1. Value Chain Analysis of Bioenergy in
Tanzania:
A Case Study in Tandai Village
Anja Fasse
Institute for Environmental Economics and World Trade (IUW),
University of Hannover, Germany
www.better-is.com
fasse@iuw.uni-hannover.de
09. June 2010, ICRAF Nairobi

2. Outline
• Introduction to Better-Is project
• Research issues of IUW related to Better-is
– Description of the research area
– Extended environmental social accounting matrix
– Village equilibrium modeling
09. June 2010, ICRAF Nairobi 2

3. “Strategies to use biofuel value chain potential in Sub-Saharan Africa
to respond to global change”
?
Source: FAOSTAT (2009), based on data from 2007
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4. www.better-is.com
Biofuel Evaluation for Technological Tanzanian Efficiency using
Renewables - Integrated Strategies
Strategies to use Biofuel Value Chain
Potential in Sub-Saharan Africa to respond
to Global Change
Enhancing low-productivity Farming in Tanzania and linking to SMEs
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5. Objectives Better-iS
• To identify the potential for linking low-productivity
farming to small and medium enterprises (SME) to
enhance livelihoods through biofuel value chains
• To provide farmers, regional organizations and local
authorities in sub-Saharan Africa with feasible
strategies
– to benefit from biomass production potential
and
– to mitigate food insecurity.
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6. Project Consortium
Leibniz Centre for Agricultural Landscape Research e.V.
World Agroforestry Centre
The International Food Policy Research Institute
Association for Strengthening Agricultural Research in Africa
Wuppertal Institute for Climate, Environment and Energy
Environmental Economics and World Trade
University of Agriculture, Sokoine (now involved)
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7. Project Design
Partners Modeling Statistics Appraisal Expertise
global energy and agricultural modeling
The International Food
Policy Research Institute
Biomass consumption patterns
Wuppertal Institute for Climate,
Environment and Energy
Coordination & value chain analysis
Leibniz Centre for Agricultural
Landscape Research e.V.
Village modeling & certification appraisal
Environmental Economics
and World Trade
Stakeholder processes
Association for Strengthening
Agricultural Research in Africa
Stakeholder processes
World Agroforestry Centre
09. June 2010, ICRAF Nairobi 7

8. Survey Area:
Tandai Village
(Kinole Ward,
Morogoro
District)
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8

9. Survey Area: Tandai Village
• Location within the
– Uluguru Nature Forest Reserve (UNR)
– Community forest
• Tandai: 1040 households including 4211 individuals
• Sample size 30% (stratified random sampling): 314 households
• Wood value chain (firewood, charcoal, timber..)
• Jatropha as a host plant for spices e.g. black pepper, vanilla, also passion fruit.
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10. Vanilla on Jatropha
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11. 09. June 2010, ICRAF Nairobi Black Pepper on Jatropha 11

12. What has been done so far:
• Survey 314 households on agricultural production patterns and
interlinkages between households
• Energy consumption and production
• Focus on important value chains of cash crops (banana, pineapple,
spices) and agroforestry.
• GPS coordinates including altitude of 80% of the households
• Timepreferences of the farmer
• Perception of soil erosion and yield losses
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13. Value chain analysis: Applied methods:
• Development of a social accounting matrix (SAM) extended by
natural resource accounts for soil on village level
– Impact assessment via multiplier analysis
• Scenario analysis supported by an economy-wide planning
model developed for the village economy
– Feasibility study comprising different biofuel value chains
• Consumer surveys in selected European countries
– Exploring WTP for certified biofuels (and ecosystem services) from Sub-
Saharan Africa
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14. Village Social Accounting Matrix (SAM)
Factor Domestic Private Savings
Factor Markets Wages
Costs & Gov. Savings
Rents
Taxes
Demand for
Producers Intermediate Households Government Saving/INV
Inputs
Transfers
Private Government Investment
Product Consumption Expenditure Demand
Sales Markets
Revenues Demand for Final Goods
Imports
Exports Foreign Savings
Rest of the Country
and World
Source: IFPRI Training Material 2003
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15. 09. June 2010, ICRAF Nairobi 15

16. Mathematical Planning Model
Commercial Resource Use Activities
Logistic
Management System
Management System
growth
model Forest Land Water
Linear Activity
Model & Farm I Farm II Village Farm III Farm IV
Additive Utility
-Production
-Forest & Water Extraction
-Storage
Purchases -Consumption Sales
-Transport
-Processing
endogenous
prices
Village Factor and Product Market
exogenous
prices Trade with the neighboring region
09. June 2010, ICRAF Nairobi (Etti Winter, 2008) 16

17. Comparison Firewood and
Jatropha Collection and Processing
Households Distance to Hours/ Wood (man Jatropha
Type (fam) ha forest in km Day days/month) (man days/month)
H1 (4.1) 0.52 1 3 7.2 8.6 (7.1)
H2 (6.1) 1.17 2.5 4.5 16.1 12.8 (10,5)
H3 (4.5) 1.38 2.5 4.5 11.7 9.3 (7,6)
H4 (5.1) 1.89 5 7 21 10.7 (8,9)
2kg wood per hh member per day*365=730 kg wood equivalent to 55 l plant oil per
person & year. 15kg wood/Trip
Collection: 3kg Seed/h Extraction: 20% (30%) Processing 1,5h/ l
09. June 2010, ICRAF Nairobi Winter, E. and Fasse, A. 2009 17

18. H1 Min Labor Max profit Max Utility Min Labor Max Profit Max Utility
No grazing No grazing No grazing
Subsistence [€] 665 665 665
Surplus [€] 0 151 127
Labor [h] 527 700 673
Leisure [h] 173 0 27
Z (Shadow Wage) 0,86
Wood [kg] 11906 17035 16242 13807 16294 16749
Labor [month] 1,2,3,4,7,12 All All but 3
Land [month] 6,7,8 6,8 6,8
Forest Income % 65 76 70
% Labor +14 0 +2
% Income 0 -8 -18
09. June 2010, ICRAF Nairobi Winter, E. and Fasse, A. 2009 18

19. Max Utility, No Forest Use, Jatropha Production
Household H1 H2 H3 H4
Z (Shadow Wage) 0.52 0.69 0.68 0.72
Surplus [€] 0.6 412 401 6196
Labor [h] 699 1424 687 1220
Leisure [h] 1 54 53 0.4
Utility 1 22 21 2500
Own Land [ha] 0.53 1.17 1.38 1.89
Community Land [ha] 0.44 8.12
Sold Labor [%] Yes: 0.53 Yes: 0.84 Yes: 0.67 No: 1.8
Winter, E. and Fasse, A. 2009 19

20. How might Certification
Schemes be Designed ?
1. Standard → principles and criteria to
guarantee certain characteristics, certain
methods etc
2. Principles → guidelines describing how
to meet a standard
3. Criteria → requirements describing how
to achieve the principles
4. Indicators → concrete measures to
verify that principles and criteria are met
Source Segerstedt 2009
09. June 2010, ICRAF Nairobi

21. • How could Co-Benefits between Biofuel production, Carbon
savings and other ecosystem services be handled and
what kind of market regulation is necessary?
• How could persistent funding and provisioning of ecosystem
services be secured ?
• What certification scheme is best ?
• What are the preferences of consumers and suppliers?
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22. Thank you for your attention!!! 22