The document summarizes a desk review of Zambia's groundnut value chain. It finds that while groundnut production and area planted have increased since 2007, yields remain low. Exports have declined due to aflatoxin issues and changing tastes. Key challenges include low productivity, aflatoxin control, and limited certified seed. Opportunities lie in favorable growing conditions and high domestic/export demand. Recommendations include breeding/multiplying certified seeds, developing agro-processing, research into technologies/value addition, and addressing high finance costs.

1. DESK REVIEW: GROUNDNUTS VALUE CHAIN ANALYSIS
FOR ZAMBIA
By the Agricultural Consultative Forum
P/Bag 16, Woodlands
LUSAKA

2. Outline of Presentation
1.Introduction
2.Groundnuts production and marketing
3. Value chain players
4. Challenges and opportunities
5. Current research
6. Key findings
7. Recommendations

3. Introduction
• Desk review undertaken to understand the main
challenges facing the groundnut value chain
• Existing data from the Ministry of Agriculture and
Livestock and past value chain reports on
groundnuts as well as a draft Groundnuts and
Common Beans Intervention Plan by the
Smallholder Agribusiness Promotion Programme
(SAPP).
• Limitations: Investigations were only centred in
Lusaka and to a few organisations due to limited
resources and time.
• No visitations were made to the productive
regions for groundnuts in the country.

4. 1. Groundnut Production and
Marketing
1.1 Producing Areas
1.2 Number of Small and Medium Scale Farmers
Producing
1.3 Trends in Area Planted, Production and Yields
1.4 Groundnuts Marketing
1.5 Gender Roles in Groundnut Production and Marketing.

5. Producing Areas
Area Planted Production Mt Yield Mt
Zambia 184,397 113,026 0.6
Central Province 19,234 12,106 0.6
Copperbelt Province 8,735 5,427 0.6
Eastern Province 56,946 30,930 0.5
Luapula Province 17,599 14,133 0.8
Lusaka Province 2,487 1,152 0.5
Muchinga Province 14,163 10,817 0.8
Northern Province 29,025 16,211 0.6
N/Western Province 7,814 10,337 1.3
Southern Province 23,089 9,616 0.4
Western Province 5,305 2,298 0.4

6. Production by Province during 2012 Season
Area Planted to Groundnuts 2012
Production in Metric Tonnes by Province 2012

7. Number of Small and Medium Scale Farmers
Producing
• Second mostly grown crop in Zambia after
Maize
• 37% of the small and medium scale farming
households grew groundnuts in 2011/12,
• 44% in 2010/11, 49% in the 2009/10 and 44%
households in 2008/09.
• The majority of these smallholder farmers are
found in Eastern, Northern, Luapula and
Muchinga Provinces

8. Trends in Area Planted, Production and Yields
• Zambia is experiencing increasing groundnuts
production since 2007.
• Available statistics indicate a three-fold increase in
groundnut production from 2007 to 2010 from 55,215
to 163,733 MT and a massive 70% increase from 2010
to 2011.
• This can be attributed to a combination of increased
hectares planted (from 147,320 ha in 2007, to 267,567
ha in 2010 and 448,243 ha in 2011) and
• Increased production per hectare (from 375 kg/ha in
2007, to 612 kg/ha in 2010 and 622 kg/ha in 2011).
• However, in 2012 production fell by 60% from
278,775MT to 113,026MT.

9. Groundnuts Yields
• Zambia’s groundnut yields have varied from between
0.3 and 0.6 MT/ha.
• These variations in groundnut yields are typically
related to:
- changes in soil fertility,
- farming systems/practices,
- seed varieties planted and
- pest attacks.
- Hectarage planted appears to be largely influenced by
the availability of markets, by prices in the previous
season, and by markets and prices of competing crops.

10. Groundnuts Marketing
a) National Markets
- Majority of groundnuts sold in the country
pass through informal market channels
- Major players in this group include the
smallholder farmers, the brief case traders;
the village based micro processors and the
informal cross-border traders.
- Eastern and Northern Provinces have over
the past years been the most important
provinces of Zambia in terms of quantities of
groundnuts sold

11. Groundnuts Marketing cont.
b) Export Markets
• Zambia was once an exporter of groundnuts to Europe.
• Between 1960 and 1970 the Eastern Province
Cooperative Marketing Union (EPCMU) exported over
8,000 Mt of groundnuts to the UK.
• However, concerns over aflatoxins and low quality
standards (size and shape of nut) led to the collapse of
this market.
• Since 2000 Zambia has oscillated between being a net
importer and net exporter of groundnuts.
• However, trade volumes for groundnuts have
remained low, not exceeding 2,000 MT for imports or
exports in a given year.

12. Groundnuts Sales in Zambia, Metric Tonnes 1987 – 2012

13. Gender Roles in Groundnut
Production and Marketing.
• It is a general belief in Zambia that groundnut is a
woman’s crop.
• Female headed households are actively involved in
groundnut production, with 24% of all female headed
households growing groundnuts.
• In male headed households groundnuts are often
gendered as a female crop.
• Women are primarily responsible for the planting,
weeding, and harvesting of groundnuts. In terms of
marketing, women tend to dominate the small-scale
informal groundnut trade in rural and urban markets.

14. Value chain players
a) Seed companies
• - Zambia has a number of seed companies (ZAMSEED,
MRI, SEEDCO, MONSANTO, PANNAR Seed, etc who
supply seed to smallholder farmers.
• Most of these companies are located along the line of
rail making their outreach to the majority of the
producers limited.
• These companies prefer to trade in maize seed which
has a big market from the government subsidy
programme.
• These companies have invested very little in
groundnuts seed production because the business is
not profitable.

15. Value chain players
b) Traders
• Traders provide a market to farmers and act as
suppliers to food processors and exporters.
• They are sometimes referred to as brief case
traders but they play a vital link between
producers and processors.
• The interest of this group is to make quick money
before the smallholder farmers take their
groundnut to big markets.
• However the biggest challenge is that most of
these traders operate along the line of rail with
easy access and good road infrastructure
network leaving out the outlying areas.

16. Value chain players
c) Smallholder farmers
- Smallholder farmers form the biggest and
most important group of stakeholders in the
groundnut value chain.
- Smallholder farmers either operate in groups
or individuals.
- This group has very limited seed multiplication
capacity and is reluctant to invest in basic
seed, hence their continued use of recycled
seed.

17. Value chain players
d) Food Processors
• This group provides peanut butter, roasted nuts, and oil
intermediaries who interface with the end users who are
the consumers.
• A number of big companies and organizations belong to
this group of players. The majority of them have the
capacity to buy the groundnuts from the traders, add value
and export or sale within the country.
• However, Zambia’s groundnuts processing industry is
fragmented, has inadequate capacity or access to finance.
• There are no international recognised groundnuts
processors in the country.
• This group is mainly concerned with aflatoxin.

18. Value chain players
e) Supermarkets, Food Service Suppliers,
Restaurants, hotels, canteens and bars
• These provide a major market for
intermediaries and farmers, as they service
the needs of the consumers.

19. Value chain players
f) Exporters/importers
• These are those business entities that export and
import the commodity and its finished products.
• Currently Zambia has inadequate capacity to be a
player in the main export markets.
• Limited informal trade has been recorded
through Chipata into Malawi and Mozambique.
• In addition, limited trade has also been made
into South Africa.

20. Value chain players
g) Consumers
• Consumers are the end users of the following end
market products are: fresh unshelled nuts in bulk, dry
unshelled nuts in bulk, shelled nuts in bulk, packaged
unshelled nuts, and processed shelled nuts with
flavourings, peanut butter, oil and cake.
• Consumers normally are interested in high quality
cheap products.
• Currently, most Zambian consumers are not aware of
the potential health risks associated with the
consumption of aflatoxin infected groundnuts.

21. Value chain players
h) Service providers
• These comprise of a range of institutions such as seed
research institutions, seed multiplication out-growers,
seed companies, input suppliers and non-state actors.
• Their interest is mainly in improving both production
and productivity through research and extension work.
• Service providers especially from government
departments have been failing to fulfil the mandate in
promoting groundnuts mainly due to human and
financial challenges.

22. Key Challenges
• Low productivity and poor quality product
• Control of aflotoxin
• Limited availability of certified seed
• Volatile exchange rate movements

23. Opportunities
• Favourable climate and good soils which are
ideal for growing groundnuts.
• High demand for groundnuts both internally
and on the export market.
Taking advantage of this market can have a
substantial impact on the economy of small-
scale farmers involved, especially women.

24. Current Research
Organisation Type of Support engaged in Location
Msekera Research Institute Variety research and support to seed certification Eastern Province
Misamfu Research Institute Variety research and support to seed certification Northern Province
Zambia Agriculture Research Institute Agricultural research and aflatoxin issues Nationwide
Seed Control and Certification Institute Seed certification and control Nationwide
Seed companies Possible seed multiplication and distribution Eastern and Northern Provinces
Profit + Farmer training, household food security, market
access and Aflatoxin control
Eastern Province
Farmer Input Support Programme (FISP) FISP has been extended to cover groundnuts.
This will create a major pull for private sector
investments in inputs, processing and marketing
Nationwide
Dunavant Groundnuts input supply and marketing. Possible
out-grower development
Eastern Province
Cotton Association of Zambia (CAZ) Farmer mobilisation into growing of groundnuts
MUSIKA Support to out-grower development in groundnuts Eastern Province
Zambia National Farmers Union Support to the development of oilseed commodity
association which includes groundnuts
Nationwide
Indaba Agriculture Policy Research Institute
(IAPRI)
Commodity research and policy development and
also support to commodity association
Nationwide
World Vision Seed distribution to small scale farmers Eastern Province

25. Key Findings
• Groundnut production and area planted to groundnuts
have increased considerably since 2007,
• Yields have remained low,
• Exports declined significantly mainly because of aflatoxin
and changes in consumer tastes,
• Lack of an organised commodity association
• Limited investment in improving yields and product
quality through extension services, seed breeding and
multiplication, labour-saving technology transfer and
aflatoxin control mechanisms.
• Insufficient confidence in the private sector to invest in
outgrower schemes for groundnuts in the country.
• Absence of a legal framework for agricultural marketing

26. Recommendations
• Government should put in place a deliberate
programme for seed breeding and multiplication and
sensitise smallholder farmers on the benefits of using
certified seeds.
• Government should facilitate the development of a
strong agro-processing industry to improve the
prospects of the groundnut subsector which has the
potential of creating strong backward and forward
linkages in Zambia’s economy.
• More research in the areas of technology development,
transfer and adoption, value addition, post harvest
handling, and farmers institutional strengthening and
change management.

27. Recommendations cont.
• Since weed control is critical throughout and extremely
labour intensive in the later stages of groundnuts
production, it may be worthwhile investigating
appropriate herbicides for weed control.
• For Zambians to remain competitive there is need to
better understand farmer and market preferences and to
ensure that the groundnut breeding programme develops
and delivers suitable varieties and sufficient quantities of
breeder seed to satisfy these preferences. There is
therefore need for traders and processors to work closely
with the breeders such as ZARI to communicate market
requirements, and these breeders need secured funding
to maintain a long term, sustainable breeding programme.

28. Recommendations cont.
• In order to improve the quality of groundnuts for the
local and export market, there is need to ensure that
aflatoxin levels are measured and if necessary addressed
through improved knowledge transfer.
• Given that one of the most labour intensive aspects of
groundnut production is the stripping of the pods from
the plants, it is proposed that the potential for
introducing pod strippers to farmers be investigated.
• In order to address the competitiveness of the industry,
government should look into the issues of the high cost
of finance and enact the draft legal framework for
agricultural marketing in the country.
• There is need for government to encourage out-grower
schemes for groundnuts in the country. This may address
some of the marketing challenges being faced in the
groundnuts industry.