Final Draft Report SOYBEAN VALUE CHAIN AND MARKET ANALYSIS Prepared for the International Labour Organisation Munguzwe Hichaambwa Christian Chileshe Bernadette Chimai-Mulenga Christian Chomba Mukwiti Mwiinga-Ngcobo June 2014 _____________________ 26a Middleway Road, PostNet Box 99 Kabulonga, Lusaka Zambia www.iapri.org.zm Page i ACKNOWLEDGEMENTS We are grateful to be accorded the opportunity to conduct this study. Special thanks go to Ms Naomy Lintini and her team at the ILO Zambia Country Office for ably facilitating the study as well as inviting one of the Study Team members to participate in a related Value Chain Development Training Workshop which was also part of stakeholder consultation for the study. We acknowledge the meaningful contributions that workshop participants made to this study through their deliberations and these have been accordingly taken into account in this analysis. We are further grateful to the other stakeholders we consulted in Lusaka, Eastern, Central and Copperbelt Provinces without whose views, we believe, this study would have been incomplete. The review inputs of the Value Chain Development Training Workshop Facilitators as well as participants in the study validation workshop are also greatly appreciated. Authors Page i TABLE OF CONTENTS ACKNOWLEDGEMENTS ......................................................................................................................i TABLE OF CONTENTS ........................................................................................................................ ii LIST OF TABLES .................................................................................................................................... iv LIST OF FIGURES .................................................................................................................................. iv LIST OF ABBREVIATIONS AND ACRONYMS ............................................................................. v EXECUTIVE SUMMARY..................................................................................................................... vii 1.0 INTRODUCTION ..................................................................................................................... 14 1.1 Background ............................................................................................................................................... 14 1.2 Study Objectives ...................................................................................................................................... 15 2.0 METHODOLOGY .................................................................................................................... 17 2.1 Technical Approach ................................................................................................................................ 17 2.2 Data Analysis and Reporting ................................................................................................................. 17 3.0 DEMAND AND SUPPLY ANALYSIS ................................................................................ 18 3.1 International ............................................................................................................................................. 18 3.2 Regional ..................................................................................................................................................... 19 3.3 National ..................................................................................................................................................... 20 4.0 FUNCTIONING OF THE MARKET SYSTEM IN ZAMBIA ........................................ 23 4.1 Mapping the Value Chain ....................................................................................................................... 23 4.2 Details of the Market System ................................................................................................................. 24 4.2.1 Policy/Enabling Environment ............................................................................................................ 24 4.2.2 Inputs Supply ...................................................................................................................................... 26 4.2.2.1 Smallholder Farmer Access to Inputs .................................................................................... 26 4.2.2.2 Large Scale/ Commercial Farmer Access to Inputs ............................................................ 28 4.2.2.3 Analysis of Constraints and Opportunities ........................................................................... 28 4.2.3 Production ........................................................................................................................................... 29 4.2.3.1 Smallholder Soybeans Production .......................................................................................... 29 4.2.3.1 Large Scale Commercial Soybeans Production ..................................................................... 31 4.2.3.2 Harvesting and Threshing ........................................................................................................ 31 4.2.3.3 Analysis of Gross Margins ....................................................................................................... 32 4.2.3.4 Analysis of Constraints and Opportunities ........................................................................... 33 4.2.4 Aggregation and Marketing ................................................................................................................ 33 4.2.4.1 Aggregation and Main Marketing Channels from Smallholder Farmers .......................... 33 4.2.4.2 Main Marketing Channels from Large Scale Commercial Farmers ................................... 35 4.2.4.3 Analysis of Constraints and Opportunities ........................................................................... 36 Page ii 4.2.5 Processing ............................................................................................................................................ 37 4.2.5.1 Commercial Processing ............................................................................................................. 38 4.2.5.2 Small Scale and Domestic Processing .................................................................................... 38 4.2.5.3 Analysis of Constraints and Opportunities ........................................................................... 38 4.2.6 Wholesaling/Retailing ........................................................................................................................ 39 4.2.7 Consumption ....................................................................................................................................... 40 5.0 KEY OPPORTUNITIES FOR YOUTH PARTICIPATION ............................................ 42 6.0 POTENTIAL FOR RURAL FOOD/NUTRITIONAL SECURITY ............................... 46 7.0 CONCLUSIONS AND RECOMMENDATIONS .............................................................. 47 REFERENCES......................................................................................................................................... 51 ANNEXES ................................................................................................................................................ 52 Annex 1: Primary Data Collection Tools ..................................................................................................... 52 A. Farmer Focus Group Discussion Guide ........................................................................................................ 52 B. `Individual Key Informant Discussion Guide ................................................................................................ 53 C. Field Observation Guide .............................................................................................................................. 54 D. Gross Margins/Value Addition/Transportation Questionnaire .................................................................. 55 Annex 2. Terms of Reference ............................................................................................................................. 57 Annex 3: List of Stakeholders Consulted .......................................................................................................... 63 Annex 4: List of Participants at ILO Value Chain Development Training Workshop ............................. 66 Page iii LIST OF TABLES Table 1: Soybeans Production, area planted and yields: 2003-2014 .................................................................. 21 Table 2: Estimated Zambia Soybeans Demand and Supply ............................................................................... 22 Table 3: Breakdown of Value Capture by Stage of Soybean Processing .......................................................... 24 Table 4: Main sources of 2011/12 soybean seed among smallholder farmers ................................................ 27 Table 5: Soybean production and farmer characteristics by age group ............................................................. 30 Table 6: Smallholder soybean performance indicator in 2010/11 season by seed variety category ............. 30 Table 7: Gross margin analysis for Emerging/Commercial Production .......................................................... 32 LIST OF FIGURES Figure 1: World Soybeans