FACILITATING THE EFFECTIVE PRODUCTION AND MARKETING OF PROCESSED FOOD PRODUCTS BY SMALL-SCALE PRODUCERS IN ZIMBABWE [PROJECT R7485]* OUTPUT 1: LITERATURE REVIEW Proctor, S., Henson, S., Loader, R., Masakure, O., Brouder, A., Bhila, L. and Sigauke, N. September 2000 Dept. of Agricultural and Food Economics ITDG Southern Africa The University of Reading 3rd Floor Coal House 4 Earley Gate, 17 Nelson Mandela Ave/Corner Leopold Whiteknights Road Takawira Street PO Box 237, PO Box 1744 Reading RG6 6AR Harare UK Zimbabwe *This paper is an output from a research project funded by the United Kingdom Department for International Development (DFID) for the benefit of developing countries. The views expressed are not necessarily those of DFID [R7485 Crop Post Harvest Programme]. CONTENTS 1. Introduction ……..Page 1.1 Background to the study 1 1.2 Research outline 3 1.3 Objectives 3 1.4 Outline of research activities 4 1.5 Location of the study 4 1.6 Organisation of literature review 5 2. Zimbabwe’s Agricultural Sector 2.1 The role of agriculture in the Zimbabwean economy 6 2.2 Zimbabwe’s agro-ecological regions 6 2.3 Zimbabwe’s dual agrarian structure: Large-scale commercial versus small-scale farming sector 8 3. Zimbabwe’s Horticultural Sector 3.1 Geographical location of horticultural production in Zimbabwe 11 3.2 Types of produce cultivated 12 3.3 Growth of the horticultural sector in Zimbabwe 15 3.4 The main horticultural production systems 16 3.4:1 Large-scale commercial production 16 3.4:2 Small-scale production 18 3.4:3 Sub-contracting arrangements 19 3.4.3.1 Case studies of sub-contracting arrangements 20 Case Study 1: Example of contractual agreement between small-scale producers and large-scale food processor- CAIRNS Food 20 Case Study 2: Example of contractual agreement between irrigation scheme and food processing company- OLIVINE Industries 21 Case Study 3: Example of contractual agreement between small-scale producers (on irrigation schemes) and a wholesaler- Wholesale Frutierers Trading (Pvt) Ltd 22 3.4.4 Nature of contractual agreements 25 3.5 Peri-urban horticultural production 26 3.5.1 Peri-urban agriculture: A definition 26 3.5.2 On-plot versus off-plot agricultural production 27 3.5.3 Urban and peri-urban cultivators: Who are they? 28 3.6 National consumer demand for horticultural produce 29 3.6.1 Urban population growth 30 3.6.2 Urbanisation: Changing consumption patterns 31 3.6.3 The impact of ESAP on consumption patterns 33 i 4. Small-scale Processing Enterprises in Zimbabwe 4.1 Introduction: Definition of small and medium enterprises 39 4.2 Employment growth in small-scale enterprises in Zimbabwe 39 4.3 Dynamics of small-scale enterprises in developing countries 40 4.3.1 Employment growth in MSEs in the developing world 41 4.4 Small-scale agro-processing enterprises 43 4.4.1 The main techniques employed for processing horticultural produce 43 4.4.2 Technologies used in small-scale horticultural processing enterprises 44 4.5 Large-scale processing enterprises 47 4.6 Examples of small-scale processing of fruit and vegetables 47 4.6.1 Drying of fruit and vegetables 48 4.6.2 Production of jam and fruit juices 50 4.6.3 Canning and bottling of fruit and vegetable products 51 5. The Supply and Distribution System within the Horticultural Subsector 5.1 Sub-sector Functions 52 5.1.1 Crop production: Harvesting methods 53 5.1.2 Grading 53 5.1.3 Processing of horticultural produce 53 5.1.4 Packaging 54 5.1.5 Storage 54 5.1.6 Transportation of produce 54 5.1.7 Wholesaling, retailing and exporting produce 56 5.1.7.1 Formal versus informal marketing channels 56 5.2 Sub-sector participants 57 5.2.1 Transporters and commodity brokers 57 5.2.2 Wholesalers 58 5.2.3 Commission agencies 58 5.2.4 Large and small-scale food processing companies 58 5.2.5 Large and small-scale retailers 60 5.2.6 Role of private and government agencies 60 5.3 Technology used by sub-sector participants 60 6. The Potential Benefits of Production and Processing of Horticultural Crops 6.1 Distribution of poverty in Zimbabwe 62 6.2 Household consumption and nutrition 62 6.3 Peri-urban food security 63 6.4 Employment and incomes 64 6.5 Improving female livelihoods 64 6.6 The advantages of peri-urban production 65 6.7 Processing may overcome production constraints 66 ii 7. Constraints to the Production and Marketing of Processed Horticultural Products by Small-Scale Producers 7.1 Introduction 68 7.2 Constraints to smallholder horticultural production 68 7.2.1 Agro-ecological constraints within Communal Area lands 68 7.2.2 Lack of irrigation networks 69 7.2.3 Non-flexible cropping patterns 71 7.2.4 Problems faced in contract farming 71 7.2.5 Access to credit 72 7.2.6 Capital equipment and appropriate technologies 73 7.2.7 Lack of extension services 74 7.2.8 Input supply 74 7.2.9 Disease and pest management 74 7.2.10 Crop quality 74 7.2.11 Inappropriate harvesting techniques 75 7.2.12 Grading 75 7.2.13 Post harvest handling 76 7.2 14 Poor infrastructure 76 7.2.15 Lack of market information 77 7.2.16 Distrust of middlemen 77 7.2.17 Labour availability 78 7.2.18 Lack of farmer initiative and heavy reliance on donors 78 7.2.19 Summary of constraints faced by producers 79 7.3 Constraints to small-scale processing of horticultural products 79 8. Conclusions 82 References 85 iii List of Tables 1. Percentage share of major economic sectors in selected years 6 2. Natural Regions of Zimbabwe 7 3. The share of large-scale and small-scale farms in agriculture (1990) 8 4. Distribution of population by land sector (1992) 9 5. Vegetable crop calendar for Zimbabwe 13 6. Fruit crop calendar for Zimbabwe 14 7. Imports and exports of selected fruit and vegetable products, 1997/98 17 8. Crops produced by small-scale farmers in Manicaland Province under contract to CAIRNS 21 9. Details of irrigation schemes working with Olivine Industries 22 10. Product mix supplied to Interfresh by small and large-scale producers 23 11. Organisations that Wholesale Fruiterers (Pvt) Ltd supplies with fresh produce 24 12. Characteristics of on-plot and off-plot cultivation 28 13. Population growth in Zimbabwe, 1951-1992 30 14. Population growth among Zimbabwe’s main urban centres 31 15. Annual average increases in prices from 1991 to 1999 34 16. CPI food group and group indices, December 1998 35 17. Average wages by sector (Z$), 1985-1995 employment surveys 35 18. Annual average household food expenditure as percentage of household budget, and food consumption as percentage of total household consumption by sector, Zimbabwe ICES, 1990/91 37 19. Mean shares of total food expenditure of own consumption, gift transfers and payments in kind by broad food group 38 20. Definition of small and medium enterprises 39 21. Characteristics of micro- and small-scale enterprises 41 22. Income levels and rates of growth in survey countries 42 23. Technology adopted for horticultural processing by enterprise type 44 24. Main processing techniques adopted by small-scale processors 45 25. Companies involved in processing of fruits and vegetables in Zimbabwe 47 26. Varieties of fruit and vegetables that are processed in Zimbabwe, `and examples of their end-products 48 27. Familiarity of consumer income-groups with different types of dried fruit and vegetables in Zimbabwe 50 28. Technologies used and where they are sourced 51 29. Main functions in the dried fruit and vegetable sub-sector 52 30. Most common types of export packaging for fresh and preserved products 54 31. Main participants in the dried fruit and vegetables sub-sector 57 32. Characteristics of technology used by participants in the dried fruit and vegetable sub-sector 61 33. Crop growth duration and production periods of selected crops 66 34. Irrigation development in Zimbabwe according to landholding category 70 35. Processing constraints in the horticultural sub-sector 79 36. Potential constraints to small-scale enterprises in Zimbabwe 80 37. Marketing, finance and input problems according to gender of proprietor 84 iv List of Figures Figure 1. Map of Zimbabwe showing Natural Regions 7 Figure 2. Zimbabwe: Communal Areas and Natural Regions 10 Figure 3. Administrative provinces of Zimbabwe 12 Figure 4. Where are vegetables grown in Zimbabwe? 19 Figure 5. Taiwan’s changing diet 33 Figure 6. Consumption of fruit in Zimbabwe (1961-1998) 36 Figure 7. Consumption of vegetables in Zimbabwe (1961-1998) 37 Figure 8. Tomato processing in Zimbabwe 44 Figure 9. Harare’s Mbare market 59 Appendices Appendix 1. Details of activities of Interfresh business operating units 100 v 1. INTRODUCTION 1.1 Background to the study In spite of the widely publicised ‘success’ stories about Zimbabwe in the 1980s, 50% of the population continues to live in poverty. There is still food insecurity, extreme poverty, hunger and child malnutrition at the household level in Communal Areas, among commercial farming labourers and low income urban families, especially those which are female-headed. Jayne, Chivso and Rukinin (1994) point out that Zimbabwe’s food situation is characterised by a disturbing paradox of chronic food security amid abundance. This is in spite of the fact that Zimbabwe experienced a 300% increase in grain sales to the Grain Marketing Board in the 1980s and early 1990s. Recent research demonstrates that poverty levels in Zimbabwe are high. According to the Zimbabwe Human Development Report about 75% of all Zimbabweans are classified as poor and about 47% are classified as very poor (UNDP, Poverty Reduction Forum and IDS, 1998).