THE STATUS OF THE AGRO-PROCESSING INDUSTRY IN ZIMBABWE WITH PARTICULAR REFERENCE TO SMALL AND MEDIUM ENTERPRISES

Norman Mhazo1, Brighton M. Mvumi2, Raymond M. Nazare2 and Elijah Nyakudya2

1Development Technology Centre, University of Zimbabwe, P. O. Box MP 167, Mt. Pleasant Harare, Email:, Zimbabwe

2Department of Soil Science and Agricultural Engineering, University of Zimbabwe, P. O. Box MP 167, Mt.Pleasant, Harare, Zimbabwe.

Emails: B. M. Mvumi <>; R. M. Nazare <>; E. Nyakudya

Abstract

The objectives of this study were to develop and present a detailed and clear picture of what small and medium agro-processing systems require to effectively manufacture and market processed products; and to review agro-processing service provision, research and extension linkages in Zimbabwe. The study was implemented through a desk-review of literature focusing on commodity-specific cases of agro-processing enterprises. Informal discussions with key players in agro-processing were also conducted.

Prior to Zimbabwe’s independence in 1980, manufacturing, distribution and sales of agro-processing equipment as well as processing of commercial agricultural products have been a preserve of the large scale conglomerate companies. In the mid-1990s, there was rapid growth of both formal and informal small and medium scale manufacturers of equipment; a trend that could be attributed to the Economic Structural Adjustment Programme (ESAP) implemented by the government then. This was characterised by a dramatic increase in small and medium scale agro-processing enterprises. A wider variety of processed food and non-food products became available on the market.

Despite the resultant increase in the number of agro-processors and the employment opportunities thereby created, the current market forces and the prevailing economic environment tend to favour more growth of medium scale enterprises by down-sizing of large scale processing systems and upgrading of small scale processing enterprises. The loss of business by large-scale processors has led to massive retrenchments and even closure of factories whilst women clubs got disempowered by loss of individual and co-operative agro-processing enterprises.

The Zimbabwe agro-processing industry plays a vital role in the national economic development and has potential to meet the local needs and export requirements. The supporting infrastructure for this industry in terms of electricity supply, through the government-funded rural electrification programme, and road and telecommunication network, is well established. There are also well established skills training programmes in manufacturing (tool making, welding), for rural artisans and users. However, the sector currently faces many challenges emanating from the poor performance of the national economy, uncertainties that exist over access to both local and foreign finances, limited research, limited technical advice, limited marketing information and lack of reliable markets.

Key lessons that emerged from the study are that equipment ownership (individuals, farmer groups or entrepreneurs) has been left for people to decide without adequate technical advice. Equipment costs are beyond the reach of individuals and the prevailing economic environment favours technology access rather than ownership. One survival strategy being adopted by many large-scale processors is sub-contracting medium-scale processors that meet the required standards, to supply processed products in bulk for large-scale companies to pack and market.

Literature on small and medium scale agro-processing often leaves out meat, mopani worm, fish and non-food products such as hides and skins, timber and medicinal plants. However, some people may argue that the areas of timber and medicinal plants are more into natural resources than agro-processing. Documented studies are commodity-based such as grain milling, vegetable oil pressing. The case study helped to collate and synthesise the scattered literature.

A key PHILA process learning is that there is hidden agro-processing information and expertise among technocrats that has been deliberately kept unpublished for commercial purposes and people are reluctant to share this information. Studies of this type require good connectivity to be able to access relevant and up-to-date information.

  1. Introduction

One of the major policies of the Government of Zimbabwe (GoZ) at independence in 1980 was “Growth with Equity” aimed at eliminating previous economic and social disparities which existed along the racial divide. Although considerable effort has been made towards social and economic stabilisation over the years, limited progress has been made in achieving equitable distribution and growth in agro-industrial development. The fast track land redistribution that the GoZ implemented in 2000-2, has benefited thousands of indigenous farmers who received land allocations under the resettlement models A1[1] and A2.[2] The resettlement exercise is expected to increase levels of agricultural production as under-utilised land in large commercial farms is opened up for farming activities, communal areas are de-congested and farm sizes are reduced to manageable sizes. The World Food Programme has reported that the area planted to cereals increased by 9% in the 2004/05 season with maize increasing by 14% due to expansion of farming land (Elich, 2005). Though the new local farmers are currently battling to raise production amid lack of funding, agricultural inputs and commercial farming skills, given enough time there should be an increase in productivity. Research has established that productivity increases exponentially with decrease in farm size in all natural regions of Zimbabwe (Elich, 2005).

As increased agricultural production is envisaged, there is need to have proportionate improvement in the agro-processing industry. Agro-processing industries refer to those activities that transform agricultural commodities into different forms that add value to the product. Agro-processing industries, especially food manufacturing, tobacco and textile processing dominate the commercial industrial sector of Zimbabwe. These are mainly owned by multinational conglomerate companies with interest in farm produce supplied by large-scale commercial farmers. For example, Cairns Foods Company is the largest food processing company in Zimbabwe. The company requires a minimum of 100 tonnes of groundnuts per year for peanut butter processing and a small proportion of that is produced by small-scale farmers. The company’s demand for potatoes and fruits (guava, pineapple, mangoes etc) is largely met by large-scale commercial growers (Acquah, 1997). At present, the small-scale farmers are not organised or prepared to produce for such large-scale processing companies. However, they are for other commodities such as cotton through the Cotton Company of Zimbabwe (CottCo).

Small-scale farming in Zimbabwe rarely provides sufficient means of survival in many rural areas. It is therefore imperative to explore alternative income generating opportunities to support poor families who can no longer fend for themselves from the land-based activities alone. Recent research demonstrates that rural households depend on a diverse portfolio of activities and income sources. Some households are looking towards activities such as food processing as a means to enhance the livelihood they can achieve from a limited area of land (Simalenga, 1996).

Small-scale food processing activities represent a potential source of livelihood for many poor people in Sub-Saharan Africa. The overall potential of agro-processing is huge as it can:

  • Increase the value of crops of poor farmers and thus yield higher returns;
  • Expand marketing opportunities;
  • Improve livelihoods of people;
  • Extend shelf-life of commodities;
  • Improve palatability of commodities;
  • Enhance food security;
  • Overcome seasonality and perishability constraints; and
  • Empower women who are often involved in agro-processing.

In Sub Saharan Africa, it is estimated that 60% of the labour force find part of its work in small-scale food processing enterprises and the majority are women (ITDG, 2005). The greatest potential growth in small-scale agro-industries is in fruit and vegetable processing as many horticultural producers experience problems in marketing of fresh produce such as lack of readily available marketing information and lack of market integration, lack of data on supply and demand trends and prices, reliance on spot or road-side markets, transport constraints and spoilage (Mhazoet al., 2003, Boyd et. al, 1997). Adoption of improved and validated food processing technologies, enforcement of good standards of quality and hygiene and regulatory instruments may assist local small- and medium-scale agro-industries to compete favourably in the market place. Small to medium scale enterprises are those organisations with a total fixed capital base, excluding land, that does not exceed fivebillion Zimbabwe Dollars (equivalent to US$66 667)and employ not more than 75 permanent employees (Personal communication; Small Enterprise Development Corporation, Zimbabwe).

However, research has shown that a number of factors may constrain the ability of small- and medium-scale agro-based enterprises to effectively manufacture and market processed food products.

  • On a macro level, many policies implemented by governments have served to hinder the development of small-scale industries (Dawson, 1994; Simalenga, 1996).
  • At the firm level, limited access to credit (Chakwera, 1996); limited access to foreign currency (Nazare, 2005); lack of appropriate technologies (McPherson, 1996; Mugova, 1996); lack of technological capability; the unreliable supply of raw materials (Mosha, 1983); lack of management skills (Odunfa, 1995); poor product quality control (Jaffee, 1993);and poor markets, amongst other things, have constrained the development of small-scale industries.

These problems apply to many developing countries and are particularly applicable to Zimbabwe.

The purpose of the current study is to develop and present a detailed but clear picture of what the present agro-processing systems (small, medium and large with emphasis on the medium-scale) require to effectively manufacture and market processed food products. The main areas of interest included considering the service provision, linkages with research and extension, demand-led services, agro-processing technologies, farmer empowerment, policy implementation, gender issues and government vision.

  1. Agro-processing Definitions

Agro-processing activities comprise two major categories; primary and secondary operations. Primary processing operations involve activities such as crop drying, shelling/threshing, cleaning, grading, and packaging. These activities are mainly carried out at the farm and only transform the commodity into a slightly different form prior to storage, marketing or further processing. Secondary processing operations entail increasing nutritional or market value of the commodity and the physical form or appearance of the commodity is often totally changed from the original. Some examples of secondary processing are milling grain into flour, grinding groundnuts into peanut butter, pressing oil out of vegetable seeds, pressing juice out of fruit, making cheese out of milk and manufacturing of mince meat. Depending on type of commodity, equipment needed for primary processing is completely different from that used in secondary processing or major adjustments/modifications need to be done to suit either.

  1. Agro-processing Equipment Supply Chain

Historically, formal manufacturing, distribution and sales of agro-processing equipment have been a preserve of conglomerate companies such as Precision Grinders, G. North and Son (Pvt) Ltd and Zimplow Limited. Processing systems were split into manual tools and machines for small-scale users (mainly for communal farmers) and motorised equipment for large-scale processors. Since the mid 1990s, many new small- to medium-scale formal and informal manufacturers entered the market resulting in a dramatic increase in medium-scale motorised systems for processing food crops. It is now possible at medium-scale level to process cereals into various flours and stock feeds, groundnuts into peanut butter, sunflower, cotton and soybeans into edible oil and fruits and vegetables into jams, pulps, juices, pastes, sauces, pickles, and confectionery products.

Some of the major manufacturers of primary processing equipment in Zimbabwe are presented in Table 1. The range of processing equipment is limited to manual and motorised shellers/threshers for cereals and pulses. Most of the manufacturing activities are located in Harare, Norton and Bulawayo with distribution networks in the major cities, towns and Growth Points or Rural Service Centres (RSCs). The local industries have the capacity to manufacture complete shellers/threshers. However, for motorised equipment, the sources of power (electric motors and engines) have to be imported from South Africa and/or Asia. This obviously has a negative bearing on the availability and final cost of motorised equipment as foreign currency supplies in the country are limited. The major consumers of primary processing equipment are individual farmers or farmer groups and private contractors.

Table 1: The major manufacturers and distributors of primary processing equipment in Zimbabwe.

Company / Location / Retail outlets / Product range and Power source / Product sourcing
Practical Action* / Harare / Harare, Bulawayo, Mutare / Manual and motorised shellers, threshers / In-house manufacturing
G. North and Son / Harare / Harare / Manual and motorised shellers, threshers; winnowers / In-house manufacturing
Tanroy Engineering / Harare / Harare, Mutare, Bulawayo / Motorised multi-crop shellers and threshers / In-house manufacturing
Zimbabwe Oil Press Project (ZOPP) / Harare / Harare, Rusape, Mutare / Manual groundnut shellers / Subcontracting the informal manufacturers
Hastt Zimbabwe / Norton / Harare, Norton / Tractor PTO-driven crop shellers and threshers / In-house manufacturing
Precision Grinders / Harare / Harare / Motorised/PTO-driven multi-crop threshers, manual shellers. / In-house manufacturing and importation
Zimplow Ltd. / Bulawayo / Harare, Bulawayo / Manual groundnut shellers / In-house manufacturing
Institute of Agricultural Engineering, Ministry of Agriculture / Harare / Harare / Multi-crop threshers,
Manual groundnut shellers / In-house manufacturing

*formerly Intermediate Technology Development Group (ITDG)

The growth of secondary agro-processing in Zimbabwe is quite evident in the rapid rise in numbers of equipment manufacturing companies, dramatic increase in processing enterprises and the widespread availability of various processed foods on both the formal and informal market. Growth has been greater in the small- and medium-scale enterprises than the large-scale sector; for example there has been a huge increase in millers of maize and other cereals, processors of peanut butter, manufacturers of livestock feeds and soybean products. Five of the seven major manufacturers of secondary processing equipment listed in Table 2 were established in the last decade.

Table 2: The major manufacturers and distributors of secondary processing equipment in Zimbabwe.

Company / Location / Retail outlets / Product range
Renox / Harare / Harare / Vegetable oil mills, cereal grinding mills, dehullers, peanut butter mills
Intermediate Technology / Harare / Harare, Bulawayo, Mutare / Vegetable oil mills, cereal grinding mills, Manual and motorised peanut butter mills
Appropriate Technology Africa / Harare / Harare, Mutare / Vegetable oil mills, cereal grinding mills, dehullers, manual and motorised peanut butter mills, motorised juice extractor
Tanroy Engineering / Harare / Harare, Mutare, Bulawayo / Vegetable oil mills, cereal grinding mills, dehullers, groundnut roasters, Manual and motorised peanut butter mills, cassava and sweet potato chippers.
Zimbabwe Oil Press Project (ZOPP) / Harare / Harare, Rusape, Mutare / Vegetable oil mills, groundnut roasters, Manual and motorised peanut butter mills
Precision Grinders / Harare / Harare / Cereal grinding mills, dehullers, Manual and motorised peanut butter mills, mixers
Instituteof Agricultural Engineering, Ministry of Agriculture / Harare / Harare / Cereal grinding mills, dehullers, Motorised peanut butter mills,
Stainless Steel Products. / Harare / Harare, Bulawayo / Industrial pots, steam pots, pasteurizers, meat mincers, sausage makers, blenders, bakery ovens, potato chippers and peelers, mixers

There is clear evidence of widespread activities in manufacturing of cereal flour, peanut butter and animal feeds as indicated by the increased number of manufacturers of related equipment. This development should in theory lead to a wider choice of equipment and a level of competition that would benefit the consumers (Nazare, 2005). It is however, important to point out that while there are many players in the manufacturing sector; variety in equipment design is very limited. Most of the manufacturers rely heavily on procuring equipment and/or components of equipment from Asia as well as the local formal and informal outlets. This approachmay result in poor equipment quality control and certainly results in limited consumer choice. Ultimately, there are also costs associated with fixing poor quality machines when they break down. Nonetheless, the positive side of it is that it reduces the cost of tooling for individual manufacturers, may guarantee inter-changeability of spares among equipment from different manufacturers and creates employment for the locals.

  1. Research and Development

Development of agro-processing equipment has not received the level of research support it deserves. There are limited and isolated research efforts in the private sector. In the public sector, budgets for Research and Development have been cut down drastically and furthermore there is a critical shortage of qualified research staff to carry out the work. However, considerable research in the development of crop shellers, threshers, vegetable oil mills, peanut butter mills and crop dryers has been conducted by the Ministry of Agriculture (MoA) through the Institute of Agricultural Engineering, the University of Zimbabwe (UZ) and ENDA Zimbabwe since 1990. Useful research results have been generated but extension of the results to the private sector (manufacturers) and farmers has generally been poor.

UZ usually works in partnership with the private sector in equipment manufacturing. Transfer of technologies to end-users is facilitated by the linkages that exist between the university and the public sector and NGOs. Involvement of students in various research activities also helps in the dissemination of research results. The development and extension of the peanut butter technology has been a major success story for the Development Technology Centre (DTC) at the UZ. Technology manufacturing and marketing is now fully market-driven. However, there are issues surrounding intellectual property rights and patenting which are not in place. Many a time, technology generated by academic or public sector research organisations ends up being used for commercial purposes without due recognition of the people involved in knowledge development.