Avocado Becomes a 'Green Gold', Flying Tanzania's Flag High


By ADAM IHUCHA -- IN a hidden corner of the far north of Tanzania near the picturesque Kilimanjaro Mountain, a humble farmer lives with her family.

Yasintha Herman Mlale, 63, a mother of two, and her husband Herman never dreamt of selling their avocado fruits beyond Sanya Juu Township in Siha District, Kilimanjaro Region.

Thanks to Africado Company Limited’s initiative, the family is now selling the fruits from its quarter of one-acre farm to as far as the European market.



The once downtrodden fruits have, since last year, been making the family laughing all the way to the bank as they earn as much as Tsh 12.9 million ($7,588) from the crop in the first year of harvesting.



"I first felt the direct benefit last year when Africado started purchasing our avocadoes for export,” admits Yasintha, adding that the profit enables her to meet basic needs.



Africado embarked on its mission of distributing seedlings of a quality avocado variety and of replicating technologies for small-scale farmers in 2010.



Its three-year painstaking work prompted Yasintha’s family to increase avocado trees with a yielding capacity of a carton a season from five to around 125 plants and harvest 215 cartons of quality avocadoes for export.



“I expect to mint more money this season, for the trees, which take three to five years to yield, keep on producing more avocadoes than they did in the past,” Yasintha observes.



Now, avocado is slowly, but surely, transforming the entire rural economy, as Yasintha is just one of thousands of other smallholder farmers who are now responsible to produce 14 tonnes for export market, earning them handsome money from zero.



Africado has pioneered commercialisation of the Tanzania’s emerging export crop currently benefiting nearly 2,500 smallholder farmers in Kilimanjaro and Arusha regions alone.



Their lives are better off today, as they afford to pay fees for their schoolchildren, build modern houses and foot healthcare bills -- one of the key challenges facing most rural dwellers.





Inception

It was a bright and sunny day in most parts of the far north of Tanzania in 2007, yet the hostile weather didn’t stop peasants from being preoccupied by the cultivation season.



The lush green fields, which spread over a vast expanse of agriculture farms under the shadow of Mount Kilimanjaro, looked colourful enough to draw the attention of an investor all the way from the UK.

At his early 40s, enthusiastic horticulturist, James Parsons, resolved to move to Siha District in Kilimanjaro Region.

His dream was to grow avocado trees, whose crops were virtually worthless to most of the natives of the Chagga land, save for few who used them for feeding pigs.

Much as James eyes the European market in his dream, he didn’t give up. And first Siha district commissioner Anna Nyamubi offered moral support only to see him establish an Africado Company in the foreign land.



“When I first came here, my hosts thought I was a crazy Mzungu-- European, but few years later I showed them where a lucrative market for quality avocadoes was,” says James, explaining:

“I started growing the crop initially used for pigs’ feed with the export market in mind.”

He is right, for as you read this article, the hass avocado variety as he calls it is popular in the EU market where it competes with those from South Africa, Israel, and the Southern American country of Peru.

If comments from consumers of the fruits are anything to go by, the UK-based Supermarket Waitrose describes Africado’s avocadoes as bearing characteristics that have never been tasted before.

Ian Daniels from Greensell in the UK writes: “The quality of Africado fruits is far better off compared to the South African and Peruvian fruits. They resemble those from Israel.”

The EU market’s preference and the growing global demand for avocado oil have significantly pushed sales of the fruits.



Africado is ideally positioned to seize off-peak market opportunities available, as prices often appreciate when the Chilean season begins, and those of the South African and Peruvian end.



The Africado's proximity to Mombasa Port and competitive labour at its disposal make production, processing, and export logistics of the fruits a profitable endeavor.



 The Tanzanian product is, as a result, fetching attractive prices, as it competes with others at the international market.



Analysts say that by adding the substantial out-grower component to the existing plantation-based commercial unit, the project demonstrates rare mutual advantages and synergies of effective joint ventures between smallholders and commercial farmers.

Africado is not only the pioneer exporter from the remote district of Siha, but also the first firm to successfully handle a complex logistical chain for exporting fresh fruits directly to Europe by sea.



Multiplier effects

Unlike in 2011 when it exported about five tonnes of avocadoes, the firm anticipates shipping 1,360 tonnes this year.



“Fourteen out of the 1,360 tonnes belong to 26 out-growers certified to meet the Global GAP requirements,” says Africado Development Manager Duncan Page.



Plans are underway to certify 400 extra farmers next year, Mr Page explains, adding that in the next three years, the half of the Africado’s projected total export of 2,000 tonnes, will be sourced from the out growers.



With 145 employees, mostly women, Africado has also turned out to be the Siha’s biggest employer with massive multiplier effects to the surrounding communities.



Having paid Tsh123.4 million ($72,588) last year alone, Tanzania Revenue Authorities (TRA) in Hai District acknowledges the company as its largest taxpayer.



“This certificate is awarded to Africado Ltd of Siha as the first winner in recognition of the company’s outstanding tax compliance in 2014,” a certificate of merit Hai TRA manager Sylver Rutagwelera issued to Africado Ltd reads in part.



According to Rutagwelera, the firm is recognised for tax compliance, transparency, timely payment, precise amount, good communication and trustworthiness in documentation.



Motivated by the pat on the back, Africado expanded its irrigation facilities, constructed a borehole and a water reservoir, and increased the capacity of its nursery from 10,000 to 100,000 plants during the second phase of its project.



Almost 100 per cent of grafted plants in the out-grower scheme now comes from the nursery on the nucleus farm.



The company has formed out-growers groups mostly basing on redundant coffee cooperatives structures.



Gifted hands

James owes Tanzania Horticultural Association (TAHA) the USAID/ Tanzania Agricultural Productivity Program (TAAP) his appreciations for the overwhelmed support.



TAAP for instance, provides outgrower farmers in partnership with Africado with technical advice and training, subsidised avocado seedlings from the orchard, and transportation.



Africado, in turn, guarantees them all with off-take of avocadoes at or above prevailing market prices for local varieties.



For a produce meeting export quality standards, a grower receives a premium of over 100 per cent three months after delivery.



Sooner after establishing the company, James found himself in quagmire, facing a number of hurdles in terms of unfriendly policy and regulatory frameworks.

Thanks to the industry’s apex body -- (TAHA) and its partners -- for chipping in.

TAHA mobilises and builds institutional capacity and facilitates enabling environment and technical assistance.



“Without policy and regulatory support, it is difficult for the private sector investments to prosper,” James admits.



He commends the associations for working round the clock to maintain dialogue and good rapport with the government.





TAHA Executive Director Jacqueline Mkindi is proud of one of the success stories, which made the industry grow in leaps and bounds in the span of 10 years of the association with her at the helm.



“We have strived to assist peasants to transact business with exporters in a win-win framework,” she explains; adding that the industry now earns the country nearly $400 million annually, up from a mere $63 million in 2002.



TAHA assists farmers to adopt standard compliance practices and addresses challenges compounded by government’s numerous taxes and levies, particularly the produce cess fee.



It also supports investors in horticulture in the registration of essential horticultural inputs including pesticides, fertilizers and biological control agents.



Through its logistic firm -- TAHA Fresh Handling Ltd, the association absorbs costly and time-consuming cross-border non-tariff barriers to ease the burdens investors face.



TAHA addresses policy and regulatory hurdles for the industry to thrive. “I’m so grateful to the government for listening to us whenever policy challenges emerge,” Ms Mkindi says.



Successfully persuading the government to include essential agricultural inputs in the Value Added Tax exemption list in the 2014 VAT Bill is the TAHA’s latest case in point.





The TAHA’s support does not only result into avocadoes booming in the sprawling Kilimanjaro and its nearby Arusha regions, but also flying the Tanzanian flag high in the international markets.



Africado today is just one of many other horticultural investments enjoying positive support from the government.

As a result, besides offering reliable markets for fresh produce to thousands of smallholder farmers, the companies also now transfer crucial technologies required for boosting productivity.

Southern corridor

Rungwe Avocado Company, in Rungwe District, forms a good example of commercial fruits production, packaging, processing and export business model, which could be emulated towards development of commercial production and export in fruits industry. 

The company started in 2006, as pilot commercial avocado production by Kipunji farm owned by Mr. Robert Clowes. It was formally registered as a commercial avocado production and export company with a name of Rungwe Avocado Company (RAC) in 2009.

Mr. Robert inspired other concurring companies and engaged into partnership with Tanzania Tea Packers (TATEPA) and Wakulima Tea Company.

In 2009, RAC started investment in development of commercial production and packaging for export with a total capital of about $4.2 million.

It invested in establishment of a pack-house, which coasted about $1,000,000.  Other RAC’s investments, is a seedling nursery to support avocado out-growers scheme, with Hass avocado variety for export market.

To date, RAC is working with 4000 out-growers, who have planted 600 hectares of avocadoes in the Rungwe and Busokelo Districts.

“Our plans is to replicate practical tested models in Rungwe to the entire southern corridor mainly Iringa, Njombe and Mbeya, where there is enormous potential to grow fruits and vegetables” TAHA’s boss explains.

According to Ms Mkindi, TAHA is currently engaging in the negotiating table with Southern Agricultural Growth Corridor of Tanzania (SAGCOT) centre and the Ministry of Agriculture, Food Security and Cooperatives to partner with a view of expanding commercial production and infrastructure development in that corridor.


Tanzania’s Minister for agriculture, Food Security and Cooperatives, Christopher Chizza admits that through TAHA the industry has been the fastest growing sub-sector; recording an average growth of 11 per cent per annum over the last six years. 


Increasingly, horticulture has become the main driver of agricultural development due to its nature as a commercial industry and the growing demand for such products in the major markets in both within and outside the country. 


Indeed, the potentials for further growth are enormous, especially due to the wide range of growing conditions that the country possesses, positioning the country to produce and trade most of horticultural crops throughout the year; and the increasing market opportunities at local, regional and international levels. 


Indeed, statistics from the United Nations Comtrade assumption of projections speak volumes on horticulture potential.


With TAHA support, Tanzania's horticulture exports would earn $1 billion in 2018 and double in two years' time to reach $1.9 billion by 2020. 


The figure also suggests that more than one million Tanzanians will be working directly in horticulture industry by 2020. 

The global demand of horticulture on the other hand stands at $153 billion per annum.

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