Palm Oil Value Chain Project

In the 1960s, Nigeria was the world’s leading producer of palm oil. Though the country still remains one of the largest producers, it now meets domestic demand through imports. There are two primary types of palm oil – Technical Palm Oil (TPO) and Special Palm Oil (SPO). The Niger Delta’s 9 states account for roughly 57% of Nigerian palm oil production.

Palm oil is primarily produced in three ways – through the collection of palm fruit (fresh fruit bunches) from wild groves, private plantations managed by individual farmers, and large coproate or government owned plantations. Demand is primarily driven by household consumers who use TPO for cooking and prefer it to SPO because of its tangy flavor due to a higher concentration of fatty acids. Over the years however there has been an increasing demand for SPO to meet the needs of industrial processors that, after refining the oil, sell it to manufacturing industries for use in products such as soaps, candles, pharmaceuticals, lubrications, agrochemicals, paints, and biodiesel.

Value Chain Analysis

Data collected in some of the analysis showed the following constraints inhibiting growth in the palm oil sector:

• Production of palm oil is largely dominated by wild groves which are low yielding compared to large plantations
• The ownership structure of the wild groves fail to incentivize investment in their maintenance and upgrading
• Inefficient processing technologies are used
• Challenges in managing large estate operations create inefficiencies
• Lack of coordination between value chain actors

Improving Access to Harvesting Technologies

Technology is a great way to increase productivity, so we introduced the Mechanical Adjustable Harvester (MAH) and Malaysian Knife (MK) to farmers for more efficient harvesting of palm fruits to reduce fruit loss due to scarcity of climbers. Agro-machinery manufacturer STIHL Germany was initially looking to introduce the machine to Nigeria in 5 years, but with PIND’s intervention they introduced it within a year, investing over 18 million naira by first quarter of 2015 and now have two one of their three dealers based in the eastern part of the country selling the machine to farmers and farming clusters in the Niger Delta region. The Malaysian Knife was later introduced in 2016. We currently facilitate demonstrations of the harvester throughout the Niger Delta to generate interest in the machine, and works with local agro-dealers to help increase availability of the machines.
In 2016, 110 Malaysian Knives and 28 Mechanical Adjustable Harvesters were sold, providing 1,012 farmers with access to these technologies and increasing these farmers’ income by N107,375,476 as a result.

Digester Screw Press to Increase Extraction of Palm OIl

PIND led 19 palm oil farmers and processors from Eziorsu Farming Association, a farming cluster based in Imo State with 109 palm oil farmers and processors, on an excursion to the National Institute for Oil Palm Research (NIFOR) to show them the Institute’s locally-manufactured technologies created to enhance palm oil extraction among small-scale palm oil production. To improve access to resources and facilitate system change, PIND with the National Institute for Oil Palm Research (NIFOR) helped train 5 local engineers from the pilot farming cluster in Imo State in creating the locally-invented Small-Scale Processing Equipment (SSPE) with an extraction rate of up to 15%. The trainees produced the equipment, which was sold to a private miller following a transparent bidding process and installed.

With this technology, palm oil farmers and processors can better maximize their produce and increase their income. The 15% extraction rate is a significant improvement on the basic processing equipment which has an extraction rate of 11%. by up to 13,500 naira for each person directly involved in the industry. In 2013, we took a group of farmers from Imo State to the National Institute for Oil Palm Research (NIFOR) to see the technology and they were so excited we quickly signed a deal with NIFOR to facilitate training of local fabricators in farming clusters in the Niger to facilitate the much-needed knowledge transfer. This marked the first time NIFOR has transferred knowledge directly to private enterprises. Following the successful partnership with NIFOR on the pilot project, more fabricators were trained last year on how to build the machinery, one of whom built an improved version of the machine to be installed at Umuagwo, the largest palm oil farming cluster in Imo State, thus exposing the technology that PIND introduced to even more farmers. So far, 18 digester screw press have been sold by local fabricators, with more to come in 2017.

Processors who used improved technologies we promote earned a weekly gross profit of NGN484,667,97, compared to NGN255,760.00 earned by those using more traditional methods

Following the successful partnership with NIFOR on the pilot project, more fabricators were trained last year on how to build the machinery, one of whom built an improved version of the machine to be installed at Umuagwo, the largest palm oil farming cluster in Imo State, thus exposing the technology that PIND introduced to even more farmers.

Organizational Capacity Building of Palm Oil Farmers Association

An organizational capacity assessment workshop was held with 24 members of the Eziorsu Palm Oil Association to understand what organizational improvements are needed to make the association more efficient and able to add more value to its members. Comprehensive organizational capacity strengthening plan is being implemented throughout this year