Friday, May 12, 2006
By Isaria K.Mwende
Agriculture remains one of the most important income sources for the majority of Tanzanians; thus maintaining rural livelihoods and boosting welfare hinges upon continued sector viability. Agriculture is not the only income source for rural people. The rural non-farm sector is increasingly important for the rural poor. But the rural non-farm sector tends to prosper only when agricultural customers demand extra resources from it, and particularly when smallholders and farm laborers get richer and use their extra income to buy local non-farm products. To get the transition to the non-farm sector moving, it’s usually necessary to get agriculture moving first. One of the ways is to make agriculture a paying industry. That is, engage in commercial farming. To grow our own energy is one of the options. There are several ways – fuel wood, charcoal, pellets making from agricultural produce wastes, etc. The more promising ones are ethanol and bio-diesel production for use in the internal combustion engines, mainly in vehicles.
Ethanol and bio-diesel production will open up new opportunities in areas where agriculture has been stagnating. It will exploit the existing un-ploughed land in Tanzania, where 75% of the arable land is not under cultivation. This is an area which can as well attract foreign investors. The souring fuel prices, now costing more than $70 a barrel, will catalyze this move. It will generate jobs, primarily in the rural areas. Actually it will change agriculture into a gold mine! People will no longer be persuaded to go into farming; they will rush into it to seize the opportunity as it is the case in Mererani. No one campaigned for the youth to go there, but they are there, definitely from all corners of our country because it is paying.
The rapid increase of population and the push for development make it necessary to use more energy and this energy must be used more efficiently. However, further dependency on fossil energy increases the risk that rural development will be more seriously affected by rising prices or stagnating imports of oil as happened during the Gulf war. Furthermore, fossil energy is a finite resource which has considerable negative impact on the environment. This makes it clear that future development cannot rely heavily on non-renewable fossil energy supplies. For development, it will be crucial to conserve fossil energy and to develop renewable energy resources like ethanol and bio-diesel.
Ethanol is produced from the fermentation of biomass. It is a major renewable energy source that offers an alternative to fossil fuels. It is primarily produced from sugar and starch (complex sugar). In this case it can be produced from sugar cane and cereals such as maize, sorghum and barley and from roots and tubers such as potatoes and cassava. The by-products from the preparation of sugar, starch and the fermentation process can be used as fuel for the processing plant, fertilizer and animal feed. Ethanol production is a technically feasible undertaking and it is commercially viable. Ethanol is blended with petrol for use in the ordinary petrol engines. The use of ethanol is not something new. Henry Ford, the well known inventor of the Ford vehicles, developed an engine that could use both ethanol and gasoline. In Africa; Kenya, Malawi and Zimbabwe have already embarked in research and development of the use of the blended fuel. In 1991 the ethanol programme in Zimbabwe reduced gasoline imports by 40 million litres, where it was 15/85 ethanol/gasoline blend. At international level the largest programme is in Brazil, which provides approximately 50% of gasoline requirements in the country.
In the 1970s the Brazilian government made ethanol production a national priority using a combination of tax breaks and fuel blending mandates. This accelerated investment in ethanol production and use. The Brazilian government also encouraged the use of ethanol fuelled cars and provided subsidies to increase sugar production and distillery construction. At the same time infrastructure was developed to distribute ethanol to thousands of pumping stations around the country.
As a result, Brazil has saved almost $50 billion in imported oil costs since the 1970s —nearly 10 times the national investment through subsidies—while creating more than 1 million rural jobs. Brazil's experience shows that government leadership and smart policies can reduce dependence on imported oil while boosting local economies. It is a success story that Tanzania should be eager to emulate. If we add a rigorous analysis and sound business models, we will make it.
In Tanzania it will be possible to produce ethanol from sorghum and cassava. Both are drought resistant crops. They do best in marginal lands and can be grown countywide. Cane use can be considered once sugarcane is produced more than our industries can process. There is ample land for expansion of sugar cane cultivation.
Biodiesel is a domestic, renewable fuel for diesel engines derived from natural oils like coconut, sunflower, cotton and groundnuts oils just to mention a few. It is a clean burning alternative fuel produced from domestic, renewable resources. It contains no petroleum. It can be used as a pure fuel or blended with petroleum in any percentage. B20 (a blend of 20 percent by volume biodiesel with 80 percent by volume petroleum diesel) has demonstrated significant environmental benefits with a minimum increase in cost for fleet operations and other consumers. It can be used in compression-ignition (diesel) engines with no major modifications. Biodiesel is simple to use, biodegradable, nontoxic, and essentially free of sulfur and aromatics.
Biodiesel is made through a chemical process called transesterification whereby the glycerin is separated from the fat or vegetable oil. A fat or oil is reacted with an alcohol, like methanol, in the presence of a catalyst. The process leaves behind two products - methyl esters (the chemical name for biodiesel) and glycerin (a valuable byproduct usually sold to be used in soaps and other products). This process can be carried out in a simple plant in the rural areas as well as at industrial level.
Biodiesel is one of the most thoroughly tested alternative fuels on the market. A number of independent studies have been completed in the US and other countries with the results showing biodiesel performs similar to petroleum diesel while benefiting the environment and human health compared to diesel. One of the major advantages of biodiesel is the fact that it can be used in existing engines with little impact to operating performance. In the US, there are presently more than 14 companies that have invested millions of dollars into the development of the biodiesel manufacturing plants and actively marketing biodiesel.
In Tanzania we can as well exploit this technology. What is required is availability of raw materials (cultivation of oil producing plants) and the processing plants. As stated above, land is not a constraint. There is one fact that Tanzania is not self sufficient in edible oil. In this case, to avoid competition, it will be more sound to cultivate non-edible plants for the production of biodiesel. A big potential exists with the jatropha plant or commonly known as mkaburi in Kiswahili. In some areas in the country, already its oil is being used for lighting purposes in the kibatari – the locally made torch.
Growing our Own Energy:
The opportunity to grow our own energy can be seized by the small scale farmers. One of the major constraints facing the small scale farmer is inability to take advantage of market opportunities. In many cases the small scale farmer has to pay high costs to overcome market imperfections. These farmers often have trouble accessing credit, obtaining information on market opportunities or new technologies, purchasing inputs and accessing product markets. When markets are accessible, farmers may be subject to price fluctuations or inequitable prices as it is currently the case with cotton and coffee. State agencies/crop boards no longer provide direct marketing and service functions to small scale farmers, leaving a vacuum that the private sector has yet to fill in.
To overcome these bottlenecks, contract farming can be a potential way out. It is one possible mechanism for improving the livelihood of rural small holders and providing them with the benefits of economic liberalization. We can learn from the tobacco and sugar industries where this is partly practiced. This is an area where government intervention is required, to attract large scale investors who will construct processing plants for ethanol and bio-diesel production in Tanzania. These will then enter into contract with the small scale farmers to produce the required raw materials for the processing plants – sugar cane, sorghum or cassava for ethanol production or jatropha (or other oil producing plants) for bio-diesel production.
Contract farming is an intermediate production and marketing system that spreads the production and marketing risks between the large scale investor and the farmer. The contract provides extension support and would overcome problems associated with lack of information and market. The small scale farmer is assured that his farm produce will find a market at harvest at a pre-agreed price. The small scale farmers may receive advance payment from the plant owners (some kind of a loan) to meet the input costs. The small scale farmers can be encouraged to form their own organizations so as to enhance their negotiating power with the plant owners. The aim is to have a win-win situation where both the small scale farmers and the plant owners’ benefit. The plant owners may provide credit, inputs and technical and management advice in order to maximize productivity. They will be assured of quality and quantity of the required raw materials. They are able to control certain elements in the production without owning the means of production. They can minimize costs by not purchasing land or directly hiring labour. On the other hand a mechanism should be put in place to ensure that both parties honor the contracts to guarantee accountability and sustainability.
The above mentioned arrangement has the potential to tremendously increase incomes of the small scale farmers as well as have multiple effects in the rural as well as the broader economy by growing energy on our own. Harmonizing public and private interests and formulating coherent policies is the challenge to be faced by the government. There is evidence that contract farming improves small holder welfare in other parts of the world, why not in Tanzania!
The gradual move away from fossil fuels to renewable bioenergy sources such as ethanol and biodiesel should begin now.