Haas students crack into the kola nut = business

UC = Berkeley >=20

Genetic=20 analysis rewrites salamander family tree

Field study projects deliver more than=20 learning

Berkeley=20 student selected for new 'green' intern program

More=20 news: Researchers=20 honored; Clarke on=20 Bush...

Steve = Hardgrave, Mike=20 Cipresso, Jonathan Piazza and Loic Comolli join a kola = nut=20 reseller at his stall in a Yaound=E9 street=20 market

Cracking into the kola nut business: = Putting=20 wheels on the science of tree domestication

By Mike Cipresso, Loic Comolli, Steve = Hardgrave, and=20 Jonathan Piazza | 10 September, = 2004

YAOUND=C9, CAMEROON =96 The = challenge of=20 protecting the world's dwindling sanctuaries of biodiversity = is=20 immense. Providing options and answers that address the = complicated=20 reality of rural poverty is also an imposing goal. At first = glance,=20 doing both at the same time appears to either require a = miracle or=20 an exercise in wishful thinking. People all over the world, = however,=20 have begun to realize that the best way to protect the = earth's=20 precious resources and rich biodiversity is to ensure that = someone's=20 livelihood is connected to the health of the world's = forests.

The future of these forests and the future of millions of = the=20 world's poorest people are already inextricably linked. = Rural=20 poverty is concentrated in many areas where the world's = biodiversity=20 is most threatened. More than a billion people now live = within the=20 world's 19 forest biodiversity "hotspots" and population = growth in=20 the world's tropical wilderness areas is 3.1 percent, over = twice the=20 world's average rate of growth. Over 90 percent of those who = live on=20 less than a dollar a day depend fully or in part on forest = products=20 for their livelihoods.

Slideshow:<= /STRONG>=20 Adventures in Africa

By the end of our time in Cameroon, we had become quite = educated=20 about the production and commercialization of kola nuts =96 = something=20 we had never heard of only months before. It was very clear = to us=20 that ICRAF has done excellent work in developing appropriate = technology models for domesticating and harvesting kola and = other=20 nontimber forest products (NTFPs). It was also clear that = the=20 organization had won the confidence of local farmers by = patiently=20 developing strong relationships with them. However, it was = also=20 obvious that much more work needs to be done on identifying = markets=20 and building strong distribution networks that will make = them more=20 accessible and efficient. This "putting wheels on the = science of=20 tree domestication" is also a wonderful opportunity for = ICRAF to=20 partner with others whose strengths lie in the field of=20 commercialization, as they are still building this expertise = internally.

Market obstacles

The most critical aspect of the market for participation = by poor=20 producers is the existence of well-organized market = intermediaries=20 to assemble their small and irregular surpluses at = reasonable cost.=20 However, national NTFP marketing systems in most poor = countries are=20 still largely informal and most suppliers operate on a = modest scale.=20 There is little development of sophisticated marketing = chains (such=20 as cold storage). There is significant price volatility due = to=20 limited information flows, high perishability, high = seasonality,=20 trade fluctuations, and climatic variability. There is = limited added=20 value through small-scale processing. Profit margins are low = due to=20 high marketing costs (poor transport, roads, and = communications=20 infrastructure). While there are price premiums for good = quality and=20 supplies out of the main seasons, there is still relatively = little=20 emphasis on quality overall, since many consumers are poor. = Volumes=20 traded in many NTFPs, such as medicinals and botanicals, are = small,=20 and producers rely heavily on direct market linkages with = buyers=20 (Poulton and Poole 2001).

Although we did not extensively research the = international demand=20 for kola nut as part of our project, we were not able to = identify an=20 attractive market outside of northern Africa and possibly = the Middle=20 East. Moreover, the current productive capacity of kola nut = farmers,=20 and inefficiencies in the informal distribution network of = whole=20 sellers and resellers seriously limit their ability to = deliver on=20 any possible large demand for high quality kola nuts outside = of the=20 region. It was clear that relationships need to be developed = with=20 intermediaries to the same degree they have been developed = with=20 producers in order to complete the bridge to market. For = example,=20 the absence of financing available to intermediaries limited = the=20 amount of kola nut commerce, hurting both intermediaries and = producers alike.

Market opportunities

We felt that ICRAF and its partner farmers should focus = on the=20 national and regional markets which have a fairly consistent = demand=20 for the product. Even here, there are improvements that can = be made=20 in the commercialization process. ICRAF, together with local = farmers, has worked on developing technologies to speed the = process=20 of removing the outer covering from the kola nuts, and that = would=20 enable producers to store kola nuts for longer periods of = time.=20 Losses due to weevil infestation represent a significant = cost=20 throughout the entire value chain, and fluctuation in prices = from=20 seasons of abundance and seasons of scarcity are dramatic. =

Although we focused our work primarily on the kola nut = industry,=20 the same considerations apply to other NTFPs, even if their=20 characteristics may differ significantly. For example, = natural,=20 medicinal oils may have a greater potential in higher-priced = western=20 markets. Furthermore, fair trade or organic certification = may be=20 highly valued in these markets and a feasible business = strategy. On=20 the other hand, the market for kola nuts clearly does not = value this=20 type of certification. Identifying the market potential for = each=20 NTFP, and weighing that against the local capacity to = commercialize=20 to that market should be a part of any sustainable = agroforestry=20 project, even before the scientific feasibility is explored = and=20 expectations are raised among partner farmers.

At the end of our visit, we produced several deliverables = that we=20 hope will assist ICRAF and others in furthering both the = kola nut=20 cooperative, and the larger field of sustainable and = profitable=20 agroforestry. We tried to design tools that could be adapted = to a=20 variety of products and contexts, and used the kola nut = cooperative=20 in Cameroon as a case study example. These tools = include:

Business Plan Process Guide: A = business=20 planning manual that highlights the broad range of = considerations=20 that must be defined to establish a business model for = NTFP=20 enterprises.
Business Planning Presentation: A = summarized=20 version of the guide designed for training trainers at = ICRAF and=20 other sustainable agroforestry organizations.
Kola Nut Enterprise Modeling Tools: = A series=20 of dynamic spreadsheets that help analyze costs, revenues = and=20 profits under differing production and market scenarios. = These are=20 designed, together with the guide, to address the = feasibility of=20 the enterprise before having to invest significantly in = it.
Accounting Templates: Very basic = charts=20 designed to help local producers keep better cost = accounting=20 information to improve the quality of profit analysis into = the=20 future.

As we mentioned above, far from providing the final word = on the=20 matter, we believe that our work merely opens the door to = additional=20 questions and sheds light on the need for additional work in = the=20 field. We sincerely hope, not only that future IBD teams = would=20 return to Cameroon to continue this work, but also that we = might be=20 able exploit the unparalleled resources of UC Berkeley to = address a=20 challenge that merits the best we have to offer.

Previous > 1=20 - Cracking into the kola nut business: Mission to = Cameroon=20
2=20 - Adventures in Cameroon

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