Unlocking Opportunities in Edible Oil Crop Production and Market Dynamics to Accelerate Agricultural Investment in Kagera Region, Tanzania

Abstract

Edible oil crops such as sunflower, oil palm, sesame, groundnuts, avocado and canola are one of the fastest-growing agricultural sectors for investment at global scale. Demand for edible oil currently at local and neighbouring countries indicate huge gap that is an opportunity for production. The oil crops are grown under varied agro climatic conditions and they are vital commodities in the trade and commerce of many economies globally. Edible oil imports account for 34 % of the growth in food imports in Africa of which palm oil contributes 65% of all imports in the continent. In East Africa countries; Tanzania, Kenya, Uganda, Rwanda, Burundi, Southern Sudan and DR-Congo and SADC countries the edible oil imports exceed US$ 1 billion. Tanzania produces 290,000 MT of edible oil a year, which is not enough to meet its current annual demand of 650,000 MT, therefore, it is compelled to spend over US$ 200 million annually for import to cover the shortage. Thus, there is great business opportunity for Kagera region which is endowed with a favourable equatorial climate for agriculture, extensive arable land of more than 24,953 sq, km. (water bodies of 11,885 sq. km. that is covered by Lake Victoria, Ikimba and Burigi Lakes, Kagera and Ngono rivers), forests and biodiversity. It is envisioning that if 10 percent of the land is put under oil seed, (about 249,600 hectares) under intensified production, more 249,600 MT of grains per season will be processed, employing many people along the value chain, hence addressing the income earnings instability, mask the climate and market instabilities. The oil seed crops are alternative processing crops with price stability, high demand elasticity and low substitutability to moderate prevailing instability in earnings from coffee and banana crops. It is concluded therefore that, the proposed crop diversification will shape a strategy to deal with climate variability by increasing a range of food and cash crops, that enhances productivity, encourages youth self-employment and incomes generation along the value chain in Kagera region.