Enhancing Domestic Food Processing For A More Sustainable Food System In Benin

Generated Summary

This working paper, produced by the Food System Economics Commission, investigates the potential of enhancing domestic food processing in Benin to create a more sustainable food system. The study employs a multi-faceted approach, including case studies and an economy-wide simulation model. The case studies involve literature reviews and sector surveys among poultry and cashew producers and processors to understand the current state, challenges, and bottlenecks in these sectors. The economy-wide simulation model uses a Social Accounting Matrix (SAM) and a Computable General Equilibrium (CGE) model to assess the sectoral and economy-wide impacts of enhanced food processing. The research focuses on two primary value chains: poultry meat and cashew. The core objective is to demonstrate how improving the processing sector can contribute to the development of a sustainable food system in Benin, with a particular emphasis on the role of poultry and cashew by-products.

Key Findings & Statistics

• In Benin, agriculture accounts for 33% of the GDP and 70% of employment.
• Food expenditure constitutes about 41% of private household income.
• Approximately 10% of the population in Benin is food insecure.
• In 2019, poultry meat consumption in Benin was about 3 kg per capita per year, compared to the officially reported 10 kg.
• Beef accounts for about 40% of total meat consumption in Benin, with most produced domestically.
• Poultry meat accounts for about 30% of total meat consumption, and more than half is imported.
• In 2019, Benin produced about 130,000 tons of cashew nuts, with 98% produced in the north and center regions.
• Approximately 81% of raw cashew nuts are exported.
• Industrial processing of about 1000 tons of cashew nuts provides about 417 million FCFA (US$ 710,805) of added value.
• The average production price for 25 cl of cashew juice is about FCFA 235.
• The wholesale price of cashew juice is FCFA 1083.33/l, and the retail price is FCFA 1400/l.
• More than 40% of consumers are willing to pay between FCFA 1083 and FCFA 1400 for cashew juice.
• The average price consumers are willing to pay for natural flavored cashew juice is FCFA 1289/l, and for caramel flavored juice, it is FCFA 1317/l.
• Almost 90% of the 265 consumers surveyed were unaware of cashew juice, and less than 30% of those who knew, consumed it.
• Over 95% of participants decided to buy natural flavored juice, and over 90% chose caramel flavored.
• When Benin consumers start consuming cashew juices, more than 80% will replace soda, 70% will substitute other domestic juices, and 70% will decrease imported juice consumption.
• 54% of consumers prefer the natural flavored juice, and 57% in urban areas.
• With the shift in consumer preferences, broiler poultry meat imports decline by more than 50%.
• The trade deficit declines by 9% under PrefShift and 11% under PrefShift_Tariff.
• With preference shift, bicycle poultry meat increases by about 13 thousand tons.
• The export of domestic bicycle poultry meat increases about 1.5 thousand tons.
• The price of bicycle poultry meat decreases due to higher productivity in poultry farming.
• Under DEMAND scenario, an additional domestic demand of 219 thousand tons of cashew apple juice is generated.
• The production of cashew apple juice increases by about 222 thousand tons.
• The export of cashew apple juice increases only by 0.7 thousand tons under DEMAND.
• Under DEMAND_supwaste, the cashew apple juice price falls because of the lower domestic price.
• The production of cashew nuts increases by more than 300 thousand tons under the DEMAND scenario.

Other Important Findings

• The development of processing agricultural products has significant potential to enhance the sustainability of food systems through waste reduction, improved food security, and increased income generation in rural areas.
• The poultry processing sector faces challenges such as consumer awareness of ready-to-cook poultry meat and the need for cost-saving chicken farming technologies.
• The cashew apple processing sector is developing rapidly but faces issues like the perishability of cashew apples and lack of electricity in processing units.
• Cashew apple juice is primarily consumed domestically, with a portion exported to West-African countries and the EU.
• Consumers’ willingness to pay for cashew apple juice increases after tasting the products.
• The market for cashew apple juice is segmented, suggesting the need to promote both natural and caramel flavored juice.
• The study suggests that training farmers and supporting them with presses could support the cashew sector’s development.
• Higher production of bicycle poultry meat and bicycle poultry increases wages as well as prices of agricultural capital and land.
• The shift in consumer preferences could make diets in Benin more sustainable by increasing the consumption of local poultry meat.
• The development of cashew apple processing could provide additional income to farmers and households.
• The use of cashew by-products, such as cashew nutshells for bioenergy, can make the sector more competitive and sustainable.

Limitations Noted in the Document

• The study acknowledges that higher import tariffs on frozen poultry meat might not significantly impact domestic production without addressing consumer preferences.
• The research recognizes that the effectiveness of cooling chains in Benin, impacting the quality of imported frozen poultry meat, is not fully known.
• The analysis relies on specific scenarios and assumptions within the CGE model, which may influence the results.
• The study notes that the lack of markets for cashew apple products can be a main problem for the processing units.
• The survey-based data may be subject to limitations, like potential biases in consumer preferences, or the lack of awareness regarding cashew products.

Conclusion

The study emphasizes the potential of domestic food processing in Benin for creating more sustainable food systems, specifically in the poultry and cashew sectors. In the poultry sector, a shift in consumer preference towards locally produced bicycle poultry meat, along with support for local processing, could significantly benefit the domestic sector. Recommendations include promoting local products, improving quality standards, and establishing effective marketing campaigns. For the cashew sector, the development of cashew apple processing presents a substantial opportunity. It can increase farmer income, reduce waste, and improve nutritional outcomes. The study underscores the importance of strategies to enhance domestic demand for cashew apple products, support the processing sector, and facilitate exports. The study suggests that training for farmers, investment in infrastructure, and public-private collaborations will support the sector’s growth and sustainability. The use of cashew by-products, especially for energy production, can improve the competitiveness of the cashew sector and promote a circular economy. A critical component of the policy implications include supporting the sector development and training. In conclusion, the paper highlights that the development of food processing in Benin has the potential to enhance the economy. The study advocates for a multi-pronged approach that involves consumer education, infrastructure development, and strategic partnerships to foster sustainable growth and improve the nutritional status of the population. Furthermore, it underscores the importance of investing in human capital through education and scientific research to support these developments.