The Commercial Farmer Model .1 Description

The fourth model for Jatropha value chains in Namibia involves commercial farmers who plant Jatropha on their own land then use the Jatropha seeds or sell them to off-grid generators or other markets (Interim Bio-Energy Committee, 2006). In the SSA it is quite rare to find a large number of

commercial farmers with technical skills, mechanization and good access to formal credit and input- and output-markets. The National Bio-oil Energy Roadmap (ibid.) estimates that 500 commercial farms in Namibia could plant between five and 10 ha of Jatropha on freehold and communal land. When we conducted our research, there were already trial plots on freehold land in the Maize Triangle. In addition, extensive areas in Kavango and Caprivi had been assigned for small-scale commercial farming units (2,500 ha), primarily for livestock, while growing Jatropha as a cash crop was being considered (Int. Communal Farmer; Int. MLR).

Some of the commercial farmers in Namibia had started to plant Jatropha early. One interviewee had begun growing Jatropha in order to replace conventional tractor diesel with Jatropha SVO (Int. Commercial Farmer).

Long truck transport, cost and occasional gaps in the availability of diesel make Jatropha SVO attractive. Quality standards are less of an issue since the producer is the consumer. Also other farmers in the Maize Triangle had started to plant Jatropha on a trial basis, with the idea of eventually selling it on the domestic market or to potential foreign buyers (Correspondence with German Farmer 2009). Currently, the largest plots are on a government farm in Kavango that mostly produces irrigated food crops: in the very first year, 14,000 Jatropha trees produced seeds with very high oil yields, possibly because of groundwater streams (Int. Commercial Farmer).

5.2.4.2 Major factors in viability

Despite the relatively straightforward potential effects on development including the need of less external assistance for cultivation than the Community Model, there are some obstacles to this model:

Farmers had underestimated the frost sensitivity of young Jatropha trees.

At one farm we visited, Jatropha trees suffered badly in their first year and did not become sturdy enough to withstand the frost of the Maize Triangle’s exceptionally cold winters (Int. Commercial Farmer). One farmer mentioned, however, that in the Maize Triangle frost is mainly a problem in valleys, not on farms at higher altitudes (Int. Commercial Farmer).

Belying earlier beliefs of the plant’s toxicity, wild animals were discovered to have survived eating young Jatropha trees that had not yet become toxic (Int. Commercial Farmer). Insects and termites were also reported as having destroyed Jatropha plants (ibid.).

Another problem of commercial farmers were labour costs for harvesting the trees due to the lack of appropriate mechanical harvesting devices and of local workers who were available to work short-term.

Whereas large-scale Plantation and Contract Farming Models can produce and access markets at the same time, commercial farmers must depend on on-farm utilization or selling to external markets (which do not yet exist).

The national AGRA co-operative sells seeds for crops with dual and triple uses, such as sunflowers, to commercial farmers and guarantees them a market (Int. Communal Farmer). There is no guaranteed market for Jatropha yet, it would have to be created in parallel to production.

Jatropha cultivation in communal areas by small-scale commercial farming units (Chapter 4) could face problems regarding leaseholds. From the interviews it was not clear whether this group of farmers would be authorized to grow Jatropha. This shows the limits to farmer self-determination in state-driven programmes, partly because many new medium-scale farmers are inexperienced in commercial agriculture and start off with debts.

5.2.4.3 Developmental effects

Compared with large-scale Plantation or Contract Farming Models, direct developmental impacts of the Commercial Farming Model on rural development and poverty are presumed to be quite limited. The relatively few commercial farmers have low capacities and higher opportunity costs for creating large output because of their high production intensity. But they could attain reasonable economies in Jatropha processing cooperatives.

Were Jatropha technically viable, it would be a welcome option for crop diversification with several synergistic on-farm linkages (fuel, seedcake, permanence of crops, etc.) – but few community linkages.

Despite this model’s limited potential to create direct effects, commercial farmers can play an important role in developing a biodiesel industry by introducing and spreading innovations (Int. NDC). Commercial farmers are less risk-averse than small-scale farmers and relatively independent in their decisions, at least when producing under freehold land conditions. A public good could be created if farmers were given incentives to conduct field trials of Jatropha and their research results were made accessible to the wider economy (positive externalities). It could be used to support governmental research and decision-making, thereby saving government

resources and perhaps eliminating risks for late adopters. The Commercial Farming Model could play an important role in applied research and the dissemination of innovation, with processing industries or co-operatives transferring knowledge to other farmers and communities. Growing Jatropha on commercial farmland could also help to grow a critical mass of Jatropha seeds, needed for independent processors.

Commercial farmers’ dominance in the development of the National Bio-oil Energy Roadmap and the early dynamics of Jatropha cultivation shows not only their agility but also their political organization and influence.

Finally, unlike foreign investors, commercial farmers are familiar with the local terrain and subject to increased control because of their Namibian citizenship. These factors reduce the risk of moral hazard.

5.3 Effects and institutions related to the Jatropha value