The Man from Morogoro

Farming in Africa carries many similarities to my favorite game on The Price is Right: Plinko. The farmer stands at the top with little visibility into the end of the chain and lets his produce go – for a very small percentage of the end value gained by the exporter from the market. The fruits and vegetables bounce haphazardly beyond the farmer’s control and he is not rewarded fairly in the end.

This concept of fair is important because its root cause is the missing infrastructure to enable transparency or assembly among farmers to participate more fully in the chain.

This loss in value is due to several factors, including a lack of transportation infrastructure, dirt roads that wash-out in the rainy season, no centralized collection stations where farmers could collectively bargain with buyers to receive a higher price, few larger volume buyers, a lack of education about the actual market value of the produce, and no enforced standards of quality largely beyond size (small, medium, large) or weight.

Today I met with the largest pineapple processor in Tanzania – his operation is based in Morogoro, southwest of Dar es Salaam. He negotiates with local farmers for pineapples as well as processing oranges from the northern Tanga region. He owns a processing facility that can manage 250M tonnes of produce per day – however, the current volume brought to him is 100M tonnes per day. He has the capacity – he just needs the volume.
This means, he needs to find farmers willing to work with him directly.

“Mr. Morogoro” runs a unique model where he negotiates directly with the farmers. It took him over four years to break through the regional level, to the district level, to the village level to remove the multi-layered bureaucracy of middle men that distort prices. Mr. Morogoro wants to work directly with farmers. This is exactly the type of model the project I am working hopes to identify, analyze and encourage in the development of the Tanzanian horticulture sector. As he wants to work directly with the farmers, his pricing reflects the benefits as well as the cost. While farmers can sell to middle men for market prices – they might be able to sell their best produce, leaving the smaller produce for waste or lower priced trading. On the contrary, Mr. Morogoro will purchase a farmers entire produce – small to large – at a price below market. The farmer gains through volume security – he knows he can sell everything – but the farmer risks the potential upside of selling his goods in traunches. Mr. Morogoro’s prices depends on weight (kilos), where even the pineapple is discounted 20% since the head and tail are lopped off for processing juice.

He was also unique in that he is working Saturday – all days of the week. He’s on email – he responds to calls. He is a true entrepreneur who wants to build his business.

I will be traveling to Morogoro at the start of next week for a few days of interviews with district and village level government leaders, contacts at the local university, and to see this pineapple plant.