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Impact of AFLATOXIN on the Private Sector in the EASTERN AFRICA region Impact, measures &recommendations Gerald Makau MASILA, Executive Director, EAGC Presented to the COMESA Aflatoxin Challenge WORKSHOP 10 th March 2014, Lilongwe, MALAWI. Contents. Intro to EAGC Who & Why

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  1. Impact of AFLATOXINon the Private Sector in the EASTERN AFRICA regionImpact, measures &recommendationsGerald Makau MASILA, Executive Director, EAGCPresented to the COMESA Aflatoxin Challenge WORKSHOP 10th March 2014, Lilongwe, MALAWI

  2. Contents.... • Intro to EAGC Who & Why • Grain Sector in EASTERN AFRICA • Afflatoxins IMPACT to Private Sector • MEASURES taken by Private Sector • Recommendations

  3. EAGC –Who we are…. • Grain Value Chain Actors..GETTING TOGETHER • Inclusive… • Farmers/Producers – small holder and large • Traders, Handlers, Warehouses • Processors/Milling/Manufacture • As Members of EAGC…Active, Affiliate, Associate • EAGC is a Regional Council for Grain Value Chain, Not for Profit Company, Ltd by Guarantee • Object – develop and promote regional structured grain TRADE and advocate for an enabling environment, reduce transaction costs trade barriers, increase incomes/reduce poverty, improve food security

  4. Why EAGC. • Grain Sector Issues – Global/Regional/National • Production Structure – Large Scale/Smallholder • Production Risks/Surplus/Deficit • Post Harvest – Storage, Preservation, losses • Access to Markets & Price Risks/Volatility • Cross Border Trade Barriers • Frequent Bans on Cross Border Maize • Tariff and Non Tariff Barrier • Informal Cross Border Trade • Standards/Quality/Grading/Safety/Aflatoxins • Market mechanisms (ss/dd) vs State regulations

  5. EAGC Services/Benefits • A unique FORUM for Grain Stakeholders • TO ADDRESS COMMON ISSUES & CREATE PARTNERSHIPS • SET OWN PRIORITIES AND DESTINY FOR THE SECTOR • HAVE A VOICE/SAY IN THE POLICY DIALOGUE AFFECTING YOUR BUSINESS • ACQUIRE SKILLS/TRAINING IN STS, REGIONAL TRADE • BUSINESS TO BUSINESS (B2B)LINKAGES – SUPPLY CHAIN & SERVICES • A link to the REGIONAL GRAIN value chain • Larger Regional Market – More Sales/Profits • Regional Integration & Harmonization (Trade Policies, Standards etc • Regional & Continental Trade SUMMITS • Share best practice in the region – COMMODITY EXCHANGE! • A link to the REGIONAL Market Information System (RATIN) • Access market and Trade info for ESA region, RFBS

  6. EAGC Benefits.........

  7. Grain Sector in E. Africa • MAIN GRAINS/CEREALS • MAIZE • WHEAT • RICE • BEANS • TEFF • SORGHUM • MILLET • FINGER MILLET • SOYA BEANS • SIMSIM..etc...

  8. GRAIN VALUE CHAIN..... PROCESSING/ MILLING /MANUFACTURE CONSUMER/ DISTRIBUTION/ MARKETING TRADE NATIONAL /IMPORT/EXPORT POST HARVEST MGT/STORAGE PRODUCTION/FARMERS • POLICY – MACROECON • FISCAL • MONETARY • NATIONAL POLICIES • IMPORT/EXPORT • REGIONAL POLICIES(RECS) • AFRICAN UNION(AUC) • IGAD,COMESA,EAC • SADC, ECOWAS etc • PRODUCTION ( SMALLHOLDERS 70-80%) • INPUTS(SEEDS, AGRO-INPUTS, FERTS • FINANCE ACCESS • MARKET ACCESS, • MKT INFORMATION • RISK MANAGEMENT • PRICE VOLATILITY • COMPETITION (INTERNATIONAL/REGIONAL

  9. Grain Sector CHALLENGES... .......& OPPORTUNITIES • INVESTING IN AGRIC • CAADP - AUC • MDGs • STRUCTURED TRADE • STDS & GRADES • PHH& M, WRS • COMMODITY EXCHANGE • ENABLING POLICIES • HARMONIZATION • REG. INTEGRATION • PRODUCTION ISSUES • QUANTITY & QUALITY • SAFETY & NUTRITION • TRADE IN FOOD – LOW • MARKET ACCESS • CROSS BORDER TRADE • TRANSACTION COSTS – HIGH • FARMER INCOMES – LOW • FINANCE COSTS - HIGH

  10. Key EAGC Initiatives

  11. Regional Grain Trade Flows&EAC regional Integration

  12. Structured TRADING System TRADING PLATFORM/ COMMODITY EXCHANGE PROCESS/MILLING BANKS SILOS STORES WRS FARMERS/ TRADERS MARKET INFO. SYSTEM RULES OF TRADE/CONTRACTS/ARBITRATION STANDARDS & GRADING ENABLING POLICY ENVIRONMENT/LEGAL & REGULATORY FOR STS

  13. EAGC WRS PROCESS.......

  14. EAGC & FOOD SECURITY FOODSECURITY QUANTITY QUALITY VARIETY AFFORDABLE MKT ACCESS MKT INFO. NUTRITION ACCEPTABLE SOC-CULTURAL

  15. EAGC - Vision “To be the leading voice for the grain industry in Africa” Mission..... “To advocate for an enabling environment and promote structured grain trade for optimum stakeholder benefits”

  16. The Aflatoxin Challengeto Private Sector Fusarium Penicillium Aspergillus

  17. Aflatoxin Challenge.... • Question posed to Private Sector – EAGC • How has aflatoxin affected your business? • What steps have you taken to address the challenge? • What do you Recommend be done to more effectively address the Aflatoxin Challenge ?

  18. Aflatoxin effects to business... • We procured a lot of maize in Eastern Province of Kenya following a bumper harvest in 2008. The Maize was found to have excessive levels of afflatoxins and was CONDEMNED. Grains worth millions of dollars lost! In a country where people a dying of hunger! • Disposal of the afflatoxins infested maize is a challenge. Maize does not burn !. We spent KSh 1m to INCINERATE 200 bags,(USD 62.5 per bag). Double the commercial value of a bag of maize. It is not sustainable !

  19. Aflatoxin Effects cont.... • We have kept in the stores contaminated maize for over SIX years, and we still have the maize in store, taking up storage space and costs. Huge ECONOMIC loss!! • We are yet to figure out an effective and efficient DISPOSAL method! • We have not purchased any grain since 2010 from the Eastern parts of Kenya, thus LIMITINGOUR MARKET. • TESTING of Afflatoxins is EXPENSIVE! Adds to cost of food, reduces profitability/returns

  20. Aflatoxin effects..cont..... • We gave an order for supply of Ground Nuts from local farmers to make Nutritious foods for immune compromised patients. ALL was CONTAMINATED and rejected. Waste of TIME and MONEY!. We resulted to IMPORTING. Thus is capital intensive and a logistical challenge. • There is a lot of contaminated GRAINS in the market being sold and consumed. A recent sampling of PROCESSED foods in supermarkets revealed very high levels of contamination!

  21. Aflatoxin effects cont... • Unfortunately it is a new issue to the public and even to most Govt officials outside the quality control and agriculture departments. • Almost all clients do no know about it. • Consequently, we have had to institute the knowledge program unto our team. • But because RICE is a deficit crop the DEMAND blinds all to issues of rice !!.

  22. Aflatoxin effects cont... • Because of the major health concerns, most millers now test for afflatoxins. This means that for us to trade grains, the company has to DO TESTS on every single consignment bought from farmers. THIS HAS SIGNIFICANTLY INCREASED OUR COSTS. • This is also increasingly making grain handling and storage more complex. Because logistically it is impossible to offer identity preserved storage, it becomes a challenge to charge all farmers to carry out tests on grain delivered and segregating grain that has been tested and that which as not.

  23. Aflatoxin effects cont... • Due to high prevalence of afflatoxins levels in Eastern part of Kenya, we are procuring our commodities from North Rift area only. • The business has been very low since we have to be very cautious before we buy any cereals from small scale farmers. • Leads to Poor Maize Flour Quality !. Animal Feeds more affected by the use of by-products from maize (Maize Germ + Maize Germ meal) used for production of the animal feeds.

  24. Control measures being taken... • We are trying to find cheaper kits for measurement of the afflatoxins. • We now test all intakes for aflatoxin for key suppliers. We would like to extend this to all grains delivered but it is not sustainable. • We have ensured we only procure well cleaned, dried maize (13% m.c) with aflatoxins levels to acceptable Standards – EAC standards. This adds to our costs of operations.

  25. Control measures being taken... • We requested Uganda National Bureau of Standards to GUIDE US on this matter. • We requested PUM from Netherlands to TRAIN our staff and set up a POLICY PROGRAM FOR QUALITY matters. We bought a generic lab and three staff trained • EAGC trained two staff on stores and quality management. We applied and received training for two staff sponsored by aBi Trust specifically on afflatoxins.

  26. Control measures being taken... • Field surveys, regular analysis and random sampling during harvesting at farm level to assess the prevalence and extend of contamination and do not purchased from areas with a high prevalence. This affects the market and prices. • We ensure ALL grain tested before being purchased for storage and milling. • Regular analysis on animal feeds and addition of toxins binders into the feeds to improve of quality though these are extra expenses on the production costs

  27. Control measures being taken... • EAGC has developed partnerships with various stakeholders to address the Aflatoxin issue. In Nov 2013, EAGC and the Mexican Embassy and other stakeholders hosted a training on Afflatoxins. • EAGC through its training and capacity building division the Eastern Africa Grain Institute – EAGI, is developing a comprehensive Training Program to offer to members and stakeholders. We are reaching out to work with others.

  28. What should be done? • Farmers should be TRAINED on post-harvest handling and on ways to improve their storage facilities • Find out the main source of aflatoxin in maize, hence preventive measures, and education to the farmers and suppliers. • Mitigation of afflatoxins should start from farm level. Mitigation at storage level is like trying to collect spilt milk. So, efforts should be made to provide the technologies that suppress the aflatoxin causing strains of aspergillums.

  29. What should be done? • Education of Public officials and thereafter the general public on the aflatoxin situation. • Make and create educative and punitive measures with private sector participation all over the region. • Develop labs and infrastructure to test and store well all grain etc. • Provide incentives for this exercise

  30. What should be done? • Be that as it may, it would help if the governments and donor community gave this issue the same attention as they do major diseases (for lack of better word) like cancer, HIV, and malaria. • This is because the population may be taking high doses of the toxin without their knowledge since aflatoxin analysis is very expensive for most traders, leave alone small scale farmers.

  31. What should be done? • What is the Issue? Aflatoxin - poisons • Where from? Fungi contamination, at FARM and in STORAGE. At farm stress factors-weeds, water/rain, seed variety – open ends give room for fungi to grow. In storage- damaged kernels (insect/shelling), insect infestation create heat transfer, moisture content in grain beyond standard of 13.5% are causes! • How to know?, not visible to naked eye. Require test. High levels of IGNORANCE about aflatoxin

  32. What should be done? • Control OCCURANCE by preventive measures • Farm Level – GAP, Post Harvest Handling, Storage • Knowledge & Education and Training • Research – Collaborative efforts, Best Practice • Training – EAGC Grain Institute - EAGI • Trade Testing, Labs, Quality control cost effective • Disposal methods – effective, efficient • Ethanol distillation ?, get out contaminated grain • Food preparation/Processing methods to reduce afflatoxins - NIXTAMALIZATION

  33. FOR MORE DETAILS PLEASE CONTACT Gerald Makau MASILA EXECUTIVE DIRECTOR EASTERN AFRICA GRAIN COUNCIL (EAGC) Maple Court, off Westlands Road, P. O. Box 218 - 00606, Nairobi Kenya Tel: +254 20 3745840 | Fax +254 20 3745841 Cell: +254 733444055 | Email: gmasila@eagc.org www.eagc.org, www.ratin.net

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