01/01/2011 (IPP Media) - Kilimo Trust, an organisation dedicated to linking farmers in the East African Community (EAC) plans a palm oil production and processing project in Tanzania and Burundi to cater for local soap producers.

The project will enhance efficiency in palm oil production, meeting local demand instead of importing the raw palm oil to cater for their needs.

Prof Nuhu Hatibu, Chief Executive Officer of the Kilimo Trust East-Africa told The Guardian recently that the project will be set up in Kigoma region and would help small producers to produce sufficient palm oil to meet domestic industrial demand for the production of edible oil.

The project will also help growers in the two countries to alleviate poverty in their families.

ôAs I speak to you, a discussion on how to implement the project is at initial stages,ö he said.

During the implementation, Kilimo Trust will intervene in three areas that comprise mobilising and organising smallholder palm oil producers into business groups, corporate so that these groups can enter into contract farming with smallholder oil palm processors.

Kilimo Trust will also mobilise and organise small holder growers with oil processors to enter into marketing contracts for palm oil and support smallholder oil processors to acquire modern oil processing and refining plants.

He said this would help palm oil producers produce sufficient oil of high quality that will compete well in the market.

"As Kilimo Trust we have decided to embark on this project after observing that it will have a great impact in smallholder producers in the near future, he said.

Presently oil palm production in Tanzania is carried out mainly by smallholder farmers especially in Kigoma rural district, Kyela district and some parts of Tanga region.

According to a FAO report made available to the Guardian recently, Tanzania has about 1.2 million hectares suitable for oil palm cultivation although in 2004, only 4,500 hectares of land was actually harvested with a yield of 6.8million litres of palm oil (2008), it indicates.

A research carried out by Emmanuel Sulle and Fred Nelson both from the International Institute for Environment and Development (IIED) based in London recently indicates that despite domestic demand for palm oil there has been little investment in its cultivation in Kigoma region.

Due to such impediment local refineries and soap manufacturers import raw palm oil from Indonesia and Malaysia to meet their supply needs in Tanzania.

The small amounts of palm oil that are processed domestically do not meet international quality standards due to un-hygienic production processes, while current processing practices result in a great deal of loss and wastage.

ôFor instance, FELISA estimates 60 percent of oil content is not extracted from the seeds as a result of poor quality grinding machines.ö it indicates.

They suggest that investment in improved post-harvesting technology in Tanzania may result in significant production gains because modern machines enable extracting more than 80 percent of oil content from the seeds.

On the other hand, the adoption of improved technologies that increase the efficiency of palm oil production where palm tree is grown is a potentially important step for improving overall production and meeting demand for local domestic consumption, industrial soap manufacturer, and biofuel production.

Also the cultivation of palm require large capital investment for the development of large plantations, but it is possible for out growers to intercrop hybrid palm trees with other crops or plant palms in a small portion of their land while using their other land for food crops, it state.

Kilimo Trust undertakes the building of lasting institutions, the scaling-up of products and services to facilitate commercial agriculture for development across the EAC region in ways that lift large numbers out of poverty.

Prof Hatibu noted that the on-going project to integrate small scale farmers into modern malting barley value chain in Tanzania that has been recently signed by TBL and farmers from Southern Highlands of Tanzania is part of the thrust of the Trust to enhance the commercialization of smallholders by helping most of them to graduate as farmerÆs enterprises or agri-SMEs capable of utilising market opportunities, executing contracts within value chains, and attracting private sector commercial financing,he said.

In Tanzania, Kilimo Trust has partnered with AGRA and Stanbic Bank to establish an agribusiness loan scheme to increase access of smallholder farmers and SMEs to commercial financing of their enterprises and expand business relationships between large agribusinesses and smallholders.