Jatropha Biofuel for Local Markets - Tanzania

Biofuel production in Tanzania based on a contract farming model. Increases income of smallholder farmers and benefits the environment.

This Tanzanian company managed by a German is setting up a jatropha farming business that eventually seeks to engage 15,000 smallholder farming families in the production of jatropha seeds. Each farmer will initially grow 1,000 trees. The company is already fully operative implementing a Jatropha outgrowing scheme with 2,000 smallholder farmers in the region around Morogoro. It will produce jatropha oil as well as jatropha seed press cake. The oil will be mainly sold to poor rural and urban households currently relying on candles, kerosene and charcoal as biofuel derived from jatropha oil is an excellent alternative to charcoal - or kerosene - as a fuel for lamps or cooking stoves. Jatropha oil may also be made into soap and the press cake can be marketed as organic fertilizer.

Jatropha trees yield from year two, in which the company expects to produce some 500,000 litres of jatropha oil. By year five, production will have significantly increased to 6 million litres. A Tanzanian soap manufacturer has already expressed interest in buying part of the oil. From years four and five, the company plans a significant expansion of its business - possibly by entering the European market or by trading carbon credit certificates.

This jatropha business has the potential to increase the daily income of up to 75,000 smallholder farm household members by 25 per cent on average. In addition, the company will create direct and indirect employment opportunities along the value chain - for example in the manufacturing of biofuel stoves. Staff and partners of the company benefit from a strong emphasis on capacity building. The jatropha plant is known for its positive impact on the environment as the oil derived from jatropha seeds is carbon neutral.

The company has built an excellent country-wide network in Tanzania that includes smallholder farmer associations as well as high-level policy makers. Agreements on cooperation in production and marketing are in place. Distribution networks for stoves and fertilizers already exist.