Organic Soybean Cultivation and Processing
Business Model Description
Cultivate and process organic soybeans using processes that preserve their organic character allows for more added value and for gaining market share locally and for export.
Expected Impact
Contribute to food security and poverty reduction as well as the establishment of sustainable agriculture.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
- Togo: Maritime
- Togo: Plateaux
- Togo: Centrale
- Togo: Kara
- Togo: Savanes
Sector Classification
Food and Beverage
Development need
Poverty is slowly decreasing with a rate going from 55.1% to 45.5% between 2015-2019, far from a complete elimination of extreme poverty targeted for 2030. In rural area, the poverty rate is 76.1% (1). Chronic, acute malnutrition and underweight affect respectively 27.5%, 6.5% and 16% of children under five years old particularly in the regions of Savanes, Kara and Plateaux (21).
Policy priority
Making agriculture a real engine of growth and job creation is one of Togo's ten strong ambitions (2). The Agricultural Plan aims to “modern, sustainable and high value-added agriculture serving national and regional food and nutritional security; a strong, inclusive, competitive economy that generates decent jobs and stable by 2030 and reduction of poverty and rural vulnerability (21).
Gender inequalities and marginalization issues
Women are poorly empowered and confined to agricultural activities. Mostly women (53.46% compared to 46.54% of men) carry out agricultural activities, notably in the activities of weeding, sowing, harvesting, storage, processing and marketing of products. The agricultural sector, with its low productivity and low income, plunges agricultural workers, particularly women, in high levels of poverty (1).
Investment opportunities introduction
Investment opportunities are due to both the expansion of local and foreign markets for many agricultural value chains and the land reform Togo initiated, which establishes equal rights of access to land for both women and men. Food crops have significant growth and employment potential, while livestock products and cash crops have additional growth effects (3).
Key bottlenecks introduction
Several constraints affect agricultural value chains like, limited production capacities to satisfy expanding and competitive markets, financing constraints for farmers, lack of long-term credit, and transport costs and constraints. Land issues also exacerbate the situation of farmers, particularly women and young people (3).
Food and Agriculture
Development need
The situation of malnutrition and undernourishment in Togo places the food and beverage production sector at the center of these scourges. The agricultural sector does not provide sufficient production and suffers from low productivity and low income for workers. Various agricultural subsectors are involved, including crop, livestock, fish production and agri-food industries (21).
Policy priority
As part of the operationalization of the agricultural national policy, investment plans by crop have been developed for the period 2024-2028: roots and tubers; pineapple; fonio; cashew; shea; and mango (21), and a five-year plan for the soybean sector.
Gender inequalities and marginalization issues
Women are engaged in individual activities to the point where the majority of them are in the informal sector (54%), commerce and services (53.46%) as well as agricultural activities. Women experience land insecurity and low jobs opportunities which also affect young people. They also suffer from limited support in securing their production plots, as well as difficulties in accessing credit (4).
Investment opportunities introduction
With a view to encouraging exports, Togo has engaged in liberalization characterized by measures to harmonize legislative and regulatory frameworks with treaties and agreements. Making way for the private sector, Togo inaugurated the Adétikopé Industrial Platform dedicated to the transformation of Togo's natural resources and agricultural exports (5).
Key bottlenecks introduction
Competition between smallholder farmers and agro-industries for access to land results in the detriment of smallholder farmers finally deprived of land. Weak water resource management, downstream pollution as well conflicts linked to transhumance and storage infrastructure deficit affect agricultural activities (21).
Agricultural Products
Pipeline Opportunity
Organic Soybean Cultivation and Processing
Cultivate and process organic soybeans using processes that preserve their organic character allows for more added value and for gaining market share locally and for export.
Business Case
Market Size and Environment
< USD 50 million
< 5%
Togo reached a trade balance of USD 5.14 million for vegetables and fruits in 2022.
Imports of food and animal products amounted to USD 322.458 million, or 11.1% of total imports in 2022 for a deficit of USD 10.77 million in the same year. Imports of fruit plants exceeded exports of products in the same category by USD 5.14 million in 2022. This balance can be considered as the initial market size of plant and fruit products (6).
Soybean production for the 2022-2023 campaign was 281,000 tonnes. The farm-gate purchase price was set at 300 CFA F/kg (USD 0.5/kg) or USD 500 per tonne for the 2022-2023 campaign. The produced value of soybeans in 2023 is therefore for 281,000 tonnes of equalling USD 140.50 million (25). Soy production is carried out by several producers, among them more than 200 companies for a turnover in 2020 (26, 27).
For the 2023-2024 campaign, the objective is 300,000 tonnes, divided equally between conventional soybeans and organic soybeans. 80% of conventional soybeans will be processed and 20% exported. 60% of organic soya will be exported and 40% processed locally (24). A farm gate price of 200 F/kg or USD 33,333 per tonne is set for the 2022-2023 campaign (25).
Indicative Return
> 25%
As part of the case study conducted for an organic soybean farming project, profitability is estimated at 11% in the first year and 38% in the last year (28).
The production of organic soya appears to be more profitable in Togo than that of other vegetables and cereals. Yields per hectare are around three tonnes of soybeans and allow appreciable profitability (26, 27).
Investment Timeframe
Short Term (0–5 years)
The study of the financing modalities of an agricultural farm producing organic soya in Togo estimates the duration of amortization of the loan and return on investment at 5 years (28).
The return on investment period for many soy production projects is approximately 5 years as presented on the website of the Agency for the Promotion of Investments and the Free Zone of Togo (29).
Ticket Size
< USD 500,000
Market Risks & Scale Obstacles
Capital - Requires Subsidy
Business - Supply Chain Constraints
Market - High Level of Competition
Impact Case
Sustainable Development Need
According to PNIASAN, the trade balance of agricultural and food products presents an average annual deficit of USD 99.083 millions over the period 2010-2014 (32). Food import included cereals, particularly rice, and meat products and fish, which reached USD 454.167 million in 2022 (6).
In 2022, the cereal deficit increased to 25,179.60 tonnes of exports of cereals and cereal preparation. For pulses and fruits, imports were 57,469.70 tonnes against exports of 19,115.20 tonnes. The deficit for pulses and fruits reached USD 5.14 millions (6).
Togolese agriculture is characterized by low productivity, which condemns workers in the agricultural sector to low incomes. This means that populations living from agriculture are among the poorest due to the low-paying nature of agriculture; the national poverty rate was 45.5% in 2019, compared to 76.1% in rural areas the same year (1 ).
Gender & Marginalisation
Women working in Togolese agriculture, including in organic soy production, are subjected to poorly paid tasks which plunge them into poverty (1). Women's ability to seize economic opportunities in rural areas is limited by unequal access to land ownership (8).
Around 25.21% of women and even fewer in rural than urban areas compared to 38.3% of men have access to a bank account (8). This situation limits the ability of women to invest and implement more productive processes due to lack of adequate equipment and inputs like improved seeds (8).
The limitation of women's opportunities in rural areas, materialized by their poor access to land and financing, forces them to set up systems of production and processing of agricultural products that are not very productive and poorly remunerated (8).
Expected Development Outcome
Organic soybean cultivation for food based on high productivity cultivation methods will provide abundant and nutritionally diverse food products for the growing needs of the population and ensure food security.
Organic soybean cultivation for food will provide better remuneration for engaged workers and contribute to increased income from the export of organic soybeans and reduced imports of vegetables and cereals.
Organic soybean cultivation for food will create increased valorisation opportunities including through the supply of raw materials for the production of edible oils and animal feed.
Gender & Marginalisation
Organic soybean cultivation for food improves the remuneration of agricultural workers, particularly women who are the most numerous to work in this space, and allows them to escape poverty.
Organic soybean cultivation for food improves the technical and financial capacities of women in agricultural activities and allow them to improve their financial assets and capabilities to undertake and fully seize their opportunities.
Organic soybean cultivation for food ensures to women, including youth, the implementation of improved techniques for processing agricultural products for increased added value.
Primary SDGs addressed
2.3.1 Volume of production per labour unit by classes of farming/pastoral/forestry enterprise size
14.00 PPP USD of agricultural production per day of work of small food producers in 2019 (9).
28.00 PPP USD of agricultural production per day of work of small food producers by 2030 (9, 21).
2.1.1 Prevalence of undernourishment
12.8% in 2022 (9).
N/A
1.1.1 Proportion of the population living below the international poverty line by sex, age, employment status and geographic location (urban/rural)
26,6% in 2021 (9).
N/A
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Corporates
Public sector
Indirectly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Corporates
Public sector
Outcome Risks
The cultivation and processing of organic soybeans not based on sustainable processes could affect ecosystems and constitute a considerable factor of harm to ecosystems and soil degradation, including water pollution, ecosystem degradation and increased greenhouse gas emissions.
The cultivation and processing of organic soybeans could face problems with access to land and cause competition between companies and farmers over these resources.
The high productivity of the cultivation and processing of organic soybeans could push uncompetitive developers and farmers out of business.
Impact Risks
High professional requirements in the cultivation and processing of organic soybeans could penalize young people and women living in production areas, who are less qualified.
Faced with a very competitive production process, women without land or capital and unable to find financing will be confined to unprofitable activities and trapped in poverty.
Low productivity could negatively affect the cultivation and processing of organic soybeans faced with competition from imported food products such as rice and vegetables by compromising sales.
Impact Classification
What
Organic soybean cultivation and processing increase the income of agricultural workers, particularly women, while ensuring the reduction of imports of food products (7).
Who
Companies, the agricultural workers and professional associations involved in the cultivation and processing of organic soybeans and the Ministry of Agriculture participating in the intervention.
Risk
While the model is proven, professional requirements, competitive production processes and women involvement, and importation competition requires consideration.
Impact Thesis
Contribute to food security and poverty reduction as well as the establishment of sustainable agriculture.
Enabling Environment
Policy Environment
Strategic Plan for the Transformation of Agriculture in Togo by 2030 states as objectives to ensure food security; rebalance the agricultural trade balance; improve the level of agricultural income; ensure a high rate of agricultural growth in a sustainable manner (21).
National Agricultural Investment, Food and Nutritional Security Program (PNIASAN) 2017-2026 is the tool for implementing the 2016-2030 agricultural policy accompanied by the Strategic Plan for the Transformation of Agriculture in Togo by 2030 through the development of agricultural centers (7).
Action Plan for the Soy Sector (2023-2028) has been put in place with the objective of promoting processing units for the crushing of soy intended for human and animal food. It is a plan for promoting the international export of organic soy and the local processing of soy-derived products (32).
As part of the operationalization of the national policy, investment plans by sector have been developed for the period 2024-2028. Soyabean is one of the domain covered by the investment plan (32).
The Ministry of Agriculture placed issues of equity and gender equality at a heart of its monitoring unit; women's empowerment is particularly considered through significant participation of women in production, processing and marketing activities of agricultural products (4, 7).
Financial Environment
Law 2019-005/PR of January 2019 on the investment code provides for approved companies making a minimum of USD 83,333,333 in new investment, exemptions from duties and indirect taxes or, in the case of imports, other taxes collected (granted for a period of five years) (12).
Companies generating 75% of their turnover from exports benefit from the special industrial zone regime (12) and are eligible for more tax advantages, including exemption from corporate tax during the first 5 years and 10% on taxable profit from the 11th to the 20th year (13).
Regulatory Environment
Law No. 2018‐005 of June 14, 2018 relating to the Land and State Code Art. 10 states that land is the subject of a policy known as national land policy: Subtitle 4 – National land policy (10). The policy influences agricultural activities for land acquisition and exploitation.
Policy Land Principles (Law No. 2018‐005) is applicable to property, access to land ownership, and use of land resources; seeks to improve productivity and the contribution of land resources to social, economic, political and environmental development; and works towards promoting poverty reduction (10).
Togo Land and State Code Law No. 2018‐005 of June 2018 prescribes that the state must ensure that women and girls enjoy equal land rights and equal access to land, fisheries and forests, regardless of their gender, civil status or their marital status (10).
The National Engagement Strategy states the need to ensure equitable access to land, constitutes the foundations of strategy aimed mainly at the development and implementation of a land policy, and defines sectoral policies with the involvement of multi-stakeholder and civil societies (11).
Marketplace Participants
Private Sector
Agrokom SAS, Al-Walid Agribusiness SARL, Soja Bio SARL and Scoops Akpene Soja.
Government
Ministries for Agriculture, Livestock and Rural Development; Urban Planning, Housing and Land Reform; Village Water and Hydraulics; Environment and Forest Resources; Promotion of Investment.
Multilaterals
African Development Bank (AfDB); International Fund for Agricultural Development (IFAD); Food and Agriculture Organisation (FAO); World Bank; West African Development Bank.
Non-Profit
The Interprofessional Council of the Soy Sector (CIFS) brings together the following NGOs: National Federation of Soya Producers Cooperatives (FNCPS), National Association of Soya Traders and Exporters (ANCES) and Togolese Association of Soya Processors (ATTS).
Target Locations
Togo: Maritime
Togo: Plateaux
Togo: Centrale
Togo: Kara
Togo: Savanes
References
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