Zambia: Farmers increase groundnut income by making peanut butter

| July 8, 2019

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Muketoi Lubinda sits in a chair at his corner shop. He sells peanut butter at Soweto market in the heart of Lusaka, the capital of Zambia. The market is packed with agricultural products like fresh tomatoes, honey, and watermelons. Mr. Lubinda stands up briskly and hands a 250-milligram bottle of peanut butter to a customer in exchange for some Zambian kwacha.

With his brother, Mr. Lubinda grows and processes groundnuts with locally-made processing equipment and sells the nut butter at their shop. He says, “It will get better with time … the demand for peanut butter keeps increasing. I can certainly say this business is profitable.”

Mr. Lubinda used to harvest and sell 50 25-kilogram bags of unprocessed groundnuts, then simply wait for the next farming season. He earned money only after the harvest, so his income was poor compared to farmers who were adding value to their groundnuts. But with peanut butter, he earns money whenever he sells a bottle.

Mr. Lubinda and his brother started producing and selling peanut butter in 2015. To meet the huge demand, they buy groundnuts from other farmers. The brothers process between 90 and 180 kilograms of dried groundnuts into peanut butter every day.

The processing is time-consuming but rewarding. Mr. Lubinda explains: “First, we roast the groundnuts in the fryer. Usually, we fry about 45 kilograms of groundnuts for three hours, after which the groundnuts are put in a drier to cool…. After that, they are polished to get rid of the outer shell.” They purchased the fryer from a local artisan for 7,000 Zambian kwacha ($543 US) and the polisher was imported from India and cost 15,000 kwacha ($1,165 US).

He adds, “We then load them into the crusher … and the process is completed by placing the groundnuts in the finisher where we add salt and get first-grade butter.”

After processing, they package the peanut butter in transparent plastic bottles and bring it to the shop to sell.

Before they made peanut butter, Mr. Lubinda and his brother earned between 30,000 and 45,000 Zambian kwacha per year ($2,330 to $3,500 US), but now earn about 150,000 Zambian kwacha ($11,650 US).

But farmers who make peanut butter face challenges, including the high price of groundnuts and packaging bottles, as well as high costs for utilities such as electricity.

Jerome Miselo also produces and sells peanut butter in Soweto market. He says high production costs sometimes negatively affect the business. Mr. Miselo explains: “In the last three years, the cost of fuel in Zambia increased by nearly 50%, and last year, electricity tariffs were hiked, making it expensive to operate. When there is drought, the prices for groundnuts become very high.”

Despite these challenges, Mr. Lubinda believes that if the government banned imported groundnuts, farmers and processors like him would benefit because stores and supermarkets would stock more peanut butter from local farmers and producers.

He says, “We produce good peanut butter. It does not contain any additives. I feel the government should restrict importation of products such as this one, which is being produced locally.”

To improve business operations and meet local demand, Mr. Lubinda and his brother plan to buy more land, employ more staff, buy additional processing machines, and improve packaging. He adds, “We will begin to brand our butter.”