111018 gatsby cotton programme tcb review...

Gatsby Charitable Foundation

Tanzania Cotton Sector Development Programme

Tanzania Cotton Board Strategic Review: Request for Proposals

Background In September 2007, following discussions with the Tanzanian Government, the Gatsby Foundation

initiated a major long-‐term Programme to support the transformation of the Tanzanian cotton sector. Working in partnership with the Tanzanian Cotton Board (TCB), the Programme aims to transform the performance of Tanzania’s cotton sector, doubling yields for 400,000 cotton farmers.

After three years of pilot activities, the Programme and TCB are now driving a major restructuring of the industry. The Programme assists TCB to implement the recently approved regulatory framework

for introducing contract farming, which will include major policy work on pricing and quality in addition to input finance. In parallel to this transformation, the Programme has three other pillars: facilitating universal access to improved cotton seed; encouraging cotton farmers to adopt

conservation agriculture; and building the capacity of key sector institutions, in particular of the TCB. With regard to this final objective, Lord Sainsbury met the Minister of Agriculture in Mwanza in May

2011 and offered to help the Ministry build the capacity of the TCB, to support the sustainable management and development of the sector. It was agreed that the Gatsby Foundation would fund a Strategic Review of the TCB which would aim to review the needs of the sector and its

stakeholders vis-‐à-‐vis the regulatory body and the new functions of the TCB; assess the existing capacity of the TCB; and propose an operational plan for the development and strengthening of the TCB to fulfil the agreed needs. The Honourable Minister Maghembe has since written to Lord

Sainsbury to confirm this arrangement. This RFP sets out in further detail the requirements of this Review.

Context The Tanzanian Cotton Board The cotton sector is governed by the Cotton Industry Act 2001, which provides for the establishment

of the TCB to govern the sector. The TCB’s mandate as defined in the law is to improve and develop the cotton industry by promoting, facilitating and monitoring the functioning of the entire production, marketing, processing and export chain of cotton sector. Broadly speaking, the cotton

sector is one where there is a very valid role for a strong regulatory body where effective rules are in place and enforced that ensure that sector participants work together for the benefit of all.

Sector constraints Since liberalisation in the 1990s, increased competition has led to higher farmgate prices but plummeting investment in productivity. The over-‐traded sector structure creates incentives that

contribute to the sector’s deterioration; in particular, to the following key challenges: -‐ Lack of investment in production: average yields are less than one third the global average

due to low input use and lack of credit availability to farmers

-‐ Deterioration of quality: due to contamination and lack of grading, Tanzanian cotton is

traded at a discount of 4-‐6 US cent per pound1

-‐ Inadequate extension services: the sector lacks an effective means through which farmers can gain knowledge on improved agricultural practices

-‐ Dilapidated storage facilities for both inputs and production

Contract farming Addressing these constraints involves re-‐structuring the industry, ensuring greater investments are

made in production, improved technologies and farming practises, and greater attention to quality and integrity is re-‐introduced into the trade of cotton. To this end, the TCB has since 2008 been

promoting the development of contract farming. This system was endorsed by the cotton sector stakeholder meeting in 2010, and is being rolled out in the 2011-‐12 marketing season.

Contract farming is a significantly more organised marketing structure than that which has historically operated. This will impose significantly higher demands on TCB to regulate transactions, protect contracts, mitigate possible negative farmgate price trends and build trust between

stakeholders. Moreover, it is appreciated that contract farming may not be the best solution for Tanzanian cotton in the long term; the TCB needs to develop the capacity to think through and manage any subsequent structural transitions or challenges to the industry.

Challenges facing TCB The TCB is currently significantly under-‐resourced even for its current limited role. In particular it

suffers from -‐ Lack of clarity on present role and function of TCB in light of new changes -‐ Limited skills and capacity in a very small management team, and subsequent over-‐reliance

on a charismatic Director-‐General -‐ Insufficient field staff to effectively cover the cotton growing regions -‐ Challenging relationships with government and with the private sector; in part due to a lack

of effective communications mechanisms and in part due to issues of institutional culture -‐ Chronic infrastructure problems, including weak IT systems and a lack of reliable power in

both main offices

Objectives The 3 principle objectives of this review are as follows:

1. To assess the needs of the sector and its stakeholders as regards the sector’s regulatory

body; particularly in the context of the current move towards contract farming, but also with

a view to the sector’s ability to react to future changes in the international market or domestic production capacity; and to build stakeholder consensus around these needs.

2. To review the existing capacity of the TCB in the context of this needs assessment; present a

comprehensive gap analysis highlighting where TCB capacity needs to be improved; and propose strategic options and priorities resulting from this.

1 Instead of getting a premium of up to 4 US cents per pound, as it did prior to liberalization.

3. Based on discussion of strategic options with the Ministry of Agriculture and interested

donors, to set out a prioritised and costed operational plan for the development and

strengthening of the TCB to meet the consensus sector needs. Areas for Review

Consultants should outline in their proposal the areas where they feel the review should focus, demonstrating their expertise in the field. However, following the three objectives above, key areas within the review should include:

-‐ Situation analysis (context and trends)

o Overview of the risks (weather, market, political) of cotton markets in general and of Tanzania in particular

o Supply/demand and price trends in international cotton markets

o Stakeholder dynamics and market structure in Tanzania’s cotton sector o Trends in donor and Tanzanian policies and budgets, regarding cash crops in general

and cotton in particular

o Assessment of other key sector institutions and how they relate to TCB o Assessment of the operating environment in Dar es Salam and cotton growing areas

in terms of geography and infrastructure, in particular power and connectivity

-‐ Objective 1A: analysis of future requirements: sector management functions of the TCB

The existing functions as stipulated in Cotton Act of TCB are set out in Annex 1. The review

should re-‐appraise these functions reflecting the immediate needs of overseeing contract farming and also the potential need to change market structures in future. This will require facilitation of stakeholders to develop consensus on what these functions are. Each function

should be broken down into specific sub-‐functions. Functions should include: o Market regulation and protection of contract farming or other market structures o Technical advice to stakeholders, particularly farmers, regarding productivity;

engagement with local extension services o Introduction and promotion of new technology (new seed varieties, GM technology,

mechanisation, conservation agriculture farming systems)

o Regulation and promotion of quality o Industry stabilisers to manage risks (such as market price or weather risk) o Information needs of stakeholders

o Functions required to work under and report to Ministry of Agriculture

-‐ Objective 1B: analysis of future requirements: generic institutional functions

In addition to these mandated functions the TCB also has generic functions required to operate effectively as an institution, such as HR, Accounting, Governance, IT, etc. These should also be mapped out within the review of functions.

-‐ Objective 1C: analysis of future requirements: translating functions to capacity

The functional requirements set out in 1A and 1B will need to be translated into specific

recommendations of the capacities, skills and processes required to fulfil those functions.

This should include right-‐sizing and updating capacity to operate effectively given the environment in Tanzania. Recommendations will therefore need to cover:

o Governance o Leadership and culture o Staffing levels – management, administrative and technical

o All back office institutional functions o Infrastructure

-‐ Objective 2: Assessment of current situation and gap analysis In order to drive an operational development plan, it is necessary to set out the current

position of the TCB. This will enable a gap analysis to be produced, showing how the existing capacity of the TCB maps against the recommended capacity needs derived from 1C above.

o Leadership and strategic capacity to make informed decisions on the development

of the sector o Effectiveness of governance o Staffing model: management capacity to effectively implement operations; field

staffing levels; appropriateness of current levels and types of skills; o Equipment, systems and processes: including administrative and financial

management systems, working environment, transport and IT capacity, particularly

in the context of the new demands of contract farming regulation o Stakeholder relations: effectiveness of relations with ginners, farmers, Ministry and

other key stakeholders; communications capacity

o Village-‐level marketing infrastructure These two objectives will comprise “Phase 1” of the assignment, following which interim findings will

be discussed with stakeholders. This will lead on to “Phase 2”, which will cover the final objective:

-‐ Objective 3A: Develop an Institutional Development Plan (IDP): Having set out the future functions required; the financial, capital and human resources, and appropriate management and governance structure, necessary to fulfil those

responsibilities; and assessed the current situation; it is then essential to develop a plan for implementing the required institutional development. This should therefore build on Phase 1, and should be:

o Developed through a consultative process where outcomes of previous phases (Objectives 1A-‐C and 2) are discussed and agreed with key parties

o Based on realistic assessment of future capacities that are realistic to develop and

retain, given resources available o Be embedded and owned within the TCB o Be costed and budgeted

o Be prioritised and set out within a 3-‐5 year plan

-‐ Objective 3B: Develop institutional funding recommendations

Sustainable funding sources will be needed In order to sustain the TCB with appropriate capacity. This will require the Review to provide:

o Budget forecasts over 3-‐5 years, including 2-‐3 realistic scenarios, to illustrate future

funding needs

o An assessment of potential funding sources, including a review of how the TCB relates to the Cotton Development Trust Fund, other levies on the sector and support from the Ministry of Agriculture

o Facilitation of a process where realistic recommendations are developed regarding funding sources

-‐ Objective 3C: Offer recommendations on implementing the IDP Having set out a realistic plan, the review team should also recommend how best this plan

can be implemented. This should include the extent to which the leadership and management are able to oversee the plan and the extent to which additional resource must be brought in to oversee the change management. This section should provide a series of

recommendations learning from approaches used in other comparable institutions on how the change management process should be managed. This should include:

o Leadership and management of reform process

o Communication management of process o How skills will be reviewed and recruitment phased o Lessons from experience of capacity building at other East African institutions, as

appropriate Deliverables

-‐ Inception plan with suggested plan of work, schedule of meetings, fieldwork, etc. -‐ Draft Phase 1 Report of no longer than 30 pages, plus annexes, covering the Situation

Analysis and Objectives 1 & 2

-‐ Presentation of draft Phase 1 findings to TCB Board, Steering Committee and stakeholder workshop (PPT presentation with key findings, implications and options going forward)

-‐ Detailed Institutional Development Plan for the TCB, building on the draft Phase 1 report

and stakeholder comments thereon, and including funding scenarios and recommendations -‐ Final report, including

o Final Phase 1 Report

o Final IDP o Recommendations on the delivery of the IDP

Activities The consultants are required to design and plan all appropriate activities in order to achieve the specified objectives and deliverables. It is suggested that these are likely to include, inter alia:

-‐ Inception meetings and orientation with Steering Committee members and TCB staff;

agreement on approach, plan of activities and deliverables, including a one-‐day workshop at

the start of assignment with the TCB Board. -‐ Desk review of secondary materials. -‐ Key stakeholder interviews. Stakeholders are anticipated to include the following, but

consultants would be expected to advise on this list

o TCB Board members and staff o Representatives of major cotton ginners

o Representatives of farmers o Representatives of cotton traders / textile manufacturers o Ministries of Agriculture (crop development team; senior civil servants) and Finance

o Donor staff, including the EU and Gatsby Foundation o Local government authorities in the cotton-‐growing regions of Tanzania

-‐ Field trip(s) to the Western Cotton Growing Area to visit ginners, farmers and local

government; to assess the institutional infrastructure of the TCB and the marketing infrastructure in the cotton sector; and to understand the local context of TCB operations

-‐ Two one-‐day interim workshops with Steering Committee and TCB staff: o To present draft findings and strategic options at the end of Phase 1 o To present and discuss the draft IDP at the end of Phase 2

-‐ Drafting of a final Strategic Review report (summarising Phase 1) -‐ Drafting of an Institutional Development Plan for the TCB (summarising Phase 2)

Background Documents The consultants will be expected to draw on the following documents:

-‐ The Cotton Industry Implementation Plan, CIIP: 2010-‐2015

-‐ Second Corporate Strategic Plan: 2010/11-‐ 2012/13 -‐ Tanzania Cotton Board Annual Report 2010 -‐ Relevant legislation, in particular the Cotton Industry Act No. 2 (2001) and the Contract

Farming law (2010) Consultants will also be expected to review relevant documentation from the Ministry of

Agriculture, including historical and forecast budgets as they relate to the cotton sector, and from the TCB and CTDF.

Team & Resources The Review will be conducted by a team of 2-‐3 experts with complementary skills that must include:

-‐ An understanding of cotton sector dynamics, both production and marketing: this includes a

familiarity with different institutional approaches to regulating and supporting cotton sectors in different countries, especially in developing countries; an understanding of global cotton market dynamics, particularly as they relate to lint quality; and a broad perspective

on approaches to public and private goods in different national cotton market systems -‐ An understanding of regulated contract farming systems whether in cotton or another crop,

in order to assess the appropriate role and necessary capacity of the TCB as regulator of

contract farming -‐ An understanding of the cotton sector in Tanzania, specifically of the history of the sector’s

evolution through privatisation and the role of the Cotton Board and its predecessors in that

evolution; and an appreciation of the political, social and economic significance of the crop -‐ An understanding of Tanzanian government processes: to enable the team to work

appropriately with the Ministry of Agriculture, principle funders of the TCB, and to put the

budget of the TCB into the context of Tanzania’s cotton levy, the local government cess and other sources of public or donor income in the sector.

-‐ An understanding of institutional development: to address whether the TCB has the right strategy and operating model to deliver their responsibilities to the sector and to assess areas of institutional strength and weakness. This should include an understanding of

organisational structures, systems and governance.

Total man-‐days on this project should not exceed 175. At least one member of the consulting team

should be a Tanzanian.

Governance and Reporting The Strategic Review will be funded by the Gatsby Foundation. The consultant will report jointly to the Senior Advisor to the Cotton & Textile Development Programme (employed by Tanzania Gatsby

Trust (TGT)), and to a representative of the Ministry of Agriculture, Cooperatives and Food Security. The consultants’ approach to the work should be collaborative, aiming to share early conclusions

and recommendations with TGT, TCB and the Ministry on a regular basis. The aim of the Review is to provide the Ministry of Agriculture, Cooperatives and Food Security with a detailed blueprint for a better-‐resourced and more robust, effective TCB; the political implications of this objective should

be borne in mind throughout. Besides the direct reporting, the Review will be supervised by a steering committee comprising

representatives of the following: -‐ Ministry of Agriculture, Cooperatives and Food Security -‐ Tanzania Gatsby Trust

-‐ UK Department for International Development -‐ Tanzanian Cotton Board -‐ European Union

Timeframe The following table provides a guideline for timing:

Activity Timing

Selection of the research firm, contracting, briefing Late November 2011

Research, consultations and fieldwork December-‐February 2011*

Phase 1 report and stakeholder workshop Late February 2012

Development of Institutional Development Plan March 2012

Presentation of draft IDP Late March 2012

Final Report and IDP Mid-‐April 2012

*It is anticipated that a break in the work will be necessitated by the Christmas holiday

Firms should provide a detailed timeline for executing the project activities within this guideline

provided, advising where and why any deviation from this guideline is necessary. Proposals should include perceived project risks and contingency plans.

Budget Research firms are invited to submit technical and financial proposals that address the scope of work outlined above within the suggested timeframe.

Proposals from interested firms must provide evidence of the technical capacity of the firm to undertake this exercise. This includes capacity to deliver the results in the timeframe provided, as

well as some indication of prior experience in conducting a survey of this magnitude and purpose within the agricultural sector. The application must identify the core management and technical

team, their technical expertise in sample design, questionnaire design, field work, statistical analysis and overall project management. Core team member CVs must be included as well as a description of any further resources that may be required.

The financial proposal should provide a detailed costing for the scope of work and deliverables described above. Costs should be broken down into professional fees and expenses. The budget for

this initiative is not to exceed $200,000. Submissions

Proposals should be addressed to the Gatsby Foundation. The deadline is 17h00 on 21st November 2011. Firms need only provide electronic versions of all documentation, sent to [email protected]. Once the selection process has been completed, Tanzania Gatsby

Trust, as the local programme management institution, will issue a contract confirming the appointment of the research house.

Any queries relating to this Request for Proposals should be referred to Ian Anderson, Africa Programme Manager, Gatsby Charitable Foundation, at [email protected].

Annex 1: present functions of TCB

The main functions of TCB as stipulated in the Cotton Industry Act No. 2 of 2001 are as follows;

• To advice the government on the policies, strategies and all other matters relating to the development of the cotton industry.

• To promote the development of cotton industry. • To provide for licensing of persons engaged in the marketing, processing of cotton or

cotton by products.

• To make regulations for the control or eradication of cotton pests and diseases • To assist directly or through financial support research and development and extension

services.

• To educate stakeholders on mechanism for international cotton pricing. • To protect the interests of farmers against syndicate of buyers. • To promote the establishment of societies or associations of stakeholders and monitor

their activities. • To regulate and control the quality of seed cotton and cotton lint. • To collect, refine, maintain or disseminate information or data relating to the cotton

industry. • To make regulations for cultivation, marketing, processing, importation, exportation and

storage of seed cotton and cotton lint. • To receive and administer any fund established under Cotton Industry Act No. 2 of 2001. • To represent the government in all international for a relating to or dealing with cotton

industry.