Small Farmers In South Sudan Take Bold Step Into Markets

One of the least developed regions on earth, South Sudan is a tough place for small farmers to get ahead. But a few of them have, like maize growers Paul and Angelo, who have made the leap into commercial farming with the support of the Purchase for Progress (P4P) initiative. Like most members of the Nzara Agricultural Farmer Association (NAFA), Paul and Angelo’s transformation into successful commercial farmers didn’t happen overnight.

As participants in WFP’s P4P, which helps to link farmers with markets, Paul and Angelo had a lot to learn about modern methods of storage and quality control. They had to start using bags and tarpaulins to dry and pack their maize, and learn to keep it safe from rot and rodents. It also took courage. Paul and Angelo live in an area also frequented by the Lord's Resistance Army (LRA), a paramilitary group known for terrorizing small villages throughout central Africa. But their hard work paid off when, after the first delivery, Paul and Angelo returned from WFP’s office in Juba with $49,000 to distribute among their fellow farmers. A running start South Sudan is a landlocked area roughly the size of France, but with extremely poor roads. Shipping large amounts of food is difficult and expensive. While hugely beneficial, that makes the P4P programme in South Sudan one of the most challenging to date. Poor roads and infrastructure are compounded by a daunting security situation and a lack of important institutions, like banks, that would help to support the economy. Something as simple as cashing a check in Southern Sudan can be a complicated, time-consuming ordeal. Cont’d in pg 2

ISSUE 7

PURCHASE FOR PROGRESS MAY UPDATE

ISSUE 32

MAY 2011

P4P Pilot Countries

AFRICA

HIGHLIGHTS OF THE MONTH

• Agricultural development within the emerging country of South Sudan was a focus of high level attention during the month of May. The USAID Administrator and the UK Secretary of State for International Development visited Juba. The International Fertilizer Development Centre (IFDC) Regional Director, AGRA Programme for African Seeds Systems Director, P4P Coordinator and Government counterparts also took the opportunity to seek further synergy in supporting agricultural/market development.

• The Chicago Council on Global Affairs Symposium on Global Agriculture and Food Security: Progress to Date and Strategies for Success was convened in Washington on 24 May co-chaired by Catherine Bertini and Dan Glickman (US Secretary for Agriculture during the Clinton Administration). The catalysing role of P4P was highlighted by several high level speakers (see page 2).

• Preliminary findings/conclusions of the P4P Mid Term Evaluation undertaken by the Overseas Development Institute (ODI) were discussed by WFP staff implementing and supporting P4P together with four representatives of the external P4P Technical Review Panel (FAO, IICA, IFAD and Oxfam). Discussion centred around the evaluators’ interpretation of the programme principles and assumptions (see page 4).

• First Joint Training on procurement processes and market analysis in support of local and regional and P4P food procurement was launched by WFP in Kenya for staff from eight pilot countries, thanks to support from USAID.

CENTRAL AMERICA

ASIA

IMPLEMENTATION STATUS

21 P4P Pilots:

• 21 Country Assessment Missions completed.

• 20 Approved Country Implementation Plans (CIP): Afghanistan, DRC, El Salvador, Ethiopia, Honduras, Ghana, Guatemala, Kenya, Nicaragua, Burkina Faso, Liberia, Mali, Malawi, Mozambique, Rwanda, Sierra Leone, Sudan, Tanzania, Uganda and Zambia.

• Laos: CIP under develop-ment (still unfunded).

Paul and Angelo (centre)

Page 2 ISSUE 32

Cont’d from pg 1

Looking forward But at least in the case of the Nzara Agricultural Farmer Association members, the hurdles were overcome. At the time of WFP's first payment to NAFA, some 130 metric tons had already been delivered with another 120 tons were being aggregated for delivery. Moreover, the money earned by its members will help to convince other farmers in the region to increase production. With maize purchased in South Sudan, WFP was able to supply food for Congolese and Central African refugees who have been displaced into South Sudan as a result of widespread attacks by LRA rebels. See http://www.wfp.org/purchase-progress/blog/small-farmers-south-sudan-take-bold-step-markets

Washington Symposium on Global Agriculture and Food Security

The Chicago Council on Global Affairs convened the Symposium on Global Agriculture and Food Security: Progress to Date and Strategies for Success on May 24, 2011 in Washington DC. The symposium, co-chaired by Catherine Bertini and Daniel Glickman, reviewed progress on the U.S. government’s global food security strategy and provided critical thinking on how best to overcome potential obstacles to success. It aimed to: evaluate progress to date on the U.S. government’s approach to agricultural development and food security, both celebrating successes and identifying opportunities for further work; discuss how long-term U.S. public and private sector support for agricultural development can advance global security, stability, and economic prosperity; and offer constructive thinking on future implementation challenges. Among the keynote speakers at the forum were: Mr. Bill Gates, Co-chair and Trustee, Bill & Melinda Gates Foundation (BMGF); the Honorable Rajiv Shah, Administrator, US Agency for International Development; and the Honorable Thomas Vilsack, Secretary, US Department of Agriculture. Story of Odetta: Rwandan Farmer To make the point that investments in agricultural development work, Bill Gates praised P4P in Rwanda and highlighted a story of a female farmer, Odetta Mukanyiko, a Rwandan smallholder who recently quadrupled her income through farming. “She’s been working the same tiny plot of land for 20 years, making less than a dollar a day,” he said. “But a year ago, Odetta’s life began to change. She was approached by the World Food Program, which as you know, buys huge amounts of food – mostly from large traders – to feed people affected by famine or disaster. Through a program we’ve helped fund called Purchase for Progress, they’ve begun to buy food from small farmers. The aim is to help small farmers gain access to reliable markets – so if they produce more, they can sell the surplus, and become self-sufficient.” “They told Odetta and other farming families in her village that if they improved the quality of their maize and bean crops, Purchase for Progress would pay them a good price. So Odetta borrowed some money, expanded her plot, and planted more than she ever had before.” “She sold all her crops, as they had promised. And in one year, her income quadrupled. Suddenly, for the first time in her life, Odetta had more money than she needed, so she adopted two small children. Now she has four. She feeds them. She pays school fees for them. She buys health insurance for them. And she can house them all too – because she replaced her two-room hut with a four-room home.” “But P4P does more than act as a buyer. It helps farming families develop the crops and market access they need to sell to other large buyers on a regular basis. The world needs more food. Working together with farmers like Odetta, we can boost supply to meet demand – and make historic progress against poverty and hunger.” In her remarks WFP Executive Director, Ms. Josette Sheeran, said that WFP is working with governments, international organizations and the private sector on the P4P initiative. “P4P is designed to get farmers into WFP’s supply chain and the broader market place.” “Over 65,000 famers, warehouse operators and small & medium traders have received training from WFP and partners in improved agriculture production, post-harvest handling and agricultural finance.” “Under a joint agreement with Compact and GAIN (Global Alliance for Improved Nutrition), WFP’s P4P pilot is developing an almond-based Ready to Use Supplementary Feed to be produced locally in Afghanistan for use in our supplementary feeding programme, which provides nutritional support to pregnant women, nursing mothers and children under 5.”

Odetta Mukanyiko at her house

Copyright: BMGF

The Knowledge Partnership for Improved Market Access in East and Southern Africa The Knowledge Partnership for Improved Market Access in East and Southern Africa is a new regional learning network. It connects three groups of people who generate and share experiences, lessons and ways to improve market access for smallholder farmers. The initiative is funded by a US$1.5 million grant from the International Fund for Agricultural Development (IFAD) to Kenya-based not-for-profit PICO Eastern Africa. PICO, which stands for People, Innovation and Change in Organizations, will manage the initiative and provide facilitation services. Network members Partners in the network will include public donors and private social investors in market access development. Local learners will be smallholders and others in value chains, as well as implementers of the partners’ country programmes. The network consists of four main entities:

• Partners/investors - who determine the learning agenda and commit resources to support the learning network;

• Community of Practice (CoP) – which is the hub of the network, and is where lessons are distilled from experience and then shared;

• Local learners - who are the innovators of the network;

• Facilitation function – PICO-EA is tasked to facilitate the linkages and flow of knowledge and experience. It will also facilitate the systems and processes needed to make the knowledge partnership work.

The partners will support local peer-to-peer learning among farmers and others in the market chain. The Community of Practice will ensure that lessons, experience and good practice flow continuously between the local and regional levels. The purpose of the knowledge partnership The network is designed to achieve the following development outcomes:

• Enable smallholders to benefit from higher market prices and a greater choice of markets;

• Enable investors to scale up good practice in their programmes through effective cross learning and sharing;

• Enable investors to improve the social and economic returns on their investments.

While IFAD has made the initial investment to get the network up and running, it is crucial for the success of the initiative that other partners come on board. A first meeting of potential partners was held at AGRA headquarters in Nairobi in April this year, and was attended by representatives of USAID, AGRA, World Food Programme’s Purchase for Progress team, various projects supported by these and other donors, as well as IFAD-supported projects. Learning expectations for the network include: Partners will learn how to increase the impact of public and private investments in inclusive market access by smallholders; Local learners, the smallholders and others in the value chain will learn how to operate transparent, inclusive and competitive markets; Members of the Community of Practice will learn how to improve market efficiency and inclusion, scale up proven practices, and get better returns on public and private investments. During the April meeting, the potential network partners identified some of the most critical challenges in market access in the region, which form the basis for the network’s initial learning agenda:

• How to organize farmers/traders access to markets;

• How to meet quality and food safety standards;

• How to facilitate markets and a trade-friendly policy and regulatory environment;

• How to improve services in structured trading systems (for example warehouse receipt systems, finance, MIS);

• How to promote investments in improved storage and market facilities.

The network will make available to its partners innovative, proven practices and policies, a roster of experts and trainers, and access

to sites where local value chain players are learning together.

For further information about this initiative contact: Ed Rege, Team Leader, PICO Eastern Africa, ed.rege@picoteamea.org; Helen

Gillman, Knowledge Management Officer, East and Southern Africa Division, IFAD, h.gillman@ifad.org

Article contributed by IFAD: Knowledge Partnership/Learning Network .

Page 3 ISSUE 32

PARTNERS

Community of

Practice

Local Learning

groups

Knowledge manage-

ment services

Resources

Demands

Technical

advice

Lessons

Innovations

Impact stories

Ideas

Practices

Policies

Page 4 ISSUE 32

P4P PROGRAMME PRINCIPLES AND ASSUMPTIONS At mid-point in the P4P pilot, and given various interpretations by different stakeholders about why WFP started the P4P initiative, a refresher in some of the fundamentals inherent in the P4P concept and the intentions of WFP when it started the

pilot are summarised below.

WFP’s extensive experience in local and regional procurement has informed the design of the P4P concept. The economic logic of P4P rests on building the capacity of smallholder/low-income farmers and farmers’ organizations to capture some of the value added and transaction costs currently accruing to the many intermediaries involved in marketing smallholder commodities and postulates that farmers or farmers’ organizations can perform these functions as efficiently as the market does now. The associated higher returns to agriculture should stimulate investment in production – assuming the provision of appropriate capacity building support. The impact on farmers’ incomes thus comes from higher returns and increased production.

Programme Principles The following non-negotiable principles are considered fundamental to the spirit of the P4P initiative.

• P4P country strategies must contribute to the national agenda for agriculture and market development and smallholder/low-income farmers must be at the centre of these efforts.

• The P4P initiative is inclusive of farmers’ organisations, traders, processors, agro-dealers, NGOs and marketing platforms (i.e. warehouse receipts systems, cereal fairs, commodity exchanges, electronic trading platforms etc) – Engaging with and supporting these various market agents is appropriate provided there is a benefit for smallholder/low-income farmers, and there are benefits of cost efficiency and reliability.

• The procurement modalities are an integral part of a comprehensive programme for capacity development engaging a range of partners with the objective of building the market readiness of participating smallholder farmer’s organizations and transitioning them to formal markets.

• Participating farmers’ organizations are expected to transition from WFP direct contracting processes to engaging with formal markets (competitive tendering for WFP) in an agreed timeframe as part of their growth strategy.

• Participating smallholder/low-income farmers must have capacity building support to increase productivity. Increases in agricultural productivity are necessary if farmers are to engage in the market on a sustainable and profitable basis.

• The Procurement Division in WFP Headquarters is the procurement authority for all P4P purchases and all existing WFP rules, guidelines and processes for food procurement apply to P4P.

• P4P purchases must comply with the WFP principle of cost efficiency.

• All food purchased by WFP must conform to specifications and standards which have been established to protect the health of the final food assistance beneficiaries. The standards and specifications used by WFP are dictated by national and codex alimenturius directives. Commodities are analyzed by an independent superintendent prior to final purchase by WFP.

Programme Assumptions

• The rationale for P4P rests on the premise that to efficiently buy the quantities it needs locally in the long run, WFP will buy primarily through competitive processes (tenders, warehouse receipt systems, commodity exchanges). However, smallholder farmers face significant constraints to profitably access competitive markets. Chief among these constraints are limited production capacity and limited market access.

• Purchase for Progress also accepts the (testable) hypothesis that smallholder farmers will likely fare better when marketing as a group (i.e., through farmers’ organizations) than when marketing individually at farm-gate. However, most farmers’ organizations lack the capacity to effectively aggregate and market their members commodities – especially through competitive processes to demanding and quality conscious buyers such as WFP.

• The programme is designed on the assumption that WFP demand will be predictable and stable for the duration of the pilot programme, and P4P purchases would account for at least 10 percent of local purchases in the pilot countries.

• One of the objectives of P4P is to increase the capacities of smallholder farmers in order to raise their income from agricultural markets. Income increases are expected to come from increased productivity, commodity quality improvements and enhanced market access, and not solely from better market prices. Specifically, P4P expects increases in farmers’ incomes to come from:

• Enhanced group marketing capacity to increase negotiation and bargaining power;

• Building capacity in commercialization and marketing and transferring to farmers a greater portion of the marketing margins;

• Higher farm productivity and a reduction in post-harvest losses, increasing the quantity and quality of commodities being traded, and reducing unit costs;

• Improved quality of commodities; and

• Transformation to modern marketing systems, i.e. commodity exchanges, warehouse receipt systems, and direct access to commercial markets with higher returns.

Cont’d in pg 5

Page 5 ISSUE 32

P4P is all about Partnerships Supporting smallholder low-income farmers to enter the market-place requires a broad partner-based strategy to build their competencies and competiveness. Public private sector partnerships are an essential part of this strategy. Governments, producers, civil society, commercial entities, regional bodies, UN agencies and donors need to combine activities and efforts to address the numerous challenges faced by developing countries in stimulating agriculture and markets. Specifically pro-smallholder agriculture development requires a marrying of supply-side and market access initiatives. While WFP brings to the table the ability to purchase staple crops, procurement and quality assurance expertise, logistics and supply-chain operational expertise, expertise in market analysis and funding to support capacity development for market access, WFP’s expertise does not extend to the areas of production, post-harvest handling, credit and group marketing and governance. Therefore, to ensure that the appropriate portfolio of assistance and support is provided on all levels, partnerships and capacity building are a central pillar of the P4P initiative at the global, regional and national level. P4P Partnership Framework

Cont’d from pg 4

• There is an inherent assumption that farmers will be rewarded for improving the quality of their produce, and that beyond the WFP market, a market exists for quality which more than compensates farmers for the additional work involved to meet high quality standards.

• The programme targets implicitly assume that smallholder organizations are already organized and plentiful in areas where WFP needs to deliver food assistance, and are poised to increase productivity with the right support. Furthermore, capacity building agents are present but need some support in the form of the assured market offered by P4P.

• Marketing in food staples will become more efficient and evolve from a situation of low/unpredictable volumes, low quality and fluctuating margins to high volumes, high quality and low margins.

Development logic of P4P The figure below illustrates the development logic of P4P. Increased smallholder income is a result of increased agricultural productivity, improved group marketing capacity, market development, and an enabling environment that supports smallholder market access. P4P Development Hypothesis

Capacity D

evelopment

Reliance on Partnerships

across the value chain

FARMERS

ORGANIZATIONS

+

SMALL/MEDIUM-SCALE TRADERS

INFRA-

STRUCTURE

POST HARVEST

HANDLING

& QUALITY

CREDIT

PRODUCTION DEMAND

WFP and other

buyers, traders,

government

RESEARCH &

MONITORING &

EVALUATION

POLICY

ENVIRONMENT

& Advocacy

Increased Income = Increased productivity + Enhanced group marketing capacity

+ Market development + Enabling environment

MARK AGOYA, P4P REPORTS OFFICER, WFP ROME

A Kenyan national, Mark Agoya has a Master’s degree in Multi-Media Communications and has worked for WFP since 2002 in Rome, Afghanistan, Pakistan, Zimbabwe and Sri Lanka. Mark joined UK’s Department for International Development (DFID) in Kenya in 2008 as a Senior Programme Officer for Social Protection working on the Hunger Safety Net Programme, a cash transfer programme, targeting the 4 poorest districts in the Arid and Semi Arid Lands of Kenya, a position he held until February 2010. Prior to joining P4P he did another stint with WFP Afghanistan where he rolled out the Cash and Vouchers programme in Afghanistan. “I am a firm believer in the P4P concept. P4P provides a perfect opportunity for WFP to engage with other stakeholders, including national governments, to push people out of poverty in the spirit of the shift from food aid to food assistance. When small farming fami-lies experience climatic or any other shocks they are thrown into desperation and be-come highly vulnerable. There is no better spring board than P4P to assist these small scale farmers into self sufficiency and to becoming active participants of competitive local, and even international, market economies.”

Page 6 ISSUE 32

P4P Country Coordinators/Focal Points

Asia Afghanistan: Stephane Meaux <Stephane.Meaux@wfp.org> Laos: Sengpaseuth <Sengpaseuth.simmanivong@wfp.org> Regional Bureau Focal Point: Francois Buratto <Francois.Buratto@wfp.org>

Eastern, Southern & Central Africa Democratic Republic of Congo: Melanie Jacq <Melanie.Jacq@wfp.org> Ethiopia: Enrico Pausilli <Enrico.Pausilli@wfp.org> Kenya: Martin Kabaluapa <Martin.Kabaluapa@wfp.org> Malawi: Tobias Flaemig <Tobias.Flaemig@wfp.org> Mozambique: Billy Mwiinga <Billy.Mwiinga@wfp.org> Rwanda: Emmanuela Mashayo <Emmanuela.Mashayo@wfp.org> South Sudan: Marc Sauveur <Marc.Sauveur@wfp.org> Tanzania: Dominique Leclercq <Dominique.Leclercq@wfp.org> Uganda: Elvis Odeke <Elvis.Odeke@wfp.org> Zambia: Felix Edwards <Felix.Edwards@wfp.org> Regional Bureau Focal Point: Simon Denhere <Simon.Denhere@wfp.org> WFP’s secondee to ACTESA: Simon Dradri <Simon.Dradri@wfp.org>

West Africa Burkina Faso: Veronique Sainte-Luce <Veronique.Sainte-Luce@wfp.org> Ghana: Hassan Abdelrazig <Hassan.Abdelrazig@wfp.org> Liberia: Lansana Wonneh <Lansana.Wonneh@wfp.org> Mali: Isabelle Mballa <Isabelle.Mballa@wfp.org> Sierra Leone: Miyuki Yamashita <Miyuki.Yamashita@wfp.org> Regional Bureau Focal Point: Jean-Martin Bauer <Jean-Martin.Bauer@wfp.org>

Latin American & Caribbean El Salvador: Hebert Lopez <Hebert.Lopez@wfp.org> Guatemala: Sheryl Schneider <Sheryl.Schneider@wfp.org> Honduras: Nacer Benalleg <Nacer.Benalleg@wfp.org> Nicaragua: Francisco Alvarado <Francisco.Alvarado@wfp.org> Regional Bureau Focal Point: Laura Melo <Laura.Melo@wfp.org>

KEY P4P CONTACTS IN ROME P4P COORDINATION UNIT

• Ken Davies, P4P Coordinator: Ken.Davies@wfp.org

• Sarah Longford, Snr Programme Adviser, Partnerships: Sarah.Longford@wfp.org

• Mary-Ellen McGroarty, Snr Programme Adviser for Ethiopia, Kenya, Laos, Malawi, Mozambique, Rwanda, Tanzania, Uganda & Zambia: Mary-Ellen.McGroarty@wfp.org

• Jorge Fanlo, Snr Programme Adviser for Afghanistan, Burkina Faso, DRC, Ghana, Liberia, Mali, Sierra Leone & South Sudan: Jorge.Fanlo@wfp.org

• Clare Mbizule: Snr Programme Adviser, M&E: Clare.Mbizule@wfp.org

• Alessia De Caterina, M&E Officer: Alessia.Decaterina@wfp.org

• Blake Audsley, Market Analyst: Blake.Audsley@wfp.org

• Tobias Bauer, Communications Officer: Tobias.Bauer@wfp.org

• Mark Lwanga Agoya, Reports Officer: Mark.Agoya@wfp.org

• Helen Kamau-Waweru, Finance Officer: Helen.Kamau-Waweru@wfp.org

• Ester Rapuano, Snr Finance Assistant.: Ester.Rapuano@wfp.org

• Amanda Crossland, Snr Staff Assistant to P4P Coordinator: Amanda.Crossland@wfp.org

• Kathryn Bell, Admin. Assistant: Kathryn.Bell@wfp.org

• Alessia Rossi, Staff Assistant: Alessia.Rossi@wfp.org PROCUREMENT DIVISION

• Bertrand Salvignol: Food Technologist: Bertrand.Salvignol@wfp.org

• Van Hoan Nguyen: Food Technologist: VanHoan.Nguyen@wfp.org

• Jeffrey Marzilli: P4P liaison: Jeffrey.Marzilli@wfp.org

• Laila Ahadi: Procurement Officer: Laila.Ahadi@wfp.org

The update is published by the P4P Coordination Unit in Rome, Italy. Contact us at wfp.p4p@wfp.org External: www.wfp.org/p4p Internal: http://go.wfp.org/web/purchaseforprogress

CALENDAR

• 6 – 10 June: WFP Executive Board

• 7 – 10 June: AGOA Forum Private Sector/Civil Society Session: "Enhanced Trade through Increased Competitiveness, Value Addition and Deeper Regional Integration" Lusaka, Zambia

• 14 June: FAO Plant Production and Protection Division organising a Forum on Sustainable Crop Production Intensification (SCPI), FAO headquarters in Rome. The forum will preview a new FAO publication, “Save and Grow”, a policymaker’s guide to sustainable in-tensification of smallholder crop production, which will be officially released on 25 June 2011 at the FAO Conference.

• 16 June: HarvestPlus European Donor Meeting, Zambia 23 June UN Value Chain Development group meeting, Turin

• 25 June – 2 July: 37th FAO Conference

• 27th and 28th June 2011: 2nd Meeting of Partners for the Network for Enhanced Market Access by Smallholders in East and Southern Africa (NEMAS) to be held at the Jacaranda Hotel, Westlands, Nairobi.