purchase for progress december update december 2012 · “accelerating progress towards economic...
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PURCHASE FOR PROGRESS
DECEMBER UPDATE ISSUE 51
DECEMBER 2012
21 P4P pilot countries Asia: Afghanistan, Laos Africa: DRC, Ethiopia, Ghana, Kenya, Burkina Faso, Liberia, Mali, Malawi, Mozambique, Rwanda, Sierra Leone,
South Sudan, Tanzania, Uganda, Zambia Central America: El Salvador, Honduras, Guatemala, Nicaragua
Highlights:
The first two pages of this Newsletter highlight the importance of P4P Partnerships. WFP currently works with 208 partners in 20 countries, ranging from Government and UN agencies to international and local NGOs. An example of a successful local partnership supporting P4P through farmer training schools in Honduras is offered on page 2.
An insight into methods and procedures of the Common P4P initiative in Rwanda which is led by the Government and implemented together with WFP across the country is presented on page 3.
Warehouse Receipt Systems (WRS) are increasingly promoted as marketing platforms as they give smallholder farmers more flexibility in determining when to sell their produce. P4P asked two experts for their opinions on challenges, future and possibilities of WRS (page 4).
Burkina Faso is the first P4P country to finalise its P4P story. A short synopsis is given on page 5. Two P4P-supported farmers’ organisations in El Salvador have signed forward purchasing
contracts for over 1,200 mt of maize with Harisa, a flour producing company. German Martinez, advisor to Harisa, emphasized the importance of the support provided by P4P: “The farmers’ organisations experience with P4P gave us the confidence to purchase maize and promote sustainability in the long run. Both are well-structured and trained, guaranteeing a product of an ideal quality.”
In December, P4P Guatemala held a Consultative Workshop on the implementation of the “Accelerating Progress towards Economic Empowerment of Rural Women Programme”. The pilot, which is led by the P4P team in Guatemala and jointly implemented by the Rome-based agencies and UN Women, received high-level government support at the meeting.
Inside this Issue:
Working with local partners in Latin America ..... p. 2 An insight into Common P4P in Rwanda ............... p. 3 Challenges and Future of Warehouse Receipt Systems ................ p. 4 P4P Story Burkina Faso - a short synopsis ................ p. 5 Other Updates and Contact Info ........ p. 6
P4P Partnerships Continue to Strengthen
An analysis of P4P partnership data echoes what is being seen at the field level, with evidence of the growing diversity and depth of
partnerships, which have been steadily strengthening since the inception of the P4P pilot over four years ago. The article below provides some details of this analysis while the story on page 2 provides an example of the importance of these partnerships to the
success of P4P.
As of 30 September 2012, the 20 active P4P pilot countries are working with 208 partners. Another 87 partnerships are under negotiation while 96 have already been completed. Of the 208 on-going partnerships, WFP has a formal partnership agreement with 123 partners. Some 74 also receive some funding from WFP under the P4P initiative.
P4P works together with government counterpart ministries and agencies, international and local NGOs, UN agencies, research institutions, donors, regional entities and the private sector. Technical support on agricultural production is the main area of focus of P4P partnerships at the country level, followed by agri-business management and post-harvest handling. Further areas include institutional capacity building and financial services.
The transfer of knowledge in these fields is one of the most important types of support provided by P4P partners. Over 193,000 smallholder farmers, lead farmers, agricultural technicians, small and medium traders and warehouse operators have participated in capacity building activities organised by WFP and partners since January 2009. The number of trainees has increased steadily. On average 34% of trainees were women. Not yet captured in these figures is the significant number of individuals benefitting from “trickle down” training provided by trainers who participated in “Training of Trainers” programmes.
Comprehensive reports on P4P Partnerships and P4P Capacity Building can be found at: www.wfp.org/content/reports-p4p-implementation
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Local Partners Supporting Farmer Training Schools in Honduras
In order to achieve the goal of reaching smallholder farmers in some of the poorest countries in the world, the success of P4P depends heavily upon its partners. As of September 2012, P4P pilot countries are working with 208 partners, with another 87 partnerships under negotiation. These partners range from UN organizations such as FAO and IFAD to international and local NGOs. Local NGOs are often at the forefront of capacity building strategies, providing guidance in areas that include, but are not limited to, gender equality, accounting, and post-harvest handling. Below is an example of the work that is being accomplished in Honduras with our local partners.
The Business Entrepreneurship Center (CIEN) in Honduras and P4P
Local partnerships in the Central America region have been steadily growing since the inception of P4P. In Honduras, P4P has received technical support for the Farmer Training Schools (FTS) initiative from a number of local organizations, including the Business Entrepreneurship Center (CIEN). “CIEN’s mission is to develop the capacities of micro, small and medium-size enterprises (MSMEs), in order to promote sustainable development and poverty alleviation in targeted communities.”
CIEN has worked in partnership with P4P since mid-2012 and is organizing ten Farmer Training Schools with P4P-supported farmer’s organizations (FOs) on best agricultural and manufacturing practices (BAP/ BMP) and management. FTS involves practice-oriented field learning in which farmers share agricultural knowledge under the supervision of technical staff from CIEN. So far the main topics addressed by CIEN through a learning by doing approach have been: sustainable agriculture practices, irrigation systems, postharvest handling and quality management, administration and accounting, gender equity, and rural youth development.
CIEN and how it helps farmers’ organizations
This local partner supports FTS with P4P FOs in the western region of Honduras. The partnership with CIEN is especially relevant because three out of these FTS focus on women. For instance, the “Union y Esfuerzo” FO consists of fifteen female farmers. For the development and implementation of these specific farmer training schools, CIEN developed a female-oriented curriculum jointly monitored with the P4P team.
Women from Union y Esfuerzo FO maintain that for many years they never had the opportunity to participate in training sessions, however thanks to CIEN and the partnership with P4P, they are being included in training and are receiving agricultural packages to increase their productivity. They feel even more committed to their work and closer to the members of the FO. Dania, a member of the FO confirms: “The good thing about participating in the farmer training school is that we are always looking for something to learn in the field. The training is normally available in the afternoons, so we can bring our children and balance our personal life with our work out of the house.”
Female trainees value their own work and demonstrate the same enthusiasm as their male counterparts. As one of the farmers says: “Thanks to the trainings -through the farmer training schools approach- we motivated ourselves to work hard together. We are also learning new agricultural techniques to increase our yield and produce to the required quality standards, adding value to our crops in order to get better prices.” Moreover women feel that if they remain united, they will be able to aggregate more produce and access formal markets.
Farmer Training Schools
In the Farmer Training Schools (FTS) approach, a group of farmers get together in their own fields to learn about their crops and how to manage them. This is a practice/observing-oriented field learning. Many development organizations have been developing farmer training schools – enabling groups of farmers to find out the answers for themselves – a different approach to extension workers providing advice to farmers.
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In approximately 30 pages, the Burkina Faso P4P Story describes the general context in which the project took place, the strategy that was adopted, the actual implementation and important lessons learned that can be used to improve P4P and similar initiatives in the future. It is expected to provide interesting insights on key dimensions of the P4P initiative as a whole. Highlights of the Burkina Faso P4P story include:
The approach Burkina Faso adopted was holistic and therefore enabled WFP and its partners to address key problems along the supply chain, from production to marketing to the development of managerial capacities and provision of equipment. Burkina Faso can be considered a procurement laboratory for P4P as the three main P4P procurement modalities (direct contracting, forward contracting and soft tendering) have been tested under the initiative and in doing so, WFP has strictly followed the rules that had been set up under P4P. This has allowed for interesting lessons to be learned regarding the modalities and best ways to support farmers’ organisations (FOs).
A major achievement in terms of partnerships has been the establishment of a new coordination
mechanism through the Stakeholders and Partners Consultation group which also includes the Government as a member. Communication between the different rural development stakeholders in Burkina Faso has been strengthened and new opportunities and collaborations have emerged. Furthermore, it has contributed to the development of a shared vision in terms of rural development in the country.
Though gender disparity remains a major challenge in the country, valuable insight is emerging around
specific initiatives which benefit women-only groups. Thus far the results have been encouraging. P4P farmers’ organisations have been able to establish successful relations with traders which now account
for up to 80% of their collective sales. The improved capacities they have gained in aggregation and quality management have helped them negotiate and improve their bargaining position. However, improvements in quality are not yet sufficiently valued by traders. Therefore, there is still a considerable way to go before P4P smallholder farmers will be able to engage sustainably in more competitive markets. This suggests the importance of also maintaining the capacity building efforts beyond the P4P pilot.
Notwithstanding the important achievements, the development impact of P4P has not been utilised to its full potential. As the country office has been moving towards cash-based programmes, reducing the scale of traditional food assistance operations, the level of procurement under P4P has remained relatively limited and has not reached the level projected in the P4P Country Implementation Plan. As a result, collective sales from FOs to WFP have been relatively small and the impact of the procurement part of the pilot may not meet initial expectations. However, given the limited quantity of WFP purchases, FOs supported under P4P have relatively quickly engaged with other buyers. Overall, WFP only bought some 20% of the volume aggregated by P4P FOs while the remainder has been bought by other institutional buyers, traders, processors and households.
P4P Stories – An Example from Burkina Faso
In the P4P November update, we wrote about the on-going effort of each P4P pilot country to document their own “P4P
Story”. This document will be the first point of call for anyone wishing to learn about how P4P evolved in each of the pilot
countries - from implementation to lessons learned - as we approach the final year of the pilot. With the support of P4P
Monitoring and Evaluation Officer, Damien Fontaine, Burkina Faso has already produced an extensive first draft of their
P4P story.
The Burkina Faso WFP/P4P Team with M&E officer Damien Fontaine
© WFP
ISSUE 50
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The P4P experience in Rwanda
WFP’s P4P initiative in Rwanda was launched in 2009 in the Eastern Province, with the objective of reaching 45,000 smallholder farmers over a period of five years. As the 24 selected farmers’ organisations had no previous experience in collective marketing, the first step of the initiative was to help them develop the necessary skills to engage with an institutional buyer such as WFP. The USAID-sponsored Post Harvest Handling and Storage project partnered with WFP to deliver tailored capacity building programmes on post-harvest handling, quality parameters, construction of storage centres and negotiating techniques.
Within one agricultural season, farmers were able to supply 4100MT of maize to WFP. P4P-supported cooperatives had successfully developed the capacity to fulfill contracts according to WFP’s stringent quality requirements. Impressed by these positive outcomes, the Government decided to use the P4P approach to facilitate the outreach and up-scaling of government efforts geared towards improving the role of cooperatives in addressing post-harvest losses and linking farmers to institutional buyers and markets. The result was the establishment of Common P4P (CP4P) in 2010 which is implemented together with WFP on a country-wide level. The ultimate objective is to develop smallholders’ collective and professional capacity to supply large buyers.
In October 2012, a joint WFP and FAO mission visited Rwanda to carry out a case study of CP4P. One striking feature observed by the mission was how P4P has been fully integrated into the work of the Rwanda Ministry of Agriculture at all administrative levels of Government.
How does CP4P work?
As seen in the diagram, CP4P is coordinated by The Ministry’s Post Harvest Task Force (PHTF) based in Kigali. At the provincial level, PHTF officers supervise the activities of 15 PHTF field officers, each of whom is assigned responsibility for two districts. In addition, the Rwanda Ministry of Agriculture has an extension officer stationed in each province and an agronomist in each district and sector. In addition, socio-economic advisors operate at village and agriculture promoters at cell levels, living and working alongside the community members they serve. Promoters countrywide have received training on post-harvest handling. They work with their extension and PHTF counterparts at higher levels to ensure that farmers are receiving information, training and access to fertiliser and inputs needed to maximise their production and marketing efforts.
Agricultural extension and PHTF staff perform different activities throughout the agricultural cycle. In the planting season, the focus is on forecasting production in each sector. Socio-economic advisors and promoters gather information on the crops that households will plant in their cells and villages, and the land that will be allocated to each crop. This information is fed to the sector level agronomists who meet with their district level agronomist each Monday, often with a PHTF field officer from Kigali in attendance. Based on the data from the districts, PHTF field officers coordinate the timely delivery of subsidised fertilisers and seed to the cooperatives. Inputs are subsidized at 50% and provided to farmers on credit.
As the harvest approaches, the sector and district agronomists visit farmers to ascertain harvest time, identify any needs for post-harvest equipment and/or drying facilities and conduct refresher training on appropriate post-harvest handling. The production forecasts prepared by the districts at the start of the season are used by the PHTF to plan purchases for the National Strategic Reserve from the cooperatives. Based on the available projections for the 2012/13 “agricultural season A”, the Government has signed Forward Delivery Contracts with 212 cooperatives to deliver 22,048 MT of maize and beans for that national strategic reserve. The CP4P case study is under finalization and will be shared in the near future.
From a small pilot to country-wide coverage : “Common P4P“ in Rwanda
Drawing on the success of the P4P initiative which is being implemented in Rwanda since 2009, the Rwandan Government
has successfully expanded the P4P model to link smallholder farmers with public and private sector markets and stimulate
national food supply systems. Sharing a common interest in promoting knowledge about institutional buying models that
contribute to food security, WFP and FAO undertook a case study on the Government’s Common P4P approach in October
2012. A short synopsis is given below.
Government structures supporting Common P4P
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Janet Kalulu Ngombalu: Key Stakeholders for Successful Development of WRS
Public authorities: There are key steps required by the government: a) to pass and implement legislation on WRS law and
the standard conditions for licensed warehouses; b) to set up a licensing and inspection system for the
licensed warehouses; c) to set up a performance guarantee system; d) to work with the private sector to establish viable
quality standards.
Farmers and processors: Consultation with farmers and processors is essential to ensure that the planned system suits their needs and constraints, and to ensure that they understand and support the new legislation. Ongoing feedback once the scheme has started is also important to help fine-tune its operation. As a result, the scheme should be planned through a bottom-up consultative process.
Local banks: When the scheme has been set up, the role of the local banks is critical to ensure that it is operable. This requires training bank staff and establishing clear internal procedures, including a system for weekly monitoring of prices of commodities being used as collateral. Warehouses that already have an established relationship with financial institutions are most likely to be seen as credible participants of the scheme at the outset, with acceptability widening to more warehouses once the scheme is shown to operate reliably.
International institutions: these can greatly accelerate the establishment of WRS by supporting the institutional development to assist in providing technical assistance in establishing quality standards, training warehouse operators and inspectors, advising on draft legislation, help set up performance guarantee schemes and draw on best practices in other countries. Future development: The Warehouse Receipt System in East Africa is on an upward growth, especially in Uganda and Kenya. The role of the various actors within the WRS is seldom understood and therefore, EAGC is carrying out professional training under the Eastern Africa Grain Institute (EAGI).
Germain Akoubia: Challenges of the WRS for smallholder farmers: the perspective from Uganda
There are many challenges on this issue, ranging from limited access due to inadequate incentives for the private sector to invest in rural areas, to the private sector’s management models, governance structure and marketing strategies. In addition, there are inherent limitations that perhaps were not foreseen, such as the requirement for each individual depositor to check their stocks using a computer and the high interest rates from the participating banks. In a country where over 40 per cent are illiterate, computerising the system did not open the opportunity to many smallholder farmers. Also, the long waiting period to obtain a loan does not encourage the use of WRS.
The banks advance credit at commercial rates, which, at an average of 21 per cent per annum is too high for smallholder farmers. Consequently, the main players have remained medium-scale traders and big farmer organizations with strong governance and marketing structures. In order to bring more players on board, there is need for a special credit facility that would provide credit to depositors at a much lower interest rate. WRS is not currently addressing this demand. Ideally, depositors at the WRS facilities should be able to access credit using Electronic Warehouse Receipts (eWRs) as collateral at participating banks but in reality, smallholder farmers are reluctant to use WRS. To meet this demand, banks should reduce the loan rates and rely on the WRS ability to establish grain quantity and quality.
Warehouse Receipt Systems:
The challenges, future and how it can help smallholder farming
The Warehouse Receipt System (WRS) is a potentially growing opportunity for smallholder farmers, especially in East Afri-
ca. A well functioning WRS would provide the opportunity for smallholder farmers to store quality grain, access quality
markets, and would offer them the ability to hold the commodity until they can receive the best price. Warehouses are
certified and ideally the depositor can use the grain they are storing as a security for loans, which are typically offered at
60 percent of the market value of the grain at the time of the loan. This ability to access cash without having to sell com-
modities right away (possibly at below market price), could be fundamental in transforming the lives of many smallholder
farmers. Strengthening of WRS can play a pivotal role in addressing the challenges of agricultural financing. To date, WFP
has received 4,000MT through this system. Below are perspectives on the WRS in Kenya, Uganda and the East Africa
region, courtesy of Janet Kalulu Ngombalu of the East Africa Grain Council (EAGC) and Germain Akoubia, P4P Country
Coordinator in Uganda.
“A Warehouse Receipt is ‘a document issued by a licensed warehouse operator certifying the quality and quantity of a specified commodity placed by a named
depositor into a secure storage environment’. The receipt contains the following information: location of
the warehouse, commodity type, date of delivery, name of the depositor, quality and quantity of the
commodity, and associated storage charges.”
National Milling Corporation Limited – Zambia
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P4P Country Coordinators / Focal Points
Asia
Afghanistan: Djordje Vdovic <[email protected]>
Laos: Sengpaseuth Simmanivong <[email protected]>
Regional Bureau Focal Point: Francois Buratto
Eastern, Southern & Central Africa
Democratic Republic of Congo: Francis Bere <[email protected]>
Ethiopia: Enrico Pausilli <[email protected]>
Kenya: Martin Kabaluapa <[email protected]>
Malawi: Irene Del Rio <Irene.Del-Rio@wfp,org>
Mozambique: Ana Touza <[email protected]>
Rwanda: Emmanuela Mashayo <[email protected]>
South Sudan: Marc Sauveur <[email protected]>
Tanzania: Dominique Leclercq <[email protected]>
Uganda: Germain Akoubia <[email protected]>
Zambia: Aurore Rusiga <[email protected]>
Regional Bureau Focal Point: Simon Denhere
West Africa
Burkina Faso: Veronique Sainte-Luce <[email protected]>
Ghana: Hassan Abdelrazig <[email protected]>
Liberia: James Legg <[email protected]>
Mali: Isabelle Mballa <[email protected]>
Sierra Leone: Miyuki Yamashita <[email protected]>
Regional Bureau Focal Point: <[email protected]>
Latin American & Caribbean
El Salvador: Hebert Lopez <[email protected]>
Guatemala: Sheryl Schneider <[email protected]>
Honduras: Lenin Gradiz <[email protected]>
Nicaragua: Francisco Alvarado <[email protected]>
Regional Bureau Focal Point: Laura Melo <[email protected]>
KEY P4P CONTACTS IN ROME
P4P COORDINATION UNIT
Ken Davies, P4P Coordinator: [email protected]
Catherine Feeney, Snr Programme Adviser, Partnerships:
Jorge Fanlo, Snr Programme Adviser for Afghanistan, Burkina
Faso, DRC, Ghana, Liberia, Mali, Sierra Leone & South Sudan:
Edouard Nizeyimana, Snr Programme Advisor for Ethiopia,
Kenya, Malawi, Mozambique, Rwanda, Tanzania, Uganda &
Zambia: [email protected]
Clare Mbizule, Programme Adviser, M&E:, Learning and
Sharing: [email protected]
Alessia De Caterina, M&E Officer:
Damien Fontaine, M&E Officer:
Lauren Lepage, Communications and Advocacy Officer:
Bhai Thapa, Finance Officer:
Barbara Pfister, Reports Officer:
Ester Rapuano, Snr Finance Assistant:
Judy Gicharu, Snr. Admin Assistant:
Gianluca Guerrini, Admin Assistant:
PROCUREMENT DIVISION
Shane Prigge, Food Technologist:
Van Hoan Nguyen, Food Technologist:
Stephane Meaux, Food Technologist:
Brigitte Labbe, Procurement Officer:
The update is published by the P4P Coordination Unit in Rome, Italy.
Contact us at [email protected]
External: www.wfp.org/p4p Internal: http://go.wfp.org/web/purchaseforprogress
CALENDAR
23 – 27 January, World Economic Forum Annual Meeting, Davos, Switzerland
18 – 19 February, Executive Board, First Regular Session, Rome, Italy
25 – 28 February, P4P Technical Review Panel Meeting, Rome, Italy
Introducing Lenin Gradiz - New P4P Country Coordinator in Honduras
Lenin Edgardo Grádiz Carcamo is a Honduran national and has worked with WFP since 2011 as an Advisor in Training and Capacity Building in Rural Environments. He joined the Honduras P4P team at the beginning of this year and became P4P Country Coordinator in October.
After graduating in Agricultural Engineering and Agricultural Analysis Systems, he obtained a Ph.D. degree in Agricultural Science from Kyoto University (Japan) and Wageningen University (Netherlands). Before joining
WFP, Lenin worked as a researcher in Rural Development and Modeling Integrated Production Systems at the International Livestock Research Institute (ILRI) in Kenya. He also worked as a University lecturer at the National Agricultural University of Honduras.
For Lenin, the most important aspect of P4P is its contribution to research and innovation (R&I) in agriculture: “Given the challenges associated with providing sufficient food for a growing population, R&I are necessary to increase food security. P4P represents a global portfolio of R&I strategies to create more productive crops, sustainable agricultural production systems, ensure food security, and enhance access to reliable and fair markets.”
SAVE THE DATE
P4P ANNUAL
CONSULTATION
29 – 30 January 2013
FAO, Rome, Italy