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FAO NAMC Linking Farmers to

Markets in Southern Africa


Angeline Kahari
SNV ZAMBIA
5-8 October 2009
Production Income and Employment
Setting the context
Our country programme
The RICE Value Chain
Progress so far
Results so far
What we have learned
Value for money?
Is our strategy working?
CONTEXT: PRIVATE SECTOR GROWTH
THE PRIVATE SECTOR IS AN ENGINE FOR GROWTH.
CREATION OF ENABLING CONDITIONS FOR PRIVATE
SECTOR PARTICIPATION IS CRITICAL TO BOTH
DOMESTIC INVESTMENT (ESPECIALLY SME) AND TO
ATTRACTING FOREIGN DIRECT INVESTMENT (FDI).
Growth driven by private investment leads to
higher revenues for governments to finance
vital social services and infrastructure
(Africa Commission Report, May 2009, page 6)
Topic for today: THE PROMISE OF RICE IN OUR
REGION: compelling evidence from Zambia.
CONTEXT: OUR CHANGING WORLD
Global food crisis
Global financial crisis
Recession
Climate change
[They] threaten the hard-won gains made by African
countries over the past decade. Investments are
declining. Businesses are struggling to survive. And
jobs are lost. Jakaya Mrisho Kikwete, President of the Tanzania, May 2009
STAPLE FOOD PRICES ARE RISING
Global food prices have risen 83% over the last
three years (World Bank estimate) and 45% in
the past year alone (FAO)
Staple foods account for much of this escalation
Wheat prices rose 130% over the previous
year
Soy prices rose by 87%
Maize prices rose by 31%
Rice prices climbed by 74%!
SOURCE: Institute for Food and Development Policy
What do we see?
We see a Zambia richly endowed with
natural resources- land, water, forests,
minerals, people
We take a closer look and see:
many unemployed people (only 7% have formal employment)
many young people (more than 45% are under 15)
unrealised human potential (adult literacy is under 64%)
many sick people (life expectancy at birth is 40.5 years)
people toiling in fields (over 80% are dependent on agriculture)
many poor people (over 63% live on less than $1 per day)
hunger and malnutrition
greed and corruption
And We question:
HOW CAN THIS BE?
WHY IS IT SO?
WHAT CAN WE DO ABOUT IT?
HOW WILL WE DO IT?
P
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IN
TH
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FA
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W
EA
LT
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ISSUE BASED APPROACH
What are the
bottlenecks?
What is impeding
progress toward
impact/
Political
will or
political
wont?
Wheres the
money?
What
money?
NEW
BREW
Teachers? Desks?
Books? Jobs? Where is
the loo? Im hungry!
They are sick.
This is not
transparent
!!!!!!!
OUR THEME IS INVESTMENT IN GROWTH
Growth in services: education,
WaSH, renewable energy
Growth of the private sector:
Agricultural value chains
Pro Poor Tourism
Governance for empowerment
over-arching
Vocational and skills
development cutting through
+IMPACT on lives of the poor !
18
MACRO
MESO
MICRO
Policy
environment
SNV
Triggers
Where
RESULTS
(should)
have
meaning
ISSUE = AXIS
GROWING RICE
CAN REALLY
CHANGE OUR
LIVES
RICE FACTS
Globally, rice provides 25-30% of world dietary energy supply.
Rice consumption in Africa is growing at 4% per annum.
In Africa rice consumption presently outstrips production which
has at most grown by 2% (FAO 2009).
Sub-Saharan Africa is a net importer of rice.
Western and Eastern Africa provide 95% of production.
Madagascar, Comoros and Tanzania are leading global rice
consuming nations.
South Africa is one of the biggest net global importers of rice.
In Africa poor people spend more than 50% of their income on
staple foods- increasingly rice.
MORE RICE FACTS:
In southern Africa increase in rice consumption has
averaged 6% per annum since 2000
Sub-Saharan Africa is the biggest world importer
Purchases 6.7 million metric tonnes
Equivalent to 36% of rice consumed in region
In Zambia 35,000 MT are consumed annually
In 2007 18,000 MT were produced
Potential for rice production in Zambia is high
STARTING WITH THE MARKET FOR RICE
In 2007 the estimated production in Zambia was 18,000 MT
12,000 MT was informally traded mainly to DRC through cross
border traders (Fewsnet:2007)
Consumption in the country was estimated at 35,000 MT
The deficit of 29,000 MT is imported mainly from Eastern Asia
(perceived to be of higher quality and also cheaper)
Buyer(s) market dominated by small scale traders and rice
retailing conducted through open informal markets.
Imported rice sold through formal retail chains.
RICE VALUE CHAIN ISSUES
Low volumes of poor quality produce from small
scale producers (over dry paddy)
Excess Milling Capacity with Processors
Collapse of formal marketing systems
Absence of quality local brands in the domestic
market
Decrease in access to financial services by rural
farmers (elimination of Government directed
credit)
Inadequate post harvest handling skills &
agronomic practices
Absence of pure seed and fertilizer
Lack of quality storage facilities
Insufficient market information for market actors
Poor rural roads network
Justification for Rice Choice
25,000 rice producers in SNV selected
provinces (70,000 in the whole
country)
Staple crop consumed in the country
Unsatisfied market (29,000 MT
imported)
Commercialising smallholder cash
crop (local prices stabilising)
Potential income USD 1,000 p.a. for 1
hectare per producer (2012)
SNV PRODUCTS
Producer Group Strengthening
-legitimacy, credibility and viability of
economically active farmers
Market Intelligence
-both supply and demand side
Multi-stakeholder Platforms
-meaningful dialogue focusing on impacts and
economic performance
Service Provider Strengthening
Value Chain Financing
- increase access and utilization of financial
services and products by VCA for business
growth and equity
Effective Public Policy Management
-Advocacy and dialogue with Government for
development of enabling policy environment
SNV INTERVENTIONS
Value Chain Approach is applied across 3 provinces in 7
Districts
Value Chain Assessment in 2007
District level Multi-stakeholder Platforms (MSP)
Baseline in 2008 confirmed the national production level
National MSP to bring together the actors established in
2008
Warehouse receipting system development
MoU Zambia Agribusiness Technical Assistance Centre
Ltd. (ZATAC) 2008 for brokering funds for rice processors
and producers
SNV INTERVENTIONS continued.
Inclusive Business with SPAR Retail Chain in 2008:
10 MT supplied monthly from DMDC (Processor) to
SPAR (retailer).
SME out-grower scheme in 2009: 3 processors
approached to establish out-grower schemes with
local small holder rice farmers across 3 Districts
SNV INTERVENTIONS
IFAD/SNV Knowledge Brokering Programme:
Feasibility Study to assess viability of small
holder warehouse receipt schemes in 2007
Exchange Visit to Mbeya in Tanzania to learn
about Warehouse Receipt Systems (WRS) for 20
farmer group represented in 2007
Warehouse Receipt Training conducted across 3
provinces for 140 farmer representatives in
2008
Warehouse Audit conducted on small holder
storage facilities- 5 facilities in 2008
SNV Interventions continued
IFAD/SNV Knowledge Brokering Programme:
- Rice Knowledge Exchange Conference in Nairobi in
2009 (2 Zambian Millers, 3 Ugandan & Tanzanian
farmer s, Malawian and Mozambican NGO
participated) organized through ESAANet & SNV
Zambia
National Partnership with Zambia Agricultural
Research Institute for knowledge dissemination on
rice agro-technologies and rice extension training in
2009 involving 60 farmers & 30 extension officers
RESULTS SO FAR AMONG SNV BENEFICIAIRES
Expanded programme outreach from 3,000 producers in 2007 to
5,000 in 2009 towards a target of 15,000 in 2012
Production rose from 2,770 MT /HA in 2008 to 4,675 MT/HA in
2009 representing an increase of 69%
Farmer income from rice production increased from USD 237 in
2007 to USD 800 in 2008 representing an increase of 27%
Farmer income from rice projected to rise to USD 1,000 in 2009
Value chain financing of USD 300,000 brokered for rice millers for
forward contracts with small holder farmers
Value chain financing of USD 300,000 to producers for bulking of
rice
New employment opportunities in the processing industry after
financing of processors by SNV partners (8 new jobs created)
RESULTS SO FAR continued
Locally branded Mongu rice present in SPAR supermarket chain a
total of 50MT at a total value of USD 55,000
5 Multi-stakeholder forums established in Mongu, Isoka,
Chinsali, Chavuma and Northern Province (Farmers, MACO,
financiers, Zambia Agricultural Research Institute [ZARI], and
private sector players)
ZARI/IFAD/SNV rice manual for rice extension officers and lead
farmers produced and in use
14 small holder owned rice demonstration plots across 7 districts
(SNV-IFAD )
70 farmers involved in seed purification pilot in Western Province
Regional publication of rice cases from the ESAANet/IFAD/SNV
regional knowledge conference under development
Formation of a Rice Strategy Task Force at the Ministry of
Agriculture which SNV has been requested to advise. This task
force is being funded by JICA.
RESULTS SO FAR continued
SNV facilitated formal trade of paddy rice from small
holders through their associations. from less than USD
50,000 in 2008 to more to 900 MT worth over USD
234,000 in 2009.
Increased stakeholder participation that includes
MACO, ZANACO/Rabobank, ZATAC (USADF,
WOORD&DAAD)
11 rice farmer associations registered with a
membership base of 3,000 farmers
ZCSMBA has procured 4 warehouses in its six step
process of warehouse receipt scheme implementation
across 4 districts in the country (through EU funding)
(IFAD/SNV knowledge adoption)
RESULTS SO FAR some more.
15 Savings and Credit Cooperatives established
(SACCOs) with 100 members each with savings
of USD 5,000 mobilized so far
SACCOS Manual and Warehouse Receipt
Operational Manual produced (SNV/SCAPEMA)
and in use.
FROM THE FIELD
Challenges
Under funded government departments that are
supposed to provide services to producers (Research and
Extension)
Creating business orientation in farmers who have
essentially been subsistence producers
Inadequate infrastructure and storage facilities
Delayed approval of the Agricultural Credit Act that
legalizes warehousing receipt system
OUTLOOK
Zambia is blessed with more than 90,000 HA of arable land that
can be opened up for rice production (excluding land suitable for
upland rice that is also being introduced)
The Government of Zambia has taken in rice as one of the crops for
both livelihood and commercial production. Fertilizer inputs will now
also be allocated for rice production
Private sector participation has been enhanced and the biggest food
processor in the country, National Milling Limited, has opened up
collection depots in the rice growing areas of Western Province with
intention to buy from smallholders.
Rural SMEs taking the lead in rice processing and marketing
ZARI has obtained funding of USD 74,000 for NERICA rice seed
multiplication (ZAMSEED) and they are seeking a partnership with
SNV
WHAT WE HAVE LEARNED:
Through their empowered associations farmers are able
to solve their own problems
All of the institutions that are working with SNV along the
rice value chain are working toward business goals and
profitability rather than just subsistence
With SNV support rice value chain facilitation has
expanded to include producers, input suppliers,
processors, extension service providers and financiers.
A culture of entrepreneurship is slowly emerging as
evidenced by the formation of active SACCOS
Progress made along the chain has attracted funders
VALUE FOR MONEY?
It is still early days. The rice value chain
has occupied SNV ESA innovative space
for two years and is ready to move on in a
wider programme addressing food
security through investment in
agricultural value chains.
Some results have already been achieved
and the lives of people have already
changed.
IS OUR STRATEGY WORKING ?
Targets set in 2008-2009 have been reached
and even surpassed.
Growth of the private sector is occurring along
the whole rice value chain.
Business and producers associations are more
empowered and are working at creating and
capturing value at the local level.
Multiple stakeholders are focused on
strengthening their own capacity to innovate
local solutions to local problems.
I will leave that to each of you to judge!