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AGRA MARKET ACCESS PROGRAM

By

Anne Mbaabu

February 2010

AGAGRARA?

The Alliance for a Green Revolution in Africa (AGRA) is an

African-based and African-led organization working with

our partners to catalyze change that rapidly and sustainably

increases the productivity and incomes of smallholder

farmers, most of whom are women, and achieves food

security for Africa.

Our goal is to catalyze a uniquely African Green Revolution.

Medium

farmers

Smallholder farmers

(mostly women)

Large farmers

In Africa Smallholders constitute the backbone of farming in Africa about 85%

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AGRA focus 13 countries

Confidential

AGRA Strategy

Overview of AGRA

– The Alliance for a Green Revolution in Africa (AGRA) is focused on 3 key dimensions:

• Driving innovation

• Funding demonstration

• Engaging with partners to scale up success across staple breadbasket areas and countries

– AGRA’s strategy focuses on:

• Breadbasket regions

• Food staples e.g. maize, rice, cassava, sorghum, millet and grain legumes

• Use of M&E to establish baseline, track performance, long/short term objectives, learning and mid-course direction

AGRA Strategy

:Holistic value chain approach

Farm

ProductionProcessing Distribution

& Trading

Retailing ConsumptionLand

Preparation

Soil Health‏

Input Supply

PASS (seeds)‏Market Access Program‏

– Policy & Partnerships‏ in support of the program to create an enabling environment

AGRA has set three main strategic goals for 2020:

1. Reduce food insecurity by 50 percent in at least 20 countries.

2. Double the incomes of 20 million smallholder families.

3. Put at least 15 countries on track for attaining and sustaining a uniquely

African Green Revolution.

Increase incomes and reduce poverty by promoting efficient, well functioning markets that will create market linkages for millions of smallholder African farmers

Market Access Global objectives

Market Access

Program

Confidential

AGRA Strategy

The Importance of Markets

• Where large increases in agricultural productivity occur without corresponding market access improvements, the outcome is dangerous for farmers because;

• Localized gluts drive down farm-gate prices

• Farmers abandon new technologies

• Low production occur in the next season, driving up food prices

• In the next five years, Market Access will focus on using an integrated value chain approach to deliver the following key objectives:

• To reduce transaction costs for the 4 million smallholder farmers in the 13 AGRA target countries in Africa

• To increase value addition in food usage in the 13 AGRA target countries in Africa

• To increase demand of food staples through alternative usage of food staples in the 13 AGRA target countries in Africa

• To promote an enabling environment for local and regional trade of food staples in the 13 AGRA target countries in Africa

Market Access business plan

• The Market Access Program will reach 4 million smallholder farmers directly and an additional 1.5m indirectly in 5 years.

• The total estimated spend across all initiatives between 2010 and 2014 is US$160 million.

• Program is not funded upfront. $9m available up to July 2010.

• Currently mobilizing funding

• Phased implementation of business plan P1 countries (Mozambique, Tanzania, Ghana, Mali) and Kenya

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Market linkages to public/private sector

Three intervention archetypes that describe what and how the Market Access Program invests :

– Direct Procurement (DP)• Facilitating linkages between farmer groups and top of supply chain

players and/ or SMEs ( e.g. WFP, Millers, large traders etc.)

– Market Development (MD)Facilitating access to credit via guarantee funds, investment funds,

and product development, MIS, Small medium agro-processing

– Storage & Services (SS) Increasing available storage capacity, particularly in main production

zones

Training farmers, traders and processors on structured trade systems e.g. warehouse receipts and commodity exchanges

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Market Access Grant making (20 grants)

Bank guarantee funds to banks to facilitate access to credit facilities by poor smallholder farmers, agro-dealers and other players in the small holder value chain (Standard Bank, NMB & Equity Bank)

Building a competitive banana industry in Kenya and Uganda

Provision of Business Development Services to SMEs; Kenya, Uganda, and Ghana

Market information systems ; Malawi and Kenya (private sector driven)

Cassava commercialization through village –level semi-processing for industrial feed use

Strengthening g capacity of small holder farmers to access rice markets; Tanzania

2 joint investments with Soil Health Program in Kenya and Nigeria to link soybean producers to processors

Collaborative Master of Science in Agricultural & Applied Economics; East and Southern Africa

Grants Committed 2008 – 2009 in $Millions

$3.0

$1.1

$0.6 $0.8

$1.8

$0.7

$1.5

$3.5

$0.40

0

0.5

1

1.5

2

2.5

3

3.5

4

Amount of Grants Approved - $Millions

Expected Outputs/outcomes targets

40,000 farmers linked to market in Northern Ghana in sorghum and

nuts markets

30,000 farmers supplying cassava chips to feed industry in East Africa

47,000 banana farmers’ incomes doubled in Kenya and Uganda

38,000 grain growers in Kenya targeted in Kenya & supplying P4P

100,000 farmers using SMS to access market prices in Kenya and

Malawi (MIS). Prices delivery over Radio reaches over 3m

The Standard Bank grant targets 750,000 smallholder farmers and

SMEs in 3 years.

Confidential

Some key achievements in the first two years

• Market Information System (MIS);

– Farmers able to negotiate better prices; for example in Malawi farmers increased their pigeon peas margin by 50%

– Established virtual trading floor through the national radio program called supermarket on airwhich is broadcast in vernacular language reaching more than a million smallholder farmers

– USD$2.6 million worth of commodities traded by smallholder farmers using MIS

Confidential

Some key achievements in the first two years

• Linking Banana Farmers to Market;– In Kenya, the banana project has so far reached 20,638 smallholder farmers

organized into 530 farmers owned and business oriented groups (Producer Business Groups.).

– Introduced the system of weighing bananas now farmers receiving 300% more margins than before. They have sold 12,796.8 MT of bananas earning revenues of US$1,577,038.

– Farmers have regular market days, as opposed to farmers waiting in their home for brokers to show up and buy their produce leading to low farm gate prices

– In Uganda, we supported 17,353 farmers who have sold 77,550 MT of bananas earning them revenues of US$7,300,000

Confidential

Some key achievements in the first two years

• Linking Cereal Growers to Market;– linked a group of 86 widowed women farmers in Kenya, who sold US$400,000

worth of maize to the World Food Program (WFP) Purchase for Progress Program (P4P)

Confidential

Some key achievements in the first two years

• Loan guarantee funds to banks

– Working with other Partners we have provided a 10% first loss guarantee to leverage USD 100m from Standard Bank

– 10 Small and Medium Enterprises assisted in preparing business plans in Uganda

–

– Now smallholders farmers able to access credit (Kilimo Biashara) through Equity Bank in Kenya ($50m facility)

PRIVATE PUBLIC SECTOR INVESTMENT POTENTIAL

• Areas of private sector investments and financing

• Investment in cleaning and drying facilities in the rural areas

• Investments in storage facilities (silos and warehouses) to reduce post-harvest losses

• Investment in agro-processing ( cassava, maize, soya beans) and animal feed industries

• Build rural market places ( wholesale and retail markets) for improved trade

• Investment in agricultural market information services including farmer help-lines through call centers, for timely, accurate market information services.

Thank You