Agricultural Input Markets Strengthening Project

Agricultural Input Markets Strengthening Project

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Overview:

CNFA implemented the two-year USAID-funded Agricultural Input Markets Strengthening Project (AIMS) to fill identified market gaps in Mozambique. We developed the capability of private sector agrodealers to respond to increased demand for productive inputs and opportunities for market-oriented agricultural production. Overall, AIMS opened up and established more competitive markets and agrodealer networks as primary channels through which farmers could access improved agricultural technologies, which lead to better crop quality and increased incomes.

Program Approach:

  1. Increased availability of agricultural inputs (fertilizer, improved seed and crop protection products) in the Beira and Nacala corridors, where prospects for commercial agriculture production are improving;
  2. Increased adoption of best input technology packages for key commodities in the Beira and Nacala corridors, based on profitability and potential for adoption by smallholders;
  3. Reduced fertilizer and seed costs to smallholder farmers and increased input quality and diversity in the market, in turn increasing crop productivity of selected commodities in target areas;
  4. Enhanced commercialization of smallholder agriculture through linkages with new input/output markets.

Partners:

  • International Fertilizer Development Center (IFDC)

Agribusiness Development Project

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Overview:

CNFA’s Agribusiness Development Project (ADP) in Moldova improved the international competitiveness and trade performance of the country’s high-value agriculture (HVA) sector, ultimately increasing rural incomes and employment. The $12.5 million program, funded by USAID, was successful in preparing Moldovan enterprises to meet the challenges of the international market. ADP strengthened the capacity of all participants in the value chain in Moldova, including producers, processors, aggregators, and exporters. The approach emphasized identification of markets for individual products, the use of value-chain drivers, production of marketable products, financing for replication, and the dissemination of market information.

Program Approach:

  • Development of the High-Value Agriculture Sector: ADP focused on developing the high-value agriculture sector by increasing the quality of crops through new technologies, including cold storage, better pre- and post-harvest handling techniques, and improved seeds. By the end of the project, participating firms had exported over $105 million in processed agricultural products, an increase of more than 23 percent.
  • International Quality Assurance & Certifications: In order to boost exports to higher-value international markets, CNFA facilitated largescale gains in crop quality assurance and certification in food safety and quality standards.
  • Expanding Access to Markets: Due to Russia’s 2005 embargo on Moldovan fresh fruits and vegetables, ADP began identifying and cataloging new markets for Moldovan produce. Target market conformation studies were conducted in the Baltics, Belarus, Germany, Poland, Romania, and Ukraine to assess the demand and market qualifications for 12 products, including apples, sweet peppers, tomatoes, table grapes, and other fresh fruits and vegetables. ADP conducted detailed rapid market appraisals in Romania, Russia, and Ukraine to give greater market detail and identify specific buyers. Domestic and international study tours followed to allow more than 1,500 people to make important international buying contacts.
  • Leveraging Private Investment Through Matching Grants: ADP employed matching grants to increase local buy-in and promote investment in new technologies, awarding 23 producers and processors with grants worth $1.3 million to implement modern technologies including cold storage and new drying facilities. With a matching ratio of 2:1, the grants leveraged an additional $2.9 million from local enterprises. Producers were able to increase their annual sales from $500,000 to over $4.2 million, almost $2 million in high-value products. Similarly, processors increased their sales of high-value products from $1.3 million to $6.1 million.
  • Promoting Market Information: To ensure producers and processors had access to the latest market information and training material, CNFA worked with the National Extension Network, a local Moldovan non-profit development agency, to create the Export MoldovaExport Moldova provided market surveys and training materials on international safety certifications, modern agricultural practices, and planning and management.

Agrodealer Strengthening Program for Mali

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Overview:

Partnering with the Alliance for a Green Revolution in Africa (AGRA), CNFA implemented the three-year Agro-dealer Strengthening Program for Mali (ASP-M) to increase rural incomes and reduce poverty by transforming Mali’s underdeveloped input distribution practices into a more efficient, commercially viable input supply system. ASP-M strengthened Malian agro-dealers by providing training in business management and productive farming methods and increased farmer access to agro-dealers in remote areas, ultimately raising rural incomes and increasing household productivity. In order to transform Mali’s agro-dealer network sustainably, our team implemented a methodical four-step approach.

Program Approach:

  • Built Agro-dealer Capacity to Serve Farmers: ASP-M developed and implemented activities including business management training, training in product knowledge, and safe use of chemicals and fertilizers. The program also increased market demand for improved inputs through demonstration plots, exhibitions, and farmer field days.
  • Improved Rural Access to Finance: To complement stronger business and technical expertise of program trainees, CNFA worked to improve agro-dealers’ access to finance, creating guarantee facilities to stimulate access to trade credit and capital, developing agricultural lending training for commercial banks and microfinance institutions, building targeted agricultural lending products, and introducing competitive matching grants to spur private sector investment.
  • Connected Farmers to Markets: With better financing in place, the program focused on smallholder farmer access to larger markets for distribution of their products. CNFA worked with agro-dealers to develop and deliver basic output marketing training in order to increase farmer awareness of market opportunities and to help link them to existing market channels.
  • Advanced Agricultural Policy Advocacy: The last component of ASP-M focused on improving channels for a sustainable public-private policy dialogue. CNFA maintained a leadership role in the policy arena, shaping Malian agricultural policy to promote the interests of private sector growth and of the rural smallholder. CNFA also supported the growth of the Agro-dealers National Union in Mali (UNRIA-Mali), which received an endorsement from former United Nations Secretary General Kofi Annan after he visited the project in August 2010.

To ensure the successful operation of UNRIA, CNFA provided training on organizational management, member services, networking, and advocacy capacity building. This last component of ASP-M ensured that the program would be self-sustaining and bring increased business for agro-dealers and higher incomes for smallholder farmers.

Agricultural Support to Azerbaijan Project

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Overview:

The goal of the Agricultural Support to Azerbaijan Project (ASAP) is to increase the incomes of agribusinesses and agricultural producers, with the purpose of accelerating the development of Azerbaijan’s non-oil economy. To accomplish this, CNFA will support the growth and expanded exports of agribusiness entrepreneurs through the utilization of local Business Service Providers (BSPs) and increased access to finance; by promoting improved production practices through strengthened extension services; and by facilitating a favorable business enabling environment through expanded dialogue and the use of analytical tools and training.

Program Approach:

ASAP, currently in the preparatory phase of implementation, will build on the successes of USAID’s support to agricultural producers and processors in Azerbaijan over the last 15 years. Various activities have strengthened the ability of domestic producers to meet international quality standards, increased exports, and fostered better supply and domestic market demand, in turn boosting employment and incomes. ASAP targets value chains with the highest economic potential including hazelnuts, pomegranates, orchard crops and vegetables. In specific, CNFA activities will:

  1. Assist growers and processors to adopt new technologies and techniques to increase the quality and quantity of production;
  2. Facilitate increased exports and enhanced domestic marketing through more rigorous food safety systems, packing, and post-harvest methods;
  3. Strengthen the linkages among actors in the respective value chains and foster cooperation through strengthened industry associations; and
  4. Build the availability, quality, capacity, and sustainability of Business Service Providers and public and private extension services.

For more information on up-to-date-impacts, please refer to the ASAP Impacts section of this page or contact the REAP team at nolgesashvili@cnfa.org.

Rural Agricultural Input Supply Expansion Project

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Overview:

With funding from the Rockefeller Foundation and the United States Department of Agriculture (USDA), CNFA, through its Malawi affiliate the Rural Market Development Trust (RUMARK), developed a proven and flexible model for a rural-based, commercially-viable agro-dealer network that provides inputs and technology to smallholders on a sustainable basis. The model is tailored to address local needs, conditions, and available resources, and combines a trade credit guarantee to help local input retailers expand inventories and services for smallholder clients with business skills training needed to manage their operations profitably and sustainably.

RUMARK’s initial project, Rural Agricultural Input Supply Expansion (RAISE), focused on increasing the number of agro-dealers selling inputs to smallholder farmers by facilitating agro-dealer access to training in business, financial management, and product knowledge, use and safety from input supply companies, input supply companies willing to extend credit, group loans for working capital from financial institutions, and demonstrations of product and technologies supported by input supply companies to stimulate demand.

RAISE’s goal was to increase rural household incomes, agricultural productivity, and output marketing channels of smallholder farmers. CNFA achieved this goal by strengthening and expanding existing agro-dealer networks in Malawi, thereby increasing access to inputs, technical knowledge, and linkages to resources for farmers. CNFA also facilitated the creation of a commercial business skills training network to deliver business and financial management training to rural retailers, and enlisted almost all of Malawi’s major input distribution companies in private sector partnerships to develop production linkages with these retailers.

Program Approach:

  • Created an Umbrella Agricultural Inputs Traders Association (AITA) made up of the Seed Trade Association of Malawi (STAM), Croplife Malawi, and the new Fertilizer Association. CNFA helped create and serves as the secretariat for both AITA and the Fertilizer Association, and will continue to help the private industry use these associations as a platform for policy advocacy;
  • Developed broad technical training programs to include a range of important training topics for agro-dealers such as rural lending (by Malawi Rural Finance Company), the seed industry (by STAM), and pesticide regulations;
  • Introduced a new training module on Managing Business Relations that blends elements of technical training and business management training. Training was delivered jointly by both CNFA staff and input supply company staff to better strengthen business linkages between the input suppliers and the agro-dealers.

Malawi Agrodealer Strengthening Program

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Overview:

The three-year Malawi Agro-dealer Strengthening Program (MASP) improved the input supply and output marketing distribution channels available to smallholder farmers in the underserved, remote areas of Malawi by developing a commercially viable network of agro-dealers. Prior to MASP interventions, these small farm stores were located mainly in urban areas and were therefore inaccessible for many farmers. In partnership with the Alliance for a Green Revolution in Africa (AGRA), CNFA provided targeted training in business management and productive farming methods and increased smallholder access to agro-dealers in remote areas, thereby raising rural incomes and increasing household productivity.

Program Approach:

  • Conducted a detailed survey of the existing agro-dealer network to identify underserved areas where new startups could be created;
  • Worked with input suppliers to develop and deliver technical training to agro-dealers and promote the use of improved seed;
  • Improved rural access to finance, which is difficult to obtain in remote areas due to the high cost of agricultural financing and high perceived risk by lending institutions;
  • Facilitated smallholder farmer access to larger markets for sale of their improved products;
  • Shaped agricultural policy to promote the interests of private sector growth.
  • Business Management Training:CNFA and MASP worked through commercial trainers to identify and train rural retailers in a six-module business management training program that culminated in agro-dealer certification. The business management training included sessions on: managing working capital, managing stocks, costing and pricing, selling and marketing, record keeping, and managing business relationships. MASP succeeded in training and certifying over 1,500 agro-dealers in Malawi;
  • Credit and Financial Services:After certifying agro-dealers, the program provided access to working capital and trade credit by linking them with input suppliers and microfinance institutions. CNFA leveraged private sector investments and backed commercial credit with a 50% credit guarantee. Almost 300 agro-dealers benefited from MASP’s guarantee component. In addition to improving smallholder access to key value chains and trade in rural markets, CNFA supported capacity building programs and the development of agricultural-specific lending products for financial institutions in Malawi;
  • Technical Training:The program also helped input suppliers to develop and deliver technical training to agro-dealers in product knowledge, handling and safe use of pesticides, herbicides and fertilizers, and use of improved seed. Training was complemented by increased smallholder farmer awareness of, and demand for, improved inputs through demonstration plots and farmer field days. CNFA worked with stakeholders, including the Pesticides Control Board and other groups, to increase their institutional capacity to deliver technical knowledge to smallholder farmers;
  • Agricultural Policy Reform:CNFA worked to improve agricultural policy by increasing the role of the private sector in policy advocacy, decreasing the government’s role in the inputs market and minimizing market distorting subsidies and government interventions. In Malawi, CNFA helped to create the Agriculture Inputs Traders Association (AITA) and worked with AITA to develop a white paper on fertilizer subsidies that was presented to the government. This submission led to a change from direct government distribution of fertilizer to a farmer-held voucher-based system;
  • Output Marketing:CNFA strengthened the linkage between input and output distribution channels and used the rural retailer as a link back to cash markets for their farmer customers. In Malawi, agro-dealers frequently served as a point of market information, traded in outputs as well as inputs, and often engaged in primary processing, storage, or handling. To foster and strengthen capacity to fill this varied role, MASP provided agro-dealers with small matching grants to improve storage facilities, put in small processing facilities, and invest more deeply in equipment for farmer outputs. CNFA trained 217 agro-dealers in output marketing;
  • Animal Health and Veterinary Training:Many of the agro-dealers surveyed provided veterinary supplies and animal healthcare products for rural farmers. As such, technical experts provided training on how to approach veterinary service provision, stock veterinary supplies, feed supplements, and link with wholesale suppliers;
  • Association Development:Association development efforts resulted in a sustainable forum for advocacy on behalf of small business agro-dealers throughout Malawi. Through MASP, CNFA strengthened associations through trainings on organizational management, member services, networking, advocacy, and capacity building. Overall, MASP supported nine agricultural associations and 29 agro-dealer associations.

Kenya Drylands Livestock Development Program

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Overview:

From 2010 to 2013, the USAID-funded Kenya Drylands Livestock Development Program (KDLDP) addressed obstacles facing pastoralists in northeastern Kenya. USAID awarded KDLDP to CNFA through the Farmer-to-Farmer (F2F) Leader with Associate Award (LWA) mechanism. With a total budget of approximately $10 million, the program’s main objective was to increase income and food security for pastoralist households in the districts of Garissa, Ijara, Mandera, Tana River, and Wajir.

Pastoralists in northeastern Kenya face obstacles such as poor access to inputs like animal feed and water, limited access to vaccines, poor linkages between producers and markets, and a lack of price transparency in their local markets. To address these problems, CNFA focused on the entire livestock value chain, connecting herders to markets, credit services, and livestock health inputs while also working to improve the policies that affect pastoralists. CNFA worked with key local partners like the Kenya Livestock Marketing Council (KLMC) and a Kenyan affiliate, the Agricultural Marketing Development Trust (AGMARK), to address short-term issues facing pastoralists and to lay a foundation for long-term, sustainable development.

KDLDP integrated cross-cutting themes such as gender, youth, and adaptation to climate change, and the project undertook baseline studies, including Household Income Surveys, a Gender Analysis study, and Environment Impact Assessments. These studies and assessments helped to inform local policy and support the continuity of future development initiatives in KDLDP’s target regions.

Program Approach:

  • Enhanced Livestock Trade and Marketing:CNFA mobilized groups including Livestock Marketing Associations (LMAs) to form larger commercially oriented associations of producer groups called Pastoralist Marketing Clusters (PMCs). PMC employees received Business Management Training (BMT) to improve the groups’ negotiation, documentation, record keeping, and bookkeeping skills. Recognizing that cultural implication would not allow the Muslim population in the area to access traditional banking loans, the program created the Community Owned Finance Institution (COFI), Kenya’s first Sharia-compliant Savings and Credit Cooperative Society (SACCOS). KDLDP also contributed to the National Livestock Market Information Systems (NLMIS) by providing weekly information from different markets within the program area. Key information generated from the data collected was broadcasted through the Wajir Community Radio and the Star FM radio stations;
  • Livestock Product Value Addition:CNFA identified initiatives that greatly improved the livelihoods of communities in the Arid and Semi-Arid Lands (ASAL) areas. Program staff worked with local groups to produce and market value-added products for niche markets, identify new market opportunities, conduct studies of new enterprises, support the financing of viable enterprises via grants and guaranteed loans, and support improved performance of existing enterprises;
  • Increased Livestock Productivity and Competitiveness:The Business Management Training (BMT) component of KDLDP equipped agro-dealers with the skills and knowledge to manage and stock their enterprises professionally, and to disseminate the techniques to pastoralists. CNFA also strengthened the ability of Kenya’s Ministry of Livestock Development (MoLD) to implement disease surveillance and better control livestock movements;
  • Facilitate Marketing and Livestock Development through Policy Change:KDLDP held policy dialogue meetings to discuss issues, build consensus, and prepare memoranda detailing constraints and policy suggestions on livestock development. CNFA hosted multiple activities to develop the capacity of the District Livestock Marketing Council (DLMC) and to equip pastoralists’ representatives with the necessary skills to participate in policy processes and advocate on behalf of their constituents;
  • Promote Strategies to Mitigate the Effects of Climate Change:KDLDP equipped pastoralists with skills to combat disease epidemics that derive from climate change and more severe weather. The program provided support to the expansion of water harvesting and the mainstreaming of Community Managed Disaster Risk Reduction (CMDRR) in all program activities. In addition, KDLDP supported vaccination programs in areas where flooding may trigger Rift Valley Fever (RVF) and Hemorrhagic Septicemia.

Kenya Agrodealer Strengthening Program

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Overview:

The three-year Kenya Agro-dealer Strengthening Program (KASP) project, made possible by a grant from the Alliance for Green Revolution in Africa (AGRA), strengthened Kenyan agro-dealers by providing training in business management and productive farming methods and increased access to agro-dealers in remote areas, ultimately raising rural incomes and growing household productivity.

CNFA worked to improve the input supply and output marketing distribution channels available to smallholder farmers in rural Kenya by expanding a commercially viable network of rural retail enterprises. KASP built on the foundation of existing agro-dealers in Kenya and expanded the network to cover 85 districts located in targeted agricultural areas across the country. Expansion of this network benefited smallholder farmers by greatly reducing the distance traveled to obtain needed equipment and farm inputs.

Program Approach:

  • Strengthened the business and technical skills of agro-dealers to better serve the needs of smallholder farmers;
  • Improved rural access to finance to jumpstart agro-dealer enterprises in areas where none existed;
  • Increased smallholder farmer access to larger markets to distribute their products by working with agro-dealers to develop and deliver basic output marketing training;
  • Increased farmer awareness of market opportunities, helping to link them to existing market channels;
  • Advanced agricultural policy advocacy by creating a mechanism for sustaining a public-private policy dialogue.
  • Agro-dealer Surveys:CNFA carried out agro-dealer surveys in all 85 districts of KASP operation and developed a comprehensive database of 5,156 agro-dealers, representing 52% of the estimated 10,000 agro-dealers in Kenya at the time. The team also developed GIS-based maps showing agro-dealer density and distribution. AGMARK boasts the most comprehensive database of agro-dealers in Kenya and is now used by leading stakeholders in the agricultural inputs industry;
  • Business Management and Technical Training:CNFA certified 1,976 agro-dealers through a six-module business management training program that included sessions on managing working capital, managing stocks, costing and pricing, selling and marketing, record keeping, and managing business relationships. CNFA/AGMARK also worked with input suppliers to develop and deliver technical training to agro-dealers in product knowledge, handling and safe use of pesticides, herbicides and fertilizers, and use of improved seed, using demonstration plots and farmer field days to increase awareness and demand for improved inputs. AGMARK-led training is now recognized by leading stakeholders in the inputs industry, including the Ministry of Agriculture, who has required individuals to be trained by AGMARK in order to participate in certain government subsidy programs;
  • National Accelerated Agricultural Input Access Program:NAAIAP is a government-sponsored program targeting resource-poor farmers to facilitate access to improved farm inputs with the aim of improving agricultural production of staple foods and promoting the use of quality farm inputs for increased productivity. Since its inception in 2008, KASP was involved in the program by preparing agro-dealers with business and technical skills and financial support to enable the agro-dealers to provide farmers with the correct information and inputs. The subsidy program worked with more than 60 districts (over 95,000 farmers) in the country. Those who benefited from the program received seeds and fertilizers valued at $7.8 million;
  • Credit and Financial Services:Credit guarantees are an important instrument in enabling small rural-based and start-up agro-dealers to access the credit necessary to stock their stores. CNFA/AGMARK deliberately chose to partner with wholesalers and microfinance institutions because the more established financial institutions do not target them. A matching investment facility targeted two areas: agro-dealer start-up and grain bulking and aggregation;
  • Technical Training:CNFA/AGMARK facilitated agro-dealer training on technical knowledge of inputs by input supply companies, in addition to project training on seeds, agrochemicals, veterinary and fertilizer companies, product knowledge, and safe use, to help teach farmers at the point of sale. Other stakeholders, including the Ministry of Agriculture (MOA), Agrochemical Association of Kenya (AAK), Pest Control and Produce Board (PCPB), Kenya Health Inspectorate Services (KEPHIS), Kenya Bureau of Standards (KBS), National Environmental Management Authority (NEMA), Kenya National Agro-dealers Association, and various financial institutions, were also involved in the trainings to ensure that the various components of agricultural input handling are exhausted. These interactions provided vital linkages for continued business and education relationships;
  • Output Marketing:CNFA strengthened the linkage between input and output distribution channels, and used the rural retailer as a link back to cash markets for their farmer customers. KASP provided agro-dealers with small matching grants to improve storage, install small processing facilities, and invest in transportation, packaging, and handling equipment for farmer outputs;
  • Demand Creation:Through demand creation activities, farmers were exposed to different methods of growing crops, the use of hybrid seeds, the use of veterinary products, and the proper handling of fertilizer and other farm products. The seed and fertilizer companies were able to penetrate the market after establishing demonstration plots and holding field days to show farmers, first-hand, the quality that could be produced with improved seed and fertilizer. Over 142,000 smallholder farmers attended KASP-sponsored farm input exhibitions and were exposed to a broad range of productivity-enhancing farm inputs and services;
  • Output Marketing:In all of its agro-dealer programs, CNFA strengthens linkages between input and output distribution channels and uses rural retailers as a link back to cash markets for their farmer customers. The agro-dealer serves as a point of market information, trades in outputs as well as inputs, and often engages in primary processing, storage, or handling. To strengthen these initiatives, KASP provided agro-dealers with small matching grants to improve their storage facilities, add small-scale processing capacity, and invest in transportation, packaging, and handling equipment for farmer outputs;
  • Association Development:KASP created a sustainable forum for advocacy on behalf of small businesses and agro-dealers throughout target districts and nationwide. CNFA has previously helped launch agro-dealer associations in Kenya and Tanzania and built their capabilities through trainings on organizational management, member services, networking and advocacy, and capacity building. CNFA/AGMARK activities led to the formation of 25 agro-dealer associations, including one national-level association, KENADA.

Agricultural Market Development Trust

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Overview:

The Improving the Productivity and Incomes of Smallholder Farmers in Western Kenya initiative aimed to expand the agricultural input distribution system across four key districts of Bungoma, Bondo, Siaya, and Vihiga. This pilot project focused on the development of rural agricultural input stockists, accessible to smallholder farmers and local communities. Through its locally registered Kenyan affiliate AGMARK, CNFA addressed the constraints in the input distribution system to stimulate the flow of productivity enhancing inputs and provide increased production, food security, and incomes to smallholders.

Program Approach:

  • Built the capacity for stockists via training in both agricultural inputs, product knowledge and safe use, and business management. CNFA leveraged both “embedded” services provided by companies on products and independent trainers for teaching business management skills;
  • Drafted six new training modules comprised of Working Capital Management, Stock Management, Selling and Marketing, Costing and Pricing, Record Keeping, and Managing Relations and Networks (Supply Companies, Banks, and GOA Agencies) information;
  • Used a Financial Innovation Fund to provide partial guarantees to reduce initial risk for companies and wholesalers interested in selling to project-supported stockists.