Private Sector Activity (PSA)

Private Sector Activity (PSA)

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In 2015, the Government of Azerbaijan (GOAJ) developed strategic sector roadmaps for developing the economy, with a special focus on nonoil sectors such as agriculture. The need for developing non-oil sectors,
especially agriculture – which officially employs half the Azerbaijani workforce – became obvious as the world price for oil began declining in 2014. Since then, the GOAJ implemented a reform agenda supporting incentives for non-oil exports by facilitating greater exposure to regional markets, implementing administrative reforms to remove barriers for trade, registering agricultural associations, and establishing new government agencies to support small and medium sized business.

The USAID Private Sector Activity (PSA) is a five-year, $15 million initiative that utilizes a partnership and co-investment approach to support a more resilient Azerbaijan economy and improve the business enabling environment. To accomplish this, PSA supports the non-oil sector by improving the competitiveness of the private sector (with a special emphasis on agriculture and other rural economic activities), building the capacity of business support services, and reducing the barriers that hinder the development of micro, small, and medium enterprises (MSMEs).

PSA is building on the successes of USAID’s support to agricultural producers and processors in Azerbaijan achieved over the last 20 years. In partnership with the Azerbaijani government and the private sector, PSA helps address their priorities for modernization and improvement of public and private sector support and service delivery. This supports the diversification of Azerbaijan’s economy by strengthening the capacity of public institutions to carry out new responsibilities and adjust to institutional change to implement the reforms outlined in the strategic roadmap. PSA achieves this through activities designed to:

  1. Develop a more diversified economy: USAID provides assistance that supports the increased diversification of the non-oil economy in Azerbaijan, specifically but not limited to the agricultural sector. As such, PSA assists small and medium-sized farmers to become commercially viable, competing in local or export markets. The project also works with processors, traders, and cold storage operators to improve their adherence to international standards. The activity builds capacity in support of developing the agricultural sector and value chains in which the activity works, as well as in support of USAID’s Global Development Alliance (GDA) initiatives.
  2. Improve the business environment for micro, small and medium-sized businesses: Because businesses face administrative barriers that stifle competition, dissuade investment, and constrain trade, PSA works with associations and MSMEs to identify these barriers, communicate them to the relevant government agencies, and target their elimination. These efforts help to increase the benefits of economic growth and remove obstacles to competition, investment, trade and integration into the global economy. PSA also contributes to the harmonization of Azerbaijan’s legislation and institutions with  international standards and recognized best practices. As a result, businesses have increased opportunities to produce, trade, export and earn income.
  3. Support Azerbaijan’s economic reforms: PSA increases Azerbaijan’s economic stability by supporting economic reform initiatives to help boost the non-oil sector. To accomplish this, PSA has developed a rapid, flexible response mechanism to provide technical specialists and material support to Azerbaijani officials who require assistance to identify public sector reforms. PSA will then recommend reform implementation options and monitor the progress of reforms offering assistance as needed. Support will include both short-term and long-term technical assistance to Azerbaijani counterparts, potentially including specialists in: Monetary Policy; Banking Supervision; Financial Intelligence; Public Financial Management; and others as identified by Azerbaijan’s government and private sector, as well as USAID.

Cross-cutting themes:

  1. GOAJ collaboration
  2. Private sector engagement
  3. Women’s economic participation

Partners:

  1. Nathan Associates Inc. (USA)
  2. WCC International (USA)

New Facility Helps Boost Revenues and Expand Market Access for Georgian Farmers

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Georgia is the world’s fourth-largest producer of hazelnuts. Production of the popular nut—one of that nation’s leading agricultural exports—supports the livelihoods of more than 50,000 Georgian growers and processors.

Unfortunately, inadequate post-harvest handling services and outdated Husking, Drying, and Storage (HDS) facilities have hindered many smallholder Georgian farmers from producing crops of consistently high quality—resulting in crop losses, lower prices and reduced profitability.

But now a new hazelnut HDS facility is helping to turn that situation around for one hazelnut-growing community. The facility, established with the help of the United States Agency for International Development (USAID) through its Georgia Hazelnut Improvement Project (G-HIP), opened its doors in September 2019 with a ribbon-cutting ceremony attended by USAID Mission Director Peter Wiebler, local farmers and partners.

The new hazelnut facility—located in the Koki village, Zugdidi Municipality, Samegrelo Region, and owned and operated by Koki 2014 LLC—is designed to offer farmers husking, drying and storage services that will help them better process their crops and improve product quality in order to boost revenues and expand market access.

The project is part of efforts spearheaded by G-HIP’s Global Development Alliance (GDA), a coalition of USAID, Ferrero and Cultivating New Frontiers in Agriculture (CNFA) which leverages the partners’ technical and financial resources to advance development of the hazelnut industry.

Koki—which contributed $210,509 of its own cash to cover construction of the HDS facility, as well as expenses for new staff salaries, laboratory tools and marketing—used a $50,000 USAID/G-HIP grant to procure drying silos, heated air blowers, fans and a storage electric pallet stacker to outfit the new 800-square-meter HDS facility, which is expected to employ 17 individuals and serve approximately 300 local farmers. The $50,000 USAID/G-HIP grant was co-financed equally through the Agricultural and Rural Development Agency under the Georgian Ministry of Environmental Protection and Agriculture, and AgriGeorgia/Ferrero for a total project cost of $260,509.

The facility will be capable of drying up to 1,000 tons of hazelnuts per year. With an estimated value of $1,800 per ton, this represents $1.8 million in potential revenue to improve the income and livelihoods of local hazelnut farmers and the 900 members of their families.

Improving the Georgian hazelnut sector’s post-harvest handling through new husking, drying and storing facilities represents just one part of G-HIP’s overall program objectives. Over the next year, G-HIP will also continue to provide training and technical assistance alongside the Georgian Hazelnut Growers’ Association and the Hazelnut Exporters and Processors Association, with the aim of further strengthening capacity, facilitating market linkages and improving growers’ knowledge of market requirements. G-HIP along with AgriGeorgia/Ferrero, will also support the establishment of a certification course in hazelnut cultivation and postharvest handling.

 

 

 

West Africa Cashew Project (PRO-Cashew)

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Overview:

Cashews were introduced to West Africa in the 1960s to fight erosion and desertification. Over the past decade, increased demand, expansion of orchards, and increased government prioritization has caused raw cashew nut production to become a critical commercial activity for smallholder farmers, and a major revenue stream for governments. West African production is also growing faster than that of any other region—10 percent over the past decade, generating $1.5 billion in export sales for over 1.1 million farmers. Côte d’Ivoire is the world leader in cashew production, followed by Nigeria, Benin, Burkina Faso and Ghana.

Cashew gains made by West African producers face several serious challenges: reduced yields due to aging cashew tree stocks, farmers’ limited technical and financial capacity to rehabilitate and renovate aging orchards, and an undeveloped nursery sector unable to provide timely and consistent high-performance seedlings to offset declines in productivity. This is complicated by trade policies that have boosted exports also pit countries against their neighbors, producing uncoordinated, regional policies that weaken public and private-sector support for cashew grower/seller advocacy efforts.

The five-year United States Department of Agriculture (USDA) PRO-Cashew project will work to boost the competitiveness of West African producers by improving efficiency and quality in production and trade, and by working to develop more coherent regional trade and investment policies. In doing so, the project will strengthen producer capacities as well as develop incentives to renovate and rehabilitate cashew farms, improve production and quality, and create a more competitive West African raw cashew nut for the international market.

Program Approach:

  1. Capacity Building: CNFA will build the capacity of farmers through selected farmer organizations and agro-food suppliers over the life of the project in the areas of business and orchard management, and service delivery. In collaboration with the Competitive Cashew Initiative (ComCashew) and the African Cashew Alliance (ACA), CNFA will work with local ministries of agriculture to review training curriculums, identify gaps and mentor extension teams in Good Agricultural Practices (GAP), renovation and rehabilitation (R&R), and climate- resilience.
  2. In-Kind Grants for Equipment & Inputs: CNFA will leverage matching contributions of individual grant disbursements from private, public or farmer sources to catalyze private investment, increase stakeholder partners’ and farmers’ profitability, and build the capacity of cashew farmers to renovate and rehabilitate their farms.
  3. Develop Agrodealers & Input Suppliers: CNFA will support Tree Global to improve the efficiency and sustainability of seedling production systems through public-private partnerships, establishing cost-effective, high-performance tree seedlings at central nurseries and distribute seedlings close to farms through rural-based seedling retail businesses. CNFA will also facilitate signing agreements between research entities and the central nurseries to ensure long-term public-private partnerships. PRO-Cashew will coordinate with existing efforts of the governments, World Bank and research institutes.
  4. Develop an Integrated Data System: CNFA, through Development Gateway, will identify gaps in the enabling environment for cashew data collection, storage, usage and dissemination, and address them by building a multi-country cashew data management system (Cashew-IN) that meets policymaker, farmer and private sector needs.
  5. Disperse Improved Market Information: CNFA will strengthen existing data as well as fill significant gaps in data coverage and quality. The integrated Cashew- IN will be accessed and used by farmer organizations, policymakers and private sector investors to understand the national, regional and overseas cashew markets in terms   of supply and demand. It will also monitor the cashew supply chain, support traceability for quality control, and inform evidence-based policies to increase profitability and marketability of cashews in West Africa.
  6. Improve Policy & Regulatory Framework: CNFA will engage with national and regional policy makers, private sector stakeholders, and development agency partners to facilitate and improve regional trade policy cooperation. With the support of regional research centers, CNFA will conduct an analysis of trade policies currently deployed by West African cashew-producing countries and produce annual reports on both country and regional competitiveness, government policy analysis, and foreign direct investment, with quantitative and policy analysis.

Nigeria Agribusiness Investment Activity

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Overview: 

The five-year USAID Feed the Future Nigeria Agribusiness Investment Activity aims to strengthen the business enabling environment to promote private sector investment in the agriculture sector. To achieve this goal, the activity focuses on three interrelated components: improving the ease of doing business in the agricultural sector; broadening access to finance by mitigating the credit risks of agribusinesses; and promoting investment opportunities for agribusinesses to expand and scale up operations. In line with the U.S. and Nigerian governments’ commitment to growing the non-oil-based economy, these efforts will increase the quality, quantity, market access, and diversification of Nigeria’s agribusiness sector.

Beginning in December 2018 and closing in December 2023, the$15.7million Agribusiness Investment Activity, with Cultivating New Frontiers in Agriculture (CNFA) as the prime implementing partner, aims to integrate thousands of micro small and medium enterprises (MSMEs) and producer organizations as high-performing commercial actors in the rice,maize, soybean, aquaculture, and cow pea value chains. As a result of streamlined regulations, more effective policies, improved production and processing practices, and significantly increased finance and investment flows, the project will increase the competitiveness and returns of both large- and small-scale agricultural enterprises.

Methodology

The Agribusiness Investment Activity’s three main components are:

  1. Ease of Doing Business – The regulatory burdens faced by agribusinesses (whether farmers, processors, or traders) constrain their productivity and growth. This initiative targets relevant World Bank Doing Business indicators and seeks to implement reforms to improve Nigeria’s agricultural and agribusiness enabling environment.
  2. Access to Finance – The infrastructure and market reach of both formal and informal banking services remains inadequate in many regions, presenting a significant barrier for rural agricultural entrepreneurs. The Agribusiness Investment Activity works to expand access to financial services across the value chain through informal, community-based savings plans; formal and
    informal credit; guarantee programs; insurance offerings, and more.
  3. Investment Promotion – To catalyze new agribusiness investments, the Agribusiness Investment Activity improves the investment readiness of agribusinesses, supports enterprises to scale-up operations, and links agribusinesses with both domestic and international investors.

Program Approach:

The Agribusiness Investment Activity employs a unique strategy that places the direct facilitation of growth for existing private sector agribusinesses as the central engine of our work. The activity is working with select large agribusinesses as well as the suppliers, financiers, investors, and service providers within their value chains to assist them in realizing their individual growth and expansion objectives. This includes building the capacity of their supply and distribution chains, where applicable, and supporting the reform of the most pivotal legal and regulatory constraints.

The Agribusiness Investment Activity strategy includes but is not limited to the following key pillars:

  1. Working with public and private sector partners, including agribusinesses, financial institutions, investment groups, and business development service providers to facilitate greater engagement with MSMEs and potential agro-entrepreneurs in their value chains;
  2. Connecting entrepreneurs and MSMEs to services (e.g., business plans, loan applications) that support them from inception to the formation and growth of profitable, sustainable enterprises. Special emphasis will be given to MSMEs that are women-owned or have the potential to hire significant numbers of women and youth; Supporting the development of new financial products suitable for MSMEs and entrepreneurs and implementing public awareness programs to enhance financial literacy and management;
  3. Linking MSMEs and entrepreneurs with larger firms in the selected value chains to facilitate commercially viable and sustainable business linkages; and
  4. Addressing policies that restrict or constrain the ease of doing business, including registration, licensing, obtaining land, access to finance and investment, and exporting.

 

 

AMD Sector Overview Videos

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Response to Brown Marmorated Stink Bug

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Overview:

With $176 million in exports in 2015, the hazelnut is Georgia’s highest earning agricultural export and supports the livelihoods of over 40,000 families. However, the stability and profitability of the hazelnut sector, as well as the incomes of the smallholder farmers who depend upon it, are being threatened by the rapid growth of a pest known as the Brown Marmorated Stink Bug (BMSB).

Originating in China, the BMSB is devastating the hazelnut sector by reducing the quality and quantity of hazelnut kernels. Left uncontrolled, the BMSB could set the country back years of agricultural growth and development in other sectors including apples, corn, grapes, peaches, and vegetables.

To address these challenges, the USAID Restoring Efficiency to Agriculture Production (REAP) project received an additional $3 million to provide technical assistance and equipment to Georgia’s National Food Agency (NFA) between April 2017 and September 2018. By working closely with the Government of Georgia to develop a State Program with a focus on monitoring and managing the BMSB’s growth, REAP strengthened the capacity of local institutions to limit the agricultural losses caused by the pest. REAP’s efforts also helped the Government of Georgia better understand the BMSB’s biology to better inform management of the infestation.

Program Approach:

  1. State Program Development Support: In partnership with local and U.S.-based entomologists, REAP managed the design and oversight of the Government of Georgia’s action plan through its local Working Group, spearheaded by the NFA. The Working Group was used to develop an implementation strategy, define the monitored area, and calculate the budget of the State Program to combat the infestation;
  2. Communications and Outreach: Because the BMSB was new to Georgia, it was crucial to increase awareness and understanding amongst Georgian farmers, citizens, and extension agents before any monitoring and management strategies could be implemented. In cooperation with the NFA, REAP developed communications materials to educate citizens, District Task Force staff, and other public and private extension agents about BMSB management. A Geographic Information System (GIS) mapping platform augmented the approach, visualizing data for the NFA and general public to track BMSB and other pests;
  3. Training: To prepare Georgia’s Ministry of Agriculture for the monitoring and management the BMSB, REAP delivered a multi-faceted training program on BMSB identification, trap establishment and maintenance, and the safe use and application of pesticides;
  4. Local Capacity Building: Experience in the U.S. and Europe indicated that the invasive BMSB will be present in Georgia for an extended period of time. To ensure that the Government of Georgia is able to manage the BMSB in the present and future, REAP worked with the Ministry of Agriculture to outfit local NFA staff and entomologists with awareness, monitoring and management through local research and a capacity-building trip to the United States;
  5. Procurement Support: To equip the Ministry of Agriculture with the tools necessary to monitor and manage the BMSB, REAP worked with the NFA to procure the required equipment to implement the State Program, such as traps, lures, and spraying equipment.
  6. Private Sector Engagement: In order to manage the infestation, CNFA partnered with Trécé Inc, a US-based leading-edge research and development provide latest solutions in insect population monitoring and control.

Leveraging Digital Solutions to Improve Farmers’ Yields in Egypt

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Across Egypt, many farmers struggle with low productivity, poor quality of produce, and post-harvest losses, resulting in a significant loss in income. Even when crops are healthy, pests can destroy a large part of the harvest, incorrect harvesting techniques can bruise fruits and vegetables and packaging can impact the quality of the produce.

Shaaban Mohamed Ghallab, a farmer in Esna Village, Egypt, previously grew onions solely for his family’s consumption at home. Despite having an interest in expanding his production and selling beyond his home, he lacked the know-how in post-harvest handling to make the change.

The ICT platform sent daily text messages to farmers on agriculture best practices in Arabic

Shaaban is just one of 132 onion farmers participating in the Feed the Future Egypt Food Security and Agribusiness Support (FAS) project that received hands-on technical training to acquire the knowledge and skills on post-harvest handling techniques as well as daily SMS text messages that serve as a timely reminder to follow through on practices learned during training.

Over the course of four weeks, participants were trained on best practices for the harvesting, sorting, and packing of onions and tomatoes for local and export markets. Key messages included; ensuring good hygiene during harvest and handling, minimizing irrigation directly prior to harvest to ensure strong stalks and prevent new root germination, integrated pest management to minimize damage from rats and crows, and proper drying of onions post-harvest. Shaaban was selected as a lead farmer, meaning he applied the best practices from the training and provided advice to farmers both in the program as well as in the broader community. As a trusted voice, farmers often looked to Shaaban for recommendations and reassurance regarding agricultural practices. “Farmers would call me and say, ‘Do we add this amount of fertilizer? Or, do we follow this practice? Yes or no?’” he said.

The FAS project also developed an information and communications technology (ICT) platform with the support of Souktel Digital Solutions to send follow-up text messages to all participating farmers. These messages were sent to remind farmers of best practices to follow leading up to harvest time as well as during harvest time to prompt farmers on how to maintain quality produce and how to correctly package produce for the markets. “Since most everyone has a phone and we do not have the ability to visit each farmer in-person daily, because of the distance in rural areas, this is an easy way to reach the farmer with key knowledge,” said Mahmoud El-Rady, the FAS Post-harvest Coordinator responsible for queuing up the messages in the system. “The SMS messages are written step by step as if someone is sitting right by the farmers side in the field,” he said.

In Shaaban’s case, one of the important reminders he received was right at harvest time, when the onion was ripe and ready to be picked. “They sent messages about how to look at the fruit and understand whether it is the right time to pick it and what is the right amount of water to give it at a specific time around harvest so it is not damaged. This is sensitive timing when every minute counts and we can’t always wait for someone to come to the field,” said Shaaban. As a lead farmer, Shaaban also encouraged other farmers to open the messages since they contained helpful information.

Since the launch of the platform, more than 4,800 messages have been sent to participating farmers that produce tomatoes, onions, and grapes. Recently, the FAS project began creating content surrounding post-harvest best practices for the cultivation of mangos. Since the platform has proven to be an effective method for communicating with farmers, this tool is being expanded to send messages on agricultural best practices during production as well as to share lessons on nutrition, particularly with women in the agro-processing workforce.

In his first year of working with the FAS project and producing onions for market sale, Shaaban sold 45 tons of onion, making a profit of 27,000 Egyptian pounds (~1,511 USD). Since Shaaban and his family were living with two other families, he used the profit from his onion sales to help purchase a new home for his own family. “I was very happy because my first goal was to just get the training on onion [production]. I did not expect that I would also get this profit,” he said. Shaaban is now looking to take the skills he’s learned and expand his farm to plant other crops that reap high profits, such as hibiscus, in addition to continuing with the production of onion.

USAID Egypt Food Security & Agribusiness Support (FAS) Project Links Local Onion Farmers to an International Exporter

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The FAS project supported the Negoaa Mazen agriculture cooperative, based in Sohag governorate, to complete an export contract with ELI company, an Albanian exporter, in which the cooperative sold 45 Metric Tons of high quality onions to ELI. This was the first time an international exporter directly contracted a cooperative without its own packhouse facilities. This success demonstrates the potential a well-managed cooperative has for negotiating and organizing member farmers to deliver on contracts. The elimination of middlemen in this exchange both increased prices available to farmers, and improved information exchange by creating a direct link between farmers and an export market actor.

The onions were sold at a competitive price of LE 5000 per Metric Ton, amounting to a total transaction value of LE 225,000 that is about 10% higher than would otherwise have been available to the farmers for onions of similar quality.

This successful contract between Negoaa Mazen agriculture cooperative and ELI is part of the FAS project’s overall objective to increase smallholder farmer incomes by facilitating opportunities for farmers to sell horticultural crops to export markets. One strategy the project follows for achieving this is to build and encourage formation of new relationships through trade show participation. At the Fruit Logistica Trade Fair in Berlin in February 2019, FAS project had the opportunity to connect with numerous international exporters such as ELI and encourage them to connect with cooperatives and associations with whom the project works, such as Negoaa Mazen. By helping to forge relationships between the buyer and local supplier, the FAS project empowered the Negoaa Mazen Cooperative to negotiate sales terms, and to contract neighboring groups to help them meet buyer demand.

The Negoaa Mazen Cooperative was established in 1962 in Sohag Governorate.  It offers agriculture and marketing services to around 2,000 smallholder farmer members, who collectively own 2,000 feddans of land, about 200 feddans of which are owned by women. Crops include green beans, wheat, onion, sugar cane, and clover. The FAS project provided technical support and regular monitoring for cooperative members to help improve their crop yields and ensure that their product would meet export quality standards. Training and technical assistance included fertilization programs, irrigation, integrated pest management (IPM), and best practices for harvesting. The project also advised farmers on good input supplies to improve product quality and increase their productivity.

In addition to providing the cooperative with technical support on production, the FAS project built Negoaa Mazen Cooperative’s capacity to both maintain high standards of product quality in compliance with exporter requirements, as well as to negotiate suitable contract terms. The FAS project also worked with both parties to help them comply with domestic regulations and manage logistics such as connecting with a local shipping company to export the onions. “We gained experience dealing with the international market, became aware of international standards required by this exporter, and were trained on the proper handling of onion for export by the project,” said farmer Ahmed Saleh, Chairman of Negoaa Mazen Cooperative.

Pakistan Agricultural Technology Transfer Activity

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Overview: 

Because improved technologies that are affordable, impactful, and safe have not yet penetrated the vast smallholder market in Pakistan, smallholders continue to use outdated and less effective technologies, leading to stagnant or dwindling productivity and returns, particularly in the horticulture and livestock sub-sectors.

To combat these challenges, the $8.2 million Pakistan Agricultural Technology Transfer Activity (PATTA) funded through the United States Agency for International Development (USAID) has been working since April 2017 to increase smallholder farmers’ access to markets, alongside their overall development impact and cost-effectiveness. By building on CNFA’s 10-year history of successful implementation in Pakistan, PATTA is galvanizing ongoing private-sector investment to commercialize the types of agricultural technologies that enable smallholders to increase their incomes, create jobs, and enhance economic growth and stability. These technologies include seeds, fertilizers, water pumps, improved plant and animal breeds, precision agriculture, and integrated soil fertility management, amongst others.

By the completion of project activities in April 2021, PATTA will have created new, strong, and sustainable private-sector relationships that meet the evolving needs of smallholder farmers and drive increased productivity and economic growth across Pakistan.

Program Approach:

CNFA is collaborating with and building upon previous investments by USAID and development programs to improve the lives of smallholder farmers through the following three-pillared approach:

  1. Enable agricultural technology-related businesses to expand, adapt, and market their products and services to meet smallholder farmers’ needs.
    CNFA is undertaking the initial and ongoing market and cost-benefit analyses, as well as outreach to key stakeholders based on the findings of these analyses. In addition, CNFA is overseeing a competitive process leading to detailed memorandums of understanding and technical support, and comprehensive technical support and capacity building. In doing so, PATTA is making the business case for sustained private-sector investments in technology transfer, adaptations, outreach, and marketing such that profitable, inclusive output marketing opportunities for smallholders over the long term can be identified.
  2. Increase smallholder farmers’ access to affordable, appropriate, and effective agricultural technologies.
    Sustaining increased access to improved technologies that are adapted to smallholder needs requires focused, strategic efforts by demand-side stakeholders who stand to profit from this outcome. These stakeholders include technology retailers like agrodealers and arthis—Pakistani agricultural agents who act as middlemen buying and selling inputs on commission and often making loans to smallholders—as well as microfinance institutions and banks that profit when they provide more loans and financial services to expanding agribusinesses and farmers’ associations. PATTA’s holistic approach of capacity building and technical support complements the new marketing and outreach plans of technology companies to inspire sustained investments in the vast smallholder market.
  3. Scale the adoption and use of agricultural technologies.
    PATTA is supporting the collective work of supply- and demand-side partners to launch and sustain demonstration activities that provide evidence of the value of improved technologies. These include the promotion of activities with a proven record of success, such as field days, demonstration plots, and peer-to-peer education by champion farmers. Such demonstration activities leverage various mediums, including radio broadcasts, videos, and mobile exhibits that reach women in purdah and other underserved groups.