Strengthening Agricultural Input and Output Markets in Africa (SAIOMA)

USAID in partnership with the Alliance for a Green Revolution in Africa, the Bill & Melinda Gates

Foundation, and the Swedish Government

A Global Development Alliance:

STRENGTHENING AGRICULTURAL INPUT AND OUTPUT MARKETS IN AFRICA (SAIOMA)

COOPERATIVE AGREEMENT

AID-OAA-A-12-00061

TARGET COUNTRIES

KENYA, MALAWI and ZAMBIA

FY 2014 Second Quarter Report January - March 2014

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TABLE OF CONTENTS

ACRONYMS LIST ............................................................................................................................................... 3

1. INTRODUCTION ........................................................................................................................................ 4

2. PROJECT ACCOMPLISHMENTS ..................................................................................................................... 5

3. Achievements by Objectives ........................................................................................................................ 7

3.1 Objective 1: Improved Agricultural Production ..................................................................................... 7

3.1.1 Intermediate Result 1.1: Increased men and women smallholder farmers’ access to agricultural

inputs ........................................................................................................................................................ 8

3.1.2 Intermediate Result 1.2: Improved agricultural practices among men and women smallholder

farmers. .................................................................................................................................................... 8

3.2 Objective 2: Improved access to markets .............................................................................................. 9

3.2.1 Intermediate Result 2.1: Increased adoption of improved post-harvest management practices by

men and women smallholder farmers ................................................................................................... 10

3.2.2 Intermediate Result 2.2: Improved marketing structures and linkages for men and women

smallholder farmers ............................................................................................................................... 11

3.3 CROSS CUTTING ISSUES ........................................................................................................................ 12

3.1: Farmer Organization Capacity Building ........................................................................................... 12

3.2 Gender Inclusiveness........................................................................................................................ 13

5. CHALLENGES ............................................................................................................................................... 14

6. PRIORITIES FOR NEXT QUARTER ............................................................................................................... 14

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ACRONYMS LIST

ACE Agricultural Commodity Exchange

AFO Administrative and Finance Officer

AGMARK Agricultural Market Development Trust

AGRA Alliance for a Green Revolution in

AO Agreement Officer

AOR Agreement Officer Representative

BFS Bureau for Food Security

BMGF Bill & Melinda Gates Foundation

CA Cooperative Agreement

CCIA Cooperative Consultancy and Insurance Agency

CGA Cereals Growers Association

FO Farmer Organization(s)

FOSUP Farmer Organization Support Programme

FtF Feed the Future

FUM Farmers Union of Malawi

GDA Global Development Alliance

GSDA Gender and Social Diversity Assessment

Ha Hectares

ICRW International Center for Research on Women

Kgs Kilograms

M&E Monitoring and Evaluation

MOU Memorandum of Understanding

MPI Markets, Partnerships and Innovations [office]

NASFAM National Smallholder Farmers’ Association of Malawi

RUMARK Rural Market Development Trust

SAIOMA Strengthening Agricultural Input and Output Markets in Africa

SHF Smallholder farmer

USAID United States Agency for International Development

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1. INTRODUCTION

Strengthening Agricultural Input and Output Markets in Africa (SAIOMA) is a Global Development Alliance between the United States Agency for International Development (USAID), the Alliance for a Green Revolution in Africa (AGRA), Bill & Melinda Gates Foundation, (BMGF) and Swedish Ministry of Foreign affairs with a mission of promoting inclusive agricultural growth in selected African countries, namely Kenya, Malawi and Zambia. The United States Government’s Feed the Future (FtF) initiative through USAID contributes US$9m in cash resources while AGRA leverages another US$9m from the BMGF, and Swedish Ministry of Foreign Affairs through in-kind contributions towards the attainment of project objectives. The goal of this project is to promote inclusive agriculture sector growth in the target countries. SAIOMA’s primary beneficiaries are rural smallholder farmers, and the project specifically focuses on promoting the role of women and youth in the agricultural sector. The project approach fosters partnerships among local implementing partners with complementary social, agricultural and business skills, whose collective expertise will promote food security and farmer incomes in Africa. Strategically targeting specific high potential agricultural value chains in each project country, SAIOMA interventions strive to generate better economic opportunities for project beneficiaries along supported agricultural value chains, particularly women smallholder farmers. The project in being implemented by consortiums, the Kenya team constitutes of the Lead Partner Agricultural Market Development Trust (AGMARK), that is responsible for consortium coordination, agro-dealer development (input markets) and work on gender mainstreaming. The other partner in the Kenya consortium is Cereals Growers Association (CGA) that is responsible for farmer organization mobilization and training (productivity component) and produce aggregation and linkage to markets (output market access component. The third and last partner is Cooperative Consultancy and Insurance Agency Ltd (CCIA), working on farmer organization capacity strengthening. The Zambia consortium has Nutri-Aid Trust (NAT) as lead partner, responsible for agro dealer development and consortium coordination. The other partners include Frontier that is implementing the output market component, and the Farmer Organization Support Program (FOSUP) who are implementing of the Farmer Organization capacity strengthening component. The Malawi consortium consists of National Smallholder farmers’ Association of Malawi (NASFAM) as lead partner and also responsible for coordination of the consortium, they work on the output market component with the Agriculture Commodity Exchange (ACE). The Rural Market development Trust (RUMARK) executes the agro-dealer development work within the input markets component. Lastly Farmers Union of Malawi (FUM) works on the Farmer Organization capacity strengthening component.

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This report covers the period from January 01, to March 30, 2014, which represents the first full quarter of project implementation after the approval of sub-awards, last quarter. Key accomplishments of this quarter include the successful launching of the project in Kenya, Malawi and Zambia. The project team conducted inception meetings with all implementing partners in the three target countries, and the baseline studies were concluded during the present reporting period. The implementation of activities in the field included the identification and profiling target beneficiaries for project interventions and the rolling out of various training activities.

2. PROJECT ACCOMPLISHMENTS

2.1 Project Launches During the present reporting period, the SAIOMA project was officially launched in the three target countries. The first project launch took place in Zambia on the 27th of January in Lusaka, and was well attended by fifty people from various partners from the private and public sectors. The key guests were the Permanent Secretary from the ministry of Agriculture Dr. David Shamulenge and USAID Zambia Economic Growth team Lead, Dr. Anna Tonnes. In Malawi the launch took place in Lilongwe on February 10 2014. The key quests were USAID Malawi Deputy Economic Growth Team Lead, John Edgars and AGRA Market Access Director, Anne Mbaabu. The event was attended by partners from the private and public sectors; USAID Feed the Future flagship implementing partners also participated in the event. The Kenya launch took place on the 19th of February 2014, in Nairobi. The chief guests at the launch included Special Advisor on Agriculture to the President of Kenya, Dr. James Nyoro, Stephen Fondriest USAID AOR, Dr. Millie Gadbois, the FtF Coordinator at USAID Kenya and Jane Karuku, AGRA’s President. Other guests at the launch included representatives of farmer organizations from the project areas and other private and public sector partners. SAIOMA, in collaboration with the Meru County organized a field launch event on 14th march 2014 at Urru stadium, Kianjai -Tigania West, Meru North County. Attendees included farmers, Government of Kenya ministry officials, NGOs, Input Supply companies, financial institutions, various service providers, agro-dealers and smallholder farmers. The event was presided over by Prof. Kaburu M’ribu - County Executive, Ministry of Agriculture, Livestock and Fisheries. 2.2 Inception Workshops SAIOMA conducted inception workshops with the implementing partners in each project country. In these week-long workshops, AGRA staff introduced various requirements under SAIOMA, in the areas of financial compliance and reporting, environmental compliance, as well as monitoring and evaluation. The workshops also discussed the other details of the grant award letter, to enhance grantees’ readiness for successful project implementation.

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2.3 USAID AOR Visit to Kenya During his working visit to Kenya, Steven Fondriest, USAID’s SAIOMA AOR participated in the project launch and conducted a field visit to Meru with SAIOMA management team, to familiarize himself with the Project operating environment. Mr. Fondriest also worked with the project team to identify emerging issues that require management action by AGRA and USAID. In Meru, the team paid a courtesy call to the Agriculture, Livestock and Fisheries office and held discussions with the County Executive Minister of Agriculture Prof. Kaburu and the Director of Agriculture, Mrs. Dionesia Miluaki. The team visited Kimachia CBO in Tigania West, an umbrella farmer organization made up of 21 groups who aggregate pigeon peas, sorghum, maize and green grams. The field trip to Meru included a visit to a hub agro-dealer, Mr. Kithendu of Farmers Centre. This meeting discussed potential areas of collaboration between SAIOMA and the business in strengthening and expanding the agro-dealer network in Meru and its environs. Figure 1: USAID AOR addressing farmers in Meru

2.4 Changes in Implementing Partners Consortia

In Kenya, one of SAIOMA’s implementing partners; ICRW that was supposed to execute the

gender component of the project, withdrew from the consortium after the grant had been

awarded. Following this withdrawal, AGRA worked with project implementers to revise the

Kenya sub-award budget, which was thereafter submitted to USAID for approval.

In Malawi, AGRA proposed to change the lead partner of the consortium after determining

that the lead partner RUMARK had lost to much capacity to fulfill this role’s requirements.

After the departure of RUMARK’s Managing Director on extended leave due to his

involvement in the political campaigns, AGRA decided to replace RUMARK with NASFAM as

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the coordinating agency of the Malawi consortium while RUMARK will focus the Agro-dealer

related work.

2.5 SAIOMA-leveraged resources

In the pursuit of SAIOMA objectives, the project leveraged substantial resources from AGRA

and from the private sector through the project implementing partners.

During the inception workshops, SAIOMA benefitted from the expertise of AGRA personnel

from the Internal Audit Unit and Grants Administration Unit, who trained SAIOMA

implementing partners in various areas of grant management. The staff time, and travel cost

were leverage from AGRA to the project.

SAIOMA was also benefitted from AGRA’s staff time and expertise from the M&E unit that

supported the SAIOMA team in the review and finalization of baseline reports. Finally, project

partners sourced seed and fertilizers from private sector companies at no cost to the project,

for 22 project-promoted demonstration sites in Malawi and for 30 demo plots in Zambia.

2.6 Key staff transition

The AGRA SAIOMA Administrative and Finance officer, Stephen Migwa resigned from the

position in February 2014. An AGRA Temporary Officer, Mr Antonny Kavinguha is filling in

the position as the project seeks a long term solution.

3. Achievements by Objectives

3.1 Objective 1: Improved Agricultural Production

SAIOMA interventions under this objective seek to enhance the availability of agricultural inputs and promote good agronomic practices needed for market participation, primarily through rural agro-dealers. The theory of change here is that when producers use improved agricultural inputs and improved agronomic practices, they will increase their yields and incomes. Demand creation activities for agricultural inputs such as field days and demos are therefore important both for the development of agro dealer businesses, as well as for farmer adoption of improved inputs and practices. During this quarter, the project identified the agro dealers and hub agro that will work on the project. Furthermore, SAIOMA held field days where agro dealers advertised their inputs and other yield enhancing technologies to their potential clients (farmers). The achievements by country are as follows:

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3.1.1 Intermediate Result 1.1: Increased men and women smallholder farmers’

access to agricultural inputs

KENYA The project mapped and profiled 511 agro-dealers (296 Male, 211 Female, 4 cooperatives) in the project districts. This task also identified 14 potential Hub agro-dealers and will further inform the promotion of start-ups through micro-grants since it indicates the areas that will require agro-dealership business set up. MALAWI In Malawi, the project started this exercise towards the end of the quarter and identified18 potential agro-dealer project partners that could apply for support from the SAIOMA micro-grants facility. These are rural agro-dealers that need some support to provide more reliable services to project farmers. ZAMBIA The Zambia project team profiled and mapped 224 (46 women) potential agro dealer collaborators. As a result of this process, 6 cohorts of 25 trainees (1 per district) have been selected for training in Business Management and Technical (BMT) skills in the next quarter. This early training will enable them have enough time to set up businesses in time for the coming 2014/15 crop season.

3.1.2 Intermediate Result 1.2: Improved agricultural practices among men and

women smallholder farmers.

KENYA In an effort to publicize the project, the SAIOMA team in collaboration with Meru county Government organized an Agricultural inputs exhibition on 14th March 2014 at Urru stadium, Tigania West district. During this event, agricultural input suppliers and other agricultural value chain stakeholders exhibited their goods and services for producers.. Exhibitors used the event to inform farmers of available agricultural inputs and technologies such as improved seed varieties and appropriate application of fertilizer. MALAWI Project partners sourced seed and fertilizer for distribution to agro dealers for establishment of crop demonstration plots. Pannar Seed Company provided the project with two maize hybrid seed varieties; one early maturity variety PAN 4m21 and one medium maturity

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variety, PAN 53. A few agro-dealers contributed seed from their stocks to compliment that provided by Pannar Seed Co. 100kgs of NPK and 100kgs of Urea fertilizer were sourced from a local fertilizer supplier, the Smallholder Farmers Fertilizer Revolving Fund of Malawi, SFFRFM. These inputs were distributed to agro dealers in readiness for planting and application in demonstration gardens. The project identified 22 sites for the establishment of crop demonstrations was distributed inputs to them all. The project team managed to conduct 16 field days that were attended by 748 smallholder farmers (306 female and 442 male. ZAMBIA SAIOMA, with the assistance of various input supply companies, distributed a total of 30 demo packs to existing and potential start up agro dealers. These demo packs consisted of hybrid maize, soybeans, sunflower and groundnuts seed. Project staff monitored the demo plots and also facilitated 7 field days in four districts. Please see farmer and stakeholder attendance in table 2 below:

Table 2: Farmer attendance at SAIOMA field days

District # of field days held

Farmers attending AD present M F Tot

al M F Total

Mumbwa 1 98 38 130 1 0 1 Chibombo 4 414 145 559 4 1 5 Katete 1 91 48 139 3 1 4 Petauke 1 96 19 115 3 1 4 Total 7 699 250 949 11 3 14

During these events, agro-dealers successfully marketed their inputs and stimulated local demand for them. Agro-dealers also made business linkages with several input suppliers present. Lastly, field days were also an important avenue for recruiting new agro dealers as many lead farmers made enquiries on how to become agro dealer agents.

3.2 Objective 2: Improved access to markets

This objective will be accomplished using farmer organizations as an entry for project interventions, SAIOMA facilitates linkages to structured market for participating farmers, trains farmers crop management techniques that reduce post-harvest losses and improves storage facilities.

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3.2.1 Intermediate Result 2.1: Increased adoption of improved post-harvest

management practices by men and women smallholder farmers

KENYA The smallholder farmers are recruited into groups to increase their capacity in aggregation. In this period, 2207 (553 Male, 1654 Female) farmers were mobilized into 97 groups. The project team conducted training needs assessment surveys on post-harvest handling and entrepreneurship for farmers within the newly mobilized groups. A total of 96 farmers (26 male and 70 Female) representing 16 farmers from each of the districts, Tigania west, Tharaka North, Kitui central, Lower Yatta, Mwala and Yatta were sampled. The table below indicates a summary of the findings.

Table 3: Training Needs assessment Findings Post -Harvest handling

% of 96 smallholder farmers trained

51%

Harvesting and storage 28% of 51% Fumigation 25.5% of 51% Drying 14.9% of 51% Entrepreneurship % of 96 smallholder farmers trained

39.4%

Business planning 16.7% of 39.4% Financial management/book keeping

11.5% of 39.4%

Credit and loan management 14.9% of 51% The survey showed that there was a lot of spillage of produce while aggregating at the VACs since the farmers do not have tarpaulins to use. The farmers indicated that they needed more training on storage aspects (post-harvest handling) and Business planning, credit &loan management, financial management/book keeping (entrepreneurship). MALAWI SAIOMA partners in Malawi did not do any field activities but worked on mapping and planning the areas and sites they would work in. USAID Malawi expressed concern of potential double-counting of beneficiaries in districts where SAIOMA and USAID Malawi’s FtF flagship program, the Integrated Nutrition and Value Chain (INVC) project overlap. AGRA and SAIOMA implementing partners met with INVC’s project team to discuss how to avoid double-counting of beneficiaries and duplication of activities in the district of overlap (Balaka, Machinga and Mangochi).

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It was resolved that INVC and SAIOMA will primarily work in separate Extension Production Areas (EPA) , and in EPAs where both projects operate they would share beneficiary information and report that number of beneficiaries receiving support from both projects. In line with USAID Malawi’s strategy of colocation, coordination and concentration, SAIOMA plans to work with farmer clusters that were initially served by USAID Malawi’s WALA project. SAIOMA will take up these clusters and group them into bigger, formal and more viable farmer organizations whose capacities will be strengthened by SAIOMA and they will be linked to structured output markets. ZAMBIA During this quarter, the bulk of Market access activities were concentrated around Eastern province in Lundazi, Katete, Petauke, and Chipata Districts. The key activities undertaken under this component include:

Identification of Trainees for training in Post-harvest and warehouse management. Conducting TOT in Post-Harvest and Warehouse Management in all 4 districts in

Eastern province Identification of potential commodity buyers in Eastern Province Collection of government crop production forecasts from the SAIOMA areas. Identification of potential aggregation sites

The project identified 32 trainees for the TOT post-harvest trainings in the Eastern Province Most of these were Camp and Block Extension Officers in the respective SAIOMA areas as well as some representatives from the local District Agricultural Offices and the Technical Services Branch (TSB). This quarter, two TOTs were conducted in Eastern Province. The first TOT for Camp and Block Extension Officers was conducted in Lundazi District with 8 trainees. The second TOT conducted was for the Camp and Block Extension Officers in the Katete, Chipata and Petauke Districts with 24 participants. In addition to conducting the TOT, the project was also identified potential commodity buyers for SAIOMA crops in Chipata, Katete, Lundazi and Petauke districts. These buyers are SHIFFA CARGIL, KUDU TRADING, NWK AGRI SERVICES, KESSONS, CARGIL, JUNGLE BEAT, COMACO and ALIBOO.

3.2.2 Intermediate Result 2.2: Improved marketing structures and linkages for

men and women smallholder farmers

KENYA This quarter, SAIOMA identified and profiled 26 Village Aggregations Centres. The project will select which of these facilities to improve, based on the needs identified during the profiling exercise.

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MALAWI SAIOMA partners in Malawi identified one large warehouse in Balaka district, which if confirmed will be refurbished and certified for Warehouse Receipt System by the project for commercial use. ZAMBIA During this quarter, SAIOMA identified two potential sites for aggregation at Zumwanda (Lundazi) and Mtenguleni (Chipata); these have been marked for refurbishments. The project team also collected crop production forecasts for Lundazi district. This information will be shared with potential buyers outlined above for them to assess the community’s ability to meet their commodity requirements.

3.3 CROSS CUTTING ISSUES

3.1: Farmer Organization Capacity Building

The project is working to strengthen capacities of farmer organizations, helping them to link up with reliable input suppliers and commodity buyers. The achievements of capacity building of Farmer organization were as follows: KENYA Seventy two (72) farmer groups in the target districts were profiled in view of identifying which groups were functional, the crops they produced, and their level of organisation as a group in terms of purpose of formation, meetings and composition. This will inform SAIOMA on which groups to undertake capacity building on governance. Some of the observations made on the groups were that;

Majority of the group members were involved in farming of one or two of the target crops;

The target crops were not the only crops they were growing; Majority of the members in the farmer groups engaged in other economic activities

other than farming e.g. tailoring, welding, retail shops; Majority of the members accessed credit facilities from either a table banking group

(lending amongst each other), a micro-finance institution or from friends. Those who said they accessed finance from a commercial bank were not many

although some groups did through group lending schemes. Majority of farmer groups do not access loans as individual farmers but rather as

groups which offer group guarantee. This affected ability of many farmers to grow

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their own crop. Majority of the farmer groups practiced table banking, which served as bridge funding

for the farmers that were unable to access formal financing from an institution. MALAWI Other than administrative and planning, no field activities took place. ZAMBIA During the quarter SAIOMA team worked to identify operational agricultural camps and mobilization of farmer organizations. The project has targeted to support 200 FOs in 6 districts. The project plans to identify at least 100 FOs in the first year by selecting at least four (4) agricultural camps per district and four (4) FOs per agricultural camp. SAIOMA also identified trainees and conducted training of Farmer Organization trainer of trainers in governance. A total of 37 Farmer Organization TOTs out of the project overall target of 180 ToT’s were trained in governance. The training for Mumbwa and Chibombo districts are on-going and are scheduled to be completed in April 2014. The process of identifying TOTs in other selected camps and FOs is on-going. The project team conducted a rapid assessment of participating farmer organizations in Eastern Province. These FOs were clustered based on some key performance parameters including:

a) Presence of strategic or long-term plans b) Availability of the membership recruitment and retention strategy c) Availability of an authentic organizational constitution d) Presence of operational procedures and management policies e) Participation in networks f) Presence of strong gender-based decision making systems g) Availability of sound financial base and status of the financial resources h) Capacity of leaders and trained lead farmers i) Main activity of the groups

3.2 Gender Inclusiveness

SAIOMA will take specific measures to ensure that interventions designed to improve the involvement and participation of women and youth do not disenfranchise men. The project will undertake an assessment study on gender and social diversity in the target countries, to identify gaps and potential entry points for women and youth in line with the project activities. A training of consortium staff on gender, agriculture and agribusiness will also be conducted.

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In Kenya, activities pertaining to gender and youth mainstreaming will be conducted by an identified Gender consultant. This follows the withdrawal of International Centre for Research on Women (ICRW) who was to implement activities under Gender for the SAIOMA project. In Malawi, FUM will spearhead the mainstreaming of gender interventions into project interventions. In Zambia, the project identified women and youth agro-dealers in order to increase their participation on the agro dealer trainings planned for the next quarter. This was achieved by a series of visits by WASAA coordinators as well as phone contacts with the potential and existing agro-dealers. The total number of women agro-dealers who were identified through this process were Katete (25), Petauke (14), Chipata (18) and Lundazi (2). A one day sensitization workshop with these prospective women and youth agro-dealers was held in Katete, in view of increasing their participation in agro-dealership. At present, most agro-dealers are men and SAIOMA will utilize its micro-grants facility to promote the start-up of women-owned rural agro-dealerships.

5. CHALLENGES

The changes that had to be made in the Malawi consortiums delayed the

implementation of activities.

The complex nature of this integrated project, the inherent challenges of coordinating

several partners’ activities and capacity limitations of implementing partners

constitute significant constraints to project implementation.

Most implementing partners need capacity strengthening particularly in monitoring

and evaluation skills.

6. PRIORITIES FOR NEXT QUARTER

Kenya

Undertake capacity building of agro-dealers and FBOs

Conduct Training of Trainers Post- harvest handling and entrepreneurship

Conduct linkage Meetings

Submit signed MOU and letters of consent from GDA partners

Finalize M&E plans

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Zambia

Train 150 new agro dealers in BMT (25 per district)

Establish linkages between 150 new agro dealers and input suppliers

Strengthen district agro dealer associations

Develop selection criteria and identification of 18 hub agro dealers

Develop grants application guidelines for small grants for start-up agro dealers

Perform monitoring and mentoring new agro dealers

Conduct TOT in post-harvest management

Hold TOT in FOs

Initiate refurbishments of 3 aggregation centers and purchase of equipment

Conclude women and youth agro dealer identification in Eastern province

Conclude sensitization workshops with prospective agro dealers in Eastern province (3

workshops)

Visit selected camps to commence situation analysis and needs assessment with farmer

groups

Malawi

Prepare and commence training of new agro dealers in business management and technical

skills

Collect and assess Micro-grant applications

Profile agro dealers for hub agro dealer selection

Hold 22 vegetative field days.

Profile Farmer organizations

Select sites for refurbishment