Production Income and Employment

Transcription

1 FAO NAMC Linking Farmers to Markets in Southern Africa Angeline Kahari SNV ZAMBIA 5-8 October 2009

2 Production Income and Employment Setting the context Our country programme The RICE Value Chain Progress so far Results so far What we have learned Value for money? Is our strategy working?

3 CONTEXT: PRIVATE SECTOR GROWTH THE PRIVATE SECTOR IS AN ENGINE FOR GROWTH. CREATION OF ENABLING CONDITIONS FOR PRIVATE SECTOR PARTICIPATION IS CRITICAL TO BOTH DOMESTIC INVESTMENT (ESPECIALLY SME) AND TO ATTRACTING FOREIGN DIRECT INVESTMENT (FDI). Growth driven by private investment leads to higher revenues for governments to finance vital social services and infrastructure (Africa Commission Report, May 2009, page 6) Topic for today: THE PROMISE OF RICE IN OUR REGION: compelling evidence from Zambia.

4 CONTEXT: OUR CHANGING WORLD Global food crisis Global financial crisis Recession Climate change [They] threaten the hard-won gains made by African countries over the past decade. Investments are declining. Businesses are struggling to survive. And jobs are lost. Jakaya Mrisho Kikwete, President of the Tanzania, May 2009

5 STAPLE FOOD PRICES ARE RISING Global food prices have risen 83% over the last three years (World Bank estimate) and 45% in the past year alone (FAO) Staple foods account for much of this escalation Wheat prices rose 130% over the previous year Soy prices rose by 87% Maize prices rose by 31% Rice prices climbed by 74%! SOURCE: Institute for Food and Development Policy

6 What do we see? We see a Zambia richly endowed with natural resources- land, water, forests, minerals, people We take a closer look and see: many unemployed people (only 7% have formal employment) many young people (more than 45% are under 15) unrealised human potential (adult literacy is under 64%) many sick people (life expectancy at birth is 40.5 years) people toiling in fields (over 80% are dependent on agriculture) many poor people (over 63% live on less than $1 per day) hunger and malnutrition greed and corruption

7 And We question: POVERTY IN THE FACE OF SUCH WEALTH HOW CAN THIS BE? WHY IS IT SO? WHAT CAN WE DO ABOUT IT? HOW WILL WE DO IT?

8 ISSUE BASED APPROACH Political will or political won t? This is not transparent!!!!!!! What money? NEW BREW What are the bottlenecks? What is impeding progress toward impact/ Where s the money? Teachers? Desks? Books? Jobs? Where is the loo? I m hungry! They are sick.

9 OUR THEME IS INVESTMENT IN GROWTH Growth in services: education, MACRO MESO MICRO ISSUE = AXIS Policy environment SNV Triggers Where RESULTS (should) have meaning 18 WaSH, renewable energy Growth of the private sector: Agricultural value chains Pro Poor Tourism Governance for empowerment over-arching Vocational and skills development cutting through +IMPACT on lives of the poor!

10 GROWING RICE CAN REALLY CHANGE OUR LIVES

11 RICE FACTS Globally, rice provides 25-30% of world dietary energy supply. Rice consumption in Africa is growing at 4% per annum. In Africa rice consumption presently outstrips production which has at most grown by 2% (FAO 2009). Sub-Saharan Africa is a net importer of rice. Western and Eastern Africa provide 95% of production. Madagascar, Comoros and Tanzania are leading global rice consuming nations. South Africa is one of the biggest net global importers of rice. In Africa poor people spend more than 50% of their income on staple foods- increasingly rice.

12 MORE RICE FACTS: In southern Africa increase in rice consumption has averaged 6% per annum since 2000 Sub-Saharan Africa is the biggest world importer Purchases 6.7 million metric tonnes Equivalent to 36% of rice consumed in region In Zambia 35,000 MT are consumed annually In ,000 MT were produced Potential for rice production in Zambia is high

13 STARTING WITH THE MARKET FOR RICE In 2007 the estimated production in Zambia was 18,000 MT 12,000 MT was informally traded mainly to DRC through cross border traders (Fewsnet:2007) Consumption in the country was estimated at 35,000 MT The deficit of 29,000 MT is imported mainly from Eastern Asia (perceived to be of higher quality and also cheaper) Buyer(s) market dominated by small scale traders and rice retailing conducted through open informal markets. Imported rice sold through formal retail chains.

14 RICE VALUE CHAIN ISSUES Low volumes of poor quality produce from small scale producers (over dry paddy) Excess Milling Capacity with Processors Collapse of formal marketing systems Absence of quality local brands in the domestic market Decrease in access to financial services by rural farmers (elimination of Government directed credit) Inadequate post harvest handling skills & agronomic practices Absence of pure seed and fertilizer Lack of quality storage facilities Insufficient market information for market actors Poor rural roads network

15 Justification for Rice Choice 25,000 rice producers in SNV selected provinces (70,000 in the whole country) Staple crop consumed in the country Unsatisfied market (29,000 MT imported) Commercialising smallholder cash crop (local prices stabilising) Potential income USD 1,000 p.a. for 1 hectare per producer (2012)

16 SNV PRODUCTS Producer Group Strengthening -legitimacy, credibility and viability of economically active farmers Market Intelligence -both supply and demand side Multi-stakeholder Platforms -meaningful dialogue focusing on impacts and economic performance Service Provider Strengthening

17 Value Chain Financing - increase access and utilization of financial services and products by VCA for business growth and equity Effective Public Policy Management -Advocacy and dialogue with Government for development of enabling policy environment

18 SNV INTERVENTIONS Value Chain Approach is applied across 3 provinces in 7 Districts Value Chain Assessment in 2007 District level Multi-stakeholder Platforms (MSP) Baseline in 2008 confirmed the national production level National MSP to bring together the actors established in 2008 Warehouse receipting system development MoU Zambia Agribusiness Technical Assistance Centre Ltd. (ZATAC) 2008 for brokering funds for rice processors and producers

19 SNV INTERVENTIONS continued. Inclusive Business with SPAR Retail Chain in 2008: 10 MT supplied monthly from DMDC (Processor) to SPAR (retailer). SME out-grower scheme in 2009: 3 processors approached to establish out-grower schemes with local small holder rice farmers across 3 Districts

20 SNV INTERVENTIONS IFAD/SNV Knowledge Brokering Programme: Feasibility Study to assess viability of small holder warehouse receipt schemes in 2007 Exchange Visit to Mbeya in Tanzania to learn about Warehouse Receipt Systems (WRS) for 20 farmer group represented in 2007 Warehouse Receipt Training conducted across 3 provinces for 140 farmer representatives in 2008 Warehouse Audit conducted on small holder storage facilities- 5 facilities in 2008

21 SNV Interventions continued IFAD/SNV Knowledge Brokering Programme: - Rice Knowledge Exchange Conference in Nairobi in 2009 (2 Zambian Millers, 3 Ugandan & Tanzanian farmer s, Malawian and Mozambican NGO participated) organized through ESAANet & SNV Zambia National Partnership with Zambia Agricultural Research Institute for knowledge dissemination on rice agro-technologies and rice extension training in 2009 involving 60 farmers & 30 extension officers

22 RESULTS SO FAR AMONG SNV BENEFICIAIRES Expanded programme outreach from 3,000 producers in 2007 to 5,000 in 2009 towards a target of 15,000 in 2012 Production rose from 2,770 MT /HA in 2008 to 4,675 MT/HA in 2009 representing an increase of 69% Farmer income from rice production increased from USD 237 in 2007 to USD 800 in 2008 representing an increase of 27% Farmer income from rice projected to rise to USD 1,000 in 2009 Value chain financing of USD 300,000 brokered for rice millers for forward contracts with small holder farmers Value chain financing of USD 300,000 to producers for bulking of rice New employment opportunities in the processing industry after financing of processors by SNV partners (8 new jobs created)

23 RESULTS SO FAR continued Locally branded Mongu rice present in SPAR supermarket chain a total of 50MT at a total value of USD 55,000 5 Multi-stakeholder forums established in Mongu, Isoka, Chinsali, Chavuma and Northern Province (Farmers, MACO, financiers, Zambia Agricultural Research Institute [ZARI], and private sector players) ZARI/IFAD/SNV rice manual for rice extension officers and lead farmers produced and in use 14 small holder owned rice demonstration plots across 7 districts (SNV-IFAD ) 70 farmers involved in seed purification pilot in Western Province Regional publication of rice cases from the ESAANet/IFAD/SNV regional knowledge conference under development Formation of a Rice Strategy Task Force at the Ministry of Agriculture which SNV has been requested to advise. This task force is being funded by JICA.

24 RESULTS SO FAR continued SNV facilitated formal trade of paddy rice from small holders through their associations. from less than USD 50,000 in 2008 to more to 900 MT worth over USD 234,000 in Increased stakeholder participation that includes MACO, ZANACO/Rabobank, ZATAC (USADF, WOORD&DAAD) 11 rice farmer associations registered with a membership base of 3,000 farmers ZCSMBA has procured 4 warehouses in its six step process of warehouse receipt scheme implementation across 4 districts in the country (through EU funding) (IFAD/SNV knowledge adoption)

25 RESULTS SO FAR some more. 15 Savings and Credit Cooperatives established (SACCOs) with 100 members each with savings of USD 5,000 mobilized so far SACCOS Manual and Warehouse Receipt Operational Manual produced (SNV/SCAPEMA) and in use.

26 FROM THE FIELD

27 Challenges Under funded government departments that are supposed to provide services to producers (Research and Extension) Creating business orientation in farmers who have essentially been subsistence producers Inadequate infrastructure and storage facilities Delayed approval of the Agricultural Credit Act that legalizes warehousing receipt system

28 OUTLOOK Zambia is blessed with more than 90,000 HA of arable land that can be opened up for rice production (excluding land suitable for upland rice that is also being introduced) The Government of Zambia has taken in rice as one of the crops for both livelihood and commercial production. Fertilizer inputs will now also be allocated for rice production Private sector participation has been enhanced and the biggest food processor in the country, National Milling Limited, has opened up collection depots in the rice growing areas of Western Province with intention to buy from smallholders. Rural SMEs taking the lead in rice processing and marketing ZARI has obtained funding of USD 74,000 for NERICA rice seed multiplication (ZAMSEED) and they are seeking a partnership with SNV

29 WHAT WE HAVE LEARNED: Through their empowered associations farmers are able to solve their own problems All of the institutions that are working with SNV along the rice value chain are working toward business goals and profitability rather than just subsistence With SNV support rice value chain facilitation has expanded to include producers, input suppliers, processors, extension service providers and financiers. A culture of entrepreneurship is slowly emerging as evidenced by the formation of active SACCOS Progress made along the chain has attracted funders

30 VALUE FOR MONEY? It is still early days. The rice value chain has occupied SNV ESA innovative space for two years and is ready to move on in a wider programme addressing food security through investment in agricultural value chains. Some results have already been achieved and the lives of people have already changed.

31 IS OUR STRATEGY WORKING? Targets set in have been reached and even surpassed. Growth of the private sector is occurring along the whole rice value chain. Business and producers associations are more empowered and are working at creating and capturing value at the local level. Multiple stakeholders are focused on strengthening their own capacity to innovate local solutions to local problems. I will leave that to each of you to judge!