Livelihood Impacts through Access to Markets
Annual Program Review 2011Nairobi, Kenya
9 May 2011
Eliud Birachi
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Livelihood Impacts through Access to markets:
An overview of results from Africa
• Eliud Birachi
• CIAT, Kigali, Rwanda
• Programme area: TSBF, PABRA, SSA CP
• Market value chain research
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Overview
• Overview: Focus and impacts
• An overview of intervention projects
• Modelling market access frameworks
• Examples of livelihood outcomes from Africa programs
• Lessons and observations
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• Conducting value chain research (for market, user targeting)• Sustaining wider strategic linkages to support
commercialization marketing of agricultural products• Modeling sustainable access to markets• The value chain based platform approach
• Creating enabling environment for technology adoption: • Role of collective action and credit
• Evaluating impact of market access on reinvestment in the natural resource base
• Monitoring Impact of market access on household food security
•
Focus of agricultural market value chain research
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Expected Outcomes• Increased commercialization of
agricultural production
• Increased incomes from agricultural production actors
• Increased investments to enhance agricultural production
• Enhanced capacities of agricultural value chain actors to effectively participate in markets
• Container: Namaha (1.5 kg)• Purchase price = sale price• Margin: See picture for
determination of margin
Trading margin
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Overview of SSA CPProject and
locationNumber of
farmer groupings
NARS involved
NGO partners Major achievements
Lake Kivu 12
ISAR, NUR,
INERA, NARO,
Makerere
Diobass 12 innovation platforms based on selected value chains operational
North Kivu sites 4 INERA Diobass
Banana processing into wine, a trader platform that interacts with producer platform
Rwanda sites 4 ISAR,
NUR, ImbaragaStrong linkages with private sector for milk deliveries.Value added products for niche markets (hotels and supermarkets)
Uganda sites 4 NARO,
Makerere Huntex Processing of sorghum to a value added product
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Overview of CIALCAProject and
locationNumber of
farmer associations
NARS involved
NGO partners Major achievements
CIALCA-Rwanda 4 ISAR Over 5 Groups converted to cooperatives 2011,
Implementing b-plans
CIALCA- South Kivu
23 (merged
into 4)INERA Over 4
4 synergies formed, implemented business plans, half of them executed a warrantage credit system, bulked products, acquired fertilizer, fertilizer and seed kiosks opened, mutual savings scheme
CIALCA- Bas Congo 4 INERA Over 4 Associations strengthened, implementing
business plans
CIALCA- Burundi 4 ISABU Over 3 Began later, associations being
strengthened
• Mode of intervention: Empowering NARS, NGOs to support farmer associations • At least 3 NGO partners involved in each project area• Collaborations with private service providers and other NGOs established
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Overview of PABRAProject and
locationNumber of
partner groupings
NARS involved
NGO partners Major achievements
24 countries in Africa
Several per country
National bean
research programs, Universities, others
Several per
country
Bean (marketing) platforms and strategic linkages at policy and operational levels (private sector involvement)
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A market framework for technology adoptionPrivate sector
• Institutions of micro finances• Distributors, sellers of inputs• Bulk traders, buyers and processors•ICT/Information service providers•Infrastructure service providers (e.g. warehousing)
Business plans
Warrantage credit
Input Kiosks• Fertilizers• Materials• Seeds
MUSO
Inte
rnal
cre
dit
Members’ guarantee
Credit for input + LabourCredit for produce
Empowering financial capacity
External credit
External-Synergy
Internal -Synergy
Figure: A model for intervention in agricultural value chains
Research
Policy
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Creating systematic impact through agricultural value based platforms
Bean Impact Zone 1
Bean Impact Zone 2
Bean Impact Zone 3
Bean Impact Zone 4
Regional Platform(e.g. EAFU, ECGA, SACAU)
National Platform (e.g. CGA)
Bean Farmers in Selected PABRA countries
Bean Traders Platform
Supported by:
Credit providers
Researchers
Policy (national and regional)
Market information providers
Physical infrastructure services- warehousing
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Strategic level platforms
(COMESA/EAC/AU
National level platforms
Impact zones platforms
Impact zone platforms
National level platforms
Impact zone platforms
Agricultural input and grain trade and policy: impact and influence
Agricultural trade and policy: impact and
influence
Evaluation of impact of policy on market and
household trade
Inter-linking with regional trade policies
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• Producers have acquired the capacity to integrate ISFM and improved germplasm technologies in their business plans
• Associations are able to borrow credit to invest in ISFM and pay back regularly- (borrowed USD 8900 this season)
Enabling environment for adoption- Business plans and credit
A farmer training session in progress in South Kivu
One of the farmer operated input kiosks. 3 tons sold to farmers
last season
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• Outcome of business plans, producers adopted warrantage credit schemes by storing and exercising over 5.6 tons of legumes (4.1 tons for beans and 1.5 tons soybean) in 2010
• As a result, the net price gain for farmers was USD 0.4-0.5/kg of soybean and USD 0.9-1.0/kg of beans (over 50% in both cases)
Enabling environment for adoption- warrantage credit schemes
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• Farmer managed mutual savings schemes (MUSO)
• for productive investment (green) fund
• For social welfare (red) - protects investment fund
• 33 schemes in CIALCA sites, farmers raised over USD 5400 in one year
• Potential to support warrantage and business plan implementation
Enabling environment for adoption-mutual savings schemes
Demonstrating mutual savings schemes to farmers
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• Farmer groups/associations
• National research institutions
• NGOs
• Private sector: processors, credit providers, traders
• Focus: farmer groups to play a bigger role in product supplies
Farmer groups
Collective action: Where do farmer group lie in the supply chain?
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Collective action: Impacts of groups on technology uptake
Adoption of new varieties and technologies, an example for DRC, 2010 (over a period of 2 years)
Technology type Group Non-Group
Planting fertilizer 113% 27%
Top dressing fertilizer 299% 2%
Organic manure 878% 12%
New varieties 447% 17%
Other technologies 182% 47%
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Collective action : Benefits (Economic surplus)from technology use in the DRC
Variable: All crops Group members Non-group
members P-value
Economic gains 263.65 28.33 .001
Variable: Beans only Group members Non-group
members P-value
Economic gains 50.2 14.02 0.001
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Market access and household incomes per year (Uganda case)
Bean is leading contributors1 USD = 2200 UGShs
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Market access and re-investment of agricultural incomes: early indications in Uganda
Re-investment in NRM: Aggregate of land improvement activities
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Contributions to revenue and prices in the DRC and Rwanda- beans
Contribution to revenue Percentage
20% 33%
30% 14%
40% 23%over 50% 30%
n=129 100%
Beans contributed to at least 40% of household income for 53% of households in North Kivu, DRC
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Niche market Prices (in RFrw)Nakumat Supermarket 200La Galette 160-180Ndoli supermarket 170Jehovah witness 180Average 178
Rwanda: bean prices in Kibungo district (about 100 km from Kigali) are USD 0.35 per kg of beans, in Kigali price was USD 0.58 Potential for income is almost 50% higher in Kigali.
Market access and incomes: Effect of linkages to profitable markets and value addition
Producers supply over 35 tons of products over 3 months. Old price = RFrw 90
Finally, in DRC, processing of banana into wines yielded over 90% more returns compared to raw bananas.
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0
10
20
30
40
50
60
Farmers Traders
Prop
ortio
n of
usa
ge %
Traders Farmers Radio Government SMS Television Market Notice Board Group
Communications channels, Burundi
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Enhancing access to profitable markets: Potential link to ICT platforms
Farmers By Traders
Market information
systemReliability % Usefulness % Reliability % Usefulness %
Radio 37.2 32.5 66.6 52.4Government 25 57.2 50 100Television - - 33.3 33.3SMS 54.5 54.6 48.3 58.6Traders 43.4 47.1 55.9 67.8Other Farmers 64.7 50 55.6 66.6Group/Association 18.2 11.1 - -
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Market access and gender in agricultutal product trade
Producers Traders
Burundi Uganda DRC Rwanda Burundi Uganda
Male (%) 50.3 52 25 35 58.2 57
Female (%) 49.7 48 75 65 41.8 43
Farming households in Burundi (estimated)
Percentage of farmers accessing bean markets
(n=380)
Mean overall household income
1.3 million 27% 257,219
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Lessons and observations• Agricultural product branding and positioning needed for value capture• Market information networks: Can extend benefits from agricultural
product trade• Forward contracting and warehousing (receipt system) should be
encouraged• Agricultural product marketing platforms as a means of sustaining
market linkages– Platforms provide a framework for convergence of successful
interventions in agricultural value chains• Credit access is a must for effective utilization of new technologies
(need to harness internal credit potential as well)• The role of groups need to be strengthened to achieve economic scale
of production and marketing• Finally, linkages to regional blocs (COMESA, EAC, SADC) vital to improve
market access for outputs and inputs
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Thank you for your attention
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