Changing Lives Through Stronger MarketsA core IFDC goal is to increase access to modern agro-inputs by building linkages across the entire agricultural value chain. These efforts have considerably increased smallholder farmers’ access to quality agro-inputs in a number of countries, including Mozambique. Farmer training programs, fertilizer voucher programs, farmer and agro-dealer association development, private sector investment strategies and policy advocacy are some of the tools IFDC has used to build opportunities for participants along the value chain.

Since the first input market assessment it performed in 1998, IFDC has sought to improve Mozambique’s agricultural markets. In February 2011, IFDC and the Government of the Republic of Mozambique (GoM) signed a Memorandum of Understanding (MoU) in Maputo to formalize this ongoing joint commitment to improve the nation’s agricultural productivity. The MoU established formal and continued collaboration in the implementation of Mozambique’s long-term plans for integrated soil fertility management (ISFM), agricultural intensification and rural development.

The ultimate development goal in Mozambique is sustainable agricultural self-sufficiency, which is required to adequately feed 23.5 million Mozambicans. During the past six years, IFDC projects in Mozambique have assisted more than 100,000 smallholder farmers (including over 20,000 smallholder farmers in central Mozambique’s Beira and Nacala corridors). IFDC agricultural development efforts have improved agricultural production on over 300,000 hectares (ha) of Mozambican farmland.

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5 Cover: Members of an agricultural cooperative sort seeds for quality control in Nampula.

IFDC:

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Agricultural Input Market Strengthening (AIMS), 2007-2012AIMS promotes private sector investment in agro-input technologies and marketing in Mozambique. The project is improving farmers’ access to technologies through competitive markets and dealer networks. Key components are business development and capacity building, association building, technology transfer and extension support, increased production of improved seeds and strengthened policy environments.

DONOR: U.S. Agency for International Development (USAID)

BASIS, 2009-2013This field experiment is a study of the relationship between farmer savings and sustainable food security. BASIS studies: the impact of fertilizer subsidies; the interaction of fertilizer subsidies and savings; and the impact of savings facilities and savings matches. Key assessments include farm output, household consumption and other household indicators (e.g., nutrition, health, child schooling) in the short- and long-term resulting from subsidies, savings and savings matches. The effort is a collaboration of the University of Michigan, IFDC and the University of Wisconsin. In addition, the Banco de Opportunidade de Mocambique (BOM) manages a credit fund for agro-dealers.

DONOR: USAID

Cassava+, 2011-ongoingCassava+ is a public-private partnership (PPP) between IFDC and the Dutch Agricultural Development & Trading Company (DADTCO) to commercialize the cassava production of 1,500 households (6,000 people) in four districts of Nampula Province by linking them to markets more efficiently. The program assists farmers to plant and harvest cassava, which is then processed utilizing a mobile processing unit. Cassava+ guarantees farmer payment for delivered cassava and includes access to quality agro-inputs, training and new technologies. Cassava+ is expected to increase farmers’ incomes by 22 percent.

DONOR: The Netherlands’ Directorate-General for International Cooperation (DGIS)/Schokland Fund

Maize Intensification in Mozambique (MIM), 2008-ongoingThe MIM project assists smallholder farmers to increase maize production through better access to quality agro-inputs and specialized training programs. MIM strengthens the entire maize value chain by building linkages between farmers and agro-dealers, maize buyers, non-governmental organizations (NGOs), farmers’ organizations and agricultural extension services. The project utilizes farmer cluster formation and demonstration fields to promote improved agricultural technologies through innovative fertilizer and conservation agricultural techniques.

DONORS: International Fertilizer Industry Association (IFA), International Plant Nutrition Institute (IPNI) and International Potash Institute (IPI)

Overview: Current & Recent IFDC Projects

4 Opposite: Children are often the major beneficiaries of subsidies and structured savings.

33Mozambique Agro-Dealer Development (MADD), 2009-2012The MADD project builds on the achievements of AIMS, which promotes private sector investment in agro-dealer technologies and improves farmers’ access to these technologies through competitive markets and stronger agro-dealer networks. MADD is adding to these efforts, strengthening and expanding agro-dealer networks in central Mozambique. MADD has assisted more than 400 agro-dealers to date. MADD staff members work closely with fertilizer companies and other partners such as AgriFuturo (USAID) and CLUSA as well as local organizations to enhance privatization.

DONOR: Alliance for a Green Revolution in Africa (AGRA)

Mozambique Voucher Program, 2009-2011In September 2009, IFDC received a grant from the European Union (EU) through the Food and Agriculture Organization (FAO) of the United Nations to assist the GoM in the implementation of a fertilizer/seed voucher program pilot. The program targeted 25,000 maize and rice farmers. With the successful completion of the pilot, upscaling of the program to reach a much larger percentage of Mozambique’s total maize and rice farmers is in development.

DONOR: EU

Toward Sustainable Clusters in AgribusinessThrough Learning in Entrepreneurship (2SCALE), 2012-ongoingNine countries in Africa are the focus of the 2SCALE project: Benin, Ethiopia, Ghana, Kenya, Mali, Mozambique, Nigeria, South Sudan and Uganda. In these countries, 2SCALE will focus on food security while contributing to increased water use efficiency through good agricultural practices.

The 2SCALE project will emphasize IFDC’s Competitive Agricultural Systems and Enterprises (CASE) solution. The new project will emphasize taking CASE ‘to scale’ – increasing the number and the size of agribusiness clusters and the crop yields and incomes of smallholder farmers involved.

DONOR: DGIS

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AIMS promotes private sector investment in modern agro-inputs and marketing in the Beira and Nacala corridors. The project is also improving farmers’ access to agro-inputs through more competitive markets and improved agro-dealer networks. The current AIMS project, a follow-on to the initial AIMS project that ended in 2009, is continuing to strengthen the private input sector and

create demand for agro-inputs through market development and the introduction of ISFM. AIMS is part of the Platform for Agricultural Research and Technology Innovation, together with the Consultative Group on International Agricultural Research, the GoM and the Brazilian Agricultural Research Agency.

Transfer of ISFM TechnologiesAIMS is promoting the adoption of ISFM, the combined use of mineral fertilizers and locally available organic amendments, to replenish lost soil nutrients. This improves both soil quality and the efficiency of agro-inputs. AIMS is training agro-dealers and extension agents in ISFM techniques and other improved practices, enabling them to transfer the knowledge to farmers through demonstration plots and participatory learning.

Strengthening the Input Supply Chain and Developing Agro-Dealers in Rural AreasThe small size and unorganized nature of agro-dealers in market towns make it difficult for rural smallholder farmers to access quality inputs. In most areas, farmers travel 30-40 kilometers (km) to buy agro-inputs and market their crops. This discourages farmers from using modern inputs and therefore increasing crop productivity. AIMS is organizing dealers and training them on product knowledge and financial/business management. IFDC works with trained dealers; demonstration plots are established in collaboration with the dealers, who use the plots as promotional and training tools. This transfer of responsibility for demand-creation to the dealers encourages them to better serve area farmers.

Input Sector Policy Reforms and RegulationsWith few price or marketing controls on agro-inputs, it has fallen to the private sector to develop a stable national market. But without government-backed fertilizer laws or a fertilizer regulatory authority, private sector efforts have fallen short. This lack of oversight allows

AIMS

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AIMS

unmonitored importation of improper or uneconomical fertilizers with few quality assurance measures. Due to inadequate product knowledge, agro-dealers and farmers often buy these unregulated products, resulting in inefficiencies and low yields. An enabling policy environment to allow private sector development is essential to combat this problem. IFDC is assisting the GoM to introduce appropriate legislation and establish a fertilizer authority to enforce the laws.

Strengthening Market Information Systems (MIS)Access to timely and reliable market information on the price and availability of inputs and/or crops greatly contributes to confidence and transparency in the marketing system, and provides much-needed information to agro-dealers and farmers. The Ministry of Agriculture’s (MINAG) System of Information of Agricultural Marketing provides information on crops, but not on inputs. In 2010, IFDC organized a workshop on MIS in collaboration with the Agricultural Input Market Information and Transparency System (AMITSA), a web- and mobile-based MIS focused on agro-inputs in eastern and southern Africa.

Strengthening Agro-Dealer Trade AssociationsAssociations give members the opportunity to pool demand, reduce costs through joint procurement, organize internal and external training sessions and advocate for a favorable policy environment. Through training, AIMS encourages agro-dealers to join district-level associations, which are linked to the Association of Mozambican Agricultural Input Suppliers (AMPIA). AMPIA was created in 2008 under the first phase of AIMS. Since 2008, IFDC projects in Mozambique have worked closely with AMPIA on issues of mutual concern.

Fertilizer and Seed Voucher Program for Smallholder FarmersVouchers provide incentives to invest in agro-inputs and provide farmers with purchasing power support. A two-year pilot voucher program began in September 2009 in collaboration with the EU, FAO and the GoM. IFDC helped select and train agro-dealers and negotiated prices between importers and blenders, transporters, wholesalers and suppliers. During the second year, 25,000 vouchers were distributed and redeemed for fertilizer used on maize and rice crops.

AIMS activities collaborate with other IFDC projects in Mozambique. AIMS and MADD also collaborate with the World Food Programme’s Purchase for Progress (P4P) projects to increase farmers’ access to inputs and organize procurement of farmers’ produce through agro-dealer networks and AMPIA.

3 Opposite top: IFDC coordinates the implementation of credit support with BOM.

3 Opposite bottom: The addition of maize silos into the value chain helps farmers store crops more efficiently, reducing waste and spoilage.

6 Below: A typical rural agro-dealer shop, stocked with quality fertilizers and improved seeds. The Mozambican agro-dealer is the primary source of knowledge and advice for rural farmers.

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A Study of the Relationship Between Farmer Savings and Sustainable Food Security

According to the World Bank, only one in five Africans has a bank account, and those who do typically reside in urban areas where access to banking facilities is more convenient. This leaves the majority of rural farmers without accounts and, thus, without savings to invest in agro-inputs or basic household necessities. The BASIS project studies the relationship between farmers’ savings and their ability to improve their quality of life through better agricultural practices. The pilot is a collaboration of IFDC, the University of Michigan and the University of Wisconsin.

Specifically, the project studies the effects of incentives such as savings matches on smallholder farmers’ willingness to create and sustain bank-held savings. If a farmer is successful, he or she will have ensured that personal funds are available for agro-input purchases before the next cropping season. Key assessments of the experiment include farm output, household consumption and other short- and long-term household indicators such as nutrition, health and child schooling.

The project includes about 400 households in the villages of Chua, Penhalonga and Chadzuca in the administrative post of Machipanda. The villages were chosen due to the area’s widespread irrigation, making these maize farms less susceptible to the effects of droughts, and eliminating potential anomalies in the study data. Village access to existing BOM bank branches was also a factor.

Following the pilot, a future full-scale experiment will involve 2,000 farmers and will study the impact of fertilizer subsidies; the interaction of fertilizer subsidies and savings; and the impact of savings facilities and savings matches.

The demand across Africa for cassava by-products (such as cassava cake, high-quality cassava flour, starch and glucose) is rising due to urbanization and global increases in grain prices. These factors have convinced manufacturers of consumer and industrial products that cassava can be used as a substitute for higher-priced raw materials. With greater market demand, increased production can now benefit Africa’s smallholder cassava farmers.

Recognizing the important role that cassava and smallholder farmers play in African agriculture, DGIS, IFDC and DADTCO have expanded their PPP to promote commercial cassava production in Mozambique.

Under Cassava+, a new opportunity is being created for Mozambican farm families that currently grow cassava merely for home con-sumption and sale in local markets. The project’s goal is to increase production levels to 20-30 metric tons (mt)/ha by providing im-proved cassava varieties together with demonstrations and ISFM training to boost soil fertility. The project also makes widespread use of DADTCO’s Autonomous Mobile Processing Units (AMPUs), which process fresh cassava on-farm or nearby, negating the risk of spoilage

Cassava+

BASIS

7that occurs when crops are shipped to distant processing facilities.

IFDC is working with the Instituto de Investigacao Agraria de Mocambique (IIAM) to introduce bacteria- and virus-free improved cassava varieties using agro-dealers as distributors to smallholder farmers. Cassava+ not only improves local food security but also creates a value chain that allows farmers to sell surplus cassava roots to DADTCO, which offers a purchase guarantee to participating farmers. DADTCO in turn produces cassava cake, paste, flour and other products for commercial and industrial use, such as cassava beer production by SABMiller’s local affiliate, Cervejas de Mocambique.

The beneficiaries of this first phase of Cassava+ are 1,500 households in four districts of Nampula Province. The major benefit of the project is that as household incomes increase, money is infused into local economies to buy farm equipment and supplies, home improvements, retail purchases, school supplies and other necessities. New public and private investments in infrastructure are also common in the effort to support the newly formed value chain.

Maize, the staple food of most Mozambicans, is grown throughout the country. The total land area on which cultivated maize is grown is about 1.4 million ha, but yields seldom exceed 1.0 mt/ha because few farmers use fertilizers and

improved seed varieties. Factors contributing to the low yields include poor soil fertility, periodic droughts, weeds, pests and crop diseases. Only about five percent of smallholder farmers currently use improved seed varieties and apply, on average, only 5.0 kilograms (kg)/ha of fertilizer. The use of crop protection products (CPPs) is primarily reserved for cash crops such as cotton, tobacco and sugarcane. Low rates of agro-input use are largely the result of the lack of an integrated supply system for better access to inputs, inadequate farmer knowledge of modern technologies and the lack of available credit in rural areas.

MIM is implemented by IFDC with funding and in-kind technical support from IFA, IPNI and IPI. The purpose of the project is to improve smallholder farmers’ livelihoods by intensifying maize production through the effective use of modern agro-inputs. Technology transfer is also critical in educating subsistence farmers on the rotation of cereal and leguminous crops for greater diversity, better control of pests and improved water management through irrigation and techniques that retain rainwater at the crop site.

The second focus is the transition from subsistence farming to commercial-quality maize production and marketing. The project strengthens the agricultural economy by linking farmers with other

value chain partners. Building linkages with farmers’ organizations, agro-dealers, processors, NGOs, IFA, IPNI, IPI, agricultural extension services and the International Maize and Wheat Improvement Center, MIM creates a stronger and more dynamic maize value chain. Site-specific nutrient management and the use of ISFM techniques are key technical aspects used to increase total output to commercial levels.

MIM

3 Opposite top: With proper saving techniques, farmers can afford to send their children to school.

3 Opposite bottom: Processing cassava near a local village using a DADTCO AMPU.

4 Right: Cassava beer produced by SABMiller and Cervejas de Mocambique.

6 Below: Maize test plots in central Mozambique.

BASIS

8The project utilizes a productive farming clusters technique, and is being implemented in the central provinces of Manica and Sofala. This technique allows for optimal technology transfer and creates a community environment for shared teaching, participatory learning, experimentation and networking. Results in the project’s first year showed that the use of best agricultural practices increased maize yields from an average of 500-800 kg/ha to over 2,500 kg/ha, while profits increased to over US $250/ha.

Funded by AGRA, MADD builds on the achievements of AIMS, promoting private sector investment in agro-input technologies while improving farmers’ access to inputs through competitive markets and more effective agro-dealer support. MADD is strengthening and expanding the agro-dealer networks in Manica and Tete provinces with and through farmers’ organizations.

To achieve the most efficient supply of inputs, MADD is developing agro-dealers’ marketing skills and business linkages and is enhancing agro-input dealer/supplier access to commercial credit. The project is developing a network of 450 agro-dealers in urban, peri-urban and rural markets and facilitating the formation of provincial agro-dealer associations. MADD is also creating new demand for agro-inputs by teaching farmers modern crop production techniques.

MADD is addressing the following components, which are producing a synergistic effect on agro-input market development and agricultural production:

• Capacity building in business management and product knowledge.

• Association building and networking.

• Development of business linkages.

• Technology transfer/demand creation for seed, fertilizers and other inputs.

• Strengthening of the nation’s MIS.

• Increasing access to business finance through risk-sharing arrangements with commercial banks and input wholesalers and suppliers.

• Working to create and sustain agro-input quality assurance measures.

Voucher programs help smallholder farmers obtain agro-inputs while simultaneously building business for rural agro-dealers. Voucher programs are often called ‘smart subsidies’ because they supply agro-inputs to farmers without disrupting the commercial market.

The program targeted 25,000 maize and rice farmers on 12,500 ha of land in Manica, Nampula, Sofala, Tete and Zambezia provinces. IFDC chose the agro-dealers involved and ensured that they had access to agro-inputs required for participating farmers. In addition, targeted farmers were trained in the proper use of the inputs.

Mozambique Voucher Program

MADD

IFDC worked closely with FAO, MINAG, the National Directorate for Agricultural Extension, designated banks, suppliers, agro-dealers and farmers. The voucher progam was then extended into the 2010 and 2011 cropping seasons.

2SCALE will be implemented by a consortium of IFDC, International Centre for development oriented Research in Agriculture and Base of the Pyramid Innovation Center.

With the ‘market’ as the key driver for agricultural intensification, 2SCALE will partner with Mozambican and Dutch agro-enterprises involved in agro-input supply, professional service provision and output marketing. 2SCALE also will include a specific focus on agro-food markets that are intended to improve food security for both urban and rural poor – those least fortunate, or at the base-of-the-pyramid (BoP).

2SCALE’s goal is to improve rural livelihoods and food and nutrition security in Africa.

Using a PPP approach, project staff will develop a portfolio of robust and viable agribusiness clusters (ABCs) and value chains in the nine countries, supplying food to regional, national and local markets and BoP consumers. By the end of the project, smallholder farm families involved in these countries will have increased their productivity by 100 percent and their net incomes by 30 percent, while small and medium enterprises (SMEs) will have increased their sales volume by 50 percent. Overall, 2SCALE will increase productivity, leading to a marketable surplus of 1.7 million metric tons of cereal equivalents,

of which 550,000 mt will be channeled to BoP markets.

2SCALE will integrate smallholder farmers in local, national, regional and global value chains. CASE improves the capacities of smallholder producers and nearby SMEs to develop competitiveness in producing a certain commodity or product for a targeted market, and to overcome the risks and other barriers related to further market integration. CASE strengthens the individual and collective capacity of ABC participants.

Preliminary plans for Mozambique call for the food security interventions to be focused in the agriculture and trade corridors of Beira and Nacala; IFDC has a strong presence in these corridors with a range of projects focusing on access to agro-inputs, input credit and agricultural productivity (funded by USAID, FAO, AGRA and the fertilizer industry), allowing it to reinforce the Royal Embassy of the Kingdom of the Netherlands’ interventions and for collaboration with key NGOs and donors.

93 Opposite top: A large agro-dealer shop in Gondora.

3 Opposite bottom: Traditional Nyaguru huts surrounded by maize.

6 Below: The three components of the CASE approach (agribusiness clusters, value chains, improved institutional environment). 6 Back Cover: A fertilizer warehouse in Gondora.

2SCALEMADD

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