livelihood impacts through access to markets

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

• e.birachi@cgiar.org

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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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