Blog: Incentives, Investments and Leveraging to Link Smallholders with the Global Economy
ACDI/VOCA partners with Purchase for Progress (P4P) in Ethiopia, Ghana, Rwanda, Sierra Leone, and Tanzania to build the capacity of smallholder farmers, providing them with sustainable and diverse skill sets. In this post William Sparks, ACDI/VOCA Vice President, shares his experience with the five-year pilot P4P project and his hopes for the future.
ACDI/VOCA began operations in 1963 and has since worked in 146 countries. At ACDI/VOCA, we share a common goal with the World Food Programme’s Purchase for Progress (P4P): to promote positive economic and social change worldwide by linking smallholder farmers to the global economy.
P4P is one of the most exciting new ideas in the development sphere. Our projects with P4P have varied in size and design across each of the countries we’ve collaborated in, but in each one we have achieved much by focusing on three core principles: incentives for improving business and farming practices, investments to enhance operations and upgrades, and leveraging of partnerships and new opportunities.
Incentive to change
WFP’s demand for staple crops is an important incentive for smallholders. It offers them a clear opportunity to sell a quality product for a premium price. This potential profit is a tangible benefit that can be earned through improved business and farming practices. For example, in Rwanda, farmers are now able to meet rigorous quality standards, thanks to skills acquired through Sell More For More™ training. This program, designed by ACDI/VOCA and recognized by the International Fund for Agricultural Development (IFAD) as a best practice, reduces post-harvest losses and strengthens farmer management of collective aggregation practices. These trainings create a ladder of skills for farmers to climb in order to reach WFP’s standards and attractive prices.
Through a Common P4P program, the government of Rwanda now contributes its own incentives by procuring directly from smallholders. Across the border in Tanzania, we’ve supported a similar initiative in collaborating with the National Food Reserve Agency to make purchases from smallholder farmer organizations. P4P has demonstrated how large buyers can be an incentive for smallholder farmers to acquire new skills.
In order to continue improving the lives of farmers everywhere, we must provide guidance and resources to NGOs, governments, and the private sector to assist in the ongoing development of farmers. If P4P is the incentive for farmers to progress to the next level, then we must provide a ladder of skills for farmer organizations to climb. This will equip farmers with stronger abilities to improve their practices, outputs, and, ultimately, income.
Investments for improvement
P4P and ACDI/VOCA have successfully encouraged and facilitated farmers’ investments, and have in turn invested in these farmers to ensure their success. In Ghana, we have helped farmers in isolated regions to invest in inputs for sustainable rice intensification, including improved seed varieties, small equipment, and warehouses. These investments have helped them to produce large amounts of high-quality rice and establish Ghana’s first warehouse receipt system through which they can sell to WFP and other premium buyers.
Additionally, we helped women in Ghana invest in labor-saving technologies, such as semi-mechanized parboiling vessels and energy-saving stoves for parboiling rice. This allows women to add value to their crops, and saves them the time and labor required to parboil rice in the traditional manner. Women-owned enterprises reported that operating costs dropped by half because of these measures, helping them increase their profits and abilities to re-invest in their businesses.
To continue fostering smallholder investment, we must continue our work helping farmer organizations access improved agricultural inputs, equipment and other investment opportunities. We must also continue promoting aggregation and warehouse standards, including certification methodologies, to ensure protection of valuable commodities and farmers’ investments.
Leveraging with partners
Through our participation in the Ethiopian Maize Alliance, P4P and ACDI/VOCA have combined forces to create a greater collective impact. The alliance includes 10 organizations that coordinate plans and join resources, with P4P as their nucleus. Together, we improve the ability of cooperative unions to support smallholder farmers, moving households from subsistence agriculture to producing cash crops.
In Sierra Leone, smallholders have been linked to commercial banking, which provides farmers with credit using WFP contracts as collateral. Even though we have made great strides in leveraging credit for smallholders, we must continue combining our strengths to create successful credit models that can be adopted more broadly. Additionally, our joint efforts can be used to support the development of program advisory groups to guide and assist national governments and large buyers in designing and implementing P4P-type programs.
For me, P4P can be described in one word: believe. P4P was the first step forward, the first push toward the finish line, the first to illustrate the possibilities for linking smallholders to markets. P4P makes people believe, whether they are farmers, financial institutions, other buyers, NGOs, or national governments. The possibilities are endless once people believe.
More importantly, P4P empowers. Through collaboration with implementing partners, P4P enables farmers to access markets. Today, we’ve got the first million people across the finish line, but now we are faced with the challenge of getting every farmer there.
The first five years has demonstrated that P4P works. I look forward to the next five years, and however long it takes to get all farmers across the finish line of feeding their families.
(Note: These views are the author’s and do not necessarily reflect those of WFP.)