The rationale behind P4P is to link WFP’s demand for staple food commodities, such as cereals, pulses and blended foods, with the technical expertise of a wide range of partners. This collaboration provides smallholders with the skills and knowledge to improve their agricultural productivity and an incentive to do so, as they have an assured market in which to sell their surplus crops.
So far, P4P has reached more than 1 million farmers in 20 diverse countries. However, the benefits of smallholder-friendly procurement models are widely extended by catalysing further investment by the public and private sectors. While P4P has showcased this potential, a global scale-up of support to family farmers is necessary to improve food security and promote inclusive growth.
To best inform future efforts, P4P has emphasized an honest and transparent examination of what works and what does not. Throughout the five-year pilot, P4P has studied and documented the most effective ways of linking smallholder farmers’ organizations to formal markets, and how an institutional procurement footprint can be leveraged to promote sustainable agricultural and market development.
Partnerships along the value chain
[photo|644256] An essential part of P4P’s work has been coordinating and facilitating some 500 partnerships across the staple food supply chain in the 20 pilot countries. These partnerships have supported smallholders to access the skills and resources needed to most effectively market their crops to formal markets. Partners include host and donor governments, non-governmental organizations, United Nations agencies, academic institutions, research bodies and private sector partners. Two key WFP partners throughout the P4P implementation have been the United Nations Food and
Agriculture Organization (FAO) and the International Fund for Agricultural Development (IFAD). FAO facilitated smallholders’ access to agricultural inputs and training, whileIFAD supported representatives from farmers’ organizations and partners in their negotiations with financial institutions where programmes aligned.
Due to deeply-rooted challenges faced by rural smallholder farmers, capacity development efforts are vital to linking them to markets. Thanks to active engagement with partners, nearly 800,000 farmers, agricultural technicians, warehouse operators and small and medium traders have been trained in a variety of topics. These include improved agricultural productivity, post-harvest handling, quality assurance, group marketing and business management.
By bringing WFP’s demand for quality food into the equation, P4P has been able to enhance partners’ capacity development efforts by providing smallholders with a tangible market opportunity. This has provided an incentive to learn new skills and stimulated investment to enhance agricultural productivity. The assured market presented by WFP also ensures that smallholders can sell their quality surplus for premium prices, and don’t risk losing on their investments. During the pilot period, WFP contracted over 450,000 metric tons of food commodities, valued at more than US$177 million, using procurement modalities that address the various marketing constraints of smallholder farmers. The majority of the food was purchased through farmers’ organizations, but some quantities also came from small and medium-sized traders and marketing platforms such as commodity exchanges and warehouse receipt systems.
While the need for capacity development is often extensive, the overall P4P experience has shown that when smallholder farmers see the benefits of engaging with formal markets and are provided with appropriate support, they will seize market opportunities and respond to quality demands. Not only have P4P-participating smallholders sold to WFP, but with the technical know-how and confidence built from these sales, they have also marketed more than 150,000 metric tons of quality commodities to other institutional and private sector markets, valued at an estimated US$63 million.
[photo|644266]Almost without exception, pilot country governments have embraced the P4P concept. Their engagement and the presence of an enabling environment has proven to be vital for effectively linking smallholder farmers to markets. The methods tested through P4P have presented governments with innovative tools to support smallholder farmers, with a number already developing initiatives modelled after or similar to P4P.
The Government of Rwanda has taken ownership of the P4P project through the creation of a government-run initiative called Common P4P (CP4P). CP4P is implemented through the Ministry of Agriculture and Animal Resources, which buys up to 40 per cent of the requirements of the National Strategic Grain Reserve from smallholder farmers’ organizations. P4P’s role has been to support the Government to design a programme which best fits the country’s needs, while mobilizing partners to train participating farmers in post-harvest handling and storage. The successful adaptation of smallholder-friendly procurement models has led the Rwandan Government to host several exchange visits from countries including Burkina Faso, Ghana and Kenya. Today, the Government of Burkina Faso is beginning to implement a project similar to P4P, with the national food reserve committing to procure 30 per cent of its purchases from smallholder farmers’ organizations.
In Ethiopia, the Government has made programmes such as P4P central to national policies, enhancing opportunities for smallholder farmers. Through partnerships coordinated by the Government’s Agricultural Transformation Agency, P4P provides the platform around which to effectively coordinate the support needed to build smallholder farmers’ capacity to engage in structured markets. With its creation, an effective mechanism was formed that brought together several important players supporting the maize value chain. The Government of Ethiopia has recognized maize as vital to economic growth and development in the country.
In Ethiopia, Malawi and Mozambique, government partnerships are further strengthened through the Purchase for Africans from Africans (PAA Africa) programme, which is jointly implemented by FAO and WFP. PAA Africa was inspired by Brazil’s national Programa de Aquisição de Alimentos (Food Purchase Programme). In these countries, as well as in non-P4P countries Niger and Senegal, smallholders are supported to market a variety of fresh and staple crops to home-grown school feeding programmes. This has contributed to the testing of innovative financial models. For example, in Ethiopia and Malawi, funds have been transferred from WFP to district departments of education or schools, allowing them to purchase food directly from local farmers’ organizations.
[photo|644258]P4P has provided the impetus for public, private and civil society actors to leverage their investments to better respond to the needs and potential of smallholder farmers, and has proven that linking them to formal markets is a viable investment. Emerging evidence now shows that a wide variety of stakeholders, including governments, financial institutions and local leaders, have recognized the value of these investments, benefiting smallholder farmers, their organizations and communities in various ways.
Microfinance institutions, banks, input suppliers, WFP and other partners have now collaborated to make financial services available and affordable in remote areas. New solutions include providing smallholders with financial management and literacy training, as well as the use of food supply contracts and warehouse receipts as collateral for loans. Thanks to these initiatives, farmers’ organizations have been able to facilitate access to credit for their members and to acquire productive resources, enabling them to produce larger quantities of high quality food and to aggregate and market crops collectively. Forward delivery contracts (FDCs) have proven effective in several countries. The Commercial Bank of Ethiopia has endorsed FDCs as loan qualifying criteria, enabling cooperative unions in Ethiopia to access credit where they were often unable to previously. FDCs have also been used in other P4P pilot countries, allowing farmers’ organizations to access credit at favourable interest rates.
Agriculture, nutrition and gender
[photo|644257]Women face many challenges that can preclude them from independently owning or managing land and productive assets. In many households, men control the production and marketing of crops as well as household finances. The P4P pilot specifically targeted women farmers in order to address the particular difficulties they face, with an ambitious goal to have 50 per cent women participants. While P4P succeeded in tripling women’s participation in P4P-supported farmers’ organizations during the pilot period, the experience demonstrated that mere numerical participation does not directly translate into a positive impact on the lives of women farmers, nor provide them with the same financial gains as their male counterparts.
Rather, P4P found that a variety of interventions were necessary to empower women farmers, including context-specific action plans, new methods for targeting women farmers, including men in gender sensitization efforts and providing women with time- and labour-saving technology. In many cases, these efforts have assisted women to gain increased voice and greater decision-making ability in their homes and communities. Though these efforts yielded results, in countries such as Ethiopia, cultural barriers and traditional land tenure make it difficult for women to profit from their work. Ensuring that women benefit economically from P4P has been especially challenging in cases in which women are not heads of households.
Through P4P and partners’ efforts, agricultural development and nutrition have been linked, facilitating sustainable improvements within rural households and communities. Nutrition-sensitive approaches include improving smallholders’ agricultural production, empowering women, supporting resilience and providing access to nutrition education. In countries such as Afghanistan and Guatemala, P4P-supported smallholders market their crops to processors and millers for the creation of fortified flour and nutritious foods such as high-energy biscuits. Government investment has been vital to these efforts, as has the involvement of the private sector, which has committed to making purchases to best benefit smallholder farmers.
Poor crop quality can have a negative impact on health and nutrition. The consumption of the toxic chemical compound aflatoxin is particularly dangerous, as it can cause liver cancer and may also be linked to stunting in children. Inadequate crop quality initially posed a major challenge for WFP purchases from smallholder farmers. However, WFP’s insistence on quality standards generated results, leading to a decrease in overall default rates by farmers’ organizations, which improved the quality of their crops. Many smallholders and their families previously consumed the low quality grain they were unable to sell. However, thanks to awareness-raising campaigns on the dangers of doing so, P4P observed a reduction in this practice.
In Kenya, WFP’s high quality standards triggered investment in the development of low-cost methods for reducing occurrences of aflatoxin. On national and regional levels, continuous advocacy for the enforcement of national quality standards, the establishment of quality monitoring protocols and the adoption of best practices are critical. One of the innovative tools created to address food quality and safety was the Blue Box, a portable field testing kit which allows farmers’ organizations in remote rural areas to avoid the costly and time-consuming process of sending their crops off for quality testing.
[photo|644269]While significant accomplishments and learning have been generated by the P4P pilot, further support is needed to overcome the many complex, contextual and operational challenges. Lessons learned throughout the pilot implementation period have identified priority investment areas to more effectively and sustainably connect smallholder farmers to formal markets. Smallholder farmers’ technical skills and organizational capacity must be at the centre of investment, while investing in policy and institutional reform is essential for future programming.
Though the five-year P4P pilot treatment period concluded in December 2013, efforts to support smallholders will continue as WFP mainstreams key innovations and best practices. In the 2014-2017 Strategic Plan, WFP has committed to further increasing the amount of food it buys from smallholder farmers, and working with governments and private sector buyers to support these farmers to access sustainable markets beyond WFP.
The WFP commitment to support smallholder farmers is global, but the potential impacts of linking smallholders to formal markets can be seen most clearly in Africa. Across the continent, demand for quality food commodities is rising, driven by rapid urbanization, income growth and the increased consumption of processed foods and livestock products. Currently, the majority of these quality food commodities are imported from outside Africa. With the majority of sub-Saharan Africa employed in agriculture, assisting family farmers to access growing quality markets has the potential to create more inclusive growth. Investments in smallholder-friendly procurement can directly contribute to improving food security, boosting local economies, lowering unemployment and decreasing poverty.
By Ken Davies, Global Coordinator, Purchase for Progress (P4P)