Millet trade finance presentation final 1 octoberPresentation Transcript
USAID LEAD Project Facilitating Smallholder Farmers’ Access to International Markets 4 October 2010
USAID LEAD Project is a $35 million / 5 year project that targets 600,000 households and is structured to improve livelihoods of smallholder farmers in rural sectors.
LEAD is a VC structured project, with five key targeted VCs
Besides working in agricultural VCs, LEAD also encompasses x-cutting components, including a Financial Services component
LEAD aims to 1) ensure food security and 2) incorporate smallholder farmers into highest value markets.
Constraints to penetrating higher value markets include low quality standards, lack of finance, insufficient identified buyers, and/or slowness of payment by commercial buyers.
LEAD partners with other stakeholders to facilitate smallholder farmers’ access to higher value markets.
8a Payment of warehouse Fees 6a Caveat place on WR by Equity Bank 8c Caveat removed on WR by Equity Bank 7 Full Payments for WR received 8b Net payments direct to PO accounts 9 Transfer of WR to UNGA 6b Advance on WR 10 Presentation of UNGA WR 11 Release of Millet to UNGA 1b Issues Floor Price for Millet
2 LEAD Farmer Groups Mobilization
Mobilization and sensitization
Millet aggregation and delivery
Training on Fund Management
4 WFP Warehouse – Gulu (UCE licensed)
Cleaning and drying
Issuance of electronic Warehouse Receipts
Storage and Collateral Management
Equity Bank-Uganda UNGA Ltd, Kenya 5a Issuance of Copy of Warehouse receipts and warehousing invoice 3 Delivery of Millet STRUCTURED EXPORT TRADE FINANCE FACILITY – SEQUENCE OF EVENTS Title Document/WR Transfer Money Payments 5b Issuance of WR and WH invoices 1a UNGA and Bank sign agreement on terms of Unga’s purchase of the millet Physical Millet Delivery
Need reliable partners : Buyer, Seller, Bank, Licensed
Basic Steps to fix costs/income :
- Buyer and Seller agree quantities, price, quality
standards, delivery schedule
- Buyer, Seller, and Bank agree financing/payment terms
- Determine costs of warehousing (off loading, cleaning,