PAA Africa Programme Inception Workshop - P4P presentation


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Round Table 4 - “Local Purchases in the African Continent, challenges and perspectives for international cooperation initiatives”, July 03 2012, Brasília.

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PAA Africa Programme Inception Workshop - P4P presentation

  1. 1. P4P PURCHASE FOR PROGRESS By Laura Melo 2012
  2. 2. P4P OverviewBENEFICIARIES: at least 500,000 smallholderfarmers - 1 million members of farmers’organisations engaged in P4P (500,000 inEthiopia).DURATION: 5 years (Sept 2008 – Dec 2013) 21 PILOT COUNTRIESFUNDING: US$151.8 million for technicalcapacity for 5 years (food not included) AFRICA: Burkina Faso, Democratic Republic of Congo, Ethiopia, Ghana, Kenya, Liberia,KEY DONORS: Bill & Melinda Gates Malawi, Mali, Mozambique, Rwanda, SierraFoundation, Howard G. Buffett Foundation, Leone, South Sudan, Tanzania, Uganda,European Union, Governments of Belgium, ZambiaCanada, France, Ireland, Luxembourg, ASIA: Afghanistan and LaosNetherlands, United States of America and LATIN AMERICA: El Salvador, Guatemala,the Kingdom of Saudi Arabia. Honduras, Nicaragua
  3. 3. WFP’s local and regionalprocurement WFP Local Procurement – P4P’s foundation Principles of acceptable, timely and cost efficient food procurement
  4. 4. VISION OF SUCESSBy 2015, agricultural markets willhave developed in such a way thatmany more small-holder or lowincome farmers, the majority ofwhom are women- will producefood surpluses, sell them at a fairprice and increase their incomes.
  5. 5. P4P Main objectivesLeverage WFP’s procurement footprint as a catalyst forgrowth and connect farmers to markets,Build the organisation’s capacities and expertise in the areaof procurement and market development,Build a body of best practices in agriculture and marketdevelopmentShare this knowledge as part of the efforts to strengthen thecapacities of countries to reduce hunger. 5
  6. 6. P4P Development Hypothesis 6
  7. 7. Three main pillars Demand Supply - Partnerships Test innovative procurement Through partnerships, ensure modalities to foster ability of quality and reliability of local WFP to work with small holder supply by farmers • Providing technical expertise • E.g. pro-smallholder in agriculture and market competitive tendering, direct development and forward contracting,...) • Building capacity • Empowering women Learning & Sharing Pilot phase will be monitored closely to learn from experience and identify best practices for later scale up 7
  8. 8. Partnerships across the value chain 8
  9. 9. P4P Models Countries Approach 1: Supporting the roll-out of warehouse receipts systems in two ways • direct support for the establishment of the systemFarmers’ Organisations Approach 2 • Purchasing through the system Ethiopia, Support to Purchasing through commodity exchanges to create a “pull- Malawi, and Supply-side emerging in/follow-in effect” Tanzania, structured Uganda and Partnerships trading systems Working with farmers’ organisations to build their capacities to Zambia participate in structured trade Buying from farmers’ organisations Rationale to enhance competitiveness in the market• Receiving support on production Provide an alternative market for farmers’ surpluses and marketing Approach 3 Procurement modality – modified tendering Mozambique• various procurement modalities + Small and Training provided on WFP procurement and contract requirements and Kenya• FO’s at different capacity levels – medium traders Investment in marketing equipment – stitching machines, weighing scales high, medium and low• Main challenges – governance, access to finance, limited availability of infrastructure and Approach 4 Connecting farmers’ organisations to established food processors Afghanistan, equipment to facilitate group Developing Developing local processing capacity – biscuits, supplementary Ethiopia, feeding products marketing, meeting contract local food Guatemal, requirements processing Mozambique, ZambiaCommon approach in all capacities countries Approaches are combined to fit countries needs 9
  10. 10. Achievements - Procurement 220,000 metric tons contracted (50,660 mt defaulted) $56 million USD directed to the pockets of smallholders Global default rate - less than 23% (20,000 mt) P4P purchases as a percentage of total local purchases by WFP in the pilot countries increased from 9% in 2009 to 13% in 2010. WFP has realized savings of approximately US$ 30 million (savings with respect to import parity price, considering the total quantity contracted 10
  11. 11. Quantities contracted and Delivered
  12. 12. P4P purchases vs local procurement
  13. 13. Achievements – Training 855 FOs, with a total membership of over 1 million (352 FOs have signed contracts with WFP) Over 133,400 smallholder farmers, lead farmers, agricultural technicians, small and medium traders and warehouse operators have participated in training activities organised by WFP and partners 13
  14. 14. Number of Trainings per Quarter
  15. 15. 3 key lessons  Match buying modality to capacity of Farmer organisations  Focus on food safety / quality / processing  Link financial service providers to FOs / strengthen financial literacy
  16. 16. Risks  Consistent supply and aggregation  Quality assurance  Price discovery  Cost efficiency  Contract performance  Elite capture  Weak organisational capacity  Appropriate Processes and systems