07/25/11 PRESENTATION  AT AGRIC. SECTOR JOINT REVIEW  NRGP EXPERIENCE GRAND MENSVIC HOTEL ACCRA  JUNE 22-24,  2011 BY: PAS...
07/25/11 Paschal B. Dere VCS-NRGP
07/25/11 Paschal B. Dere VCS-NRGP
FARMER Banks/FIs <ul><li>Warehouse </li></ul><ul><li>Commodity Dealers </li></ul><ul><li>Processors </li></ul>Input suppli...
Is farmer/FBO creditworthy? B/FI Advises  Farmer/PO on how to improve credit worthiness Farmer/PO Assesses her credit need...
Farmer/PO comply with GAP recommendations from MoFA & FAs Pre-season Planning & Interface meeting b/n Marketing Company/In...
07/25/11 Paschal B. Dere VCS-NRGP Bank /FI Quantum of Funds Disbursed  No of FBOs No of Farmers District Location of Farme...
<ul><li>VALUE CHAIN ACTORS:  Private Sector Firms, individual farmers, traders, processors who are key participants / driv...
<ul><li>Knowledge sharing EVENT  </li></ul><ul><li>“ MARKET ” for commodity value chain products and services </li></ul><u...
<ul><li>Established a core working Group (9-11 member) </li></ul><ul><li>Temporarily hosted in MOFA (Value Chain Desk as C...
<ul><li>Should, and how can collaboration of Value Chain Practitioners and harmonization of Value Chain Programmes/Project...
3. THE NRGP COMMODITY VALUE CHAIN BUSINESS MODELS DEVELOPED TO IMPROVE THE SMALLHOLDER FARMER INCOMES Special Purpose Vehi...
3.1  THE LEAD FIRM MODEL LEAD FIRM  SFMC  Ltd (Aggregator) <ul><li>Services provided </li></ul><ul><ul><li>Assured market ...
3.2 THE SPECIAL  PURPOSE  VEHICLE FINANCING MODEL  SPECIAL  PURPOSE  VEHICLE FINANCING  NUCLEUSE FARMER (Khama farms) <ul>...
3.3. THE CONTRACT-OUTGROWER FARMING MODEL CONTRACT  FARMING  VEPEAG - SMALL-SCALE FARMER Farmers are integrated into a the...
BUSINESS MODEL No.FBOs/ Farmers Loan Req’d (GHC) Acres  Source of Funds Expected Repayment  LEAD FIRM FBOs 899 Farmers 3,5...
FBOs/Farmers Banks/FNGOs Warehouse Receipt Storage loan Crop delivery Receipt 3.4.  2011  Pilot WR Model  ( Expansion of I...
FBOs/Farmers Warehouse   Banks/FNGOs 3.4.  2011  Pilot WR Model  STAGE 2: OFF-LOADING Repayment Savings account Withdrawal...
Farmers FBO  identified Pre-season meetings  concluded IPB  Contracts  signed  DZVCC  established  Facilitation  Agencies ...
07/25/11 Paschal B. Dere VCS-NRGP
07/25/11 Paschal B. Dere VCS-NRGP
07/25/11 Paschal B. Dere VCS-NRGP <ul><li>Fine–tune Cashless Transactions Model for sustainable financing of agricultural ...
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Nrgp value chain overview & experience jsr june 22, 2011 paschal final

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  • To address: 1. History of High Default rate in agricultural loans 2. Un-sustainable post-project financial linkages 3. Mistrust, lack of transparency
  • Nrgp value chain overview & experience jsr june 22, 2011 paschal final

    1. 1. 07/25/11 PRESENTATION AT AGRIC. SECTOR JOINT REVIEW NRGP EXPERIENCE GRAND MENSVIC HOTEL ACCRA JUNE 22-24, 2011 BY: PASCHAL B. DERE VALUE CHAIN SPECIALIST Paschal B. Dere VCS-NRGP
    2. 2. 07/25/11 Paschal B. Dere VCS-NRGP
    3. 3. 07/25/11 Paschal B. Dere VCS-NRGP
    4. 4. FARMER Banks/FIs <ul><li>Warehouse </li></ul><ul><li>Commodity Dealers </li></ul><ul><li>Processors </li></ul>Input suppliers BDS & Agro-tech Advisors 07/25/11 Paschal B. Dere VCS-NRGP
    5. 5. Is farmer/FBO creditworthy? B/FI Advises Farmer/PO on how to improve credit worthiness Farmer/PO Assesses her credit needs & puts application to Banks/FIs Pre-season planning & Interface meeting b/n Marketing Company/Input supplier/Bank/FI-& Farmers/PO to confirm market for commodity (tentative px formula/qty/qly) Bank/FI vets Farmer/PO Farmer for credit worthiness & diligence tests Bank/FI does final diligence tests and approves loan No Farmer/PO acts on B/FI Advice Yes Farmer/FBO does final reading and understanding of loan conditions & terms of payment and contracts loan Farmers/FBOs authorize Bank/FI to pay suppliers based on countersigned Invoices. Farmer/FBO contracts services/goods from suppliers STAGE 1. 07/25/11 Paschal B. Dere VCS-NRGP
    6. 6. Farmer/PO comply with GAP recommendations from MoFA & FAs Pre-season Planning & Interface meeting b/n Marketing Company/Input supplier/Bank/FI-& Farmers At harvest f armer/FBO delivers produce to pre-designated buyer with whom contract has been signed at pre-season planning session (Processor, Commodity Dealer, Warehouse Receipt Operator, Cold Chain Operator etc) The pre-designated buyer pays off farmer indebtedness (Joint Cheque farmer or FBO /Bank) to the Bank, using monetary equivalent of part of crop delivered. Balance of crop reserved for farmer to decide on when , how much and to whom to sell STAGE 2 Has Farmer/FBO successfully repaid loan? No Study and understand reason(s) for loan default and take appropriate action Yes 07/25/11 Paschal B. Dere VCS-NRGP
    7. 7. 07/25/11 Paschal B. Dere VCS-NRGP Bank /FI Quantum of Funds Disbursed No of FBOs No of Farmers District Location of Farmers Nandom Rural Bank 10,582.00 7 89 Lawra/Lambusie Lawra Rural Bank 14,766.00 9 96 Lawra Sonzelle Rural Bank 10,125.00 9 95 Jirapa/Lambussie Sissala Rural Bank 94,991.00 24 316 Sissala West and East Builsa Rural Bank 55,352.00 27 120 Builsa BESSFA 14,750.00 15 206 Garu-Tempane Yapra Rural Bank 4,611.00 3 24 Pru Kintampo Rural Bank 6,644.00 2 24 Kintampo South AgDB 841,640.00 66 1058 Wa Muni/Bawku W/Yendi/Tamale metro Total 1,053,461.00 162 2028  
    8. 8. <ul><li>VALUE CHAIN ACTORS: Private Sector Firms, individual farmers, traders, processors who are key participants / drivers along the commodity value chains. </li></ul><ul><li>CHAIN PROMOTERS/FACILITATORS: Development Organizations and those entities implementing projects/programmes using the Value Chain Approach. </li></ul><ul><li>VALUE CHAIN SUPPORTERS: Consulting Firms, Trainers, Technical Advisors, Financial Services Providers and Business Development Services Providers. </li></ul><ul><li>VALUE CHAIN POLICY MAKERS/INFLUNCERS : Ministries, Departments and Agencies. </li></ul>07/25/11 Paschal B. Dere VCS-NRGP
    9. 9. <ul><li>Knowledge sharing EVENT </li></ul><ul><li>“ MARKET ” for commodity value chain products and services </li></ul><ul><li>Institutionalize & professionalize value chain practice in Ghana </li></ul><ul><li>Cost-Share EVENT-No free riders, eventually fully paid </li></ul><ul><li>GOAL-BOT (build, operate & transfer MOFA) MOLE SERIES, Professional Event </li></ul><ul><li>Two such fora have been held so far in November 2009 and January 2011. The 3 rd VCPF is planned for January 2012 </li></ul>07/25/11 Paschal B. Dere VCS-NRGP
    10. 10. <ul><li>Established a core working Group (9-11 member) </li></ul><ul><li>Temporarily hosted in MOFA (Value Chain Desk as Clearing House) </li></ul><ul><li>Mandated to draft Vision & Mission Statement </li></ul><ul><li>Action plan for 2011 </li></ul><ul><li>Share knowledge electronically on List-serve platform </li></ul><ul><li>(Protocol the rules for sharing this list-serve) </li></ul><ul><li>Update present list of practitioners </li></ul><ul><li>Monitor the outcome of Buying & Selling session at VCPF </li></ul><ul><li>Next meeting 1 st July 2011 </li></ul>07/25/11 Paschal B. Dere VCS-NRGP
    11. 11. <ul><li>Should, and how can collaboration of Value Chain Practitioners and harmonization of Value Chain Programmes/Projects in Ghana be fostered? </li></ul><ul><li>Should Value Chain Practitioners Forum be an annual event? </li></ul><ul><li>What form of governance structures should be put in place for the VCPF? </li></ul><ul><li>Which method of Value Chain Development should we in Ghana adopt -USAID-MicroLinks, GIZ-ValueLinks </li></ul>
    12. 12. 3. THE NRGP COMMODITY VALUE CHAIN BUSINESS MODELS DEVELOPED TO IMPROVE THE SMALLHOLDER FARMER INCOMES Special Purpose Vehicles - Nucleus / Best Farmers LEAD FIRM CONTRACT FARMING SFMC Ltd (Aggregator) NUCLEUSE FARMER (Kharma Farms, Bogu) VEPEAG A. Striving for Volume (3) B. Striving for Better Price (1) WAREHOUSE RECEIPTS & INVENTORY CREDIT (YAPRA RURAL BANK & PRU-SENE FBOs) PROCESSORS (VESTOR OILS, GHANA NUTS) Small s c ale farmers/ FBOs PROCESSORS (VESTOR OILS, GHANA NUTS) Small s c ale farmers/ FBOs EXPORT, DOMESTIC HIGH END SHOPS Small s c ale farmers/ FBOs
    13. 13. 3.1 THE LEAD FIRM MODEL LEAD FIRM SFMC Ltd (Aggregator) <ul><li>Services provided </li></ul><ul><ul><li>Assured market </li></ul></ul><ul><ul><li>Product quality specification </li></ul></ul><ul><ul><li>Quantity specification </li></ul></ul>PROCESSORS (VESTOR OILS, GHANA NUTS) Small s c ale farmers/ FBOs
    14. 14. 3.2 THE SPECIAL PURPOSE VEHICLE FINANCING MODEL SPECIAL PURPOSE VEHICLE FINANCING NUCLEUSE FARMER (Khama farms) <ul><li>Services provided </li></ul><ul><ul><li>Assured market </li></ul></ul><ul><ul><li>Tractor & other mechanical services </li></ul></ul><ul><ul><li>Fertilizer, herbicides, best production methods </li></ul></ul><ul><ul><li>training in group cohesiveness </li></ul></ul><ul><ul><li>Quantity specification </li></ul></ul>PROCESSORS (VESTOR OILS, GHANA NUTS) Small s c ale farmers/ FBOs
    15. 15. 3.3. THE CONTRACT-OUTGROWER FARMING MODEL CONTRACT FARMING VEPEAG - SMALL-SCALE FARMER Farmers are integrated into a the production, input, financing, processing and marketing.& information exchange aspects of the value chain CONTRACTOR Business usually contracts farmers as producers and supplies inputs, training, technical services and point of sale <ul><li>Services provided </li></ul><ul><ul><li>Small farmers and contractor are interdependent </li></ul></ul>EXPORT, DOMESTIC HIGH END SHOPS Small s c ale farmers/ FBOs
    16. 16. BUSINESS MODEL No.FBOs/ Farmers Loan Req’d (GHC) Acres Source of Funds Expected Repayment LEAD FIRM FBOs 899 Farmers 3,528,435.80 29,846 RCBs, ADB, STANBIC 100% SPECIAL PURPOSE VEHICLES (KHAMA Farms, BOGU S&F Assoc Farmers K- 930 B-700 Kharma-138,000 WC,-55,000EQ Bogu-148,000WC, 22,000EQ Approx. K-2000 B-1500 STANBIC 100% CONTRACT FARMING (VEPEAG) 5 FBOs Farmers 60 1,865,000 60 STANBIC 100%
    17. 17. FBOs/Farmers Banks/FNGOs Warehouse Receipt Storage loan Crop delivery Receipt 3.4. 2011 Pilot WR Model ( Expansion of Inventory Credit Scheme) STAKE 1: INTAKE
    18. 18. FBOs/Farmers Warehouse Banks/FNGOs 3.4. 2011 Pilot WR Model STAGE 2: OFF-LOADING Repayment Savings account Withdrawals as needed
    19. 19. Farmers FBO identified Pre-season meetings concluded IPB Contracts signed DZVCC established Facilitation Agencies Recruited STAGE CBP done Industrial crops Yes Yes Draft Done fine-tuning in progress Yes Yes Ongoing No Fruits & Vegetables Yes Yes but timed Draft Done fine-tuning in progress No No No No Women Crops Yes Yes Draft Done fine-tuning in progress Yes Yes Ongoing No Animals No Contract at review stage Draft Done fine-tuning in progress No No No NO Certified Seed Yes No No No No NO
    20. 20. 07/25/11 Paschal B. Dere VCS-NRGP
    21. 21. 07/25/11 Paschal B. Dere VCS-NRGP
    22. 22. 07/25/11 Paschal B. Dere VCS-NRGP <ul><li>Fine–tune Cashless Transactions Model for sustainable financing of agricultural commodity value chains in Ghana </li></ul><ul><li>Professionalize & Institutionalize Value Chain Practice in Ghana </li></ul>

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