Summary of 2nd continental briefing

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The Eastern African Farmer’s Federation (EAFF), the Southern African Confederation of Agricultural Unions (SACAU), the Network of Farmers' and Agricultural Producers' Organisations of West Africa (ROPPA) and the Network of farmer’s agricultural producers of Central Africa (PROPAC) hold their 2nd Continental Briefing in Kenya on 13-14 July on Promoting inclusive finance models for farmers in Africa. Around 120 farmers, research, finance institutions discussed key areas highlighted below. This debate was amplified by an e-discussion held within the farmer’s platform which key points are also summarized below. An action plan was drawn up for the next 12 months.

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Summary of 2nd continental briefing

  1. 1. 1 Promoting inclusive finance models for farmers in Africa: Linking Farmer’s Organisations to Financial Institutions Organized by the Pan African Farmer’s Organisations (PAFO) and the ACP-EU Technical Centre for Agricultural and Rural Cooperation (CTA) The Eastern African Farmer’s Federation (EAFF), the Southern African Confederation of Agricultural Unions (SACAU), the Network of Farmers' and Agricultural Producers' Organisations of West Africa (ROPPA) and the Network of farmer’s agricultural producers of Central Africa (PROPAC) hold their 2nd Continental Briefing in Kenya on 13-14 July on Promoting inclusive finance models for farmers in Africa. Around 120 farmers, research, finance institutions discussed key areas highlighted below. This debate was amplified by an e-discussion held within the farmer’s platform which key points are also summarized below. An action plan was drawn up for the next 12 months. Farmer’s discuss successful inclusive business models The concept of agricultural value chain finance in Africa, its new developments and new opportunities for farmers in developing and strengthening new business models was discussed. A key point is that VC is about relationships and inclusiveness and therefore FOs should be involved at all stages of decision-making. Farmer business model designed to assist farmers in adopting a business approach to farming and address the various needs in the value chain across specific value chains were shared. Different models and drivers contributing to the success of the business model were shared such as FOs taking full ownership of their agricultural value chain; FOs influencing the set up of a conducive policy and regulatory framework; FOs organizing themselves towards collective marketing. A number of business models were shared (i) contractual marketing experience: example of the tomato sector in Senegal; (ii) Experience of the joint marketing of potatoes within the Federation of Farmers of the Fouta Djallon region, Guinea; (iii) the marketing of cereals in Burkina Faso; (iv) Igara Tea Farmers Growers Factory in Uganda; (v) The National Union for Coffee Agribusinesses and Farm Enterprises (NUCAFE) in Uganda and (VI) the Oromia Coffee Farmers’ Co-operative Union (OCFCU). It is clear, Farmers must be well organized with a clear and shared business vision. The farmer organization must know its primary and secondary customers leading to design an appropriate business model. To support finance at the bottom of the pyramid, the regional farmer organisations can facilitate the support from major FOs to smaller ones in accessing finance (group lending) and various examples show success. Farmers should work in groups to overcome the challenges of logistics but the management and governance must be clear. Farmer organizations should continue to lobby and work on ways to increase the availability and affordability of insurances services as well. It will be important to revitalising agricultural insurance and expand the agricultural insurance market.
  2. 2. 2 Government and the donor community can play different roles in supporting rural businesses for greater rural development and sustainability. The financial institutions and specifically banks need to understand the farmer business structures, their business environment and dynamics and to offer financial products well tailored for the smallholder farmers. Most importantly, the Farmer Organisations recognize that they hold the greatest responsibility for this in ensuring that they present themselves to financial institutions in a manner that shows their track record in supporting what they do and how they operate. From knowledge brokers to knowledge drivers The ways in which the FOs can improve and/or strengthen their capacities and involvement in data collection and management as a way to support their business models and access financial institutions was discussed. It is critical that FOS build their knowledge and organize their local information to improve business decisions, awareness on trade opportunities, increase their access to markets and finance. This knowledge building goes hand in hand with education of farmers and the FOs in the management and use of credit. The relevancy of reliable and accurate data in all areas of the value chain was stressed and FOs should be capacitated to become knowledge drivers and knowledge brokers in the agriculture sector Seeking new alliances and strategic partnerships to attract capital The financing landscape is changing and we need to bridge the gap between farmers and financial institutions. Taking advantage of the momentum and opportunities offered at the VC Finance Conference and with the objective to expand smallholder farmer access to financial services, the RFOs drew up an action plan to upscale some successful business operations aimed at increasing access to finance, capacity building and innovative partnerships. The FOs will strengthen their engagement with the policy processes, notably with CAADP (NEPAD) and the RECs.

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