Emerging P4P results show importance of capacity building
In order for P4P to generate increased production and sales among smallholders, significant investments in capacity building are necessary. Emerging quantitative results, presented at the P4P Annual Consultation in January 2014, show how smallholders have benefitted from capacity building by P4P and its partners, leading to improved overall livelihoods.
The incentive provided by WFP’s demand alone is not necessarily enough to increase smallholders’ production of quality crops. Many of the farmers’ organizations (FOs) targeted by P4P had never marketed collectively before, and the smallholders’ agricultural practices were generally poor, leading to limited production of low quality crops.
Because of this, capacity building has been emphasized as one of P4P’s key pillars throughout the pilot phase. P4P has collaborated with a variety of private and public partners to ensure that smallholders and their organizations can access inputs, as well as improved farming technologies and tools in order to increase crop yields. This has been critical to achieving the increase in household income expected from participation in the P4P programme. Reduced post-harvest losses, improved quality and better on-farm storage facilities are other positive indicators.
Capacity building at two levels
P4P and its partners are building capacity at two levels. At the household level, individual farmers receive training and tools, which support them to improve their agricultural practices and increase productivity. At the level of the farmers’ organization, which is WFP’s entry point to negotiate most contracts, capacity building focuses on business management and marketing.
Emerging results from P4P’s global monitoring and evaluation system show how improved skills, such as how to use fertilizer and how to dry and clean crops for better quality, have allowed smallholders to produce more surplus. The data also suggests that this has led to farmers’ organizations aggregating and marketing larger quantities more effectively.
Increased income leads to improved household welfare
In Tanzania, households participating in P4P have almost doubled their maize production, from an average of 1.35 metric tons (mt) per hectare in 2009 to an average of 2.47 mt per hectare in 2011. In Malawi, participating households increased their maize production from an average of 1.53 mt per hectare to 2.37 mt per hectare during the same period. Particularly in Tanzania, this increase seems to be connected to the use of certified maize seeds and fertilizers, a practice encouraged through P4P capacity building.
A common investment that households make with their increased income is to improve their houses. Magreth Simon Mgeni from the Usomama Savings and Credit Cooperative (SACCO) in Tanzania is one of the P4P-supported farmers who has invested in permanent materials for her home.
“Before P4P I was living in a mud house, but now I have an improved house. I am now taking my children to school without any problem. Today my neighbours are learning from me, understanding how the market works, and doing as I do,” Magreth says. When she joined P4P in 2009, Magreth was cultivating 2 acres of land. She now cultivates 9 acres, and in 2013, she sold 4,000kg of maize through her SACCO.
Increase in farmers’ organizations’ capacity
One way of measuring the impact of capacity building at the FO level is to study the services offered to their members, the quantity of their sales and the diversity of their buyers.
Since the beginning of the pilot in Tanzania, there has been a noticeable increase in the number of P4P-supported SACCOs offering marketing, post-harvest handling, and production related services. Half of them are also offering transportation services to deliver the produce to buyers. A similar trend is observed in other P4P pilot countries. In Tanzania, volumes sold by SACCOs have also increased significantly, particularly due to sales to WFP.
This sharp increase confirms that SACCOs have been able to scale up aggregation and master WFP quality specifications. This suggests that P4P’s method of providing FOs with the necessary post-harvest handling infrastructure, equipment, training and a reliable market, does indeed support FOs to aggregate and sell larger volumes.
Collective sales to markets beyond WFP
Data collected in Tanzania shows that SACCOs are increasingly selling to sustainable markets, such as the National Food Reserve Agency (NFRA). In Malawi, FOs are also selling increasingly to buyers beyond WFP, such as small and medium traders. Some FOs with higher capacity have also increased their sales to larger traders through the warehouse receipt system (WRS) and the Agriculture Commodity Exchange (ACE).
Bornwell Kaunga is the manager of the Mwandama Farmers’ Organization in Malawi, which has benefitted from sales to and beyond WFP. He explains that it was thanks to P4P that his organization was introduced to other quality markets. He says: “The first sale to WFP changed the whole mind-set of farmers in Mwandama. It convinced them that they could do business with the grain, if only they could be all together.”
Overall, the emerging results suggest that the presence of consistent, systematic production side partners providing capacity building can indeed increase farmers’ welfare. Results show progress in P4P-supported FOs’ capacities, illustrated by increased volumes aggregated and sold. Additionally, there is evidence that smallholder farmers are increasing their production and surpluses, and, like Magreth, are increasingly participating in FO sales, both to WFP and beyond.
Continued efforts are needed
Although smallholders are increasingly taking part in sales through their organizations, additional assistance is required to allow them to overcome the substantial challenges they face. In Tanzania, the majority (51%) of farmers contributing to SACCO sales to WFP are smallholders. This indicates that individual smallholders are indeed benefitting from the increased capacity of their organizations. Despite this, these smallholders contribute only 18% of total quantities aggregated by SACCOs, which means that larger farmers (who have more surplus and can better afford to wait for payment) are likely to benefit disproportionately more.
This is because smallholders generally have few assets and savings and many urgent financial needs at harvest time. These compel them to sell immediately for cash, rather than waiting for the lengthy procurement and payment processes necessary to aggregate and earn higher prices. Though capacity building has allowed smallholders to benefit from WFP demand for quality crops, continued efforts are needed to simplify institutional buyers’ procurement procedures and to scale up agricultural support to smallholders as well as to ensure the meticulous tracking of data within FOs in order to monitor the extent to which smallholders participate and contribute to contracts.
Data collection and consequent analysis will continue throughout 2014. Results will continuously be presented on the P4P website.