AVCMP Overview

A BRIEF OVERVIEW AGRICULTURAL VALUE CHAIN MENTORSHIP PROJECT FOR NORTHERN REGION BREADBASKET

SPONSORED BY

ALLIANCE FOR A GREEN REVOLUTION IN AFRICA

IMPLEMENTED BY

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he Agricultural Value Chain Mentorship Project (AVCMP) was launched on September 8, 2011 in Tamale. The project is an integral part of the DANIDA Support to Private Sector Development (SPSD) Phase II, and falls under the Enterprise Growth and Job Creation component of the program.

The overarching goal of the AVCMP project is to contribute towards the Government of Ghana’s objectives to achieve food security and become an agroindustrial economy by strengthening the capacity of agro-dealers, small and medium enterprises (SMEs), farmer-based organizations (FBOs) and farmers throughout the value chain, turning it to a highly productive, efficient, competitive and sustainable system.

PROBLEMS TO BE ADDRESSED: The project seeks to address the following underlying factors that lead to low agricultural productivity and income, as well as food insecurity and poverty in Ghana’s Northern Region: Low rates of use of improved seeds and fertilizers that result from limited smallholder farmer access, high cost and limited availability of improved seeds and fertilizers in the local community.

Poor soil health due to limited awareness and application of integrated soil fertility management (ISFM) technologies, limited stakeMixed seed on a farmer’s field holder skills and capacity in ISFM, low rates of fertilizer use, use of blanket fertilizer recommendations, no site-specific fertilizer recommendations and poor soil and water management practices by farmers.

Low rates of agricultural land use, lack of timely field preparation and poor crop management practices by farmers.

Inadequate extension services and poor research linkages which limit farmers’ access to knowledge on soil management.

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Reliance on rain-fed production as a result of limited smallholder farmer investments in irrigation and limited smallholder farmer knowledge of water management.

Insufficient agricultural marketing system to spur supply response from smallholder farmers due to a myriad of factors including lack of sufficient access to market outlets, high post-harvest losses, limited processing, lack of processing skills and facili- Poor water management on a farmer’s field ties.

High transaction costs due to inadequate road and transportation infrastructure; a large number of intermediaries along the value chains coupled with small volumes of varied quality produced by smallholder farmers’ poor bargaining power due to weak FBOs; poor institutional infrastructure; and limited capacity to aggregate produce.

Limited access to credit due to high interest rates, stringent collateral requirements and low investments in agriculture.

PROJECT COMPONENTS The AVCMP is being implemented under three key components as follows: Productivity Component – Implemented by the Savanna Agricultural Research Institute (SARI) which seeks “to improve entrepreneurial and technical skills of FBOs and their member farmers to scale up application of ISFM technologies for rice and soybean cropping systems while also strengthening their linkages with actors across the agricultural value chain – specifically agro-dealers, SMEs, commercial banks, seed and fertilizer producers and suppliers and extension agents.”

Agro-Dealer Support Component – Implemented by the Ghana Agricultural Associations Business Information Centre (GAABIC), which seeks “to improve entrepreneurial and technical skills of agro-dealers in rice and soybean farm inputs (seeds and fertilizers).”

SME Mentorship Component – Implemented by IFDC, which seeks “to improve entrepreneurial and technical skills of SMEs for rice, maize and soybean output 3

marketing while also strengthening their linkages with actors across the agricultural value chain – specifically FBOs and farmer members, domestic, national and international markets, agro-dealers and agribusiness service providers.” IFDC has an additional role of coordinating activity implementation and reporting.

AVCF TERM FINANCING FACILITY— The Agricultural Value Chain Facility (AVCF) under which the AVCMP falls has a term financing component implemented by Stanbic Bank. This facility seeks to provide long term financing to growthoriented SMEs (aggregators, agro-dealers, processors and other categories of agricultural service providers) operating along agricultural value chains for infrastructure and equipment acquisitions.

PROJECT BENEFICIARIES AND TARGETS The AVCMP is expected to benefit at least:  34,000 farmers in about 400 FBOs  50 SMEs – aggregators, marketers, tractor service providers, processors, warehouse services providers, etc.  400 agro-dealers The AVCMP is also expected to achieve the following results by the end of the project:  400 FBOs trained in technical skills, business development and prepared to access financial support  300 bankable business plans developed by FBOs to access seeds/fertilizers  150 loan applications by FBOs submitted to commercial banks  400 FBOs linked to 800 agrodealers for access to farm inputs  Stakeholders trained in participatory learning and action research approach to ISFM  126 ISFM on-farm demonstrations conducted  20 discussions on ISFM aired through farm/community radio stations  20,000 print materials on ISFM Drama show on ISFM technologies produced and distributed to 4

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FBOs and smallholder farmers 20 dramas performed to disseminate information on ISFM technologies 3 digital films on ISFM technologies produced and shown in the target communities 14 farmer learning centers on ISFM technologies established 400 additional agro-dealers trained and certified in business and technical skills to enable them to develop and manage viable farm input businesses 120 bankable farm input business plans developed by agro-dealers to support agricultural production 600 agro-dealers linked to fertilizer suppliers and seed producers to improve access to farm inputs Network of agro-dealers developed to foster information sharing, trade linkages and learning from best pracTraining of Agro-dealers tices 50 SMEs trained in entrepreneurial and technical skills to enable them to develop and manage viable businesses and develop bankable business plans to access commercial finance for agricultural market access support services  Loan applications submitted to commercial banks by 20 SMEs for processing equipment business  160 FBOs linked to 20 SMEs/ agribusiness centers offering processing services  400 SMEs and smallholder farmer groups linked to domestic, regional and international marTraining of SMEs kets 5

IMPLEMENTATION STRATEGIES/APPROACHES The AVCMP employs the following strategies/approaches to address the identified challenges of smallholder agriculture in the Northern Region: Linking agro-dealers, SMEs and FBOs to banks to access commercial finance.

The Project seeks to improve access to commercial finance (term finance) for farmers and agribusinesses in target areas. Through this component AGRA is helping participating financial institutions to leverage balance sheets to enable them to provide term financing. In addition, the capacity of the financial institutions is being developed to lend across the agricultural value chain, with a special emphasis on term lending.

Development of Agribusiness Service Advisors as private service providers and change agents to provide agribusiness service support to agro-dealers, SMEs and FBOs. These advisors will be trained as trainers in business development to lead, train and demonstrate the use of ISFM practices in project communities in the target districts. The change agents will facilitate links between FBOs and agro-dealers and SMEs for knowledge transfer and enhance farmers’ access to improved seed, inputs and equipment technology. They will improve farmers’ access to fertilizers by developing strong linkages with agro-dealers. They will also link FBOs and SMEs to markets.

Partnership and collaboration to enhance farmers access to markets, farm inputs, extension and advisory services and equipment service. The project will foster close collaboration among CSIR-SARI, IFDC and GAABIC, the key implementers of AVCMP, and all other existing projects and programs in the project districts that are focusing on improving rice maize and soybean value chains including: Savanna Farmers Marketing Company (SFMC), Association of Church Development Projects (ACDEP), ASI Arzakimu Project, Linking Farmers to Markets (FtM), ACDI/VOCA’s ADVANCE Project, Northern Rural Growth Program (NRGP), Center for Skills Development, University for Development Studies (UDS), SAHEL GRAINS, Center for Sustainable Local Development (CSLD), Presbyterian Agricultural Services (PAS), AGRA Soil Health Project on Maize and the Rice Sector Support Project (RSSP). Joint planning, review and regular stakeholder consultations will be undertaken to harmonize activities and results for synergy.

Expansion of existing programs. The project will focus on expanding the agrodealer network in rural areas and at the same time increasing the range of ser6

vices provided by agro-dealers to include extension services, market information, post-harvest and business advisory services to farmers. The Ghana AgroDealer Development (GADD) project provided technical and management trainings to agro-dealers nationwide. AVCMP will expand the training to FBOs on contracts and collective marketing. The SME Mentorship Component will ensure that opportunities occur to maximize market and business linkages between the small-scale farmers, community-level aggregators, larger aggregators, processors, buyers and end-markets.

Same geographical focus. The three sub-projects will work with agro-dealers, SMEs and FBOs in the same geographic area (Northern Region of Ghana) to address the problems of low agricultural productivity faced by smallholder farmers.

Promoting gender equity. Even though gender roles in rice and soybean production vary in the Northern Region, women are often systematically excluded from full access to training, credit, inputs and information. To ensure that women benefit fully, some specific training activities will target women’s groups.

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TARGET DISTRICTS The AVCMP is currently being implemented in 16 districts across the Northern Region. These are listed below.

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Tamale Metropolis Tolon-Kumbungu Savelugu-Nanton Gushiegu Karaga East Mamprusi West Mamprusi Bunkpurugu-Yunyoo

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Saboba Chereponi Yendi Nanumba North Nanumba South Kpandai East Gonja Central Gonja

While these districts are the primary districts of implementation, all other districts in the Northern Region in particular and the Upper East and West regions in general may benefit directly from the project.

For further information contact Afua Ohene-Ampofo IFDC P. O. Box ER 542 Tamale aohene-ampofo@ifdc.org 0264 57 33 28

Dr. Wilson Dogbe CSIR-SARI P. O. Box TL 52 Tamale wilsondogbe@yahoo.com 0244 60 34 14

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Yakubu Iddrisu GAABIC P. O. Box ER 542 Tamale iddiyak@yahoo.co.uk 0207 82 91 49