PARTNERSHIPS FOR PRO-POOR GROWTH
Standard Concrete Industries “Aglime to restore Soil
Fertility and yields for farmers in Fiji”
Aglime Quarry
ECONOMIC CONSTRAINT In Fiji, soils have turned acidic due to intensive cultivation without proper soil management. Acidic soils limit the nutrient uptake by plants. This results in low yields and loss of income. The world over, farmers apply agricultural lime to control the acidity of the soil; agricultural lime is typically commonly available and affordable. However, in Fiji, until recently agricultural lime had to be imported, making it too expensive to apply. Farmers were mixing cement into their soils instead. Acknowledging the extent of the problem, which affects all major agricultural commodities and thousands of farmers, the Government of Fiji set up a task force. However, this task force could not do much until a local business was ready to invest in the local mining and marketing of affordable agricultural lime.
local agricultural lime attractive for farmers Investment in machinery, storage and branding (‘Aglime’) Investment in promotion and awareness creation (training of government extension workers and retailers, production of an educational video and brochures, organizing demonstration plots) can test farmers’ soils and on this basis prescribe the appropriate lime dosage.
EARLY SIGNS OF PRO-POOR RESULTS
PARTNERSHIP SOLUTION Soil testing for farmers
The Product: Aglime
MDF invested in a partnership with Standard Concrete Industries (SCI), Fiji’s largest manufacturer of concrete masonry blocks, to diversify its business and utilize its limestone quarry to pilot the production of agricultural lime in Fiji. Being a construction company with no previous experience in agriculture, it was hesitant to do this on its own. Under the partnership SCI and MDF cost-shared the following activities: Test the lime quarry for suitability for agricultural lime Conduct a techno-economic feasibility study to determine the potential demand and the appropriate business model – logistics, price, packaging – to make
Since August 2013, Aglime is available in Fiji. The product is around 65 percent cheaper than previous imports. Aglime is sold from the three SCI depots. Monthly sales are increasing: 600 bags (of 40 kg) in May 2014, 800 bags in June, 1,500 bags in July, etc. The Ministry of Agriculture placed an order for 20,000 bags. SCI is negotiating with the Fiji Sugar Corporation, Global Traders, Fiji Cooperative Dairy Company Limited (FCDCL) and Teitei Taveuni to supply Aglime. In total, over the next few years up to 10,000 farmers are expected to start using Aglime. This is expected to result in increased yields in sugarcane, root crops and horticulture in the order of 93,500 tons per year and in increased dairy production in the order of 1.3 million litres of milk per year. Each farmer, on average, is expected to record up to FJD 550 in increased income per year. For more information on MDF partnerships please visit: www.marketdevelopmentfacility.org
South Pacific Elixirs – ‘Taki Mai’, a dietary supplement for the
PARTNERSHIPS FOR PRO-POOR GROWTH
international relaxation and anti-anxiety markets made from
the roots of the Fijian
kava plant
ECONOMIC CONSTRAINT
The Prime Minister of the Republic of Fiji, Rear Admiral Josaia Voreqe Bainimarama with the Acting Australian High Commissioner Mr Glenn Miles, at the SPE Nursery.
the right yaqona varieties; these yaqona seedlings will be handed out to farmers to guarantee the supply of yaqona roots. Recruitment of a ‘farmer relationship manager’ to educate farmers on good yaqona cultivation, standardize the quality of production and maintain relations with communities.
Taki Mai on display next to some yaqona roots
Levuka, the former capital of Fiji on the island of Ovalau, has seen better days. A tuna-canning factory was once the backbone of the local economy, but is now in decline. Tourism offers limited potential due to its isolated location. However, a local Fijian entrepreneur from Ovalau has come up with a product that can bring back some economic activity on the island. Ovalau is well known for growing yaqona (piper methysticum). Yavqona roots are kava, traditionally a ceremonial drink with relaxing and
On 28 July 2014, the Prime Minister of the Republic of Fiji, Rear Admiral Josaia Voreqe Bainimarama in the presence of Acting Australian High Commissioner Mr Glenn Miles, opened the SPE factory on Ovalau.
EARLY SIGNS OF PRO-POOR RESULT
Limited (SPE) has developed a method for extracting the
Yaqona cultivation is normally a risky
‘Taki Mai’, a relaxation drink that does not intoxicate and may have clinical applications for the treatment of anxiety. The international market for relaxation was estimated at over USD 70 million in 2011 and is expected to grow 25%
to harvest the crop. During this time a cyclone can destroy the whole crop. The method developed by SPE allows yaqona roots to be harvested after two years. In addition, SPE offers a guaranteed market and purchases directly at farm gate. SPE purchases green (wet) kava from farmers, and the price offered when converted to a dry weight equivalent price is up to 40% higher than the market price. Reception from farmers has been promising, and since the beginning of 2014, the number of farmers supplying to SPE has grown to around 40 farmers. Each farmer is expected to earn an additional income of FJD 300 per year supplying yaqona to SPE.
market in the United States where Taki Mai will be sold in retail chains like Whole Foods Market. Taki Mai can also be purchased online at Amazon.
PARTNERSHIP SOLUTION MDF invested in a partnership with SPE to set up the processing facility for yaqona on Ovalau. SPE had invested considerable resources in developing the method and the product mentioned above, but needed support to start production. Also, it had no previous experience in setting up a reliable supply from farmers. Under the partnership the following activities where cost-shared between SPE and MDF: Establishment of a processing facility for yaqona roots on Ovalau to extract the working ingredient needed to make Taki Mai. Establishment of a nursery for the multiplication of
For more information on MDF partnerships please visit: www.marketdevelopmentfacility.org
PARTNERSHIPS FOR PRO-POOR GROWTH
Adi Chocolates -
Artisan Chocolate
from Fiji for the Tourism Sector and Exports
Adi Chocolates’ products on display
ECONOMIC CONSTRAINT
produce a larger volume and more variety of chocolates. Being a small family business, Adi Chocolates did not afford this scaling up. Under the partnership, the following activities were cost-shared between Adi Chocolates and MDF: Investment in a mechanized production line, consisting enrobing machine in a new factory premises.
DFAT secretary Mr. Peter Varghese and Acting High Commissioner Mr. Glenn Miles inspect the new factory premises
In Fiji cocoa beans were left to rot under the trees and cocoa gardens were not maintained. The Government of Fiji had promoted cocoa in an attempt to diversify exports but when world market prices slumped in the 1980s, Fiji became too expensive and buyers interested in cheap cocoa in bulk stayed away. Around the same time, the tourism sector started to grow in Fiji and with it grew the demand for high-quality local chocolate for use in resort kitchens for chocolate fountains and pastry or for tourist in search of authentic Fijian products. In June 2012, Adi Chocolates stepped into this gap and started producing high-quality dark chocolate by hand for the tourism sector and exports, thereby creating a new demand for local beans and a renewed interest among farmers to start harvesting and maintaining their gardens.
PARTNERSHIP SOLUTION
international food safety standards. Recruitment of an ‘outgrower manager’ to maintain relations with farmers and teach them how to prune their cocoa gardens and dry and ferment their cocoa beans for better yields and better quality cocoa.
EARLY SIGNS OF PRO-POOR GROWTH
Farmers receive training on drying and fermenting cocoa beans in Ra
Starting from a modest turnover of two tons per year in 2011, Adi Chocolates is expected to reach around 10 tons in 2014 and to continue to grow in the years to come to reach its full production capacity of around 60 tons by to over twenty varieties. Adi Chocolates now supplies to up to 40 major resorts, restaurants and retailers around Fiji and also has started to export to Japan as well as to some retail outlets in Europe. As Adi Chocolates opens up the market for Fijian chocolate, demand for cocoa from Fijian farmers will grow. As a result, by 2017, 70 farmers are
Adi Chocolates’ owner Mr. Tomohito Zukoshi supervising workers separating cocoa nibs from shells on the new Winnower machine.
MDF invested in a partnership with Adi Chocolates to upscale production from a purely manual, kitchen-based operation to a partially mechanized process, able to
income of around FJD 200 per year. For more information on MDF partnerships please visit: www.marketdevelopmentfacility.org
PARTNERSHIPS FOR PRO-POOR GROWTH
High-quality locally milled and packaged rice:
Made in Timor-Leste
Acelda staff receive on the job training to operate the new milling machine at the Acelda factory in Baucau
ECONOMIC CONSTRAINT Rice is the preferred staple crop in Timor-Leste. Nearly all household consume it and approximately a quarter of all households grow it. Local rice varieties are preferred because of taste, freshness and familiarity yet approximately 50,000 MT of rice is imported each year, mainly to supply the cities. Local paddy does not make it into the cities as high-quality milled local rice. One reason for this is the absence of businesses connecting demand and supply by investing in the milling and packaging needed to produce a product suitable for sale in supermarkets. As a result, Timorese farmers miss the opportunity to sell rice on a regular basis and invest in more commercial, higher yielding rice cultivation. Due to the absence of a functioning ‘value chain’, what could have been a major cash crop and a source of income for poor rural households often remains cultivation for home consumption with infrequent sales of a small surplus in local markets. Acelda introduces high quality local rice, “Fos Timor”- Saude Diak Han Fos Timor (For good health consume Timorese rice)
Acelda’s new warehouse
Building a warehouse Import and installation of a sophisticated milling machine; it is likely that there is a demand for a commercial milling service among other rice traders seeking to turn their paddy into a good quality rice. Installation of a packaging machine and branding Developing a sourcing plan to build relationships with farmers; Acelda may start to buy a variety of crops from the same farming communities to establish a continuous relationship Investment in agricultural equipment (tractor, hand tractor) to help farmers with land preparation.
EARLY SIGNS OF PRO-POOR RESULTS their produce, and in which transportation to markets is
PARTNERSHIP SOLUTION MDF invested in a partnership with Acelda II Unipessoal Lda, a local agribusiness company, to connect rural supply to urban demand. Acelda had experience in processing other agricultural commodities, but the processing and for the company and the country. Under the partnership the following activities were cost-shared between Acelda and MDF:
being able to supply to Acelda on a stable and recurring basis. With an expected annual demand for rice paddy being in the order of 250 MT, more than 300 famers will be able to supply to Acelda, approximately one-third of them being women. For more information on MDF partnerships please visit: www.marketdevelopmentfacility.org
PARTNERSHIPS FOR PRO-POOR GROWTH
Timor Global – Establishing local
testing and storage facilities
to use Timorese maize and
soy in fortified food
ECONOMIC CONSTRAINT
Timor Global’s production Ermera district, Timor-Leste
bottleneck. To ensure a steady supply chain, a local testing facility had to be backed up on one hand with investments on the other hand with appropriate storage (to avoid safe, tested maize and soy from being contaminated while in storage). In a re-emerging economy such as Timor-Leste specialized private or public providers for these services do not exist. Therefore, Timor Global and MDF agreed to set all this up under one roof, managed by Timor Global. Under the partnership the following activities were costshared between Timor Global and MDF:
containing 70% maize and 30% soy
markets for their crops. Driving by oil revenues the economy is growing now and there is demand, but the business infrastructure to connect the two was destroyed and is only slowly being rebuilt. Maize is a traditional staple crop in Timor-Leste accounting for 36% of total food production and involving nearly 70% of the rural households. Maize is used to feed the family in the lean season as well as to feed the animals. For this reason DFAT invested in research to increase maize yields (through the Seeds of Life program). Maize is also the primary ingredient for addressing chronic malnutrition, which affects a quarter of lactating mothers and over half the children in TimorLeste. However, despite the local availability of maize (and soy) and farmers being keen to sell some of this, all the in Timor-Leste had to be imported until recently, for one simple reason: there was no local facility to test maize and
PARTNERSHIP SOLUTION MDF invested in a partnership with Timor Global Lda,
contaminations in Timor-Leste; the laboratory will also provide commercial services to other food processors in the country Investment in appropriate storage silos to store tested maize and soy sourcing plans for maize and soy, maintain relations with farming communities and, if needed, provide technical advice to farmers.
EARLY SIGNS OF PRO-POOR RESULTS from being able to sell their surplus of maize and soy to Timor Global, and thousands of mothers and young fresh local grains improving their overall nutrition level. Moreover, having access to local testing facilities opens up many more opportunities for local food processors to start sourcing local produce from farmers, which has hitherto been too risky to attempt. It is too early to tell how many local businesses will follow into the footsteps of Timor Global. For more information on MDF partnerships please visit: www.marketdevelopmentfacility.org
PARTNERSHIPS FOR PRO-POOR GROWTH
1000 liter cooling tank
Shakarganj milk collection center with cooling tank in chak # 4/ FW
Giving farmers access to milk collection centers and extension services for higher milk yields and
better prices
ECONOMIC CONSTRAINT For many small farmers in Pakistan, animals are their key assets and milk their most important source of income. of milk in the world and demand for milk in Pakistan’s cities is growing fast at 20% per annum, milk collection through organized cold chains is still in its infancy: only 5% of milk is processed and packaged, and most farmers have no access to any form of extension services to help them control diseases and improve husbandry practices. As a result, especially in more remote areas, disconnected from urban demand, farmers are forced to sell milk at relatively lower prices and milk yields per animal tend to be low.
PARTNERSHIP SOLUTION MDF invested in a partnership with Shakarganj, a relatively smaller Pakistani milk processor, to set up a network of 30 cooling tanks (in three phases) in the remote southern tip of the Punjab province. With the role of the government extension service for livestock being negligible, it is up to milk processors to provide veterinarian and extension services to the farmers that supply to them. Also, as some agricultural inputs are not readily available in these areas, these may need to be provided by input suppliers and milk processors. With the help of MDF, Shakarganj will substantially expand its chiller network and invest in providing much more organized veterinarian and extension services. Under the partnership the following activities are
cost-shared between Shakarganj and MDF: Establishment of 30 cooling tanks (in three phases) collecting milk from approximately 60 villages Recruitment of 30 milk collection agents, 5 assistant vets and 2 area managers to improve husbandry practices, veterinary care of animals, use of vaccinations and business planning of dairy farmers Conduct training programs and one-to-one discussions with approximately 2400 farmers on multiple topics including improvement of breeding, fodder and feed, diseases and medical care of animal, shed, water and heat stress as well as dairy farm management practices; booklets with basic information on these topics will be distributed to all farmers.
EARLY SIGNS OF PRO-POOR RESULTS Approximately 1950 farmers will supply to Shakarganj’s (approximately 20%), higher sales volume as well as the ability to call assistant vets in case they experience institutions and input suppliers to enable farmers to further increase milk yields per animal. For more information on MDF partnerships please visit: www.marketdevelopmentfacility.org