Purchase for Progress (P4P)
Connecting Farmers to Mark
Hunger…
1 billion people go to bed hungry every night Every six seconds, one child dies from hunger Major impact on economy: losses of 6-10 % in foregone GDP
WFP, feeding the poorest of the poor…
When an emergency strikes… Refugees… School children… For a better future…
... But there is more…
Logistical power and transport capacity • Logistical and storage networks worldwide including UN Humanitarian Response Depots • Leads global logistics and ICT clusters for the humanitarian system • Early warning systems • Vulnerability assessment methodologies
• Mitigating the impact of climate change in the developing world • WFP helped women in Timbuktu reclaim land from advancing desert to grow vegetables and rice
WFP: Builds roads De-mines areas Renovates tracks Builds bridges
WFP’s food basket meets the nutritional needs of beneficiaries
WFP helps to get more girls to school
Improves the lives of people affected
What is WFP?
United Nations’ frontline agency in addressing hunger World’s largest humanitarian organization In 2009, will provide food assistance to 108 million people in 74 countries
Why is WFP unique? Entirely voluntary funded 93% of donations to feed the hungry Has both emergency and development mandate Uses food, cash and vouchers to help communities achieve sustainable food security In 2008, bought US$ 1.1 billion of food commodities in 73 developing countries
New Challenges
Global Context Today Growing demand for food Climate change Natural disasters Declining natural resources
“PERFE CT STORM ”
High commodity costs Tightening food stocks
Conflicts over land resources
Increased migration
What can we do?
Purchase for Progress
Quick facts about P4P Geographic Coverage – 21 countries Africa – Burkina Faso, Democratic Republic of Congo, Ethiopia, Ghana, Kenya, Liberia, Malawi, Mali, Mozambique, Rwanda, Sierra Leone, Sudan, Tanzania, Uganda, Zambia Asia – Afghanistan, Laos
Global Facts Beneficiaries: 500,000 farmers Duration: 5 years (Sept 2008 - Sept 2013) Total funding: US$115 million for technical capacity for 5 years (food not included)
Latin America – El Salvador, Key donors – Bill & Melinda Gates Foundation, Howard Guatemala, Honduras, G. Buffett Foundation, Nicaragua Governments of Belgium,
P4P’s Two Key Questions OBJECTIVES 1 & 2
Assessment Criteria Group marketing capacity
What procurement modalities/platforms* best support capacity building and create an enabling environment for procurement from smallholder farmers?
Production / productivity response
Livelihood improvement
*Modalities include direct and forward contracts, soft tendering, warehouse receipt systems, commodity exchanges
OBJECTIVES 3 & 4
What is the best way for WFP to balance the risks and costs associated with pro-smallholder procurement in order to optimise and transform it’s local procurement practices?
Scale of procurement, timeliness, cost, efficiency and quality/safety of procured food
Market development impact
Impact on livelihoods of smallholder farmers
Three Fundamental Components Connecting Smallholder Farmers to Markets through Market and Agricultural Development
Innovative Procurement Modalities •Pro-smallholder competitive tendering •Direct contracting •Forward contracting
Supply-side Partners
•Providing technical expertise in agriculture & market development •Building capacity •Empowering Women
Learning and Sharing
•Monitoring & Evaluation •Lessons Learned/Best Practices •Informing policy
Best practices will be mainstreamed into WFP local procurement procedures by the end of the pilot
Local procurement principles underpin P4P purchases
WFP Local Procurement – the Foundation of P4P Principles of acceptable, timely and cost efficient food procurement remain the same for P4P purchases
Procurement Modalities Competitive Processes Local & Regional Procurement, “soft” tendering, Warehouse Receipts Systems, Commodity exchanges
Direct Contracting
Forward Contracting
Targeted P4P Market Entry Points Consumers Retailers WFP Point of Entry RP/LP
Blended Food or Small-scale Processors
WFP P4P Point of Entry
WFP Point of Entry RP/LP
Large-scale Food Processors/Large-scale Millers/ Large-scale Wholesalers
Commodity Exchange Warehouse Receipts System
Farmer Organizations Thrid Tier Second Tier First Tier *Levels and characteristics of FOs are different in each P4P country Agricultural. inputs & services
Smallholder Farmers
Medium-scale Traders
Small-scale Traders (Collectors)
WFP P4P Point of Entry
Strategic Partnerships CREDIT Governments, IFAD, IFC, Banks and Microfinance Institutions
POLICY & ADVOCACY Governments, Regional Economic Communities, NGOs, Media, Universities and Private Sector
PRODUCTION INPUTS Governments, NGOs, FAO, AGRA, Bilateral Partners and Private Sector
Farmer Organizations
CAPACITY DEVELOPMENT (Skills, Market Analysis, Post-harvest Handling, etc.)
Governments, IFAD,AGRA, FAO, Regional Economic Communities, NGOs and Universities, Private Sector
QUALITY Governments, FAO, NGOs, Research Institutions and Private Sector
MARKET ACCESS Governments, FAO, IFAD, AGRA, Regional Economic Communities, Research Institutions, Universities and Private Sector
INFRASTRUCTURE Governments, AU, IFAD, World Bank and Bilateral Programmes, Private Sector
Indicators for Learning Framework
Illustrative Indicators for P4P Learning Framework
Best practices models will be compared on the basis of their:
Transforming WFP’s local procurement will require a clear understanding of the benefits in terms of:
Assessment Criteria Group marketing
Production
Household welfare
Impact on farmer groups: •Organizational capacity •Financial capacity •Capacity to aggregate •Infrastructure •Access to markets
Effects on: •Agricultural production •Yields •Cropping patterns •Investments in agriculture
Impact on: •Number of smallholder farmers engaged •Annual household incomes •Food consumption score •Livelihood/wealth index •Other indicators of household welfare (e.g. health and education access, housing quality) •Net buyer/seller status
Number of smallholders engaged •Smallholder household income and other welfare measures •Procurement cost (food cost and administrative cost) •Pipeline risks •Market impacts (positive and negative) •Market development impacts •Agricultural development impacts
Challenges Limited presence of supply side partners at field level Insufficient availability of rural credit for smallholder farmers Price discovery and price expectations Natural disasters affecting agricultural production
What can you do?
www.wfp. org