Ken Davies P4p Presentation

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