InovAgro: Innovation for Agribusiness

Project description / objective

Three phase, ten year programme seeking to increase income for poor men and women small scale farmers in Northern Mozambique. InovAgro applies an MSD approach to stimulate the inclusion of the economically active poor in growing and productive value chains. 

The programme is designed to engage with lead firms (input providers and large agro-buyers) as supporting drivers of smallholders’ agricultural and income growth and to strengthen the enabling environment in the market systems for smallholder agricultural development.

Market systems focus

InovAgro works across five focal value chains (soya, pigeon pea, maize, sesame and groundnuts) implementing cross- cutting interventions in seed and input supply, output marketing, access to finance and land tenure.

Agricultural inputs and extension services

InovAgro seeks to increase the number of farmers accessing better information and buying improved inputs to steadily increase their productivity. This will lead to food security and improved income. Its interventions address the core transaction (seed and input companies create demand for seeds and increase sales to smallholder farmers), the regulatory framework governing the seed and input sector, and the supporting environment for producing and regulating certified seeds.

Output marketing

Interventions have focused on strengthening the ability of the Commodity Aggregator Traders (CATs) to open buying posts that use more transparent purchasing practices in deep rural areas which have been previously underserved. This will include improving the regulatory framework governing the CAT operating environment

Finance

InovAgro takes a dual approach towards improving smallholder farmers access to finance: by promoting smallholder farmers’ capacity to generate own savings particularly for purchase of agricultural inputs (seed) and establishing linkages with formal financial institutions.

Land tenure security

Land tenure security for smallholder farmers in Northern Mozambique is becoming an increasing problem. A growing number of investors in agribusiness, forestry and mining sectors are seeking land to implement their investment plans. InovAgro is focusing on building the demand for land titles and improving the delivery systems for delivering land titles to smallholder farmers. 

Stimulating the supply & demand for MSD programming

A stronger supporting environment consisting of development agencies and/or private investors funding additional and/or improved market systems’ approaches to engaging with smallholder farmers in Northern Mozambique. 

Programme interventions

Agricultural inputs and extension services

• InovAgro seeks to increase the number of farmers accessing better information and buying improved inputs and increase productivity. On the supply side, InovAgro wants seed and input companies to partner with agro-dealers to improve seed access and demand creation through demonstrations and training on good agricultural practices. InovAgro engaged heavily on the policy and regulatory framework to improve supply of quality seed. 
• Partnerships with private sector partners to enhance demand creation strategies and deliver products and services to target beneficiaries and build their distribution channels to reach farmers with inputs and information
• Developing a platform for dialogue on seed issues by supporting the Association for the Promotion of the Seed Sector (APROSE)
• Support to the National Seed Authority to improve the quality of seed inspection services and production of certified seeds by establishing a Private Sector Seed Inspection service.

Output marketing

• The CAT model promotes transparency and trust while bringing the buying posts closer to smallholder farmers' homes. The small volume sellers (poorer farmers) have better access to markets.
• Facilitate the establishment and operationalisation of buying posts and improve the capacity of CATs
• Support to the Ministry of Industry and Commerce on improving regulations around agricultural marketing

Finance

• Promote smallholder farmers’ capacity to generate own savings particularly for purchase of agricultural inputs (seed) and establish linkages with formal financial institutions.
• Introduction of Fundo Agricola into existing networks of Village Savings and Loan Associations (VSLAs)
• Partnership with formal financial institutions and insurance providers to deliver formal financial products to smallholder farmers

Land tenure security

• Pilot innovative ways of establishing a market system for land titling in districts at risk of large business interests.
• Development of a locally managed system for land demarcation and application for land delimitation and/or demarcation using Land Natural Resource Management Committees and Paralegal Networks 

Stimulating the supply & demand for MSD programming

• Improve donor dialogue and information sharing to drive changes in donor and implementer (demand and supply, respectively) behaviour to improve and expand the delivery of MSD programming in Mozambique.
• Activate the Mozambique Market Systems Development Network to stimulate dialogue and information sharing on best practices in MSD delivery in Mozambique and publish case studies on InovAgro MSD results as well as results from other MSD projects.

Notable results (systemic change, poverty impact)

Since its inception in 2011, InovAgro has played a significant role in building the market system for certified seed sales, increasing outreach by commodity aggregators deeper into rural areas, and developed a new financial services market centred around savings for agricultural inputs.  

These initiatives have led to increased incomes for more than 37,700 smallholder farmers across the target 11 districts and put in place the market systems for tens of thousands of additional farmers to access services needed to increase their incomes.  

Between 2015-2021, InovAgro beneficiaries generated steadily increasing annual incomes. With $10 million additional income in 2021, the last six years generated more than $34 million in additional income for direct project beneficiaries (not including indirect beneficiaries).  Market systems supported by InovAgro demonstrated strong resilience during the COVID pandemic, and InovAgro has been a major promoter of information on MSD in Mozambique through management of the Mozambique MSD Network. 

Agricultural inputs and extension services

• InovAgro has steadily driven the transformation of the commercial seed sector in Mozambique since 2012, when no certified seeds were sold to smallholder farmers by seed companies. From no active private firms, there are now 12 seed companies, multiple distributors, and more than 84 retail outlets selling certified seeds in InovAgro’s 11 project districts emphasising last mile distribution.
• Demand creation initiatives included the establishment of 841 demo plots by seed companies, distributors, and retailers, with more than 20,000 farmers attending field days. The seed partners recorded sales of 811 MT in 2020/21 in project districts, a steady increase over the previous year despite the pandemic. 
• On the enabling environment, InovAgro has led the creation of the Seed Platform for Dialogue since 2012. It was legally registered as the Association for the Promotion of the Seed Sector (APROSE) in 2016. APROSE is comprised of representatives from government, the seed industry, farmers, donors and the international research companies (CGIAR) and is now the go-to agency for all other donor projects (USAID, FAO etc.) wishing to support the seed industry.
• InovAgro has worked with the National Seed Authority (NSA) to develop the regulatory framework for the Private Sector Seed Inspector programme. This was approved in 2017. The first six private seed inspectors were licensed in 2018, and six more in 2021 (10 are active from 7 companies), as well as five university professors who will introduce PSSI content into their classes for seed staff training. 

Output marketing

• InovAgro has worked with 34 CATs, 30 of whom operated 515 buying points in 2021, a nearly 25 per cent increase over the 433 in 2020. This emphasis on 'first mile purchasing', accompanied by increased access to working capital from project-facilitated loans and end-buyer agreements, fuelled increases in CATs’ annual purchases direct from smallholder farmers, reaching $10.55 million in 2021 in project districts, to purchase 22,876 metric tons of commodities from about 30,000 farmers. 
• Over the past four years InovAgro has helped the Ministry of Commerce and Industry to pilot and roll out a new system for licensing and simplifying the trade of commodities, the Cadernetas do Comercializiçao, reducing the transaction costs associated with output marketing in project provinces. 

Finance

• There has been a steady smallholder farmers' uptake of this service led by co-facilitators, with 19,154 smallholder farmers now saving regularly for the purchase of inputs during the planting season (despite the pandemic). In 2020, the farmers saved approximately $258,000, spending about $160,000 on the purchase of certified seeds direct from large suppliers, and the rest on other required inputs .
• Smallholder farmers are also steadily increasing their annual savings per person for input purchase (up 500 per cent since the first year) demonstrating the strong value placed on the service. 
• 947 smallholder farmers are accessing formal sector loans for agricultural production and 886 farmers participated in financial literacy training offered by banks.  

Land tenure security

• Four communities have been delimited in Namarroi and Mocuba districts, representing 3,400 households and 12,330 ha of land, and received community-level delimitation certificates.
• The Land and Natural Resources Management Committees (LNRMC) and paralegals, pegged out plots of land, leading to 1447 DUATS (Land Use Right) being confirmed and issued.
• Another 744 applications are under review with the Ministry of the Interior because of a conflict where the government had granted the leasehold to a major agribusiness. 

Stimulating the supply & demand for MSD programming

• Activated the Market Systems Development Network (MSDN) and organised five major webinars on best practice in MSD in Mozambique through a professional secretariat. Webinars reached international audience from 15 countries, with 675 active participants (cumulative).  
  SDC to support an additional 16 months of the MSDN to turn it into a sustainable dialogue platform.
• Published seven case studies and a synthesis report on the entire implementation of InovAgro, with results by market system, and contributed to major MSD global reviews. Produced three new videos to explain market systems in Mozambique.
• The three close down events (Nampula, Maputo and one virtual) attracted significant numbers of implementers and included strong panels of donors, government and implementers to discuss the results. 

[Final update: March 2022)