Programme profile

Innovation for Agribusiness (InovAgro)

Programme Index Listing

Location
Mozambique
Main implementer
DAI Europe Ltd
Other implementers
COWI Mozambique
Donor
Swiss Agency for Development and Cooperation (SDC)
Duration
2010 - 2020 (Phases I - III)
Total budget
USD $20 million
Annual budget
USD $2 million

Project description / objective

Three phase, ten year project 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 as needed for each value chain.

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.

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.

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. 

Programme interventions

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

Agricultural inputs and extension services

  • InovAgro seeks to increase the number of farmers accessing better information and buying improved inputs. 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.
  • 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.

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 

Notable results (systemic change, poverty impact)

Since its inception in 2011, InovAgro has played a significant role in building the market system for seed sales. It has increased outreach by commodity aggregators deeper into rural areas and developed a new financial services market centered around savings for agricultural inputs.  These initiatives have led to increased incomes for more than 30,000 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.

Output marketing

  • InovAgro has worked with 33 CATs who operated 423 buying points in 2019, a 21 per cent increase over the 351 in 2018. CATs annual purchases from smallholder farmers are increasing steadily, reaching $5.5 million in 2019 in project districts, to purchase 12,000 metric tons of commodities.
  • Over the past two years InovAgro has helped the Ministry of Commerce and Industry to pilot and roll out a new system for licensing and tracking output marketing sales. This has reduced the transactions costs associated with output marketing in project provinces.

Finance

  • There has been a steady uptake of this service with a 50 per cent increase in 2019 to 17,445 smallholder famers who are now saving regularly to have funds available for the purchase of inputs during the planting season. In 2019, the farmers saved approximately $240,000, spending about $140,000 on the purchase of certified seeds, 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.  

Agricultural inputs and extension services

  • InovAgro has steadily driven the transformation of the commercial seed sector in Mozambique since 2012, when almost no 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 50 retail outlets selling seeds in InovAgro project districts. 
  • Demand creation initiatives included the establishment of 700 demo plots in 2019 by seed companies, distributors and retailers. The seed partners recorded sales of 621.22 MT in 2019, with sales 97 per cent higher than the 316 MT recorded in 2018, demonstrating the right growth curve.  
  • On the enabling environment, InovAgro has led the creation of the Seed Platform for Dialogue since 2012, which 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 legal framework for the Private Sector Seed Inspector programme. This has been legally approved and the first six private seed inspectors were licensed in 2018, following the first round of training. The second round of training is scheduled for 2020.

Land tenure security

Four communities have been delimited in Namarroi and Mocuba districts, representing 3,429 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 1,095 plots of land, leading to 351 DUATS (Land Use Right) being confirmed and issued. The other 744 applications are under review with the Ministry of the Interior because of a conflict whereby the government had granted the leasehold to a major agribusiness.

[uploaded February, 2020)

Share