AGRA

Despite Ghana’s significant progress over the past twenty years in reducing poverty and hunger, food security remains threatened by rapid population growth, declining soil fertility, and climate change. The availability of high-yield, disease-resistant, and drought-resistant crop varieties is essential to mitigate these challenges. Ghana, however, does not have the necessary  regulatory framework to protect the development of new plant varieties. This hinders the competitiveness of Ghana’s exports (including rice and tomatoes), which has fallen behind regional neighbors, resulting in continued dependence on imports for much of the country’s food supply.  

Ghana is a key focus country of the Partnership for Inclusive Agricultural Transformation in Africa (PIATA), a five-year partnership led by the Alliance for a Green Revolution in Africa (AGRA) and supported by USAID. As part of PIATA’s efforts to catalyze and sustain an inclusive agricultural transformation, USAID and AGRA worked closely with Ghana’s Ministry of Food and Agriculture to advance legislation to promote the development and distribution of improved plant varieties. These efforts led Ghana’s parliament to pass the Plant Variety Protection Bill in late 2020. 

This Bill protects the intellectual property rights of plant breeders. It also aligns with the 1961 International Convention for the Protection of New Varieties of Plants (to which Ghana is a signatory) and the World Trade Organization’s Agreement on Trade and Related Aspects of Intellectual Property Rights. By establishing a legal framework to promote research and development of new plants, Ghana has taken an important step towards expanding the availability of high-yield and resilient seed varieties and supporting an enabling environment for increased public and private investment. 

Continued dialogue between policymakers, plant breeders, smallholder farmers, and civil society is critical to ensure that all stakeholders understand the importance of, and are able to benefit from, improved plant varieties. Through regular engagement with smallholder farmers, plant breeders may account for important concerns around soil fertility, climate change, and biodiversity. USAID and PIATA will continue to facilitate partnerships between the government, civil society, private sector, and other donors to keep all stakeholders involved throughout implementation of the new policy. 

Capacity for impactful policy research expands across Africa and Asia 
Last year, the Policy Research, Capacity, and Influence (PRCI) Innovation Lab (IL) launched to build the capacity of local research institutes and policy research networks in Africa and Asia to conduct research that can inform policy and programmatic decision-making at national, regional, and continental levels. By building the research capacity of these partners, tying that research to policy priorities, and funding their institutional strengthening, PRCI helps grow their reputations as sources of solid, evidence-based policy thinking and further grows the influence local institutes can exert.

Despite having to navigate an enormously challenging first year in the midst of COVID-19, PRCI IL met all of its first year objectives! Three policy research institutes in Africa were selected for capacity development, three integrated research and training programs were launched in Africa and Asia, and five competitive research teams were selected for mentoring. PRCI IL designed and implemented an online Core Center technical training program as well as a Special Topics training technical program that will segue to a research program in Year 2. The IL also supported the African Regional National Agricultural Policy Research Institute (ReNAPRI) in carrying out a highly interactive five-year strategic planning exercise. Finally, PRCI IL implemented a multi-country COVID-19 survey to examine policy impacts. Find the full annual report here.

MADABA/MAFINGA, Tanzania , Mar 31 2021 (IPS) – Small agricultural loans, disbursed through mobile phones and targeting specific farming activities at different phases of production, have more than doubled food productivity among thousands of smallholder farmers in southern and central parts of Tanzania over the past three years, improving their livelihoods.

IPS travelled the region this month and spoke to many farmers who attested to how the new form of controlled village-specific lending resulted in their successful harvest.

Peter Lulandala, a smallholder farmer from central Tanzania’s Iringa Province, is one of those farmers.

Lulandala is servicing a TZS one million ($312) loan he borrowed from a local community bank. The problem was that once the money had been paid out to him in a single instalment he was unable to keep aside the funds for the various farming phases.

“We could borrow money, which was usually given in a single batch mostly during the planting season. For most of us, it was extremely difficult to keep part of the money in our houses or on personal bank accounts just to wait for the weeding or harvesting season.

“As smallholder farmers in the villages, we have many urgent things that always require cash. For example, it will be very difficult to see my children go to bed for the second day in a row without food and yet I have cash under my pillow or in my personal account,” Lulandala told IPS.

That was until three years ago when an innovative new money lending product became available in his village. Through the new model, smallholder farmers who belong to particular groups (like farmer groups or reside in certain villages), are expected to save some money with a targeted financial institution before borrowing three times their savings.

“This is an innovative product introduced to us by the Alliance for as Green Revolution in Africa in collaboration with the Small Entrepreneurs Loan Facility (SELF) project to help smallholder farmers access agricultural finance, and to help them use the money for the intended purpose,” said Khassim Masengo, the manager of Mahanje Savings and Credit Co-operative Society (SACCOS) in Madaba District, Ruvuma Province, southern Tanzania.

Farmers are guaranteed by two signatures of fellow group members. What makes the SACCOS lending different is that once the loan is approved, the farmer can only access it in phases.

“We disburse it in three phases so that the farmers can only access what they need during the planting season, then the second disbursement can only be released at the right time for weeding and top-dressing, and finally the last payment is for harvesting and post-harvest handling,” Masengo told IPS.

Lulandala said the new lending structure has worked for him.

“But since this particular cash is kept by the bank and with an agreement on how it will be disbursed, I will always look for an alternative way to feed my children as the money waits for the intended purpose,” said the farmer who hails from Itengulinyi village, 15 kilometres off the main highway that connects Makambako and Iringa towns.

The farmers are expected to pay back the loans after harvest.

“Once they harvest, we encourage them to keep their produce with particular warehouses, and based on the warehouse receipts, we can give them personal loans worth half of their produce for immediate domestic use or further investment as they wait for better prices,” explained Masengo.

According to Hedwig Siewertsen, the head of Inclusive Finance at AGRA, many African smallholder farmers fail to achieve their full potential because they have no access to agricultural finance.

She said that unless farmers have collateral to show that they can pay back loans, banks would not loan to them. Siewertsen noted that there was need to come up with innovative means through which smallholder farmers can access agricultural finance without necessarily offering collateral. 

“Our main aim is to improve the quality, cost-effectiveness, access and impact of financial and agribusiness products and services for smallholder farmers in Africa,” said Siewertsen.

According to the Food Sustainability Index (FSI), created by Barilla Centre for Food and Nutrition (BCFN) and the Economist Intelligence Unit, increasing food productivity is vital, given the population growth and intensifying climate change. And this, according to the report, can only be achieved through new innovations.

It also notes that sustainable agriculture needs funding and this is particularly difficult in developing countries.

“It can be hard to funnel money in from investors, particularly for developing countries. In the FSI, the top ten countries most likely to attract investment in sustainable agriculture are all European, with the exception of the US and Israel. And while most countries in the index offer some form of public financing for agricultural innovation, 12 countries—nine of which are in sub- Saharan Africa—do not,” the report notes.  

Unlike MUCOBA Bank, which works with farmers in small groups of 10 to 15 members, Mahanje SACCOS works with villages. This means that SACCOS’s offerings are specific to members of these villages and it also allows for traceability and easy service provision.

It also gives SACCOS security because they are able to engage the borrowers in person and from their homes.

“For one to qualify for a farming loan from this SACCOS, the first requirement is that they must be descendants of one of the eight targeted villages, and that must be confirmed by the village elder of that particular village,” said Masengo.

“The main reason is that we need to work with farmers who are well known by the villagers, and whom we can access for extension services,” he said.

So far, 2,847 members of Mahanje SACCOS, among them 892 female farmers who hail from the neighbouring villages of Mahanje, Madaba, Lituta, Mtepa, Magingo, Mkongotema, Lukira and Kipingo in Madaba District, Ruvuma Province, Tanzania have become net producers of maize and beans over the past three years. They are now able to export their produce to neighbouring districts.

SACCOS has since been converted into a fully fledged bank registered by the Central Bank of Tanzania, and it is offering credit and savings services, but specifically for farmers from the eight target villages.

However, MUCOBA Bank, which is a community bank headquartered in Mafinga town in Central Tanzania, covers a larger area and targets smallholder farmers in far areas that do not have good infrastructural access to urban centres. It currently has some 50 farmer member groups.

“Our bank has agents who are also our agricultural extension officers on the ground whom we use to register farmers through farmer groups, then send us information via internet,” Philipo Raymond, the general manager for MUCOBA bank, told IPS.

With MUCOBA Bank, qualifying farmers are then given their money through mobile phones, and once they harvest, they can service their loans through the same digital channel.

With both institutions, farmers have been able to borrow as little as TZS200,000 ($87) or as much as TZS15 million ($6,520).

“Besides receiving the moneys in batches to serve specific needs, use of M-Pesa payment has made it easier for us because we do not have to travel all the way to town, and we have reduced the risk of carrying hard cash in our pockets,” Emanik Mgwiranga, the chair of the Nguvu Kazi Itengulinyi farmers group from Itengulinyi Village, 44 kilometres from the nearest town, Mafinga, told IPS.

The main crops grown are maize, beans and rice, but some farmers also include Irish potatoes.

In addition, the Mahanje SACCOS has introduced indigenous poultry farming to cushion farmers when farming seasons fail or when market prices for their produce are still low.

Originally published

The Board chairperson for the Alliance for a Green Revolution in Africa (AGRA), Hailemariam Desalegn — who is also former Prime Minister of Ethiopia — met with Malawi President Lazarus Chakwera at State House in Lilongwe on Saturday where they discussed progress on the country’s agricultural transformation.

AGRA is Malawi’s key agriculture partner working to transform the country’s agricultural systems and increase the productivity and income of smallholder farmers.

A statement from AGRA says Dessalegn affirmed his commitment of supporting Malawi to transform its economy going forward and during the meeting took cognizance of the success of the farm Affordable Inputs Programme (AIP) which Chakwera launched soon after taking over the government in June last year.

Agriculture accounts for 42% of Malawi’s GDP and the AIP was rolled out to help drive the country’s economy through this industry which is the first line of feeding the citizenry.

During the meeting, Dessalegn applauded Chakwera’s administration that since its launch, the AIP “has already reached 3.7 million smallholder farmers who could hardly access fertilizer and improved seed”.

“This is a huge achievement considering the very short period since your Government took charge of state affairs”, he is quoted as saying.

“The US$187 million (MK140.2 billion) AIP was designed to improve agricultural productivity in Malawi by subsidizing the cost of agricultural inputs for the benefit of the country’s farmers.

“Still in its first year, the AIP — which initially targeted 4.2 million smallholder farming households, allows farmers to buy a 50kg bag of fertilizer at an affordable US$6 instead of the usual US$25 to US$28.”

The statement added that Dessalegn appraised Chakwera of his visit to Nkhotakota, Benga where he appreciated the work of a local seed company (Global Seeds) that is being supported by AGRA Malawi.

He is also reported to have seen first-hand how the newly-developed groundnut varieties of GG 9 and CG 11 — which were bred for their rosette resistance trait — have been commercialized by smallholder farmers, thereby transforming their livelihoods.

The AGRA Board Chair also briefed President Chakwera on the Hub Agro dealer extension and agro-input distribution model through Community Agribusiness Advisors in Nathenje/Lilongwe East.

“This model facilitates agriculture service delivery to smallholders through women cooperative groups known as Village Banks/Village Savings and Loan Associations.

“The Agro dealer hub model is an engine for facilitating Malawi’s rural transformation. There is need to continue supporting research institutions to develop better high yielding crop varieties.

“There is also need to de-risk lending to smallholder farmers and support them to produce three times a year through irrigation. Lake Malawi presents a huge opportunity for irrigation and land does not seem a challenge for the country.

“Malawi is on the right path towards achieving an inclusive agriculture transformation”, Dessalegn is quoted as saying.

In launching the K160.2 billion AIP, President Chakwera had said the country has been a poor and famine-infested nation because very few farming households had a chance to access cheap and affordable farming inputs.

He had said as an agricultural dependent economy, there was need to invest heavily in the sector to maximize agricultural gains and grow the country’s economy — thus the need to assist farming households with cheap and affordable farm inputs such as fertilizer and seed at a larger scale.

The AIP came into being by abolishing the Farm Input Subsidy Programme (FISP) because only few were benefitting and that there were a lot of loopholes that gave ill-minded people an opportunity to steal from poor farmers.

At the launch, Chakwera assured farmers of readily available markets for their crop produce, saying Agricultural Development and Marketing Corporation (ADMARC) would be heavily funded and ready to buy farm produce immediately farmers start harvesting their crops.

“Farmers have for many years worked in vain; time is here for them to make profit out of their sweat. We are revamping operations of ADMARC and there will be no time for intermediaries or vendors who have, for a long time, reaped off our farmers,” he had said.

Each AIP beneficiaries farming households were buying two 50kgs bags of NPK (basal) and UREA (top dressing) fertilizer at K4,495 each and a 7kgs pack of maize, rice or sorghum seed at K2,000.

The programme provided 427,910 metric tonnes of fertilizer of which 213,955 is UREA and 213,955 NPK and 21,396 metric tonnes of cereal seeds.

AGRA has been operating in Malawi since 2006 but was established as a country office in 2017 and all major continental AGRA programmes have been implemented in the country.

These include the Soil Health Programme (SHP), the Programme for Africa’s Seed Systems (PASS), and the Scaling Seeds and Technologies Partnership in Africa (SSTP).

AGRA says over the years, it has spent more than $23 million in Malawi through grants supporting capacity building, research and development, input production and distribution, agriculture transformation awareness, adoption and production and post-harvest handling.

It currently supports Government to develop and implement policies that result in a conducive environment for a private sector-led agriculture transformation and strengthening Government capacity to deliver on its priorities and mandate.

The organisationalso strengthens agriculture systems (inputs, financing, markets, mechanization, extension) and working with strategic partnerships to facilitate the alignment of government priorities and private sector interests, improving integration and coordination — leading to investments beneficial to smallholder farmers.

AGRA is supported by the Partnership for an Inclusive Agriculture Transformation in Africa: BMGF, USAID, The Rockefeller Foundation, FCDO and BMZ, among others.

Originally published

Please tell us more about your professional role at AGRA

I am the head of seed research and systems development at AGRA. I am one of several women leaders at AGRA and I sit on the cutting edge of a massive effort to transform smallholder agriculture in Africa. In my role, I oversee and provide technical direction in seed research and systems to teams in 11 African countries. These teams comprise 22-25 program officers per country, who look up to me for expert advice and technical direction in our mission to ensure that farmers have access to high quality seed.

Why is the seed sector important to you?

From where I stand, seed is the most important input for increasing farmer productivity because it contributes 40% of the total output. It is unfortunate, however, that the input has not been given the attention it deserves. This is mostly because the systems in African countries are often dysfunctional along the value chains.

How did you get involved with seed, and what are some of your major accomplishments?

I got interested in agriculture and then seed development when I was growing up in the relatively marginalized area of Mbeere South, a sub-county in Kenya’s Embu County. My parents were peasant farmers, who only managed to give us sufficient food for five months in a year. I witnessed their toil in planting but later harvesting very little, and for a long time, I dallied with question, “How can we get enough food?” Later, my passion led me to study agriculture at the University of Nairobi. Through my training, I came to understand the importance of seed, and as a young researcher, my passion for seed earned me a scholarship to study plant breeding at Iowa State University, USA, where I was exposed to the secrets for unlocking high farmer productivity.

What are some of your major career accomplishments?

When I came back to Kenya from the United States, I bred and released 33 maize hybrids, which were commercialised by small seed companies to reach one million farmers. During this time, I also led a team of 60 plant breeders (40% women), who developed 680 additional crop varieties that were commercialized by 114 seed companies to reach 3.4 million farmers. I am also glad that under my leadership, AGRA developed early maturing finger millet that is now preferred for weaning diets, and as a superfood for cancer and HIV patients in Kenya. It is for such reasons that the organization was in 2020 recognised as a Centre of Excellence in Seed Systems.

How has your leadership role at AGRA helped define your career objectives?

AGRA is a farmer centred organisation that also focuses on the role of women in Africa’s agricultural systems on the understanding that 70% of producers in Africa are women. Through AGRA, I am able to facilitate the right decisions around crop research interventions, quality seed production, and the development of seed regulations with the participation of governments, private sector players, farmers, stakeholders and development partners. I revel in this job because I have witnessed, from my childhood, the toil of African farmers – mothers especially – and that is why I am constantly driven to push for change.

You are passionate about the role of quality seed in transforming agriculture. What are you doing around this matter as AGRA?

AGRA is a leader in this space, and has in the past nine years trained 600+ crop scientists and released 680 crop varieties. This is in addition to developing 119 private seed companies, supporting 18,000 agrodealers and training 33,000 Village Based Advisors (VBAs), for the benefit of more than 33 million farmers. This investment has generated a dynamic force that has resulted in increased yields, greatly reducing hunger and improving incomes for millions of households. Additionally, AGRA continues to contribute to policy changes that favour better seed systems. This has resulted in increased farmer productivity, stable seed companies and trusted seed trade practices, all of which are linked to increased seed quality.

What are some of the recent advances in science around staples that you find exciting, and how does this speak to food security?

AGRA scientists are currently exploring how to get high yielding crops and at the same time countering the effects of climate change. We are constantly supporting research to get better seed for high yielding and nutrient rich crops. In Kenya, for example, we are working to break the overdependence on maize, as there are multiple options available to curtail malnutrition, obesity and other diseases. I, for example, believe that the mix of legumes and cereals must be given as much attention as maize. I also see the access to high yielding seeds as important for achieving the kind of yields that ensure food security. These must be complemented by better resilience programs for farmers to fight the effects of climate change and promote food security. In relation to seed, this implies disease resistance, drought tolerance and nutrient-richness. More focus should be placed on enhanced nutrition by promoting increased crop diversity to include nutrient rich staples such as high iron beans, b-carotene rich sweet potato, drought tolerance nutrient rich sorghum and millet.

Which woman leader has inspired you the most?

Melinda Gates; because she cares a lot about Africa’s agriculture. Reading her history, you will know that as a new graduate in crop science, she travelled to Africa, where she inspired young women researchers, including me. Since then, she has put her money, time and energy into improving the lives of African women. I remember that she visited my research project at the Kenya Agriculture and Livestock Research Organization (KALRO), soon after I graduated with my PhD, and, together, we gave packets of certified seed to women farmers in Tanzania. Her personal involvement in the project confirmed my conviction that seed is a critical agricultural input.

What lessons have you learnt that are unique to female leadership?

I was one of the pioneer recipients of the AWARD program for leadership in Agriculture. Fanned by our mentor Vicke Wilde, I learned that every opinion, especially from a woman, matters, as it often leads to innovation. As such, over the years, I have mentored many women in crop science for the benefit of African farmers. These include 10 women crop scientists I trained in Kenya, who went on to develop new technologies for farmers including dryland crops like cowpeas, pigeon peas, finger millet, cassava, beans and hybrid maize.

Being a woman in the area of plant breeding, do you recall suffering any biases and/or assumptions?

I realised that being a woman in any industry, you need to work twice as hard as your male counterparts. It was said to me that ‘science is not for women’, and “you won’t make it” just because I was an expectant mother with small children, who still needed to finish her thesis and research papers. Many women suffer the same challenges and they need encouragement. Thankfully, AGRA recognises this and encourages women professionals to achieve their full potential. Still, because of the conflicting roles in the family, I recommend that special opportunities be given to women researchers everywhere. On which note, I am immensely thankful to AGRA for placing women in positions of leadership and influence. Point in case, the organization has trained 600 crop scientists in different countries, 30% of whom are women.

What are your plans for the future?

My passion, going forward, is to drive scale and help more farmers access high quality seed, increase productivity and access food for more months in a year. We are already achieving that through our work in AGRA, where we now ensure food security for 7-9 months annually. That said, AGRA is working to promote sustainable partnerships that give farmers access to new technologies. In our work, we will continue to build SMEs and create businesses around seed supply by working with VBAs, seed companies and agro-dealers to support last mile access.

Brasilia, 25 March 2021 (IICA). The Alliance for a Green Revolution in Africa (AGRA), which operates in 11 countries of this continent and promotes agricultural transformation to increase the income of producers and improve food security, identified Brazil’s tropical agriculture model and its leadership in the export of soy and meat, soil recovery and reforestation, as possible areas for cooperation between Latin America and the Caribbean and Africa.

The proposal was made by Fadel Ndiame, vice president of AGRA, during his participation in the International Tropical Agriculture Week, organized by the Brazilian Agricultural Research Company (Embrapa) and the Inter-American Institute for Cooperation on Agriculture (IICA) to share the experience of researchers and entrepreneurs in the sustainable use of technologies for the adaptation of agriculture to the climate and environmental conditions of the tropics.

It was in this spirit that the representative of AGRA, an organization founded in 2006 under the leadership of former UN Secretary-General Kofi Annan, and which seeks to boost an inclusive agricultural transformation in Africa by increasing income and improving the food security of 30 million agricultural households in 11 countries, expressed interest in establishing South-South Cooperation with Latin America and the Caribbean, especially in terms of Brazil’s tropical agriculture model, soil recovery and reforestation systems and its leadership as a meat and soy exporter, among other areas.

“We are very interested in exploring opportunities for South-South Cooperation to recover millions of hectares of acid soils, and in also analyzing different development models, including Brazil’s tropical system, which is very different from ours. We are interested in exchanging knowledge with Brazil and learning about how the country became one of the top five food exporters, especially in the meat and soybean sectors. Furthermore, it is important that we analyze the opportunities to address the issue of reforestation, land rehabilitation and ecosystem services”, explained Mr. Ndiame, a sociologist with more than 30 years of experience in agriculture and economic development policies and programs.

The African leader also identified, as another area for collaboration, the experience of EMBRAPA in developing research in the Cerrado, a tropical savanna with the greatest biodiversity in the world (5% of the animals and plants of the entire planet) and the second largest biome (ecosystems with similar climate, fauna and flora) in Brazil.

The Cerrado is also an important source of water for the country, and is home to the main springs that feed eight of the twelve hydrographic regions of Brazil. In addition, this biome features soils capable of storing a large amount of carbon, and although they have a naturally low fertility, technological advances have increased their productivity for agriculture and livestock.

The International Tropical Agriculture Week also gathered different contributions geared towards consolidating the position of the Americas in preparation for the United Nations Food Systems Summit, scheduled for the end of September in New York.

Ndiame said that the Summit will be a major step forward to promote sustainability and healthier diets, although in his view, each country and continent will have to define its own route to achieve a more sustainable food system.

Agriculture in Africa

At the meeting, the vice president of AGRA described the fundamental role played by agriculture in the economy of African countries. He went on to explain that the sector employs between 60 and 80% of the population, that is, 54% of the active population of the continent, and that smallholder farmers produce about 80% of the food.

He also mentioned that in 2020, in spite of the Covid-19 pandemic, the sector grew by 5%. However, he warned about the importance of redoubling efforts in the face of the 250 million people in Africa who are currently undernourished, although indicators have shown a downward trend in the malnourishment indexes of various countries.

“By 2050, one of our objectives is to increase food production by around 350%, produce better, more, and in a sustainable manner; this is our motto” he added.

He also stated that in order to achieve this goal, it is necessary to increase public investment, strengthen institutional frameworks, develop more robust regulations and policies, improve infrastructure, support research and innovation, ensure access to technologies and digitalization to optimize productivity, and attract the youth to agricultural activity.

“We face this and many other challenges and threats, including climate change and drought, which significantly affect small producers, as well as issues regarding land degradation, access to financing, high transaction costs associated with services, infrastructure problems and an often weakened policy framework. With digitalization and investments in infrastructure and technologies, we believe that Africa could take a significant leap forward, by learning from and sharing experiences with other countries, in order to achieve South-South Cooperation and ensure the long overdue growth of the African continent” said Ndiame.

The AGRA leader concluded by assuring that one of Africa’s main opportunities to systemically transform agriculture lies in its land extension. In this sense, he stated that “we still have empty lands, and an adequate environment to promote production”, and mentioned the “unexploited resources, water resources and significant deposits of key nutrients, such as potassium, phosphate and zinc, which could be used for this transformation”.

About IICA

IICA is the specialized agency for agriculture in the Inter-American system, with a mission to encourage, promote and support its 34 Member States in their efforts to achieve agricultural development and rural well-being through international technical cooperation of excellence.

More information:
Institutional Communication Division of IICA
comunicacion.institucional@iica.int

Press release on web: https://www.iica.int/en/press/news/africa-seeks-cooperation-latin-america-and-caribbean-areas-export-development-soil

AGRA President Dr Agnes Kalibata says that contrary to narratives that farmers are invariably resistant to adopting technology, of the 10 million small-holder farmers engaged with AGRA programmes, 76% have adopted one or more technologies within one planting season.

Africa’s strongest route towards the Sustainable Development Goal of eliminating hunger lies in helping smallholder farmers to access capital and supporting governments to promote policies that enable the farmers to adopt technologies and increase yields.

Statistics indicate that by 2050, about four in five people living in extreme poverty will be concentrated in sub-Saharan Africa, where food insecurity is already a major challenge as a result of rapid population growth. To ensure food security in the future, experts say current food production levels will need to be increased by at least 70%.

With studies showing that growth coming out of the agricultural sector is eleven times more effective at reducing poverty than growth coming out of other sectors, Dr Kalibata says AGRA has been pursuing three strategies to unlock the potential of Africa’s smallholder farmers, who produce 80 percent of the food the continent eats.

“We are working with the governments across Africa to prioritise agriculture, supporting the enabling environment to benefit smallholder farmers and to make it possible for the private sector to provide services to smallholder farmers by reducing the real and perceived risk associated with the agricultural sector. We are also supporting farmers to access technologies that enable them to increase the yields and incomes while developing resilience to pests, climate change, droughts and floods,” she says.

Dr Kalibata credits the Strengthening State Capability pillar of AGRA’s approach as the most transformational in driving scale, pointing out that functional government policies are key to success.

“For example, the provision of early generation seed is usually driven by government institutions. If they aren’t functioning well, it makes it impossible for the private sector to function and farmers to access improved varieties of seeds.  If markets don’t function, and they quickly revert to subsistence farming, which perpetrates the poverty cycle,” she says.

Through technical assistance and grants, AGRA has helped to make capital more accessible to farmers, while delivering incentives to the private sector to invest in smallholder farmer systems, to shore up an agriculture sector that currently receives less than 10 percent of private lending.

Apart from finance, AGRA is supporting resilience and sustainability for smallholders especially in response to challenges brought on by climate change.  For example, in semi-arid areas of Kenya, AGRA is working with governments and the private sector to conserve, protect and enhance natural ecosystems.

“With the judicious use of appropriate fertilisers and with the right seeds, farmers are able to triple, even quadruple their yields, says Dr. Kalibata.

“Ending hunger is a solvable problem.  AGRA has learned the hard way that if you’re going to be serious about pulling farmers out of poverty, you need to support reforms of policies and support programmes that can help reach millions of farmers.  If Africa smallholder farmers become prosperous, they will change the continent forever,” she says.

To bridge the lending gaps between agricultural entrepreneurs and financiers, AGRA in partnership with the Center for Financial Inclusion (CFI) and SCOPEinsight have identified a standardized set of bankability metrics to help unlock over US$65 billion for Agricultural Small and Medium Enterprises (Agri-SMEs) in Africa.  

“Agriculture represents the largest opportunity to reach the Sustainable Development Goals by 2030, yet the sector is chronically underfinanced,” said Hedwig Siewertsen, the Head of Inclusive Finance at AGRA. “Most Agri-SMEs face challenges convincing lenders that they can productively use and repay the loans they are requesting,” she added.

The metrics were developed through a research that involved in-depth analysis of thousands of company profiles and loan portfolio data, as well as interviewing over 90 active industry actors in Agri-SME lending. The metrics serve as the common language between lenders and Agri-SMEs, ensuring that companies know what information to provide, enabling lenders to rapidly screen the loan eligibility of the company. This efficiency gain reduces the cost of making loans, which is one of the main bottlenecks for lenders when assessing companies that require smaller loans.

“No bank will lend money to a company that cannot prove that they are performing well,” added Siewertsen. “Traditionally companies complain about the lack of collateral (land titles, property) which inhibits their access to finance, however these new metrics prove that banks can accept other types of data points to ensure their loans are within their risk appetite.” She added.

“We identified three common lender behaviors that hinder lending for the Agri-SMEs,” added Henry Bruce, the Director for Research at the CFI.

First, the researchers found that lenders were uncertain about what metrics were the most relevant at each stage of the deal screening process. Secondly, lenders tend to collect a large amount of generic business information without prioritizing what is most important to them. Lastly, lenders tended to ask for all the information early on in the deal screening process, thus burdening the companies requesting a loan without guaranteeing that they had met the minimum requirements.

To reduce the burden for companies, the researchers developed a simple template for companies to fill out the General Information on their loan request sufficient for most lenders during the pre-deal screening stage.

After completion of the General Information, Bankability Screening is the next step.  The researchers identified three key areas to inform the credit-worthiness of companies. These are: Business Activity, Governance and Financials.

While Financial performance metrics are straightforward to define, ascertaining the quality of the business activities and governance is more challenging, and most lenders were previously unable to clearly identify the specific metrics for these indicators.

Leveraging insights from the databases on loan portfolios and rating reports for agricultural companies, CFI and SCOPEinsight’s found that  Business Activity quality can be assessed through three main metrics that include: Top three products; Top three clients; Contract and pricing. The information used to assess the quality of Governance include: Turnover of managerial staff; Time commitment of business managers; Separation of board and management authority.

These metrics prove that criteria other than collateral and Financials are just as important in assessing the bankability of Agri-SMEs. “If adopted, the metrics would accelerate  information sharing between Agri-SMEs and lenders during the pre-due diligence phase, and increase the flow of capital to the Agri-SMEs,” said Marise Blom, the Chief Operating Officer at SCOPEInsight.

The proposed bankability metrics which are available through AGRA’s website, complement a lender’s assessment of the loan request itself that is focused on the business plan and financial projections, and could include lender-specific requirements such as social or environmental impact.

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About AGRA

Established in 2006, AGRA is an African-led and Africa-based institution that puts smallholder farmers at the center of the continent’s growing economy by transforming agriculture from a solitary struggle to survive into farming as a business that thrives. Together with our partners, we catalyze and sustain an inclusive agricultural transformation to increase incomes and improve food security for 30 million farming households in 11 African countries by 2021.

Zabibu Magava is a VBA and a village agro dealer from Ihimbo Village in Iringa Tanzania. Through AGRA training/extension/support, she developed skills/accessed working capital for agro inputs and qualified for a matching grant in 2018, 2019 and 2020. Utilizing those skills/support, she was able to expand and increase acreage for maize cultivation from one acre to five acres and increased sales/revenue/incomes from US$ 650 to USD 6,500 from sale of inputs and farming. Today she boasts of being able to take her child to a better school and overall improved her family wellbeing.

Margreth Sanga is a hub agro dealer in Iringa Tanzania. Through AGRA training/extension/ linkage to retail agro dealers and VBAs, she developed skills and expanded her distribution channels from 4 outlets to 8. Utilizing those skills/support, she was able to increase sales/revenue/incomes by 50%. Today she boasts of having a nice house, taking her kids to better schools and her new investment in storage facility that she plan to do. Overall, her family wellbeing have improved.

Ritha Sekiyovele is a processor and exporter of fortified maize flour based in Iringa Tanzania. Through AGRA support and B2B linkages as well as warehouse expansion, she developed market intelligence skills, secured regional markets and she is buying quality grains from farmers supported by AGRA. Utilizing support received, she was able to increase sales/revenue/incomes by 40%. Today she boasts of expanding her business and storage capacity from 2,500MTs to 10,000MTs.

AGRA: Unleashing the power of #womeninag #VALUE4HER. LEAD, NETWORK, GROW IWD