Dossier

Public-private partnerships

Public-private partnerships are facilitating the transformation of African agriculture, helping farmers’ organisations to become professional businesses that generate higher income for their smallholder members.

Simon J. Costa explains how PPPs can positively transform the agricultural sector and the livelihoods of smallholder farmers © Farm to Market Alliance
Simon J. Costa explains how PPPs can positively transform the agricultural sector and the livelihoods of smallholder farmers © Farm to Market Alliance

Thursday, 28 September 2017

Simon J. Costa is CEO of the Farm to Market Alliance (FtMA), a consortium between WFP and seven public and private sector organisations. He explains how this initiative, which brings together global industry leaders, can help poor farmers progress from subsistence agriculture to commercial farming.

What are the prerequisites for a public private partnership (PPP) to successfully impact agricultural productivity in developing countries?

Households depending on agriculture for their income in developing countries are typically the poorest people in the countries where they live. For a PPP to have a successful impact on agricultural productivity in developing regions, the partnership must be structured in such a way as to ensure a diminishing dependency on external support beyond an agreed period of time. Without this, any positive impact is not sustainable.

What issues is FtMA aiming to address?

Whereas previous projects have focused on one part of the value chain, FtMA is focused on creating inclusive market places across entire value chains, delivering services to farmers throughout the season. FtMA provides risk protection tools, such as crop insurance, as well as education and access to quality input products, farming equipment and commercially viable practices. FtMA was formed to make food crop markets more productive, inclusive, resilient and profitable for all stakeholders, particularly smallholder farmers.

Since its launch in 2015, nearly 100,000 farmers have been supported to access fair markets. Another 73,000 have been trained on improved farming practices and 26,400 have accessed affordable finance. In total, over €2.5 million has been provided to farmers through loans and purchase of agricultural products. This was partly made possible by the involvement of 11 financial institutions which are offering input loans to farmers and 18 new off-taking companies that have joined the project and have made new agreements with farmers groups to purchase their production. So far, 30,726 million t of maize has been aggregated for sale at a fair price.

The Alliance is working in a number of countries, where have you seen the greatest impact?

Over the past 2 years, FtMA has been launched in four countries: Kenya, Rwanda, Tanzania, and Zambia. Of these countries, the greatest impact so far has been seen in Tanzania, where FtMA is working with over 20 partners and more than 70,000 farming families producing mainly maize and pigeon peas. The impact is greater, simply because Tanzania was the initial launch country and relationships between FtMA, the government, the private sector, NGOs, farmer organisations and farmers have had longer to develop.

How do you ensure that farmers remain committed and engaged with the Alliance?

There are no guarantees in any partnership. Even within formal contracts, where there is insufficient trust or disproportionate benefits between partners, the partnership will eventually fail. FtMA strives to provide tangible, measurable, commercial benefits to all parties involved. Upon such a foundation, long-term relationships can be built between smallholders and private sector businesses.

How do you think PPPs can facilitate the development of more demand-led agricultural value chains?

Providing farmers with access to predictable and fair crop markets is very strong motivation for smallholders to invest the required time, money and effort required to produce better quality and greater quantities of crops. Equally, commercial off-takers are more willing to commit to forward contracts at competitive rates with smallholders (or aggregation groups) when they are confident of a reliable quantity and an agreed quality standard. This is why FtMA is improving food crop solutions by coordinating, developing and implementing products and services for all value chain stakeholders, including buyers, farmers, farmer organisations, input companies, banks, etc. Each of FtMA’s four strategic pathways attempts to address the current limitations restricting subsistent farmers becoming commercial farmers and also restricting markets from engaging with farmers who have the greatest prospect of being able to commercialise.

What is the role of PPPs in the transformation of the agricultural sector, particularly in terms of modernisation and professionalisation?

Within FtMA, there is a strong mantra: educate, equip, empower. Everything starts with education. To transform behaviours, generational practices and traditional commercial arrangements, all parties must first be convinced it is in their best interest to do so. FtMA works closely with government officials, private sector product, service and equipment providers, NGOs, farmer organisations and farmers to educate and equip all value chain stakeholders and ultimately empower individual parties to be capable of operating in a self-sustaining manner.

Vincent Defait

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The Technical Centre for Agricultural and Rural Cooperation (CTA) is a joint international institution of the African, Caribbean and Pacific (ACP) Group of States and the European Union (EU). CTA operates under the framework of the Cotonou Agreement and is funded by the EU.