Ken Davies, P4P Coordinator ken.davies@wfp.org Purchase for Progress (P4P) in fragile contexts with a focus on P4P in the Islamic Republic of Afghanistan Islamic Republic of Afghanistan Using Food Assistance to Build Long Term Solutions Seminar Employment and Income in Fragile Contexts, Berne, 11 th May 2011
P4P’s 3 pillars Demand-base Partnerships WFP’s comparative advantage = • Through supply-side procurement and logistics expertise partnerships, ensure quality and • Test innovative procurement reliability of local supply by modalities: • Providing technical expertise • pro-smallholder in agriculture + market competitive tendering development development • direct /forward contracting • direct /forward contracting • Developing capacity • linking farmers to •Align with and feed into national processing opportunities development frameworks and •Share knowledge on PHH, investments transport & storage Learning & Sharing • Learning from experience and identifying best practices • M&E system • Technical Review Panel (TRP) • Annual Reviews (National/Regional/Global) • Contributing to policy debates WFP local procurement – the foundation of P4P
Targeted P4P Points of Entry in Markets Consumers Retailers WFP Point of WFP Large-scale Food Processors/Large-scale Millers/ Entry- Point of Large-scale Wholesalers RP/LP Entry- RP/LP Commodity Exchange Blended Food or Small-scale Processors Warehouse Receipts Farmer Medium-scale WFP P4P System Organizations* Traders Point of WFP P4P Entry Points of Third Tier Entry Second Tier First Tier * Levels and characteristics of Small-scale Traders (Collectors) FOs are different in each P4P country Agric. Inputs & Services Smallholder Farmers 3
P4P approaches with an array of partnerships - differs from one country to another Countries Approach 1: • Supporting the roll-out of warehouse receipts systems in Ethiopia Farmers’ Organisations Approach 2 two ways Malawi and Supply-side Support to • direct support for the establishment of the system Tanzania Partnerships • Purchasing through the system Uganda emerging • Receiving support on • Purchasing through commodity exchanges to create a Zambia structured “pull-in/follow-in effect” production + marketing trading • Working with farmers’ organisations to build their • Various purchasing systems capacities to participate in structured trade methods + progression strategy • FO’s at different • Enhancing competitiveness in the market Mozambique • Providing an alternative market for farmers’ surpluses • Providing an alternative market for farmers’ surpluses Kenya Kenya capacity levels – high, Approach 3 • Procurement modality – modified tendering + medium and low Small and • Training provided on WFP procurement and contract medium • Main challenges – requirements traders • Investment in marketing equipment – stitching governance, access to machines, weighing scales finance, limited availability of • Connecting farmers’ organizations to established food Afghanistan Approach 4 infrastructure and processors Ethiopia Developing equipment to facilitate • Developing local processing capacity – biscuits, Guatemala local food group marketing, supplementary feeding products Mozambique processing Zambia meeting contract capacities requirements Common approach Approaches are combined to fit country context in all countries
P4P VISION OF SUCCESS: by 2015, agricultural markets will have developed in such a way that many more small-holder or low income farmers, the majority of whom are women- will produce food surpluses, sell them at a fair price and increase their incomes. How Impact is achieved Profitable access to Sustainable Smallholder markets increased and profitable Productivity f( organisation, markets, engagement in Increased enabling environment) markets 5
P4P in Fragile Contexts • Afghanistan • Democratic Republic of Congo • Liberia • Liberia • Sierra Leone • Southern Sudan
Purchase for Progress (P4P) Programme Objectives Using resources as responsibly and far-sightedly as possible � Bringing demand closer to smallholder producers by using WFP’s purchasing power � Acting as a catalyst to create links with supply-side partners by using WFP purchasing footprint in an organised and planned way with partners � Learning and sharing experiences by taking stock of best practises and lessons learnt
Purchase for Progress (P4P) 3 PROGRAMME COMPONENTS Implementation Challenges and Objectives Immediate Mid Term Long Term (2010) (2011-2013) (beyond 2013) Roles & Responsibilities Afghan Working with the WFP Authorities private sector 1. Local • Diversification & Procurement Procurement • Quality • Quality Linkage with Food Linkage with Food Industry (Raw Commodities) • Competitiveness • Increase Production • Adoption of international food 2. Food quality standards Processing •Quality & Safety •Increase Production • Regulation of the (Fortified • Market Integration Food Industry Commodities) •Regional Competitiveness • No Capacity • Lab Analysis 3. Food Safety and • No Control Capacity at Central Quality Level • No Standards
RESULTS IN Wheat Local Procurement 2010 4700 mt of wheat grain - 5 Farmers Organizations RESULTS ► 188,200 beneficiaries ► 4,701.5 mt Wheat Grain ► 5 farmers’ organizations ► 28,653 US$ saved ► 4 provinces (Kunduz, Faryab, Balkh and Baghlan) ► Addressed immediate pipeline break CHALLENGES FACED CHALLENGES FACED Cost Effectiveness Geographic Targeting ► Kazakhstan and Pakistan ► Selection of remote locations Quality Preparatory Visits ► Local origin of the wheat ► Q&Q supervision of the cleaning ► Foreign matter content ► Supply side partner supervision ► Moisture content Market Integration Simplified Procurement Rules ► Limited market intelligence ► Preparatory work/Sensitization ► Procurement rules ► Direct negotiation, simplified rules
RESULTS IN Food Processing Activities 2010 65.000 mt fortified flour – 100 mt High Energy Biscuits RESULTS ► 65,000 mt Fortified Flour ► On voluntary basis ► 8 mills ► On commercial basis ► 5 cities (Kabul, Jalalabad, Mazar, Kunduz, Heart) ► Covered the needs of 355,000 people ► 11,000 US$ saved ► 100 mt High Energy Biscuits (HEB) ► 4,115 beneficiaries ► 2 private factories in Herat ► Addressed immediate pipeline break ► Addressed immediate pipeline break CHALLENGES FACED Child Labor Family Alternative Step by step approach Quality ► Trials and small first commercial batch ► WFP nutritional standards ► Constant monitoring (analysis) ► Food Safety/Hygiene standards ► Expertise, technical recommendations Market Integration Simplified Procurement Rules
RESULTS IN Quality Control and Hygiene 2010 CHALLENGES FACED ► Absence of capacity: no control at the border, insufficient in-country lab. capacity ► Regulation of the food industry spread across several entities ► No national quality standard for wheat Application of WFP Standards Application of WFP Standards RESULTS Step by step approach Short Term Strategy ► High Performance Liquid Answering WFP needs in term of Chromatography (micronutrients) analysis ► Spectrophotometer (minerals) Long Term Strategy Partnership with FAO ► Food Standards Adoption, Quality Provide technical and financial support to Control, Regulation of the Food industry scale up
2011 and Food Processing Activities Forward A Step Toward HEB Autonomy Increasing the production to ultimately answer WFP operational needs Max. Area Office HEB Containerized Area Office Private Factories Production needs in 2011 Factories (CFPU) Capacity (mt) (mt) Herat 2 - 3,200 8,482 Mazar 1 - 1,600 5,899 Kabul 1 - 1,600 11,718 Jalabad - 1 800 4,793 Faizabad - 1 800 2,617 TOTAL 4 2 8,000 26,099 Transferring Roles & Responsibilities from WFP to the Afghan Government WFP Nutritional Standards Local Authorities responsible and control Good Manufacturing Practices National Government Owned School Incentive to increase production Feeding programme WFP Afghan Authorities Working with the private sector
2011 and Food Processing Activities Forward Production of Lipid Based Supplementary Feeding Diversifying Local Procurement / Creating market outputs for fruits and nuts ► R&D stage: Tripartite agreement between GAIN, COMPACT and WFP Outline of the recipes have been established to maximize local sourcing of the main ingredients - Almonds (30%) linking with fruits & nut producer associations, traders, investors - Mulberries (20%) - Biscuits (15%) linking with the HEB suppliers - Biscuits (15%) linking with the HEB suppliers Answering WFP Operational Needs in the Mid Term ► 1 st Containerized Food Processing Unit to be manufactured by the end of 2011 ► More community oriented / more simple equipment / for remote locations first Approx. Production Capacity per CFPU Approx. Yearly Needs Number of CFPU to (mt/year) (mt/year) cover the needs 2000 3,500-4,000 2
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