Round Table 4 - “Local Purchases in the African Continent, challenges and perspectives for international cooperation initiatives”, July 03 2012, Brasília.

1. P4P PURCHASE FOR PROGRESS
By Laura Melo
2012

2. P4P Overview
BENEFICIARIES: at least 500,000 smallholder
farmers - 1 million members of farmers’
organisations engaged in P4P (500,000 in
Ethiopia).
DURATION: 5 years (Sept 2008 – Dec 2013)
21 PILOT COUNTRIES
FUNDING: US$151.8 million for technical
capacity for 5 years (food not included) AFRICA: Burkina Faso, Democratic Republic of
Congo, Ethiopia, Ghana, Kenya, Liberia,
KEY DONORS: Bill & Melinda Gates Malawi, Mali, Mozambique, Rwanda, Sierra
Foundation, Howard G. Buffett Foundation, Leone, South Sudan, Tanzania, Uganda,
European Union, Governments of Belgium, Zambia
Canada, France, Ireland, Luxembourg, ASIA: Afghanistan and Laos
Netherlands, United States of America and
LATIN AMERICA: El Salvador, Guatemala,
the Kingdom of Saudi Arabia.
Honduras, Nicaragua

3. WFP’s local and regional
procurement
WFP Local Procurement – P4P’s foundation
Principles of acceptable, timely and cost efficient food procurement

4. VISION OF SUCESS
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.

5. P4P Main objectives
Leverage WFP’s procurement footprint as a catalyst for
growth and connect farmers to markets,
Build the organisation’s capacities and expertise in the area
of procurement and market development,
Build a body of best practices in agriculture and market
development
Share this knowledge as part of the efforts to strengthen the
capacities of countries to reduce hunger.
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6. P4P Development Hypothesis
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7. Three main pillars
Demand Supply - Partnerships
Test innovative procurement Through partnerships, ensure
modalities to foster ability of quality and reliability of local
WFP to work with small holder supply by
farmers • Providing technical expertise
• E.g. pro-smallholder in agriculture and market
competitive tendering, direct development
and forward contracting,...) • Building capacity
• Empowering women
Learning & Sharing
Pilot phase will be monitored closely to learn from
experience and identify best practices for later
scale up
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8. Partnerships across the value chain
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9. P4P Models
Countries
Approach 1: Supporting the roll-out of warehouse receipts systems in two ways
• direct support for the establishment of the system
Farmers’ Organisations Approach 2 • Purchasing through the system Ethiopia,
Support to Purchasing through commodity exchanges to create a “pull- Malawi,
and Supply-side emerging in/follow-in effect” Tanzania,
structured Uganda and
Partnerships trading systems
Working with farmers’ organisations to build their capacities to
Zambia
participate in structured trade
Buying from farmers’
organisations Rationale to enhance competitiveness in the market
• Receiving support on production Provide an alternative market for farmers’ surpluses
and marketing Approach 3 Procurement modality – modified tendering Mozambique
• various procurement modalities + Small and Training provided on WFP procurement and contract requirements and Kenya
• FO’s at different capacity levels – medium traders Investment in marketing equipment – stitching machines, weighing
scales
high, medium and low
• Main challenges – governance,
access to finance, limited
availability of infrastructure and Approach 4 Connecting farmers’ organisations to established food processors Afghanistan,
equipment to facilitate group Developing Developing local processing capacity – biscuits, supplementary Ethiopia,
feeding products
marketing, meeting contract local food Guatemal,
requirements processing Mozambique,
Zambia
Common approach in all capacities
countries
Approaches are combined to fit countries needs
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10. Achievements - Procurement
 220,000 metric tons contracted (50,660 mt defaulted)
 $56 million USD directed to the pockets of smallholders
 Global default rate - less than 23% (20,000 mt)
 P4P purchases as a percentage of total local purchases
by WFP in the pilot countries increased from 9% in
2009 to 13% in 2010.
 WFP has realized savings of approximately US$ 30
million (savings with respect to import parity price,
considering the total quantity contracted
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11. Quantities contracted and Delivered

12. P4P purchases vs local procurement

13. Achievements – Training
 855 FOs, with a total membership of over 1 million
(352 FOs have signed contracts with WFP)
 Over 133,400 smallholder farmers, lead farmers,
agricultural technicians, small and medium traders and
warehouse operators have participated in training
activities organised by WFP and partners
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14. Number of Trainings per Quarter

15. 3 key lessons
 Match buying modality to capacity of
Farmer organisations
 Focus on food safety / quality / processing
 Link financial service providers to
FOs / strengthen financial literacy

16. Risks
 Consistent supply and aggregation
 Quality assurance
 Price discovery
 Cost efficiency
 Contract performance
 Elite capture
 Weak organisational capacity
 Appropriate Processes and systems