CATALIST-UGANDA
Increasing Incomes by Sustainably Commercializing Smallholder Agriculture through Improved Productivity and Market Development
PROJECT PROPOSAL
P.O. Box 2040
Muscle Shoals, Alabama 35662 USA
www.ifdc.org
Draft Proposal Submitted:
April 24, 2012
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Table of Contents
Preface 3
Acronyms 4
Executive Summary 5
1. Problem Statement, Background and Project Rationale 9
1.1 Challenges in Uganda 9
1.2 Priority Commodities 10
1.3 National Policy Context 22
1.4 Dutch Food Security Policy 22
1.5 The CATALIST Experience 24
1.6 CATALIST-Uganda: An Innovative New Project 24
2. CATALIST-Uganda Technical Approach 25
2.1 Program Goals and Objectives 25
2.2 Program Approach 25
2.3 Technical Approach 27
2.4 Sustainability Strategy and Exit 37
2.5 Project Logframe & Results Framework 38
2.6 Technical Activities/Outputs by Commodity 43
3. Performance Monitoring, Evaluation and Learning 46
3.1 CATALIST-Uganda Monitoring and Evaluation System 46
3.2 Communication 47
3.3 Reporting 47
3.4 Cross-Cutting Themes 48
3.5 Risk Analysis 48
4. Project Staffing and Organization 52
4.1 IFDC Core Team 52
4.2 Management Structure 52
5. Indicative Budget 55
Annexes 56
Annex 1. Draft Inception Phase Work Plan 56
Annex 2. Draft Performance Assessment Matrix 58
List of Figures and Tables
Overview of Major Commodities in Uganda 11
Map of Uganda 12
CASE Conceptual Framework 25
CASE Approach and Value Chain Development 27
Objectives and Outputs of CATALIST-Uganda 28
Agribusiness Coaches 32
Characteristics of Low-Level Clusters and Apex Clusters 34
Potential Partnership Examples 34
Examples of Public Works 36
Project Logframe 38
Technical Outputs and Activities by Commodity 43
CATALIST-Uganda Risk Analysis 49
CATALIST-Uganda Organizational Chart 54
CATALIST-Uganda Indicative Budget 55
CATALIST-Uganda Draft Inception Phase Work Plan 56
Draft Performance Assessment Matrix 58
Preface
The International Fertilizer Development Center (IFDC) is a public international organization addressing critical issues such as food security, the alleviation of global hunger and poverty, environmental protection and the promotion of economic development and self-sufficiency.
IFDC’s mission is “To increase agricultural productivity in a sustainable manner through the development and transfer of effective and environmentally sound plant nutrient technology and agricultural marketing expertise.” IFDC’s Competitive Agricultural Systems and Enterprises (CASE) approach focuses on the development of sustainable and private sector-based competitive agricultural production systems. A key element to productivity improvements and farmer income is the Commercialized Sustainable Farming Systems (CSFS) approach, which considers not only the primary commodity but as well other crops rotated in the farming system to optimize profitability and soil health. Together, CASE and CSFS ensure that tradable surpluses are both commercially and environmentally sustainable, and that the resulting production systems are embedded in a network of business relationships that add value not only directly to the farmer, but to the wider rural and national economy as well.
The CATALIST-Uganda proposal is presented to the Embassy of the Kingdom of the Netherlands (EKN) in Uganda based on a project similar to IFDC’s CATALIST and CATALIST-2 Projects in Rwanda, Burundi and the DRC also funded by EKN in Kigali. The CATALIST-Uganda proposal is tailor-made to the Ugandan context, incorporating important lessons learned and significant new innovations.
The CATALIST (Catalyzed Accelerated Agricultural Intensification for Social and Environmental Stability) Project (2007-2011) initially focused strongly on the introduction of ISFM (Integrated Soil Fertility Management--combining improved germplasm, mineral fertilizers, organic matter management strategies, and local management adaptations), which led to two to four-fold increases in productivity, reduction in production costs, and consequent dramatic increases in marketable surpluses and farm incomes. Following its mid-term evaluation in 2009, CATALIST intensified its efforts in value chain development and accelerated organizing agribusiness clusters—groups of value chain operators implementing a business idea around a specific commodity in one or more value chains. CATALIST-2 (2012-2106) will be a continuation and expansion of CATALIST that will further apply and adapt this approach in the Great Lakes Region of Africa and will emphasize ‘roll-out and scale up’ – increasing the number of agribusiness clusters and the relations among them. Using the market as the key driver for agricultural intensification, CATALIST-2 will use a public-private partnership (PPP) model, and will partner – whenever possible – with national and international (including Dutch) agro-enterprises in areas such as agro-input supply, professional service provision and output marketing.
Based on consultations with the EKN in Uganda, Rwanda and Burundi, stakeholders, beneficiaries and IFDC technical staff, CATALIST-Uganda builds on the lessons learned from CATALIST Project. From the production side, the project will develop and disseminate highly productive, sustainable farming systems comprised of several commodities, anchored around three to four primary commodity value chains. For the CATALIST-Uganda Project, the commodity market is the starting point. Using the ‘pull’ of the market, cluster development and market linkages will be encouraged earlier than in the original CATALIST project, facilitated by lessons learned from the CATALIST experience and sharing of regional staff and best practices between the two projects. While cluster development is opportunity-driven, starting with addressing farm-level constraints such as access to agro-inputs and credit, CATALIST-Uganda will facilitate the formation of separate apex-level clusters around each of the value chains allowing cluster actors to tap into national, regional and international market opportunities and agro-enterprises.
Acronyms
3G Three Generations Potato Project (USAID funded)
ABC Agribusiness Cluster
aBi Trust Agribusiness Initiative Trust
AMPU Autonomous Mobile Processing Unit
BSS Business Support Service
CASE Competitive Agricultural Systems and Enterprises
CATALIST Catalyzed Accelerated Agricultural Intensification for Social and Environmental Stability
CATALIST-2 Towards Viable Clusters in Agribusiness for Improved Farmers’ Income and Food Security in the Great Lakes Region
C:AVA Cassava Added Value Project
CDI ................. Centre for Development Innovation (Wageningen University)
CIP International Potato Centre
CPP Crop Protection Products
CSFS Commercialized sustainable farming systems
DADTCO Dutch Agricultural Development Trading Company
DGIS Directorate-General for International Cooperation (The Netherlands)
DSIP Development Strategy and Investment Plan of the Ministry of Agriculture, Animal Industry, and Fisheries
DRC Democratic Republic of Congo
EAC East African Community
EADN Extending Agro-Dealer Networks Project
EAGC East African Grain Council
EKN Embassy of the Kingdom of the Netherlands
FIPS-Africa Farm Input Promotions Africa
GoU Government of Uganda
HQCF High quality cassava flour
HZPC HZPC Holland B.V., Seed Potato Company
IFDC International Fertilizer Development Center
IGA Income generating activities
ISFM Integrated Soil Fertility Management
JICA Japanese International Cooperation Agency
MAAIF Ministry of Agriculture, Animal Industry, and Fisheries
MFI Micro-finance Institution
NAADS National Agricultural Advisory Services
NGO Non-Governmental Organization
OSCA One-Stop Center Associations
PHH Post-harvest handling
PMA Plan for Modernization of Agriculture
PPP Public-Private Partnership
SME Small and Medium-sized Enterprise
ToT Training of Trainers
UBOS Ugandan Bureau of Statistics
UNADA Uganda National Agro-input Dealers Association
UNBS Uganda National Bureau of Standards
USAID U.S. Agency for International Development
VCR Value-to-cost ratios
WRS Warehouse receipt system
Executive Summary
Goal and Overall Objective
The goal of CATALIST-Uganda is to sustainably commercialize smallholder agriculture through improved productivity and market development, resulting in marketable surpluses that raise farm incomes in Uganda, and increase food security for the wider East Africa and Great Lakes Region. Starting with the ‘pull’ of the market by working with commodities for which there is strong demand, CATALIST-Uganda will employ a systems approach to develop integrated cropping systems around priority commodities—Irish potato, cassava and rice—combined with an accelerated cluster development approach appropriate for Uganda. In addition to agricultural intensification, attention will be paid to input market development (both seeds and fertilizer), output marketing, linkages to Dutch and other agribusinesses and improvement of the policy environment.
By the end of CATALIST-Uganda in May 2016, 100,000 smallholder farmers will have doubled yields, achieved a 50 percent increase in incomes, and produced an annual marketable surplus of 200,000 metric tons of cereal equivalents. This will contribute to the increased rural incomes and trade in Uganda and increased food security in the region.
Approach
CATALIST-Uganda will be built on a market driven approach, focusing on the development of competitive value chains and farming systems that will lead to considerable marketable surpluses, contributing to increased incomes and trade in Uganda and greater food security in the region. Starting with the market ‘pull’ of agribusiness development in Uganda, cluster development will focus on agribusiness and entrepreneurship in Uganda at all levels – from local to national. This will allow farmer beneficiaries to seize on Ugandan, regional and international opportunities by targeting markets and trade to neighboring countries, and developing supply chains to national and multinational (including Dutch) agro-processors. To reduce production and transaction costs in the selected value chains, CATALIST-Uganda will introduce both technical and institutional innovations to increase profitability. IFDC will focus on building and strengthening of capacities of partner organizations such as farmer organizations, agro-input dealers, agribusinesses, and business service providers to ensure institutional sustainability at project exit in four years.
Based on the experience and technical achievements of CATALIST in Rwanda, Burundi and DRC, IFDC will make a significant contribution to a stronger and more productive agricultural sector in Uganda that can contribute significantly to increased rural incomes in Uganda as well as to reduced food scarcity in East Africa and the Great Lakes Region. Market development forms the foundation of CATALIST-Uganda, as it is the market “pull” on which cluster formation and IFDC’s Competitive Agricultural Systems and Enterprises (CASE) approach is based. CATALIST-Uganda will accelerate cluster development, taking advantage of the existing modest surplus production and nascent rural business linkages while simultaneously introducing commercial, environmentally sustainable farming systems that increase yields and decrease production costs per unit product. Market development and productivity enhancement form complementary halves of the virtuous cycle to smallholder agriculture commercialization. CATALIST-Uganda seeks to resolve a long-standing issue impeding agricultural intensification in Uganda—low fertilizer use—by working with agro-input suppliers, extension services, and finance institutions to enable farmers to access and profitably apply mineral nutrient inputs in a farming systems context.
To ensure long-term farmer access to markets that is responsive to dynamic conditions, CATALIST-Uganda will focus on formation of vibrant agribusiness clusters. These will be formed early on in the project, as soon as participating farmers produce tradable and commercial surpluses - at a cost of production and in sufficient quantities to be competitive. The project and its beneficiaries will be attentive to early business opportunities such as linkages with agro-inputs, bulking, storage and credit which form the basis of cluster development at farmer-group level. As these clusters develop in their transactions and in their business and market sophistication, separate commodity-specific apex clusters will be formed to take advantage of higher-level business opportunities, such as linkage with large/Dutch agro-processors. These apex clusters will access better prices in input and output markets as well as improve the policy and business environment.
Through CATALIST-Uganda, project-affiliated farmers will be able to increase investments in their own well-being as well as in their agricultural enterprises. The project’s focus on improved post-harvest handling, storage and market-linkage through its €2 million Matching Investment Fund and linkage to credit guarantees will increase the economic resilience of these farmers. Through value chain development, agribusinesses will be developed and strengthened, ensuring a strong pull for the marketable surpluses produced. Farmers, armed with the necessary links to input suppliers, agribusiness, business service providers (BSS) and market information, will take advantage of new and expanding markets. A lively and competitive agribusiness environment will be a strong motivator for farmers to produce a surplus, completing the virtuous cycle. Two additional project tools – an €800,000 Innovation Grant Fund and a €1million public works component - will support project interventions. The innovation fund is designed to spur new options for input and output market development, while public works will generate rural employment through the development of infrastructure that enhances productivity and market access, such as terracing, irrigation systems, warehouse/storage rehabilitation and the development of feeder roads.
While CATALIST-Uganda will focus on a limited number primary commodities (cassava, rice and Irish potatoes), it will employ a systems approach to anchor these commodities in integrated cropping systems in which the primary commodity is intercropped, rotated, or relayed into other crops and where possible, integrated with livestock. An option to develop another commodity chain is written into the proposal, to be selected during the inception phase. A systems approach assures that soil fertility and profitability are enhanced throughout a cropping sequence. The balanced mix of commodities and markets reduces the risks of reliance on a narrow commodity base.
The project will target those farmers that possess or have access to a certain amount of land and productive assets and therefore can accept a certain level of risk. The project will focus on farmers that have access to markets and market infrastructure such as roads. The project may also work with medium to large scale farmers in the project’s target areas to serve as nucleus farmers. While the most vulnerable farmers (those with little or no land holdings or assets) will not directly be targeted by the project’s agricultural activities, they will benefit from the project’s public works component, which can assist in asset accumulation. Particular focus will be paid on gender, as the project will promote equitable access to resources and economic returns, and shared household decision-making.
The project will begin with a 6-month inception phase, during which the project office, staff and systems are set up. During this time, market and value chain analyses will inform project implementation and the development of the first annual work plan in which selection of commodities, project beneficiaries, and partners and will be finalized. Baseline surveys, establishment of the Matching Investment and Innovation Grant Funds, and selection of the first public works will be initiated during the inception phase.
Risk and Risk Mitigation
IFDC considers the risk of political insecurity (particularly during elections) to be the largest risk factor. This risk can be within Uganda itself or in neighboring countries. Kenya is the major corridor for fuel and fertilizers, the supply of which, if disrupted, could negatively impact implementation. Unrest in South Sudan, DRC, Burundi, or Rwanda could badly affect regional markets. Additional risks come from plant disease pandemics and climatic uncertainty (both droughts and floods) and the resultant secondary social, economic and political effects. A further risk is political interference in agricultural markets through subsidies, price controls, free distribution of inputs, market unfriendly policies, rent-seeking and favoritism. While structural solutions to these problems are largely beyond the scope of the project and IFDC, CATALIST-Uganda will monitor the situation if these risks unfold, and has put in place mitigation measures in Section 3.5, “Risk Analysis”.
Apart from contextual risks, the largest implementation risk recognized by the project is the dynamic resulting from successful increases in agricultural productivity and income. With thousands of farmers producing marketable surpluses, a new social dynamic is introduced to societies. As seen in the CATALIST project in Rwanda, Burundi and DRC, this may result in land consolidation (successful farmers buying land from less successful farmers, many of whom become ‘laborers’), farmers using access to credit to buy and store other farmers’ harvest to further increase their profits, and farmers producing large surpluses that drive commodity prices down, to the detriment of inefficient producers. With the roll-out of CATALIST-Uganda, similar events are anticipated. Additional implementation risks and mitigation measures are also reviewed in section 3.7.