Before going on, make sure you’ve read Part One and Two of our blog series in Mozambique. This week, Chief of Party Fidel O’Donovan shares MERCADO’s Private Sector Engagement (PSE) approach, with a focus on the enabling environment and broad-based private sector development.
Fidel, Venture37 has been partnering with the private sector in Mozambique since 2009. What has the team learned over the years?
When we first started 12 years ago, we implemented the USDA Manica Smallholder Dairy Development Program (2009-2012) in Manica province that linked a set of rural farmers, three milk bulking cooperatives, and one dairy processor. At the time, the dairy industry was almost non-existent, so success of our first program was defined by establishing the basics. USDA’s second investment, the Mozambique Dairy Development Program (2012-2016), built on this model by expanding regionally and adding a matching grants program to leverage private sector investment. After working in the industry in Mozambique for the first few years, we understood the importance of strengthening the enabling environment. And how critical it was to have a diversity of PSE to promote a healthy, competitive market. We listened to what the market needed through conversations with stakeholders and through a series of special studies, leading to the facilitative approach on our current MERCADO project (2016-2021). We support the private sector to define investment opportunities for themselves, then access our services through capacity building and financing. It is a much more flexible model.
Tell us more about the focus on the enabling environment.
Our first two projects didn’t have policy-related activities, but they contributed to a future interconnected enabling environment for dairy in two ways. They built industry evidence for future policy. And they built relationships with credible, key actors – and got them all in the same conversation. When MERCADO started in 2016, Venture37 had already established trust with policymakers by showing that production, processing and retailing of dairy products from locally produced fresh milk is possible. Through established relationships and our light touch approach, we convened a broad range of dairy stakeholders to present evidence to the Mozambican government that informed private sector-oriented policies and strengthened market-wide growth.
A great example of this is Venture37’s support to the government in developing the National Dairy Strategy, which defined national goals for dairy into future agricultural strategies. MERCADO’s work with smallholders, the private sector and dairy focal points (government appointed dairy representatives at national, provincial and district levels) informed legislation that addressed broad-ranging challenges to strengthen the system. This step represented the strategic importance of the sector to the Government, and its support of future investments.
Due to the fact that we had built mutual trust and communication between the public and private sector, the Government of Mozambique initiated and lead dairy-specific legislation, tapping us for trusted insights and expertise while independently engaging the private sector for feedback. I saw this as the tipping point of change from our work. Market actors see the long-term self-sustaining view and take the steps themselves.
What lessons can you share for the broader agricultural development industry in Mozambique?
The dairy sector is broad – it intersects with other value chains and sectors like commercial crops and animal feed crops. When looking to build any of these sectors, we need to engage all levels of the system and find opportunities to scale them together. A lot of development projects are either smallholder-focused or commercial. If you are trying to bring up a community, market, or country, we can’t just focus on one piece of the system. And as mentioned earlier, foundational to the systemic strength is creating an enabling environment that allows these businesses and enterprises to thrive.
Another non-industry specific lesson is to build a PSE strategy that is inclusive of women and youth. Engage women early. Here’s an example: MERCADO offered grants to stimulate investment and support a strong broad-based private sector market. We built awareness with women farmers and business owners early to engage all types of stakeholders to apply for grants and work with us. You have to build this approach into the activity design and be clear that this is a priority. It’s not only the right thing to do to build an inclusive culture, but also the smart thing to do to strengthen the broader private sector market.
We also set up internship programs for youth engagement across the dairy value chain. This is something every growing sector should consider – not only to provide employment opportunities, but also to adapt labor skills in response to the market and to strengthen the future of an emerging industry.
As an affiliate of a $14B farmer-owned agribusiness in the United States, Venture37 knows that policy and an enabling environment are critical to ensuring broad-based private sector development and market growth. How have we brought those learnings to our work in Mozambique?
Land O’Lakes, Inc. is a farmer-owned cooperative that advocates on behalf of farmers and retail owners by actively engaging on issues of importance to the dairy industry and sharing its story with audiences that may not know farming well. This defines how Venture37 works in Mozambique in a lot of ways.
I think back to when our Executive Director John Ellenberger first visited the MERCADO project. In his previous role with Land O’Lakes, Inc., he led marketing for the Dairy Foods business. He often spoke with Land O’Lakes dairy farmer owners and processors. When John came to Mozambique, he visited dairy producers and processors, too. After his visit, he talked about the parallels of these experiences. Milk prices, quality control, product innovation, the overall health of rural communities – these are all topics that came up in the U.S. and in Mozambique. Even though our challenges vary, at the core, we are all trying to achieve the same goal.