Blog | December 09, 2020
Private Sector Engagement in Mozambique – RAMA-BC’s View of Input Supply Networks and Market System Resilience
Part Two of a Three-part Blog Series from Land O’Lakes Venture37
In Part One of our blog series in Mozambique, we discussed an overview of two successful private sector engagement (PSE) models in agriculture. After reading Part Two here, be sure to go on to Part Three. 

This week, Chief of Party Nic Dexter shares a deep dive into RAMA-BC’s focus on formal and informal input supply networks, insights on how to build a more resilient agricultural market system, and a vision for the future of crop development in Mozambique.

What context do you want to set for Part Two?

Nic: Two things. Climate change is already happening. Mozambique sees shorter and more erratic rainy seasons. Rains that used to come by mid-November now start 3-4 weeks later. This is backed up by data – for example, in Mozambique the length of the growing period has experienced a yearly reduction 1.5-2.0 days a year (Spearman 1981-2011).

The other concept to understand is the difference between the informal and formal markets. Formal markets are concentrated in towns and supply hybrid maize varieties – the staple in Mozambique. They also supply a narrow range of other seeds like vegetables and some beans. Informal, local markets and community trading mechanisms are more accessible, with a wider variety of crops available including many legumes, oilseeds and root crops like cassava and sweet potato. These crops are often not traded in the formal market but are important to farmers both in their diet and cropping system. However, these informally traded crop varieties are often unimproved with low yield potential and susceptible to disease (e.g. cassava mosaic disease). By increasing access to improved varieties in the informal market and market penetration for the formal market, a more balanced and complete seed market would result – one that is more responsive to the needs of farmers.

We need to focus on accessible adaptation of agriculture. Cassava, for example, is affordable, more resilient to climate change, and more nutritious than maize. The problem is improved varieties of more resilient crops like cassava are not yet accessible to remote farmers. We need to build awareness of these concepts and access to more productive varieties.

How does RAMA-BC define input supply networks and what does support look like?

Nic: We ask the question: How do farmers get their seeds? On the formal network side, which only supplies five percent of farmers, we primarily work with five hybrid seed companies who supply agro-dealers in towns or villages. We also work with the agro-dealers – 26 of them across nine Mozambique districts. RAMA-BC supports these stakeholders by co-facilitating farmer field days where seed companies and agro-dealers demonstrate RAMA-BC climate smart agriculture (CSA) and effectiveness of improved seed varieties.
Recently, we partnered with local input supply company to pilot a promotional seed kit that bundled hybrid maize seed with complementary legume cover crop seeds and instructions. The hope is that after a couple of seasons, farmers will see the yield benefits and will adopt legume cover crops in the future, creating a win-win for both the farmer and the seed supplier. On the informal side, most growers (95%) get their seed in three main ways. They draw on reserves (reusing low quality open pollinated variety seed from the previous harvest), buy it from neighbors or friends, or buy it through local markets and traders. As mentioned earlier, we want the informal network to be more efficient and have better access to improved seed varieties. We work through 108 Model Family Farmers – natural leaders in rural areas who manage community demonstration plots on their own land. They test seed varieties and CSA practices and neighbors can see the impact from trusted community members. We also work through 40 informal village savings groups to distribute CSA seed stock across informal networks.

For both formal and informal networks, local radio programs reinforce CSA messaging. Radio, farmer field days, demonstration sites, seed kits – it’s all choreographed like a show, we have to work with the private sector to get all the pieces moving together at the same time to replicate behavior change across the entire agricultural market system.

And on the formal side, how is RAMA-BC helping to build trust between seed companies and agro-dealers?
Agro-dealers will get credit from seed companies fully intending to pay them back, but often overextend their finances. If seed companies don’t trust agro-dealers, they are hesitant to offer seed credit, which limits the agro-dealers ability to meet customer demand during peak demand at the onset of the rainy season. This is one of the key reasons why formal seed market penetration is only 5%. We conduct individualized coaching sessions with each of the agro-dealers to help them better manage stocks and cash flow. It’s about better business planning and building networks of trust.

Another ongoing challenge is competing against large-scale seed donation relief initiatives that distort the local market, especially in the wake of a cyclone or drought. These one-off bulk transactions are efficient for seed companies, but it’s boom or bust – one-year NGOs or the government will buy and the next they won’t. It is not sustainable and cripples long-term agro-dealer customer networks that are tailored to smallholder farmers. To ensure these networks (and thus the food system) become resilient, development organizations instead need to foster trust and strengthen the connection between seed suppliers and agro-dealers.

How does this concept play out in disaster response and recovery?

Nic: After Cyclone Idai, NGOs bought up 500 tons of seed and distributed them for free. Agro-dealers customer demand collapsed. We need to build agro-dealer networks in a way that enables them to step in when disaster comes – while including smaller businesses like savings groups, traders, and small storage facilities. This is the private sector solution that results in resilient seed systems.
I also want to reinforce that when we talk about disasters in Mozambique, it is slow onset drought that is the most common shock. People and businesses are more resilient to drought when they have portfolio balance – seed varieties that are close-at-hand, adaptable to climate shocks and good for household dietary diversity. For example, hybrid maize seeds that need to be purchased every year have a legitimate place in the formal sector. At the same time, improved varieties of cassava and sweet potato plants are faithfully replicated through cuttings, year-after-year. Legumes, which are self-pollinating also consistently maintain their genetic profile and can be saved between seasons. This class of seeds fits well within the informal seed sector. Farmers that harvest diverse crops grown from improved varieties sourced from both formal and informal markets will have more nutrition offerings and more stable income throughout the year.

Venture37 implemented the disaster and recovery project called MIRAR in Mozambique last year following Cyclone Idai. How did you take the above insights into account?

Nic: Cyclone Idai brought on two different types of damage. Wind and flooding. Wind blew maize flat, but people were still able to recover some of it. Flooding along river basins, rotted or buried everything under mud. The government gave us a list of people with cyclone damage, we sought permission to survey and register only flooded areas, targeting only households who had lost everything. We also included legume intercrop seed in the maize seed packs along with RAMA-BC’s messaging on maize/intercrop spacing. As I said earlier, passing out free seeds is not ideal, but faced with total loss we intentionally worked with the private sector while achieving food security objectives until a more resilient agro-dealer-based system can be built.

Beyond building a resilient system, what do you see as key opportunities in the future for PSE engagement in the crops space in Mozambique?

Nic: Historically we have looked at forage and food crops as separate markets. I see a future where a PSE can bring them together – an integrated ‘whole farm’ approach for the benefit of enterprises, farmers, and the animals and people they feed. It’s about stepping back to look at the whole farming system and how raising crops and livestock can be mutually reinforcing. For example, livestock can feed off human crop residues while providing manure for soil fertility.
In the same vein, we need to raise awareness of the benefits of raising livestock and the nutritional benefits of animal source foods. For this to happen, forage crops are important. Again, we would also need to focus on the informal private sector – getting rural areas access to animal vaccines, like Newcastle disease in poultry, for example.
Using lessons from Venture37’s MERCADO project, RAMA-BC already has started a forage crops pilot activity. Forage crops like velvet bean and lablab work as well in the tropics as alfalfa does in temperate climes. For a lot of the year the availability of forage inhibits livestock production. These legumes are just as productive and nutritious and are excellent at improving soil fertility, as they fix nitrogen, add organic matter, and cover the soil restoring degraded land. We have engaged a seed company and a set of small livestock producers (small ruminants, pigs and chickens) to produce velvet bean and lablab forage. A lot of this is still experimental and would need to start with additional pilot testing to understand what works.

Preview of Part Three

In the Third and Final Part of our Blog series, MERCADO COP Fidel O’Donovan takes us through a deep dive into MERCADO’s PSE approach, with a focus on the enabling environment and broad-based private sector development. Fidel offers insights of Venture37’s dairy legacy in Mozambique, synergies he sees with Venture37 corporate affiliate Land O’Lakes, Inc., and lessons for future implementation in Mozambique beyond dairy.
By Ashley Peterson 12/09/2020 #Blog