Changing the way it does business: WFP takes stock with partners after two years of P4P

After two years it was time to take stock. So WFP joined its Purchase for Progress (P4P) stakeholders and partners in Maputo, Mozambique to look at the impressive progress to date and take some lessons for the future. Since the September 2008 launch of P4P, an additional US$40 million is now going more directly into the hands of small holder farmers and P4P has been changing the way WFP does business.    

Seventy WFP staff and seventy partners gathered in Maputo, Mozambique for the second global Purchase for Progress (P4P) Annual Review 29th November to 2nd December to collectively review progress and discuss key lessons during P4P implementation in 2010.  

Howard J. Buffett

"P4P is a unique opportunity... you can take small farmers, pull them out of poverty and walk away, and they are part of the economy."

Watch interview with Howard J. Buffett on P4P

Since the launch of the pilot initiative in September 2008, over 50,000 farmers, warehouse operators and small and medium traders have received training from WFP and partners in improved agricultural production, post-harvest handling, group marketing, agricultural finance and contracting. An enormous array of supply-side actors is now working hand in hand with WFP and farmers to support P4P at the field level. As a result, over 125,000 metric tons (mt) of commodities have been contracted by WFP in 20 P4P countries to supply WFP’s regular operations which should translate into US$ 40 million more directly into the pockets of small holder farmers than before.   

Strong support was expressed by all for the direction WFP has taken in promoting local purchase, in aligning the programme to national Government development plans, in creating concrete opportunities for women farmers to access economic benefits and in experimenting with new ways of doing business. There was overwhelming consensus that P4P is already acting as a catalyst and a platform to bring partners whose goal it is to fight hunger and address the needs of smallholder farmers around the table. As one donor said, “P4P is a magnet to bring other investments and partners together”. 

Significant progress was noted as compared to one year ago. In particular, despite continuing challenges, there were testimonials that smallholder farmers are responding well to the requirement to meet quality standards and that capacity building efforts and investments in storage and warehousing are already showing signs of a reduction in post harvest losses and an increase in sales, not just to WFP but to other buyers.  Some farmer representatives also reported that their negotiating power had increased and that they were more aware of the options available when it came to financial services.

A highlight of the review was the “marketplace” where participants broke into groups to have more in depth discussions about the experiences, challenges and opportunities relating to four recurrent themes a) capacity development: targeting and progression strategies b) food safety and quality c) financing solutions for staple crops and d) accessing markets beyond WFP.

Summary highlights from these groups are in the attached powerpoint.

Panel discussions with farmer representatives, government officials and donors brought out the high expectations and varying perspectives of some of the key partners. Expectations remain very high and calls for scaling up activities were heard from participants, but only after due reflection and learning of what works and what does not work. The importance of structuring and sharing the learning with all stakeholders was underlined throughout the week.

Organisational change and internal WFP policy and procedural issues were discussed. Commitments were made by senior managers to review the WFP business model to ensure that the right tools to purchase from farmers groups are in place and that the timeframe from procurement to payment is shortened. Having timely access to advance financing to enable signature of forward contracts was also highlighted as critical. 

The five main areas agreed for more attention by WFP in 2011 were:

Engagement with the private sector: how can WFP’s local procurement more effectively foster (and benefit from) the development of more productive relationships between smallholder organisations and small, medium and large traders;

Monitoring of indicators to track the development and progress of a farmers’organisation towards access to agricultural markets and their ability to become competitive players in the market place;

Extension of the capacity development efforts to include additional stakeholders in the value chain (i.e. traders and government institutions) with the aim of identifying priority intervention or investment points in the chain to facilitate direct WFP and similar institutional procurement;

Clarification of modalities through which P4P or similar institutional procurement might stimulate the increased provision of private financial services to smallholder, staple commodity suppliers; and

Exploration of improved market information systems using technology. 

A full report from the Annual Review will be shared in January 2011.

WFP participants included Country Directors, P4P Country Coordinators and regional bureau and headquarters colleagues (representing procurement, legal, programme, finance, logistics, policy and the P4P Coordination Unit). A wide representation of stakeholders also attended for two out of the fours days including government counterparts from El Salvador and Guatemala, Southern Sudan, Tanzania and Zambia; farmer representatives from Liberia, Mozambique, Sierra Leone; private sector representatives from Kenya, Ghana and Malawi; UN agencies: FAO, IFAD, IFC, UNCDF and UNIFEM;  NGOs: Afrique Verte, CARE, CRS, IFDC, MDG Centre, PCD, Save the Children, WVI; Financial institutions: Equity Bank Kenya, Federations des Caisses Populaires du Burkina, Opportunity Bank Malawi and Standard Bank; representatives from academia, Foundation and development partners, including AFD, BMGF, Canada, EC, HGBF; and other key regional partners including ACTESA and AGRA.