How the World Food Programme has cut its delivery times by more than 60 percent
A World Food Programme (WFP) initiative involving the advance positioning of food is cutting delivery times dramatically. The Global Commodity Management Facility allows WFP to deliver 1.4 million metric tons of food in an average of 45 days, a 63 percent reduction compared to the previous year.
With Nigeria, Somalia and Yemen facing the threat of famine, and famine already declared in parts of South Sudan, the initiative is pivotal in reaching crisis communities as soon as possible. Here, Rebecca Ssamba and Mehari Yoseph, Budget and Programming Officers in Ethiopia, explain more about the mechanism and the effect it is having in the country where they work.
"Our Country Director in Ethiopia, John Aylieff, is in little doubt about the impact of the Global Commodity Management Facility (GCMF) in the country.
‘This is one of the most remarkable changes we have had in 50 years of WFP's history,' he says. This literally saves lives.'
The Country Director is well placed to make this assertion. GCMF was a life-saver when Ethiopia was experiencing one of the worst droughts of the past few years, between the end of 2015 and the beginning of 2016.
Needs more than tripled during this period and, if we had to wait for conventional purchases to be completed, we would never have been able to reach those in need as fast as we did. Food was already available in the country by the time a contribution was confirmed.
In fact, Ethiopia is by far the largest user of the facility, with all cash purchases in 2016 procured through GCMF — amounting to more than 400,000 metric tons of food.
The facility reduced lead-time for distributions in Ethiopia by an average 85 days, an improvement of up to 90 percent compared to conventional procurement processes.
The Global Commodity Management Facility was created in 2011 and has accounted for a growing share of the total amount of food distributed by WFP. In 2016, the food delivered accounted for 36 percent of the total, and for 52 percent of all cash-funded purchases.
This is how the facility works: based on predictions of demand in a pool of countries, WFP releases funding to buy food in advance of projects' requests. This means that goods will likely be already at the delivery port, or at an advanced stage in the supply chain process, when country offices need them.
As of today, many of the largest WFP operations, including Level 3 emergencies in South Sudan, Southern Africa and Yemen, rely heavily on the facility, with 85 to 100 percent of all the food distributed procured through GCMF. This could prove vital in the coming weeks after famine was declared in some parts of South Sudan, and threatens to break out in Nigeria, Somalia and Yemen.
Reductions in lead-time are not the only benefit of the model: preliminary analysis has shown that the quantity bought through the facility is increasing. Furthermore, the average cost of buying commodities has decreased over the years, meaning increased value for money is an additional benefit of GCMF.
We were able to further reduce lead-times in Ethiopia by combining GCMF with Macro Advance Financing, a system which provides budget authority for country offices early in the process. We covered six months of requirements, helping us to avoid annual port congestion in Djibouti.
To take advantage of different food seasons for locally procured goods, we also need to look into options for longer-term storage. This remains a challenge for us.
While the initial aim in Ethiopia was for GCMF to only provide internationally procured food, in the past few years we have been able to secure a steady supply through local markets, especially maize and beans. Furthermore, more than 40 percent of GCMF food is sourced locally or regionally, supporting local producers, including smallholder farmers.
WFP's Purchase for Progress programme was also able to arrange forward delivery contracts with local cooperatives, thanks to GCMF pre-financing. Contracts are signed during planting season, seven to eight months before delivery, allowing farmers to better plan their production and to seek the agricultural inputs required.
Farmers' cooperatives are also assisted in accessing financing, with forward contracts accepted as collateral by the banks. This allows cooperatives to gather the right food at the right time from farmers. As a result, Ethiopia has bought the most food from smallholder farmers, out of all country offices.
A growing number of operations in Ethiopia are using GCMF to source most of their operational requirements, meaning WFP can contribute even more strongly towards the achievement of Zero Hunger, both here and in the other countries where we work."
The World Food Programme would like to thank the following donors for their support (in alphabetical order): Canada, the Department for International Development (DFID), the European Commission's Humanitarian Aid and Civil Protection department (ECHO), Germany, Sweden and Switzerland.