Component 1: Agricultural market development
VCDP’s objective under this component is to enhance the profitability of smallholder farmers and small/medium-scale agro-processors by improving their access to markets and their capacity to add value to raw materials. This is achieved by (a) facilitating the linkages between FOs and value chain operators and (b) easing critical infrastructure constraints to the production, processing, storage, handling and marketing of farm produce and their processed products. The component is divided into two sub-components, i.e. (i) Support to value addition and market linkages, and (ii) Support to value chain infrastructure. Activities follow a beneficiary demand-led approach. Support is provided through FOs, value chain organizations, private sector/Business Membership Organizations (BMOs) and selected MSMEs.
Sub-component 1.1: Support to value addition and market linkages
Expected outcome: Increased value addition and access to markets realized by beneficiary small and medium-sized producers and processors.
VCDP interventions consist of an integrated set of activities at macro, meso and micro levels. At the macro level, VCDP supports (a) the improvement of the policy and regulatory framework for value chain development, (b) the establishment of quality control, grading and standardization systems, and (c) the expansion of Agricultural Market Information Systems (AMIS). At the meso level, the programme (a) fosters linkages between smallholder farmers and agro-processors and market operators, (b) strengthens the business management capacity of value chain organizations, and (c) links agro-processors and market operators to financial service providers and/or existing agricultural and rural finance projects. At the micro level, the programme promotes the adoption of improved processing, storage, packaging and handling technologies.
Update: VCDP’s approach and activities are updated to:
- Address the issue of low performance in the cassava value chain. VCDP will undertake an updated market analysis of the cassava sub-sector to support FMARD in the identification of structural and policy issues constraining marketing of cassava products and import substitution. VCDP will conduct location-specific studies at state/LGA levels to establish the demand and structure of production, processing and marketing for cassava products (garri, flour, fufu, starch, ethanol, yellow cassava, etc.). The studies will provide evidence (a) on the sub-products with the highest market potential, (b) to improve linkages of smallholders with the market under a model similar to rice, (c) to define the business model to support cassava processing at beneficiary levels; and (d) to identify the enterprise nodes where women have a comparative advantage. The study will also inform modalities to support cassava processing centers as business units that drive cassava production and processing in targeted communities (sub-component 1.2). It will also highlight specific strategies and activities related to issues of climate change, gender, nutrition and financial inclusion that could be implemented.
- Dedicate technical and financial resources for the institutionalization of CAFs across states/LGAs through (a) a categorisation of CAFs (strong, moderate or weak); (b) capacity building plans according to their categorization; and (c) the establishment of a CAF in new states/LGAs. Capacity building plans will include (i) trainings and targets to improve women’s participation at all levels of the value chains; (ii) support (including business plan development) to selected off-takers to expand services to smallholder farmers, including young men and women, on a cost sharing basis. An estimated total of 27 off-takers will be targeted mainly for the cassava value chain (three per state in average).
- Upgrade to a market information system 2.0. To date, over 20,000 stakeholders are using the VCDP-supported market information platform (AMIS). The aim is to increase this number to 81,000 users (60 per cent of targeted beneficiaries) by 2024. The objective is to upgrade to a web-based platform to increase outreach and facilitate tracking of transactions between users. In each state, the programme will support the leadership of the CAF with capacity training to take ownership of the platform for sustainability.
- Improve linkage with financial institutions: Access to loans to finance business needs of the farmers, processors and market operators remains a challenge due to the lack of tailored financial products. VCDP activities will now include support to selected financial institutions to develop relevant strategies, products and delivery models for the different categories of VCDP beneficiaries with attention to the specific needs of women and youth. Implementation modalities will include:
(a) A partnership with GIZ funded AgFin Project: VCDP is in the process of signing an MoU with AgFin, which combines training of potential bank clients to make them “bankable” with technical assistance to commercial banks to offer services adapted to smallholder farmers and possibly agri SMEs. Partnerships will include commercial smallholder farmers linked to reliable off-takers as a way to mitigate the risk of lending for the banks and agri SMEs supported by VCDP.
(b) For beneficiaries not covered under the MoU with AgFin, VCDP will enter directly into partnerships with selected financial institutions regulated by the CBN for the provision of technical assistance. The CAF will be involved in the competitive process of identification and selection of the financial institutions, and a budget will be allocated for the TA under a performance-based MoU (main indicator being actual delivery of services to the programme beneficiaries). It is expected that financial institutions will be linked with relevant CBN and NIRSAL schemes.
- Enhance women’s business management skills: Building on VCDP’s Training of Trainers (ToT) approach and coaching/mentoring,1 the programme will train female entrepreneurs to enhance their performance in record keeping and business management to own and operate their business sustainably. Service providers will strive to reach 50 per cent participation of women field staff to meet the need of women beneficiaries. Training schedules will be organized in a manner that is convenient for women in terms of frequency, timing and duration, and venue. The programme will target an additional 4,000 women in processing facilities to bring the total target to at least 9,000.
Regarding mainstreaming activities, the programme will, among other things, (i) support FMARD for dialogue on measures to address gender gaps in agriculture; (ii) be an active participant in various fora on nutrition and use the opportunity for advocacy on increased investment in nutrition, (iii) conduct an acceptability study on pro vitamin A cassava to enable development of appropriate support not only on consumption but also to create markets for farmers, (iii) promote green energy and clean environment by carrying out a profitability analysis for briquettes and cassava peel conversion to support interested entrepreneurs; (iv) train processors on environmental sustainability and climate change; (v) improve awareness on health, environment and safety standards and food production hygiene; (vi) establish drying slabs for cassava and rice; (vii) support the establishment of fuelwood plantations; (viii) conduct periodic environmental audits of processing facilities; and (ix) support cooking demonstrations at processing sites for improved nutrition. For enhanced sustainability, VCDP will continue to work through existing service providers, public/private organizations and/or NGOs.
Sub-component 1.2- Support to climate resilient value chain infrastructure
Expected outcome: Demand-driven infrastructure for improved access to markets realized and sustainably managed by the beneficiary communities.
VCDP supports the improvement of (a) feeder roads connecting production areas to market and processing outlets by rehabilitating the existing feeder roads and constructing critical new ones, (b) market, processing and storage facilities through the construction/ rehabilitation of agro-processing and marketing infrastructure (stalls, stores, structures for agro-processing units and related ancillary works), and (c) water supply through provision of safe, adequate and sustainable water supply to these processing and market facilities by constructing new schemes and rehabilitating existing ones.
Improvement of feeder roads: The programme has supported the development of 246 km of roads. An additional 174 km of roads with less than 10km per portion are planned to cover new states and LGAs, in particular to link new land developments planned for women. A total of 520 km will thus be completed by 2024. VCDP will align with the FGN standard for establishment or rehabilitation of feeder roads; as such roads must be climate resilient.
Improvement of market, processing and storage facilities
Processing facilities: VCDP will no longer support small-scale home-based processors or isolated (stand-alone) processors because the approach has not worked. To build on best practices, VCDP will support the establishment of “semi-industrial” processing centers, both for rice and cassava, that meet market requirements including hygiene, quality standards and environmental management. Based on the outcome of the cassava value chain analysis, more focus will be on cassava processing to strategically increase women’s participation. In the context of the poor performance of collectively managed enterprises, VCDP will support a private-based management model. Depending on the locations – culture/social setting and business environment (to be determined during the study) – two models will apply; i.e.
- Model 1: A complete line of processing activities, owned/managed by one entrepreneur. For instance, in the case of garri business, this means from peeling to garri frying; or
- Model 2: Different business segments in the processing chain owned or managed by separate individual entrepreneurs.
Climate resilient market and storage facilities: Presently 39 markets (327 stalls), and 276 storage facilities have been provided. VCDP will support the construction/rehabilitation of 120 additional market centres (AF 2018-60 and AF 2019-60). Each market centre will contain 5 stalls and 10 open commodity shade storage facilities, making it a total of 600 stalls (and 1,200 commodity storage facilities for AF 2019). This is another strategic area that will bring more women into the programme, as about 60 per cent of the stores will be allocated to women using selection criteria to be established by the programme/women groups. Through matching grants, VCDP will promote the use of durable engine-run tricycles equipped with trailers to move produce from the farms to the market.
Water supply: 63 drinking water systems have been constructed or rehabilitated, all solar-powered. VCDP will maintain the model by providing drinking water (borehole) in the new processing centres and market commodity centres to bring it to a total of 436 boreholes/drinking water points (AF1- 158 and AF2 – 215).
VCDP will retain its implementation modalities. However, it will clearly define the maintenance mechanism for rural roads and community infrastructure and work with local government authorities to facilitate the establishment of an agricultural road maintenance team.