Attachment 2 - FTF Zimbabwe Agriculture Private Sector Concept Note.pdf

06/06/2023 1

Date: June 6, 2023

Feed the Future Zimbabwe Agriculture Private Sector Concept Note

Country Context

Courtesy: FTF Zimbabwe Fostering Agribusiness for Resilient Markets Activity

• Over 67 percent of the population reside in rural areas

• The provinces of Manicaland, Masvingo and Matabeleland make up

USAID/Zimbabwe’s Resilience Focus Zone

• Natural Regions IV and V of this Zone are characterized by frequent droughts, erratic rainfalls and prolonged dry spells

• These have impacted the agricultural production and productivity

• Consequently, majority of the men have migrated in search of more lucrative jobs in neighbouring countries

• Therefore, more than 70 percent of the smallholder farmers in these regions are women

USAID/Zimbabwe Resilience Focus Zone

• Zimbabwe lost its status as the Bread Basket for Southern Africa after the Land Reform program

• The main rainfed agricultural production in Natural Regions IV and V of the Resilience Focus Zones are:

– Drought-tolerant grains e.g. sorghum, finger millet, and pearl millet

– Legumes e.g. groundnuts, cowpeas and round nuts

– Horticultural crops under irrigation schemes

Agriculture Production and Productivity

• Only an average of 35 percent of the population have access to irrigated agriculture

• Due to poor varieties of crops and inadequate rainfall, yield per hectare is less than a third of the standard yield

• Inadequate processing and storage facilities results in significant increase in food losses and wastages

Agriculture Production and Productivity

• Inadequate and expensive agricultural inputs

• Outdated agricultural production practices due to poor agricultural practices and extension services

• Inadequate irrigation and mechanization services

• Poor processing and storage facilities

• Limited access to market information and marketing facilities

• Limited access to finance

• Pest and disease attacks such as Fall Armyworm of grains and Tuta absoluta of tomatoes

Constraints of Agriculture Production and Productivity

Livestock Population - 2020 Province Cattle Sheep Goats Pigs

2018/19 2019/20 2018/19 2019/20 2018/19 2019/20 2018/19 2019/20

Manicaland 591,084 607,990 75,693 84,963 637,123 608,739 40,579 51,760

Masvingo 1,277,577 1,028,976 95,460 109,675 625,541 659,430 66,464 58,417

Matabeleland North

583,871 670,363 39,835 36,723 415,900 405,569 23,560 30,469

Government of Zimbabwe Livestock Growth Plan, August 2020

• Livestock production is most suitable to Natural Regions III - V

• About 70 percent of communal farming households are in these areas

• Approximately 86 percent of these households derive their livelihoods from livestock and livestock products

• About 90 percent of the national cattle herd, 99 percent of the national goat flock, and 80 percent of sheep are owned by smallholder farmers

• On average, each household owns 2-5 cattle

• The livestock sub-sector provides animal draught power, 90 percent of traction, in the smallholder-farming sector and is thus a key input into crop production

Livestock Production and Productivity

• Animal breeds:

– Poor natural breeding and

– Lack of awareness and costs of artificial insemination

• Nutrition: Inadequate pasture, hay baling, poor rangeland management, and feed formulation

• Health: Prevalence of Foot & Mouth Disease, Rabies, Newcastle, African Swine Fever, Anthrax, tick-borne diseases and trypanosomiasis

• Poor livestock marketing

• Inadequate inspections and upgrading of abattoirs

• Inadequate livestock identification and traceability

• Low livestock and veterinary extension capacitation

Constraints of Livestock Production and Productivity

Prior Awards to Address the Development problem

Courtesy: USDA/Bangladesh Livestock Production Activity

• Implemented by Fintrac Inc.

• Four-and-a-half-year activity (October 2010 to February 2015)

• Total estimated cost was $36 million

• Reached 170,000 farmers.

Lessons Learned

• Sustainability beyond Life of Activity not verifiable

• Public Private Partnerships not developed

• Institutional Capacity building of private sector partners to scale up their businesses not provided

• Donor dependency on grants by private sector partners

The Zimbabwe Agricultural Incomes and Employment Development (Zim-AIED) Activity

• Implemented by Land O’ Lakes

• Four-year activity (January 18, 2010 – November 30, 2013)

• Total estimated cost of $5.8 million

• Reached 1,258 farmers

Lessons Learned

• Sustainability beyond Life of Activity not verifiable

• Public Private Partnerships not developed

• Institutional Capacity building of private sector partners to scale up their businesses not provided

• Donor dependency on grants by private sector partners

Rebuilding Livelihoods and Resilience in Zimbabwe Activity

• Implemented by Fintrac

• Five-year activity ( June 2015 – October 2020)

• Total estimated cost of $12 million

• Reached 13,449 farmers

Lessons Learned

• Sustainability beyond Life of Activity not verifiable

• Public Private Partnerships not developed

• Institutional Capacity building of private sector partners to scale up their businesses not provided

• Donor dependency on grants by private sector partners

FTF Zimbabwe Livestock Development Activity

• Implemented by LEAD, a local Zimbabwean NGO

• Five-year activity ( June 2015 – December 2020)

• Total estimated cost was $8 million

• Reached 58,600 farmers

Lessons Learned

• Sustainability beyond Life of Activity not verifiable

• Public Private Partnerships not developed

• Institutional Capacity building of private sector partners to scale up their businesses not provided

• Donor dependency on grants by private sector partners

FTF Zimbabwe Crop Development Activity

Problem Statement and Purpose

To ensure the sustainability of USG funding beyond the cessation of activities, USAID/Zimbabwe must develop and strengthen public private partnerships between USAID, private sector actors, and smallholder farmers such that the private sector partners acquire the skills, knowledge and experience to continue to provide training and technical assistance to the farmers beyond the end of USAID interventions. This will enable the farmers to acquire the knowledge and skills to increase the productivity of their farms

This approach will require buy-in from the private sector partners through interventions that will guarantee their profits from increased sales of quality climate smart technologies to the smallholder farmers, which will enable the farmers to increase the quality and quantity of their agricultural produce and/or services. 16

Problem Statement

To strengthen the ability of the private sector partners to deploy and demonstrate climate smart agricultural technologies and practices in rural areas, as well as acquire the knowledge, skills and experience to train smallholder farmers so that they, the smallholder farmers, know more about, and adopt these technologies and practices to improve the production and productivity of their farms.

Concept Goal

IF institutional capacity building is provided to private sector entities so that they are able to scale the deployment of their climate smart agricultural technologies and practices to remote areas of Zimbabwe, IF they are provided with the skills, knowledge and expertise to train smallholder farmers and provide them with relevant technical assistance and IF as a result, the farmers are able to adopt and utilize the technologies and practices to increase the production and productivity of their farms, THEN the increase in sales of technologies will motivate private sector partners to continue to provide training and technical support to smallholder farmers beyond the end of USAID interventions, which will enable the farmers to continue to increase the production and productivity of their farms.

Development Hypothesis

Concept Objectives

Courtesy: FTF Zimbabwe Mechanization & Extension Activity

Results Framework

Increased number of smallholder farmers made aware of climate smart agricultural technologies and practices

Strengthen the capacity of private sector partners to demonstrate climate smart agricultural technologies and practices

Increased availability of climate smart agricultural technologies in rural areas

Strengthen the capacity of private sector partners to train and provide technical assistance to farmers, and financial institutions

Increased number of smallholder farmers adopt and utilize climate smart agricultural technologies and practices

Increased sales of climate smart agricultural technologies motivate the private sector partners to continue to provide training and technical assistance to smallholder farmers beyond USAID Interventions

Strengthen the institutional capacity of private sector partners to deploy climate smart agricultural technologies and practices to rural areas

• Objective 1: Strengthen the institutional capacity of private sector partners to deploy climate smart agricultural technologies and practices to rural areas

• Objective 2: Strengthen the capacity of private sector partners to demonstrate climate smart agricultural technologies and practices to smallholder farmers

• Objective 3: Strengthen the capacity of private sector partners to train and provide technical assistance to smallholder farmers so that they, the smallholder farmers, are able to increase their adoption and utilization of climate smart agricultural technologies and practices

Concept Objectives

• Interventions will be finalized through direct consultations between the private sector partners and the prospective implementing partners

• Consultations will be:

– On individual basis to protect the proprietary information of each partner as well as to understand their unique needs, and

– Collectively to determine the common needs of all the partners

• All the partners must approve the concept notes before prospective implementing partners can submit them to USAID for review

• Access to finance for the deployment, demonstration and adoption of climate smart agricultural technologies and practices will be through the Access to Finance interventions

Evidence-based Interventions

Facilitate the private sector partners with technical assistance and linkages to financial institutions on the

• Establishment of

– Cattle feedlots

– Cattle and goat multiplication centers

– Training center facilities on improved livestock technologies

– Open market system for cattle and goat purchasing to reduce side marketing and the involvement of middlemen

• Improved goat and cattle breeding stock

• Production of low-cost livestock feeds, including the establishment of feeder finance schemes

• Scalability of the artificial insemination techniques; and

• Animal health & diseases 23

Illustrative Evidence-based Interventions (Livestock)

• Demonstration of hybrid technology

• Establishment of greenhouse/float tray technology for nurseries (seedlings)

• Promotion of crop protection and spray technology

• Seed development, inspection, and distribution

• Awareness campaign on horticultural and high yielding drought resistant crop production technologies

• Organization of seed fairs

• Training on improved agronomic practices and seed certification schemes;

and

• Postharvest handling, storage, transportation and processing

Illustrative Evidence-based Interventions (Crops)

• Development of a digital terminal market

• Rehabilitation of water sources

• Provision of mini grids solar equipment, solar pumps, solar dryers, and other solar appliances at a fee; and

• Provision of after sales services

• Pay-as-you-go solar-powered irrigation systems

Illustrative Evidence-based Interventions (Irrigation) financial institutions on

• Warehousing

• Solar-powered processing equipment such as threshers, dryers, shellers, grinders, and peanut butter machines

• Packaging

• Cold chains

• Storage facilities

• Processing of agricultural produce into nutritious products

• Promotion of nutritious products to increase consumption

• Transport logistics

Illustrative Evidence-based Interventions (Post-harvest Handling and Nutrition)

Roles and Responsibilities S/N USAID Implementing Partner Private Sector Partner

1 Provide technical assistance to the private sector partners to deploy, demonstrate and train climate smart agricultural technologies and practices

Deployment of climate smart agricultural technologies and practices in rural areas to smallholder farmers

2 Monitor the deployment and demonstration of technologies, and training of smallholder farmers by the private sector partners

Demonstration of climate smart technologies and practices to smallholder farmers

3 Monitor the performance of the smallholder farmers as a result of this partnership

Training of smallholder farmers on climate smart technologies and practices so that they, the smallholder farmers, are able to increase their adoption and utilization of climate smart agricultural technologies and practices

4 Training of financial institutions on increasing their liquidity and access to loans to SMEs and smallholder farmers

• Private sector partners may not meet their financial commitments to the partnership

• Due to the economic instability in the country, marketers and off-takers may not offer optimal prices for agricultural produce

• Erratic rainfall and potential droughts may significantly increase the costs of irrigation services and limit rainfed agricultural productivity

• Financial institution partners may not have the liquidity to increase access to finance for the private sector partners

• 2023 General Election may create volatile social and economic period that may impact activity implementation

Barriers, Constraints, and Risks

• Increased value addition to agricultural produce to increase diversity of manufactured products and increase farm prices

• Full complements of value chain actors are interested in being members of the public private partnership (PPP) for each target value chains

• Private sector partners make enough profit from the PPP to remain in the partnership beyond the cessation of USAID interventions

• Farm production and productivity of smallholder farmers increase to motivate them to continue to adopt and utilize climate smart agricultural technologies and practices

• Smallholder farmers will be willing to engage in market-driven farm operations

Assumptions

The target geography is the Resilience Focus Zone of:

• Manicaland Province

• Masvingo Province

• Matabeleland North Province

Due to the impact of climatic conditions in natural regions IV & V of these provinces, climate smart agricultural technologies and practices will be promoted. 30

Geographic Parameters

Small & medium enterprises, smallholder farmers, youth, women and young persons with disabilities.

There will be opportunities to collaborate and coordinate with DG, HAR and Health programs where their activities are involved in agricultural-based economic empowerment interventions.

Level of Coverage Anticipated This Activity is anticipated to benefit a minimum of 400,000 people across the Resilience Focus Zone.

Beneficiary Parameters

• DO1: Ability of Zimbabweans to live healthier lives and sustainably adapt to, mitigate, and recover from shocks and stressors strengthened

– IR 1.1: Food and nutrition security enhanced

– IR 1.3: Ecosystem services strengthened

– IR 1.4: Community cohesion enhanced

Collaboration across the Development Objective

• DO2: Youth contribution to Zimbabwe’s development progress enhanced

– IR 2.1: Youth innovation, employability, and entrepreneurship enhanced

• DO3: Good governance Improved

– IR 3.1: Citizen participation in development and democratic processes enhanced

Collaboration across the Development Objective

• Private sector partners acquire the skills, knowledge and experience to train smallholder farmers to adopt and utilize climate smart agriculture technologies and practices

• Private sector partners acquire the capacity to deploy their technologies to the most remote areas and to demonstrate them to the farmers

• Smallholder farmers are able to achieve increased farm production and productivity using the technologies and practices so that they continue to adopt and utilize them

• Increased customer base and revenue generation for the private sector partners, due to this partnership, will motivate them to continue with the partnership beyond end of USAID interventions

Measuring Higher-level Results

• EG.3.2-26 Value of annual sales of producers and firms receiving USG assistance

• EG.3.2-27 Value of agriculture-related financing accessed as a result of USG assistance

• CBLD-9 Percent of USG-assisted organizations with improved performance

• Custom Indicator Number of smallholder farmers trained by private sector enterprises without USG assistance

• Custom Indicator Increased revenue generated by private sector enterprises as a result of USG assistance

Illustrative Indicators

• PSE-1: Number of USG engagements jointly undertaken with private sector enterprises to support U.S. foreign assistance objectives

• PSE-2: Number of private sector enterprises that engaged with the USG to support U.S. Foreign Assistance objectives

• PSE-3 : Number of private sector enterprises with improved participation in the local economy as a result of USG assistance

• PSE-4: Value of private sector resources leveraged by the USG to support U.S. Foreign Assistance Objectives

• EG.11-5 Number of people supported by the USG to adapt to the effects of climate change

• EG.11-6 Number of people using climate information or implementing risk-reducing actions to improve resilience to climate change as supported by USG assistance

Other Considerations

Courtesy: FTF Zimbabwe Mechanization & Extension Activity

• The Mission is mindful of Congressional concerns not to allow officials of the Government of Zimbabwe, their associates, and others under USG sanctions to benefit from this intervention.

• While there will be engagement with GoZ, no financial and technical assistance will be provided

• Due diligence of potential beneficiaries will be conducted

GoZ Engagement and Political Economy

4/11/2023