RFI 72061124RFI00001 USAID Zambia Agricultural Diversification Support.pdf

U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT

Subdivision 694/Stand 100 Ibex Hill Road

PO Box 320373

Lusaka, Zambia – 10101 infozambia@usaid.gov

USAID.gov

REQUEST FOR INFORMATION (RFI)

TO: All Prospective Offerors

ISSUANCE DATE: Tuesday, November 28, 2023

REQUEST FOR INFORMATIONS (RFI)#: 72061124RFI00001

SUBJECT: Market Research to Identify Organizations in Zambia Working in or Capable of Partnering to Support Zambia Agricultural Diversification Support (ZADS) interventions

DUE DATE: Friday, December 8, 2023

Dear Prospective Offerors:

The United States Agency for International Development (USAID), represented by its Mission in Zambia, is performing market research to identify organizations in Zambia working in or capable of partnering to support Zambia Agricultural Diversification Support (ZADS) Interventions. USAID/Zambia is exploring the design of an activity that will meaningfully transform Zambia’s agricultural sector into an efficient, equitable, and sustainable producer of high quality and nutritious food for consumption, sale, and trade. This transition will foster growth in Zambia’s agricultural sector and enhance resilience to climate shocks while improving the market competitiveness of the targeted commodities. Additionally, the activity will increase the diversity of select nutritious commodities that hold the potential to improve dietary consumption at the rural household level. Three primary objectives of ZADS are:

Objective 1: To increase food production Objective 2: To strengthen market systems Objective 3: To improve dietary diversity

Please see Attachment 1 for more details.

Organizations interested in responding to this Request for Information (RFI) should provide the following information:

● Name of your organization and contact information.

● Organization's website if available.

● Identify whether you are a local entity as defined in Attachment 2

● In what provinces/districts does your organization currently work in Zambia?

● Please describe your organization's past and/or current efforts in supporting food production, market systems, and/or nutrition activities in Zambia.

mailto:infozambia@usaid.gov

RFI #: 72061124RFI00001

RFI ZADS

● Name other local organizations with which you are strongly affiliated and aligned either through resource partnerships or other ties.

● This will be a fixed price. What type of fixed price contract would you recommend and how would you propose fixed pricing the tasks to achieve the specified objectives?

● If USAID were to contemplate an incentive-type of contract, what factors do you feel will best motivate the prospective Contractor in producing superior performance?

Responses may be submitted via email to Elizabeth Chisala echisala@usaid.gov and jhutton@usaid.gov, under the title RFI #XXX, Request for Information by December 8, 2023, at 1500 hours Lusaka local time. Responses to this RFI via e-mail should not exceed two pages and must be in Microsoft Word format with using 11-point font size minimum.

This is a Request for Information. This is not a request for proposals, proposal abstracts, applications, or concept notes, or quotations. The release of this RFI in no way obligates the United States Government or USAID to release a solicitation for this proposed activity, nor does it commit the U.S Government or USAID any costs incurred in the preparation and submission of responses to this RFI. No other documents or information are requested at this time. USAID asks respondents to not send any additional information other than what is requested above and to kindly adhere to the page limits mentioned.

Thank you for your interest in the subject request for information and we look forward to your comments.

Sincerely, Jameson Hutton Contracting/Agreement Officer Office of Acquisition and Assistance USAID/Zambia mailto:echisala@usaid.gov mailto:jhutton@usaid.gov

ATTACHMENT 1 BACKGROUND AND CONTEXT

Zambia’s economy has been under significant strain due to a combination of a massive debt burden and the detrimental effects of the COVID-19 pandemic. This economic depression has resulted in a staggering 79% rural poverty rate. Zambia has an estimated 1.02 million informal micro, small, and medium-sized enterprises (MSMEs), along with approximately 30,000 formal MSMEs. These enterprises make up about 97% of all businesses in the country. They contribute up to 70% of the Gross Domestic Product (GDP) and 88% of the total employment in the country. As a result, these enterprises play a crucial role in providing income to the working population.

The agriculture sector in Zambia, comprising crops, livestock, and fisheries, forms the backbone of the national economy and is the primary source of livelihood in rural regions. Approximately 43% of households in Zambia are engaged in livestock activities, including cattle, pig, and goat rearing, and poultry farming. Maize is the dominant crop in Zambia and is the staple food for the majority of the population. The majority of maize grown is for human consumption with a small portion used for livestock feed. Small-scale farmers, who constitute over 60% of the labor force, face low productivity compared to the larger commercial farmers who have better access to resources – e.g., a small-scale agribusiness will produce two tons of maize per hectare compared to an average of eight tons/hectare for a commercial farm.

Lack of access to financing Access to credit is a significant challenge for small agribusinesses. This limits their ability to manage their farms effectively and improve productivity. The majority of banks focus on non-agricultural lending, with high-interest rates making it difficult for small agribusinesses to secure loans. With limited financing, small agribusinesses are unable to access mechanized, climate-smart farming approaches, such as improved seed varieties, fertilizers and pesticides, improved livestock breeds and disease control, or machinery and equipment, which further limits their productivity. Additionally, new irrigation technologies are limited, leading to dependence on unpredictable rain-fed agriculture. Moreover, the overreliance on maize has resulted in a mono-cropping system, exposing the country to risks associated with crop diseases, pests, and market vulnerabilities. The 2022/23 agricultural season was characterized by an outbreak of fall armyworm and stalk borer that negatively impacted yields.

Limited processing capacity Zambia’s agricultural sector is central to the manufacturing and food processing industries that rely on it for raw materials. However, the lack of processing capacity is preventing farmers from diversifying into higher-value crops, resulting in significant losses of horticultural produce when markets are flooded with the same perishable products. Moreover, many domestic food producers in Zambia are not investment-ready, which limits their ability to scale up the production of nutritious food products.

Consequently, the availability and affordability of nutritious food products are affected.

Inadequate access to resources, materials, and markets Many smaller agribusinesses are struggling to reach profitable markets. Access to markets, as well as resources and materials that increase productivity, is hindered by an underdeveloped transportation infrastructure and poor logistics. For example, late delivery of fertilizers during critical periods of the farming cycle has resulted in maize yield losses and inadequate cold chains have led to production bottlenecks and increased post-harvest losses. To improve production and livelihoods, investments in agricultural research and extension are necessary. However, most national programs in extension, research, and nutrition are underfunded and rely on international organizations for funding.

The private sector can contribute significantly to improving agricultural productivity by establishing technology demonstration plots, expanding the last-mile distribution of inputs, and providing agriculture extension services. These types of efforts have been shown to contribute to the increased application of quality inputs and the adoption of good agronomic practices among farmers. Additionally, a policy environment that promotes the successful development, commercialization, scaling, and trade of agricultural innovations is critical to ensure that improved technologies and approaches can reach farmers through both public extension systems and private sector-led dissemination models.

Figure 1. Example of an agricultural marketplace in Zambia. This figure shows the complexity of such a marketplace. The relationships between various market actors are illustrated through solid line arrows, representing well established relationships. Dotted lines represent weak or aspirational linkages between market actors. The top of the diagram represents the enabling environment composed of laws, policies, and regulations. The enabling environment provides a governance structure to market actors from producer to end user. In the case of Zambia, implementation of the policies is inconsistent.

Food insecurity and nutrition Food insecurity is a significant challenge in Zambia, affecting both urban and rural areas. Poverty is one of the main causes of food insecurity, leading to high malnutrition levels due to poor dietary diversity. The majority of Zambians rely heavily on maize as their primary source of food, resulting in insufficient protein and vitamin intake.

According to a July 2023 report from the World Food Program, an estimated 4.3 million people in Zambia are facing insufficient food consumption, with more than half of those resorting to ‘crisis and above’ food-based coping strategies. Rural Zambians are the hardest hit, with 82% of the population in some rural areas unable to maintain a nutritious diet.

Zambia faces significant nutritional challenges. UNICEF (2022) reports that 31.4% of children under five in Zambia suffer from stunted growth. Additionally, the country is grappling with the dual challenge of malnutrition, with 38.5% of women and 5% of children under five years old being affected by overweight and obesity. Furthermore, micronutrient deficiencies - primarily Vitamin A, iron, and iodine - are widespread.

Policy environment Market-distorting government interventions in agricultural input (seeds, fertilizers, pesticides, machinery, etc.) and output (agricultural products that are produced for sale or consumption) markets, restrictions on international trade in agricultural commodities, and poorly functioning market systems have all contributed to hindered agricultural development, reduced competitiveness, and inhibited economic growth within the agricultural sector. Moreover, global events such as the Ukraine-Russia war have raised the cost of many agricultural inputs, like fertilizer, resulting in decreased productivity of maize and other important crops. The repercussions of these issues are far-reaching, affecting health, child development, and overall life expectancy. Moreover, the economic implications are profound, with billions lost in productivity and escalating healthcare costs.

The Government of the Republic of Zambia (GRZ) has made strides in addressing these challenges. With initiatives like the Comprehensive Agriculture Transformation Support Programme (CATSP) and the Eighth National Development Plan (8NDP), there's a clear roadmap towards agricultural transformation and improved nutrition.

To increase the productivity of smallholder farmers, the GRZ introduced the Farmer Input Support Program (FISP) program in 2009. The FISP supplies government subsidized seeds and fertilizer to smallholder farmers. In 2022/23, over a million smallholder farmers received 10 kg of maize seed, 300 kg of fertilizer, and either 25 kg of soybean seed or 20 kg of groundnut seed under the FISP. The Zambian government has announced that they will continue supporting small-scale farmers with agricultural inputs in the future.

The GRZ also aims to expand the area of land under cultivation (100,000 hectares of land set aside for farm block development per province) and increase productivity by increasing access to markets, extension services, infrastructure, and investing in mechanization. This would help meet national and international aspirations for the agricultural and agribusiness sectors in general, and the agrifood system in particular.

Although the cultivation of genetically engineered maize is still prohibited in Zambia, the country has made progress towards revising its biosafety policy. This change in policy is expected to create a more pro-biotechnology environment that is science-based and enabling, which could help Zambia combat future outbreaks of pests and diseases.

Aligning with GRZ’s objectives, USAID's Country Development Cooperation Strategy (CDCS) emphasizes reducing rural poverty through enterprise-driven, inclusive economic growth. The vision is to transform Zambia’s predominantly subsistence oriented agricultural framework into a commercially oriented one. This transformation aims to bolster resilience and self-reliance, and create diversified income opportunities for Zambia’s rural populace.

GEOGRAPHIC FOCUS

The Feed the Future (FTF) Zone of Influence (ZOI) covers 10 districts across three provinces: Copperbelt, Central, and Eastern. ZADS will be implemented in the following provinces and districts:

● Copperbelt Province: Mpongwe and Masaiti

● Central Province: Mkushi, Kapiri Mposhi, Kabwe Chibombo, and Luano

● Eastern Province: Nyimba, Petauke, and Sinda

THEORY OF CHANGE

IF Zambia diversifies its agricultural practices, employing sustainable, climate-smart techniques and modern technology, AND IF the country strengthens its market systems with increased private sector engagement and favorable trade policies, while also promoting a variety of nutritious crops, THEN food production and nutrition will improve, market systems will advance, and rural poverty will be reduced, leading to healthier, more resilient communities that can actively contribute to and benefit from Zambia's economic growth.

OBJECTIVES

The goal of ZADS is to transform Zambia’s agricultural sector into an efficient, equitable, and sustainable producer of high quality and nutritious food for consumption, sale, and trade. Within the ZOI, ZADS will be structured around the following key objectives:

Objective 1: Increase food production Objective 2: Strengthen market systems Objective 3: Improve dietary diversity

TECHNICAL ASSISTANCE

To reach the minimum required results listed above, ZADS must focus on developing both upstream (processors/traders) and downstream (producers) components of the selected value chains. To strengthen the agriculture sector, ZADS must support small agricultural businesses, directly impacting job creation within these businesses and indirectly benefiting the farms from which they source. To facilitate the growth of these small agribusinesses, access to credit is essential, as is equipping them with financial management skills to enhance their ability to secure financing. In line with the objective to improve nutrition, ZADS must directly engage with households that benefit from small agribusiness support, particularly the smallholder farmers who supply produce to these agribusinesses. The aim is to maintain steady market demand and supply while efficiently leveraging USAID and GRZ engagement in agricultural policy.

Objective 1: Increase food production

Through engagement with the private sector and the government, the activity will actively support and strengthen the capacity of small agribusinesses to produce a wider variety of nutritious foods (crops and livestock) while advocating for eco-friendly farming methods that preserve soil health and water resources. ZADS will promote the “farming as business” approach, equipping small agribusinesses to effectively manage climate change induced production fluctuations, market uncertainties, and economic pressures.

By maintaining meticulous records, small agribusinesses can adapt to shifting weather patterns, anticipate market trends, ensure financial viability, and enhance the sector's overall resilience. Furthermore, this strategy not only safeguards rural livelihoods and food security but also supports sustainable agriculture by fostering environmentally responsible practices.

Small agribusinesses need technology and innovation to diversify and increase production, increase incomes, and enter new markets with more promising returns.

ZADS must collaborate with the Embassy Lusaka Deal Team, USDA FAS, Department of Commerce, Land Grant Universities, and other US-based research institutions to facilitate the transfer of cutting-edge technology and innovative practices to Zambian small agribusinesses. This technology transfer must encompass climate-smart improved seed varieties, livestock breeds, irrigation techniques, and more, through partnerships with private sector entities. By doing so, small agribusinesses will be better equipped to produce a more diverse range of crops and livestock, reducing their reliance on a single staple and enhancing their overall food security.

To meet this objective, illustrative activities could include:

● Training on drought-resistant crop varieties, improved irrigation methods, conservation agriculture, pest and disease management, and organic farming.

● Establish extension services that offer guidance on livestock management, breeding, and health practices.

● Provide training in sustainable fish farming practices, including pond construction, fish health management, and feed management.

● Training in climate preparedness and risk reduction strategies to withstand extreme weather events.

● Rainwater harvesting.

Objective 2: Strengthen market systems

To promote inclusive and sustainable agricultural-led systems and expand market access, ZADS must enhance market connections at the local, regional, and international levels. The project must collaborate with the USAID Business Enabling Project (BEP) to improve policies and regulations to create a more favorable and enabling environment encouraging increased private sector participation in the agricultural marketplace.

ZADS will engage with domestic and international private sector companies to develop viable business cases that will encourage increased investment in smallholder production in Zambia, resulting in an increase in the quantity and quality of nutritious commodities. The direct support for agriculture extension (inputs and education) currently provided by the Ministry of Agriculture will be enhanced and sustained by private sources in alignment with the development objectives of the Zambian Government. ZADS will identify companies who are motivated by a good business case to invest in Zambia, and also the additional social benefits such as improved nutrition, income and job creation, and the empowerment of women and youth by connecting producers and processors to markets.

USAID/Zambia is already implementing several complementary activities in agriculture:

1) The USAID Enterprise Development and Growth Enhanced (EDGE) project (EDGE) is working with a pipeline of over 300 agribusinesses that are improving their financial management and growing opportunities for investment to scale production to higher levels; 2) The USAID Health, Ecosystems and Agriculture for Resilient, Thriving Societies (HEARTH) - Zambia activities (Eastern Kafue Nature Alliance and Luangwa Livelihoods project) are working to protect biodiversity by improving the livelihoods of residents near famed national parks, in partnership with the private sector to support outgrower schemes for various crops. Additionally, the BEP is working to address many of the policy challenges that agriculture producers must overcome in order to support a stable and predictable business enabling environment. USAID/Zambia’s existing pipeline of improving small and medium enterprises (SMEs) provides a ready-made list of potential collaborators, and the BEP will clear the way for additional investment.

Illustrative activities can include, but are not limited to:

● Fostering partnerships between private sector entities and smallholder farmers, agribusinesses, and cooperatives.

● Connecting farmers and agribusinesses with financial institutions, promoting innovative financing mechanisms, and providing training on financial literacy.

● Establishing contract farming arrangements, improving supply chain logistics, and supporting market-driven production practices.

● Collecting and disseminating data on crop prices, supply and demand trends, weather conditions, and market data.

● Building the capacity of individuals and agriculture businesses (including producers, traders, outgrowers) to collect, analyze, and disseminate market information.

Objective 3: Improve dietary diversity Agricultural interventions and food-based strategies have demonstrated their potential to contribute significantly to poverty reduction and enhance overall nutritional well-being.

The strategy of increasing the availability and consumption of nutrient-rich foods through a household's own production is regarded as a sustainable approach because it empowers households to take primary responsibility for the quality of their diets through self-production.

ZADS will work in coordination with the Ministry of Health and Ministry of Agriculture to develop a multi-sector approach to nutrition programming. ZADS will build upon the Scaling Up Nutrition Technical Assistance project (SUN TA) which is expediting Zambia's advancement towards improved nutrition and the effective implementation of the Zambian government's Most Critical Days Program (MCDP II). SUN TA collaborates with cross-sectoral coordinating committees at provincial, district, and ward levels to identify nutrition-related challenges, pinpoint gaps in existing programming, prioritize areas for intervention, and develop effective approaches to address these gaps. To improve consumption patterns, the ZADS will prioritize Social Behavior Change (SBC) by targeting communities in the ZOI and familiarizing them with the role of nutrition-specific and nutrition-sensitive services available at public and private facilities.

Illustrative activities can include, but are not limited to:

● Comprehensive nutrition education campaigns targeting communities, schools, and healthcare facilities.

● Training on the cultivation and consumption of indigenous and nutrient-rich crops.

● Breastfeeding awareness campaigns and training to mothers/caregivers on appropriate complementary feeding practices.

● Train community health workers to promote optimal infant and young child feeding practices during home visits.

● Enhance the capacity of maternal and child health clinics to provide nutrition counseling and support for pregnant women and caregivers of young children.

● Promote the use of micronutrient powders or fortified complementary foods to improve the nutrient intake of infants and young children.

ATTACHMENT 2 LOCAL ENTITY DEFINITION

‘Local’ entity is defined as follows:

● Is legally organized under the laws of Zambia

● Has its principal place of business or operations in Zambia;

● Is majority-owned by individuals who are citizens or lawful permanent residents of Zambia; and

● Is managed by a governing body, the majority of whom are citizens or lawful permanent residents of Zambia.

For purposes of this section, “majority-owned’ and “-managed by” include, without limitation, beneficiary interests and the power, either directly or indirectly, whether exercised or exercisable, to control the election, appointment, or tenure of the organization's managers or a majority of the organization's governing body by any means.