RFI No. 72052722RFI00004 Addressing Sustainability in Alternative Development (AD) Value Chains in Peru.pdf

72052722RFI00004

REQUEST FOR INFORMATION

ISSUANCE DATE: August 3rd , 2022

CLOSING DATE: Monday August 29th , 2022, 5:00 PM (Lima Local Time)

SUBJECT: Request for Information (RFI) - New activity: "Addressing Sustainability in

Alternative Development (AD) Value Chains in Peru"

The United States Government, represented by the United States Agency for International Development (USAID) in the Republic of Peru is currently designing an activity that aims at addressing the issue of feasibility, sustainability, and scalability of market led-approaches to promoting alternative development value chains in Peru. Specifically, USAID requests ideas and approaches to consolidate gains in the transition of former illegal coca farmers to licit lifestyles.

Engagements to date demonstrate that there is local capacity to implement the resulting activity.

The Mission is therefore contemplating a restriction to eligibility.

This Request for Information (RFI) is addressed to all interested parties, including organizations, private companies and foundations that are not considered local entities or locally established as defined in ADS 303.6. Also see section III - Definitions.

A pre-solicitation conference will follow the review of all information received and will be announced in due time.

The purpose of this RFI is threefold:

1. Elicit feedback and critique of the Draft Activity Description presented in Section II.

2. Gather ideas, strategies and/or approaches on how to procure and implement market-oriented intervention(s) aimed at efficiently and sustainably (economically and environmentally) promoting alternative development value chains in Peru with diminishing USAID funding.

3. Solicit Capability Statements from local organizations. The Agency definition of a local organization can be found in ADS 303.6 and in Section III of this RFI.

Sincerely, Andre-Guy Soh Contracting/Agreement Officer USAID/Peru

Addressing Sustainability of Alternative Development Value Chains in Peru

SECTION I. INSTRUCTIONS

Responses (comments, questions, suggestions, enhancements, and Capability Statements) to this RFI are due to limasolicitations@usaid.gov, asoh@usaid.gov and rsaldana@usaid.gov by August 29th, 2022, 5:00 pm (Lima Local Time). Also, interested organizations must state their interest in attending a “Question and Answers” virtual conference to be held on August 22nd, 2022.

Electronic submissions must have the subject: "Response to RFI No. 72052722RFI00004 - Addressing Sustainability in the Alternative Development Value Chains in Peru".

All submissions must be in Microsoft Word. Responses may be submitted in Spanish or English.

General contributions in response to purposes 1 and 2 of this RFI (see cover sheet) must not exceed 3 pages. Feedback and comments may include:

● Additional innovative ideas and/or programs you have to address the sustainability and scalability of market-led approaches to promote AD value chains in Peru (palm oil excluded).

● Constructive criticism to the draft PD described in section II.

● Additional sectors that should be included or eliminated as partnering actors for this activity.

● Additional actions or focus areas that should be considered to maximize the potential of the activity described above to address sustainable AD value chains that are gender-sensitive, inclusive, and empower women and youth.

Capability Statements must be succinct, not exceed 2 pages and must address the following:

1. Organization Name, Point of Contact Name, Title and Email address.

2. Description of the organization's capacity to receive and manage bilateral/multilateral or other donor funding and the amounts (if any).

3. Presentation of past, present and future activities/projects managed in the sector of alternative development value chains (including cacao and coffee, but also non-agricultural activities).

4. Brief financial presentation of your organization. This section must cover the last 5 years and include overall budget, financial audits, and any other information.

5. Describe your overall management capability and leadership i.e., operations, procurement, personnel, certifications etc.

6. Describe your organization's overall implementation capacity i.e., technical know-how, relationships, certifications, presence or capacity to deploy or establish operations in targeted geographies.

7. Confirmation of your organization’s registration in the System for Awards Management (SAM) and registration in the Peruvian Agency for International Cooperation (APCI) system is desirable but not required to respond to this RFI. Nonetheless, SAM registration is mandatory before award.

8. Identify areas for further capability (management and implementation) strengthening

9. References mailto:limasolicitations@usaid.gov mailto:asoh@usaid.gov mailto:rsaldana@usaid.gov https://sam.gov/content/home https://sam.gov/content/home

SECTION II. NEW ACTIVITY INFORMATION

The U.S Agency for International Development (USAID)/Peru may use feedback and comments from this RFI to refine a future solicitation. If a solicitation/funding opportunity is issued, USAID/Peru intends to make one award with an estimated duration of five years in length, and a Total Estimated Amount not to exceed $12M. The type of award (Acquisition or Assistance) has not been determined yet.

Mechanism Number To be Determined Activity Name: Addressing Sustainability in Alternative

Development (AD) Value Chains in Peru Prime Partner: Local (Peru) Organization Award Number: To be Determined Implementing Mechanism Type: To be Determined Source Agency: U.S. Agency for International Development Implementing Agency: U.S. Agency for International Development Planned Funding: up to $12,000,000 Period of Performance: 5 years from award date

I. DRAFT ACTIVITY DESCRIPTION

1. Context:

The impact of illicit activities (narcotrafficking, illegal gold mining, illegal logging, land trafficking etc.) on the Peruvian Amazon has deprived thousands of families access to licit and sustainable economic opportunities. Specifically, illicit coca production, narcotrafficking, and resulting insecurity have been consistent challenges for Peruvians living in the Amazon. Historically, economic alternatives such as agriculture and agroforestry have been successful in shifting this dynamic in most of San Martin and parts of Huánuco (e.g., Monzon) following the interdiction-eradication-alternative development (AD) model and where USAID has made long-term investments.

Nonetheless, most agricultural producers, including in other regions (e.g., Pasco, Junin, etc.) have not yet been able to achieve the increases in productivity to avoid reverting to coca and negatively impacting the forest. Furthermore, product quality and incomes must be consistently improved to enable farmers to escape poverty through licit means.

If limited opportunities have negatively impacted Amazon inhabitants, the impact has been even more pernicious on women, mainly due to the “double burden” of on-farm and household labor. Moreover, the obstacles to accessing leadership opportunities are greater compared to men.

USAID has made large investments to address this development challenge. USAID activities have made substantial progress in changing this status quo over the past 20 years in some provinces. USAID has promoted a market-led approach to upgrade mainly coffee, plantain, and cacao varieties and then connect farmers to reliable buyers for their higher-quality supply. Thus, USAID unlocked access to the markets, inputs, credit, and technical assistance needed to break the cycle of poverty and provide viable economic alternatives to coca. Moreover, USAID generated a change in perspective and behavior among traders and end buyers, demonstrating that investments down the value chain (e.g., at the farm level) made business sense. These efforts have created a

“snowball effect'' attracting other private sector actors such as financial institutions, traders, commercial development, technology companies, and input providers to the region and encouraged them to view these farmers as new potential customers and suppliers.

All of this progress in alternative development has been funded in its majority by USAID.

But there is still a long way to go to consolidate the gains made in Upper Huallaga and also to expand the model to other regions of the country while ensuring that producers adopt more sustainable forms of agricultural production that include low carbon agriculture and deforestation-free production, in light of international market restrictions and climate change goals and commitments. Thus, USAID is interested in evolving its efforts to ensure the provision of financially, socially and environmentally sustainable services that would enable the successful alternative development model to be scaled up and expanded to other areas of the country, focusing on the Strategic Intervention Zones (ZEIs in Spanish) of Peru’s Commission for Development and Life without Drugs (DEVIDA). USAID intends to consolidate gains made to date in the Upper Huallaga Valley and to gradually incorporate other regions with promising alternative development potential (e.g., Pasco and the northern VRAEM).

2. Problem Statement:

The gains made by USAID and DEVIDA in the Upper Huallaga, including the development of licit economies, mitigation of potential environmental impacts, and expansion of public services to reduce coca production in AD zones are at risk unless a sustainable approach can offer services with significantly-reduced donor funding.

Thus, USAID is interested in learning about innovative, sustainable, and - most importantly -market-led approaches that will attract private investments and progressively shift the provision of services throughout the value chain to the private sector. This progressive shift could occur with minimal or no support from the GoP and/or bilateral donors and if possible, demonstrate its potential for scalability to other regions within five years.

Interested parties must address all of the following principles:

● Services. Ensure the provision of all services required by alternative development value chains, including, but not limited to access to credit, access to technical inputs and support, research and development, knowledge management, digital solutions, etc.

These services shall address organic and conventional farmers.

● Financial sustainability. Diversification of sources of income (non-USAID) in order to continue providing services,

● Environmental sustainability. Support sustainable agriculture (climate-smart, agroforestry systems, deforestation free agriculture, climate finance, and other initiatives aiming at providing environmental sustainability. Interested parties must incorporate a landscape governance approach to any proposed intervention,

● Gender, youth, and indigenous inclusion. Interested parties must directly address challenges faced by women, youth, and indigenous peoples including limited access to services and leadership opportunities

● Build upon past successes. Any proposed intervention must build on lessons learned from past USAID activities.

● Individual farmers versus well-organized farmer groups. The approach presented must clearly spell out the strategy to address which groups it plans to base its strategy on - individual farms or farmer groups.

● Entrepreneurs, not farmers. Consolidate the economic gains by actively promoting entrepreneurship among all beneficiaries.

3. Theory of Change statement:

IF the private sector invests in AD value chains and supports extension services for an environmentally friendly agriculture, and if access to capital, equipment and privately developed and tailored agricultural support services is increased, THEN market forces will drive AD value chains, profitable marketplaces for needed innovative agricultural services will spring up, leading to a sustainable, independent or semi-independent AD sector.

4. Magnitude of Change:

With the proposed US government funding, USAID intends to obtain the following illustrative results:

● Implementation of an approach to promote environmentally-sustainable licit economic growth (agricultural and non-agricultural) in alternative development regions that: 1) Is progressively funded by non-donor income, 2) Builds upon past successes, 3) Actively promotes forest conservation and deforestation free production, 4) Actively engages private sector actors, and 5) Is scalable to other ZEI areas. This system shall be fully operational and functioning beyond the life of a USAID project.

● By Year 5, USAID shall fund approximately no more than 5% of the operations.

● Assistance to approximately 20 to 30 thousand rural families engaged in AD value chains.

● At least 50-70% household income increase from licit economic growth (disaggregated by quintiles, geographical region, etc.), depending on value chain and baseline.

● At least 80% of all farms are fully traceable at the end of the activity.

● By Year 5, 100% of all farms implement deforestation-free approaches, including, but not limited to agroforestry systems.

● Carbon sequestration and reduction of greenhouse gas (GHG) emissions due to activity implementation is measured and reported.

● At least 70% of all business development services provided locally using private capital, targeted at individual and grouped farmers on a fee-based scheme (or any other efficient market-driven approach).

● At least 45% senior leadership positions are held by women.

● Women participate and/or lead at least 50% of financial decision-making processes.

● At least 25% of business development services and technical assistance staff incorporate youth.

● At least 30% of licit economic opportunities address youth challenges.

Cross-cutting themes include behavior change (to avoid reversion to coca), capacity building of farmer groups, support to small- and medium-sized enterprises, partnership with critical levels of government, women’s economic and leadership empowerment, and youth engagement. More specifically, partnership with women-led, youth-led, and indigenous-led organizations should be prioritized.

5. Top Indicators (illustrative):

Applicants will be asked to propose outcome indicators based on their described interventions.

Higher-level illustrative outcome indicators:

1. Percentage growth of annual household income from AD value chains among supported producers

2. Number of hectares under sustainable production practices (e.g., deforestation free, child-labor free, fully traceable)

3. Number of hectares of forest (within participants property) preserved (not deforested)

4. Percentage of women in leadership positions or otherwise actively involved in decision-making processes (e.g., price-negotiation and business profitability)

5. Sustainability of intervention after project end (increasing non-USAID income)

6. Changed public behavior related to:

a. Number of smallholder families preserving forest sections of farms (e.g., Through financial incentives programs or payment for ecosystem services, etc.)

7. Number of metric tons of CO2 sequestered as a result of activity implementation

8. Value of new investment generated from new private investors (Leverage)

9. Value of financing facilitated for clients

10. Change in productivity per hectare of environmentally-produced value chains, according to income quintiles

11. Number of users of digital services offered and type of digital transactions

12. number of promotional campaigns organized per year using USG funding

13. number of small and medium sized small coffee and cacao based businesses created and operating.

14. Percentage increase in local consumption of Peruvian cacao and coffee.

Interested parties are welcome to comment on the feasibility of these indicators and targets, as well as to include output indicators in their responses.

SECTION III. DEFINITIONS

Locally Established partner (LEP) A U.S. or international organization that works through locally-led operations and programming models. LEPs:

● Have maintained continuous operations in-country for at least five years and

● materially demonstrate a long-term presence in a country through adherence or

● alignment to the following:

● Local staff should comprise at least 50 percent of office personnel,

● Maintenance of a dedicated local office,

● Registration with the appropriate local authorities (SUNAT, APCI, etc.).

Local Entity:

An individual, a corporation, a nonprofit organization, or another body of persons that— (1) is legally organized under the laws of; (2) has as its principal place of business or operations in;

(3) is majority owned by individuals who are citizens or lawful permanent residents of; and (4) managed by a governing body the majority of who are citizens or lawful permanent residents of a country receiving assistance from funds appropriated under title III of this Act. (c) 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.”

DISCLAIMER:

This RFI is issued solely for gathering information and market research for design planning purposes and does not constitute a Notice Of Funding Opportunity (NOFO) or a Request for Proposals. Responses to this RFI are not applications or proposals.

This RFI must not be construed as the U.S. Government commitment to issue a solicitation.

Respondents are directly and fully responsible for bearing all incurred expenses associated with preparation and submission of their RFI responses.

USAID reserves the right to use any, all, or none of the information submitted in response to this RFI in a future solicitation/funding opportunity. Thus, respondents must clearly mark or label all proprietary information contained in their submission. USAID will not disclose proprietary information. Failure to properly mark or label proprietary information may result in an inappropriate use of such information.

If a solicitation/funding opportunity is issued, it will be announced on www.sam.gov and/or www.grants.gov at a later date, and all interested parties must respond to that Solicitation/funding opportunity announcement separately from any response to this announcement.

[END OF RFI No.72052722RFI00004] http://www.sam.gov/ http://www.grants.gov/