RFP_-_SOL-663-16-000002.pdf

Issuance Date: 02/12/2016

Due Date for Written Questions: 02/23/2016

Pre proposal Conference: 02/26/2016

Closing Date for Submission of Proposals: 03/28/2016

Closing Time for Submission of Proposals: 4 P.M. Ethiopia Time

SUBJECT: Request for Proposal No. SOL-663-16-000002 - Feed the Future Ethiopia Value

Chain Activity

Dear Prospective Offerors:

The United States Government, represented by the U.S. Agency for International Development

(USAID) Mission in Ethiopia, is seeking proposals from qualified organizations interested in providing the services described in the attached solicitation. This procurement is being conducted through full and open competition for which the procedures set forth in FAR Part 15 will apply. Any type of organization (large or small commercial [for profit] firms, educational institutions, faith based and community organizations and non-profit organizations) which meets the terms and conditions of the Solicitation is eligible to compete. In support of the Agency’s interest in expanding the number and sustainability of development partners, USAID encourages proposals from potential new partners.

The geographic code for this Solicitation is 935 and the NAICS code is 541990.

USAID/Ethiopia contemplates award of one Cost-Plus-Fixed-Fee (CPFF) completion type Contract to cover a five year period of performance. The total estimated cost for the contract is in the range of

$60,000,000 to $65,000,000. The purpose of providing an estimated cost range for the contract is to help Offerors develop their proposals around the government estimate and does not mean that

Offerors should not attempt to provide the lowest possible cost commensurate with their technical approach. The Offeror must propose costs that it believes are realistic and reasonable for the work to be done. Cost proposals will be evaluated as part of a Best-Value determination for contract award, including cost effective approaches to achieve the results. Issuance of a contract is subject to availability of funds and successful negotiation of contract terms with the successful Offeror.

The RFP addresses all of the specifics associated with this requirement. Offerors are encouraged to read the entire solicitation. Special attention should be paid to Section L “Instructions to Offerors” and

Section M “Evaluation Factors for the RFP”.

USAID encourages the participation of small business concerns, small disadvantaged business concerns and women-owned small business concerns in this activity as prime contractor, or as subcontractors.

The RFP and subsequent amendments thereto, can be downloaded from the Federal Business

Opportunities (“FBO”) web site at http://www.fedbizopps.gov. It is the responsibility of the recipient of this solicitation document to ensure that it has been received from the INTERNET in its entirety;

USAID bears no responsibility for data errors from transmission or conversion processes.

USAID will hold a conference to address questions received from potential Offerors for relevant clarifications and provide answers to the questions received. The conference will be held on February

26, 2016 at Elilly International Hotel located at Kazanchis, Kirkos Sub City from 9 a. m to 4:30 p.m.

Potential offerors must confirm attendance by sending email to Ms. Wubet Zeleke at wzeleke@usaid.gov . If substantive questions are received which affect the response to the solicitation, or if changes are made to the closing date and time, as well as other aspects of the RFP after the solicitation conference, this solicitation will be amended accordingly. Any amendments to this solicitation will be issued and posted on the Federal Business Opportunities (FedBizOpps) http://www.fedbizopps.gov/ mailto:wzeleke@usaid.gov

USAID/Ethiopia Feed the Future Ethiopia Value Chain Activity

USAID/Ethiopia | RFP# SOL-663-16-000002 3

List of Acronyms

ACC Agricultural Commercial Cluster

AGP Agricultural Growth Program

AGP-AMDe AGP-Agriculture Markets Development Activity

AGP-LMD AGP- Livestock Markets Development Activity

AKLDP Agriculture Knowledge, Learning, Documentation and Policy Activity

AMSAP Advanced Maize Seed Adoption Program

ATA Agricultural Transformation Agency

RFS Bureau of Food Security

CAADP Comprehensive Africa Agriculture Development Program

CBSP Community-Based Seed Producers

CDCS Country Development Cooperation Strategy

CFSC Commercial Farm Service Center

CIAFS Capacity to Improve Agriculture and Food Security Activity

CIG Common Interest Group

CLA Collaboration, Learning and Adaptation

CO Contracting Officer

COR Contracting Officer Representative

CPFF Cost Plus Fixed Fee

CRGE Climate Resilient Green Economy

DCA Development Credit Authority

DO Development Objective

ENGINE Empowering New Generations to Improve Nutrition & Economic Opportunities

FAO Food and Agricultural Organization

FCU Farmer Cooperative Union

FI Financial Institutions

GRAD Graduation with Resilience to Achieve Sustainable Development

GoE Government of Ethiopia

GTP Growth and Transformation Plan

HABP Household Asset Building Program

ICT Information Communication Technology

IEE Initial Environmental Examination

IR Intermediate Result

MDG Millennium Development Goal

MoA Ministry of Agriculture

MFI Microfinance Institution

MSME Micro-, Small and Medium Enterprise

MSP Multi-Stakeholder Platform

M&E Monitoring and Evaluation

NGO Non-Governmental Organization

NFE Non-Farm Enterprise

PAD Project Appraisal Document

PC Primary Cooperative

PH Post Harvest

PMP Performance Monitoring Plan

PSNP Productive Safety Net Program

RFP Request for Proposal

RCT Randomized Control Design

SACCO Savings and Credit Cooperative Association

USAID/Ethiopia | RFP# SOL-663-16-000002 4

SME Small and Medium Enterprise

SNNPR Southern Nationals, Nationalities and Peoples Region

SPS Sanitary and Phytosanitary Standards

STTA Short Term Technical Assistance

USAID United States Agency for International Development

VESA Village Economic and Social Association

VSLA Village Savings and Loan Association

WASH Water Supply, Sanitation, and Hygiene

WEAI Women’s Empowerment in Agriculture Index

WRS Warehouse Receipt System

ZOI Zone of Influence

USAID/Ethiopia | RFP# SOL-663-16-000002 5

PART I - THE SCHEDULE:

SECTION B - SUPPLIES OR SERVICES AND PRICE/COSTS

B.1 PURPOSE

The purpose of this contract is to provide services as described in the Statement of Work outlined in Section C for implementation of USAID’s Feed the Future Ethiopia-Value Chain Activity. The purpose of the activity is to improve the performance of the agricultural sector in conformity with

Component Four of the Agricultural Growth Program (AGP-II) in Ethiopia.

B.2 CONTRACT TYPE

The U.S. Government contemplates award of a Cost-Plus-Fixed -Fee (CPFF) completion type contract resulting from this solicitation. For the consideration set forth below, the Contractor will provide the deliverables or outputs described in Section F in accordance with the performance standards specified in Section F of this RFP.

B.3 ESTIMATED COST, FIXED FEE, AND OBLIGATED AMOUNT

(a) The estimated cost for the performance of the work required hereunder, exclusive of fixed fee, is

. The fixed fee is . The total estimated cost plus fixed fee is .

(b) Within the estimated cost plus fixed fee specified in paragraph (a) above, the amount currently obligated and available for reimbursement of allowable costs incurred by the

Contractor (and payment of fee, ) for performance hereunder is TBD. The Contractor will not exceed the aforesaid obligated amount.

(c) Funds obligated hereunder are anticipated to be sufficient through TBD.

B.4 BUDGET

Cost Elements Year 1 Year 2 Year 3 Year 4 Year 5 Total Cost

Labor

Travel

Grants Under Contracts 250,000 1,500,00

2,000,00

2,500,00

1,000,00

7,250,000

Other Direct Costs

Total Direct Costs

Indirect Costs

Total Costs before

Profit/Fee

Fee/Profit

Total Est. Cost + Fixed

Fee

The contractor will not be paid any sum in excess of the total estimated cost plus fixed fee.

B.5 INDIRECT COSTS

Pending establishment of revised provisional or final indirect cost rates, allowable indirect costs will be reimbursed on the basis of the following negotiated provisional or predetermined rates and the appropriate bases:

Description Rate Base Type Period

USAID/Ethiopia | RFP# SOL-663-16-000002 6

1/ 1/ 1/

2/ 2/ 2/ 3/ 3/ 3/

1/Base of Application:

Type of Rate: Period:

2/Base of Application

Type of Rate: Period:

3/Base of Application:

Type of Rate: Period:

B.6 COST REIMBURSABLE

The U.S. dollar costs allowable will be limited to reasonable, allocable and necessary costs determined in accordance with FAR 52.216-7, Allowable Cost and Payment, FAR 52.216-8, Fixed

Fee, and 52.232-20 and 52-232-22 Limitations of Cost and Limitations of Funds, if applicable, and

AIDAR 752.7003, Documentation for Payment.

B.7 PAYMENT OF FIXED FEE

Payment of fixed fee will be handled in accordance with FAR 52.216-8. FAR 52.216-8 is incorporated in Section I by reference.

B.8 MULTI-YEAR CONTRACT

This is a multiyear completion term contract that will be funded on annual basis and is considered non-severable as defined in FAR 17.103. Therefore, this contract is subject to the requirements of

FAR 17.106. Below is the Contracting Officer set cancellation ceilings for the anticipated contract.

Offerors are welcome to propose their own cancellation ceilings for consideration.

Cancellation Ceiling: This is a CPFF Completion type contract where the contractor is authorized to be reimbursed for all costs which are allowable in accordance with FAR 52.216-7, “Allowable

Costs and Payment.” Therefore, the contractor will not incur any costs which would have been amortized over the life of the contract should the contract be cancelled in accordance with FAR

52.217-2. Accordingly, the cancellation ceiling for each cancellation date is indicated below:

Cancellation Date Cancellation Ceiling

Contract Year 2: Date: September 15, 2017_____ Amount: $2,041,823

Contract Year 3: Date: September 15, 2018_____ Amount: $1,586,822

Contract Year 4: Date: September 15, 2019______ Amount: $1,134,110

Contract Year 5: Date: September 15 2020______ Amount: $ 680,237

[END OF SECTION B]

USAID/Ethiopia | RFP# SOL-663-16-000002 7

SECTION C – STATEMENT OF WORK

USAID FEED THE FUTURE ETHIOPIA VALUE CHAIN ACTIVITY

C.1 INTRODUCTION

USAID’s Feed the Future Ethiopia Value Chain Activity is part of the US Government’s Feed the

Future Initiative and the Government of Ethiopia’s (GoE’s) Agricultural Growth Program (AGP) II, Component Four: Agriculture Marketing and Value Chains. Under AGP II, the Feed the Future

Ethiopia Value Chain Activity will contribute to the GoE’s objective to improve agricultural productivity and the commercialization of smallholder farmers.

C.2 PROBLEM STATEMENT

While production growth rates in Ethiopia in the past decade have been impressive, agriculture remains characterized by subsistence-level production with low input and low output rain fed systems. Increasing productivity in a way that helps smallholders to both produce enough food to meet their own food needs and have surplus to sell in the market is one of the GoE’s main policy goals. Since 90 percent of agricultural production is done by smallholder farmers, linking them to the market for both inputs and sales is imperative

There are many factors which constrain agriculture in Ethiopia. The agricultural production areas are remote, resulting in high transport costs that limit the competitiveness of value chains. The Food and

Agriculture Organization estimates that the majority of Ethiopia’s soil is moderately to severely degraded. Water is also a limiting factor in Ethiopia agriculture. With only six percent of land currently irrigated and average land holdings of less than 0.5 hectares, smallholder farmers’ productivity and livelihood are dependent on highly variable seasonal rains. Many smallholders cannot afford improved inputs. Weak linkages with input and output markets, and inadequate post-harvest, storage, processing and packaging services translate into high losses and/or poor quality products.

In general, agribusinesses and traders are constrained by several major institutional obstacles. The cost and time required to start and manage businesses are often prohibitive. Access to finance is relatively rare and expensive. Access to land, especially for women, is only now becoming favorable to investments. The tax regime on private businesses as opposed to cooperatives creates an uneven playing field and distorts markets. Fortunately, the GoE is committed to improving its policies as well as its own human and institutional capacity to better manage the agricultural enabling environment.

Aside from the physical, capital, and institutional constraints, gender norms also bind agriculture.

Women make up over 70 percent of the total agricultural labor force in Ethiopia. Similarly, women smallholders benefit little from the downstream portion of value chain activities such as value-added processing, trade and retail. There is also gender inequality in access to productive resources, particularly land and water resources, agricultural inputs such as improved seed and fertilizer, and training and leadership opportunities. Female farmers face additional constraints due to socio-cultural gender roles, lower levels of literacy and numeracy, limited time and mobility to participate in agricultural development activities, limited access to inputs, credit, and technologies, and social norms that constrict the roles of men and women in agricultural activities.

C.3 STATEMENT OF WORK

C.3.1 Purpose and Sub-purposes

The GoE has identified the improvement of agricultural marketing as one of its principle development goals. The purpose of this activity is to improve the performance of select value

USAID/Ethiopia | RFP# SOL-663-16-000002 8 chains in the agricultural sector in conformity with AGP-II which commenced in November, 2015 and will last a period of five years.

The AGP-II components are:

1. Agricultural Support Services

2. Agricultural Research

3. Small Scale Irrigation

4. Agriculture Marketing and Value Chains

5. Project Management, Capacity Building and Monitoring and Evaluation.

The cross-cutting issues include gender, nutrition, and climate smart agriculture.

This activity functions as the principle contributor to Component Four of AGP-II, Agriculture

Marketing and Value Chains. The objective of Component Four is to improve productivity while reducing marketing costs and associated business costs, and therefore creating much more effective and competitive value chains. To a lesser extent, the activity will also contribute to Component Five, Project Management, Capacity Building and Monitoring and Evaluation.

Given the tight linkage between this activity and the AGP II, the success of this activity depends on effective collaboration with the Ministry of Agriculture’s AGP II Coordination Unit, all of its regional and local Coordination Units, the Agricultural Transformation Agency (ATA), and the donors who contribute towards AGP-II.

This activity has three sub-purposes:

1. Increase nutrition-sensitive productivity of targeted value chains, inclusive of women and youth;

2. Strengthen inclusive market systems and trade;

3. Improve the enabling environment in support of agricultural transformation

By achieving these three sub-purposes, the activity will improve nutrition and income for smallholder farmers.

C.3.2 Rationale for the Feed the Future Ethiopia Value Chain Activity

Under the GoE’s AGP II, the Feed the Future Ethiopia Value Chain Activity builds on USAID’s contribution to AGP I, including, but not limited to, USAID/Ethiopia’s Feed the Future AGP-

Agribusiness and Market Development (AMDe), AGP-Livestock Market Development (LMD), Capacity to Improve Agriculture and Food Security (CIAFS), and Ethiopia Sustainable

Agribusiness Incubator (ESAI) activities. AGP-II is designed to increase geographical coverage, consolidate past investments, and meet the emerging challenges of the agricultural sector, especially those related to targeted value chains and market systems.

Similar to USAID’s parallel contribution to AGP I, the Feed the Future Ethiopia Value Chain

Activity will not only continue past activities, but also coordinate with, and in many cases, programmatically integrate with ongoing USAID activities including the USAID-ATA Commercial

Farm Service Centers, the USAID-DuPont-Pioneer Advanced Maize Seed Adoption Program

(AMSAP), the Empowering New Generations with Improved Nutrition and Economic Opportunity

(ENGINE) and its follow-on “Growth through Nutrition”, Agriculture Knowledge Learning

Documentation and Policy (AKLDP), and USAID’s various Development Credit Authority loan guarantees. Of paramount importance is the Feed the Future Ethiopia Value Chain Activity’s ability

USAID/Ethiopia | RFP# SOL-663-16-000002 9 to integrate with the Graduation with Resilience to Achieve Sustainable Development (GRAD) and its successor activity.

C.3.3 Geographic and Commodity Focus

C.3.3.1 Geographic Focus/Woreda Selection

The AGP II program will cover 157 woredas, which includes all of those targeted under AGPI plus an additional 61. The woredas are distributed among the Amhara, Oromia, SNNPR, Tigray, Benshangul-Gumuz, Gambella, Harari regions and Dire Dawa Administrative Council. Expansion into the new regions and Dire Dawa will be on a limited scale, with two woredas in each of

Benshangul-Gumuz and Gambella, and one in Harari and Dire Dawa. The GoE’s ACC program will also target select woredas but be distributed across the AGP II regions.

Currently, Feed the Future activities operate in 154 woredas encompassing all of those under AGP-I and select PSNP, pastoralist and milk-shed woredas. Feed the Future activities will continue to support AGP-II and select PSNP, and milk-shed woredas by layering and sequencing interventions across geographic and programmatic activities.

Feed the Future activities under AGP II will complement and build on GoE investments in ACCs.

The ACCs supported by ATA promote smallholder commercialization. This activity will serve as a primary means to help them to grow. Consistent with Feed the Future principles, this activity will extend the benefits of the growth generated by ACCs to women and youth by linking ACCs to AGP

II Component Four. The activity’s geographic focus will balance AGP II woredas, the ACC clusters and opportunities to layer and leverage investments in other Feed the Future activities working in chronically food insecure areas near AGP II woredas.

C.3.3.2 Commodity/Value Chain Selection

AGP II includes twenty-one value chains. This activity includes five value chains covered in AGP-I and six of the possible 21 AGP-II value chains. USAID/Ethiopia prioritizes the following current value chains: maize, coffee, chickpea, dairy, and livestock (meat and live animals). There is potentially one additional value chain, poultry. Since the poultry value chain is new to the Feed the

Future value chain portfolio, it must be subject to a value chain and cost benefit analysis before it can be included in the activity. If the analyses are favorable, and the poultry value chain is included, the interventions will address gaps in nutrition, gender equity, income generation potential, and provide other benefits. Although USAID/Ethiopia intends to limit the number of value chains under its AGP

II investments, there are opportunities to exploit the connections and common services between value chains such as feed and fodder, fertilizer, financial services and advisory services.

Identifying value chain opportunities and constraints requires collaboration and coordination with a wide range of AGP II stakeholders, including GoE representatives from the federal, regional, and woreda levels. The stakeholder consultation process is intended to ensure technical and strategic input to inform the value chain interventions, buy-in from the project partners and stakeholders, and a strong working relationship with local partners and stakeholders.

In parallel to the investments made through the Feed the Future Ethiopia Value Chain Activity, USAID intends to provide support to the ATA to focus on three commodities using the ACC approach. These three clusters will prioritize wheat, sesame, and honey to deepen impact in these value chain crops which have already received investment from multiple donors.

USAID/Ethiopia | RFP# SOL-663-16-000002 10

C.3.4 Approach

The Feed the Future Ethiopia Value Chain Activity is an inclusive value chain and market systems development activity that integrates nutrition-sensitive interventions, climate smart agriculture, and

USAID/Ethiopia’s Push-Pull strategy. Its focus is value chain and market systems development. It stresses inclusive growth (youth, gender and women’s empowerment), improved resiliency and the integration of information communications technology (ICT). Both the direct technical assistance and the Grants under Contract (GUC) for this activity are meant to reduce the risk of stakeholders within the value chains to adjust their own behavior in concert with each other to create or adapt to the modern value chain itself.

C.3.5 Results Framework

The Feed the Future Ethiopia Value Chain Activity results framework has as its purpose: Improve the performance of the agricultural sector. The sub-purposes are:

Sub-purpose.1: Increased nutrition-sensitive productivity of targeted value chains inclusive of women and youth

1.1 Strengthened and scaled up input supply system’s delivery of affordable, high-quality technologies and services.

1.2 Expanded use of improved technologies and practices by male and female smallholders, including youth.

1.3 Increased availability of, access to and consumption of safe, diverse foods.

Sub-purpose 2: Strengthen inclusive market systems and trade

2.1 Strengthened market access and organization of the market systems.

2.2 Increased access to financial services.

2.3 Increased access to non-financial supporting services.

2.4 Strengthened lead firms, including agribusinesses, agro-processors, and FCUs.

2.5 Increased trade in domestic, regional and international markets.

Sub-purpose 3: Improve the enabling environment in support of agricultural transformation

3.1 Strengthened capacity of MoANR and improved cooperation with ATA at federal, regional and local levels for developing, implementing and monitoring policies.

3.2 Strengthened public and private sector dialogue related to policy review and implementation.

3.3 Strengthened policies, regulations and laws to support an improved business and investment environment around the selected value chains, particularly through the New Alliance

Cooperation Framework.

The activity will contribute to national and Feed the Future goals. As such, it will be measured by appropriate indicators at the mechanism, national, and zone of influence levels for impact level results.

The purpose-level indicator focuses on gross margins. Although subject to a variety of influences which may or may not be directly addressed by this activity, gross margin is a helpful way to measure the extent to which value chains lead to economic benefits for smallholder producers. The baselines established herein are largely derived from indicators used in USAID’s existing activities under AGPI, AMDe and LMD. The targets are selected from AGP II, Feed the Future norms, and the experience of USAID programming over the past several years. All of the baseline estimates will

USAID/Ethiopia | RFP# SOL-663-16-000002 11 be revised upon completion of the baseline study and cost benefit analysis updates to be conducted by the Selected Contractor during the first six months of the contract (see Section F. 5 and F.6).

Since poultry is a new value chain, there is no baseline estimate.

Purpose: Improve the performance of the agricultural sector

Indicators, Baseline and Performance Targets

Indicator Baseline and Target Annual Target Achievements

Indicator Base-line

Target 1 2 3 4 5

Gross margins

($USD/unit)

Maize, Coffee, Chickpea

(USD/ton)

Cattle, Sheep, & Goats

($USD/live animal)

Maize

(566)

Coffee

(744)

Chickpe a (789)

Cattle

(450)

Sheep

(89)

Goats

(29)

Dairy

(1,611)

Poultry

(N/A)

(651)

(855) a (907)

(517)

(102)

(33.5)

(1,335)

(566)

(744)

(789)

(450)

(89)

(29)

(1,611)

(594)

(781)

(828)

(472)

(93)

(93)

(1,691)

(622)

(818)

(867)

(495)

(98)

(98)

(1,772)

(633)

(833)

(883)

(504)

(99)

(100)

(1,804)

(651)

(855)

(907)

(517)

(1,852)

Note:

N/A refers to Not Available.

Sub-purpose 1: Increase nutrition-sensitive productivity of targeted value chains inclusive of women and youth

The premise for increasing and sustaining agricultural growth rests on incentives for farmers to efficiently produce a surplus supply that can be sold to markets. Sustained production efficiency is a result of applying technologies and practices that enable smallholder farmers to increase productivity. Farmers are trying to lower their per-unit production costs relative to market prices and to sell their surpluses in the market, while sustainably managing their natural resource base. As a result of this activity, small holder farmers will have increasingly valuable commercial produce to sell while augmenting their access to nutritious food. Most of the value chains are predominantly managed by women or affect the income and nutritional options of female headed households.

to the expected result is increased availability of diverse, safe and quality foods in domestic markets.

The multi-faceted causes of malnutrition require a multi-dimensional approach. Resources and

USAID/Ethiopia | RFP# SOL-663-16-000002 12 activities need to be allocated across types of assistance (including agriculture, health, Water

Supply, Sanitation and Hygiene (WASH), education, livelihoods, and humanitarian assistance) to mitigate direct and underlying causes of malnutrition.

The indicators for Sub-Purpose One are yield and quantity of nutritious commodity food available in the household. Yield is one of the indicators for the AGP II Program Development Objectives. Yield is particularly important because of its economic implications, particularly for women. Currently, female headed smallholder households are estimated to be 25% less productive by yield than male headed households. The baseline estimates presented here for maize, chickpea, and coffee are derived from baseline data from the MoANR’s Baseline Case Scenario for the Agriculture Sector

Growth and Transformation Plan II (2015-2020). The baselines for livestock are derived from the most recent field reports from LMD. The dairy baseline was taken from estimates made by the Bill and Melinda Gates’ Foundation in its Agricultural Development 2020 Goals. The baseline target across all of the value chains is 22 percent growth.

The indicator on quantity of nutrient rich value chain foods is a new Feed the Future indicator, as such, there is no available fixed baseline estimate.

Sub-Purpose 1: Increased Nutrition-Sensitive Productivity of Targeted

Value Chains Inclusive of Women and Youth

Indicators, Baseline and Performance Targets

Indicator Baseline and Target Annual Target Achievements

Indicator Base-line Target 1 2 3 4 5

Yield (metric tons/per hectare) as a result of

USG assistance

(disaggregated by sex, new/ continuing)

(3.4)

(1.05)

(0.7)

(4.15)

(1.28)

(0.85)

(1. 05)

(0.7)

(3.5)

(1.1)

(0.74)

(3.7)

(1.16)

(0.78)

(4.0)

(1.2)

(0.82)

(4.15)

(1.28)

(0.85)

Yield of

Livestock

(metric tons) as a result of USG assistance

(disaggregated by sex, new/ continuing)

(5.4)

(.79)

(1.4)

(6.6)

(.97)

(1.7)

(5.4)

(.79)

(5.7)

(.83)

(1.5)

(6.0)

(.88)

(1.6)

(6.3)

(.92)

(1.67)

(6.6)

(.97)

(1.7)

N/A refers to Not Available.

The 22% target is consistent with those of the World Bank but less than the targets set by the

AGP II Project Implementation (Draft, June 2015). Given the divergence, the targets used here will be revisited during the benchmark analysis along with the baseline estimates to ensure that both are realistic, consistent with AGP II and achievable.

USAID/Ethiopia | RFP# SOL-663-16-000002 13

Yield of milk

(liters/animal/da y)

Dairy

(1.69)

Dairy

(2.06)

Dairy

(1.69)

Dairy

(1.77)

Dairy

(1.88)

Dairy

(1.98)

Dairy

(2.06)

1.3.3 (Code:

TBD) Total quantity of targeted nutrient-rich value chain commodities produced by direct beneficiaries that is set aside for home consumption with USG assistance

N/A N/A N/A N/A N/A N/A N/A

1.1 Output: Strengthened and scaled up input supply system’s delivery of affordable, high-quality technologies and services

The activity supports the AGP II’s objective to ensure producer’s access to sufficient quantity and quality of inputs delivered through efficient distribution channels. There are many ways to enhance technology, administration and business culture. The activity will promote a full range of improved technologies to improve crop and livestock practices. Equally important is the need to strengthen business, entrepreneurial, and financial management skills, especially inventory management and functional literacy/numeracy throughout the value chains. Similarly, input suppliers need to develop a customer-focused business culture.

Value chain strengthening requires cooperation from a large number of stakeholders who have overlapping interests. USAID works with the GoE to assist Common Interest Groups (CIGs), Farmer

Cooperative Unions (FCUs), Community Based Seed Producers (CBSPs), Commercial Farm Service

Centers, and other private input suppliers. They are all trying to strengthen access to finance, goods and services. The work will help beneficiaries conduct business to produce and/or distribute improved technologies including seeds, machines, tools, and other services. Collaboration with, and leveraging, the ATA’s expertise in these activities will catalyze systemic changes.

The potential for secondary effects of the direct technical assistance creates opportunities. For example, capacity building efforts which include women and youth in small input supply businesses

(CIGs, CBSPs), primary cooperatives and other farmer-based organizations, fosters numeracy and literacy while formalizing financial management and entrepreneurial skills. These skills, in turn, serve graduates of the GRAD activity by “pulling” them into professionalized value chain activities such as product development, logistics, operations, management, finance, and information systems and controls.

Illustrative Activities

1. Familiarize input suppliers and small holder farmers with new techniques, equipment, and commodities.

USAID/Ethiopia | RFP# SOL-663-16-000002 14

2. Facilitate actors along the value chains with better product handling, transportation, inventory management, input and output tracking, client service, financing, pricing, and usage.

3. Find and/or test new ways to promote alternative financing – credit, advances, insurance, warehousing, and vouchering.

4. Establish direct input supply systems where they do not yet exist.

5. Promote direct seed marketing.

6. Support fertilizer blending operations piloted by AGP-AMDe and further scale through private sector investment.

7. Support linkages with Development Credit Authority guarantees as well other financing mechanisms.

Expected Outcomes

The expected outcome is increased quality and affordable technologies and services delivered by supply systems to small holders. The indicators place focus attention upon smallholders and their access to input supply value chains. The majority of households in each of the value chains have less than 0.5 hectares and/or small herds. The annual purchases by smallholders will reflect their value chain requirements. The baseline estimate for input purchases were calculated by adding purchases by beneficiaries under the current LMD and AMDe activities. The baseline estimate will be adjusted according to the baseline study. The annual targets allow for slow startup and then nearly linear progress. The baseline estimate for the presence of effective delivery services in the woredas is taken from AGP-II’s goal of extending services, including the Direct Seed Marketing Program, throughout the AGP-II zone. The expected outcomes targets reflect AGP-II goals; Feed the Future guidelines, and USAID/Ethiopia experience and expectations.

Output 1.1: Strengthened and Scaled up Input Supply System’s Delivery of Affordable, High-quality

Technologies and Services

Indicators, Baseline and Performance Targets

Indicator Baseline and Target Annual Target Achievements

Indicator Base-line

Target 1 2 3 4 5

Value of inputs purchased by smallholder farmers, disaggregated by women, men and youth as a result of

USG assistance

($USD millions).

10.4 M 13.6 M 10.4 M 11.5 M 12.5 M 13. M1 13.6M

Number of kableles in the ZOI have direct input supply systems including the expansion of the Direct Seed

Marketing Program

1,194 1,508 1,204 1,344 1,444 1,508 1,508

USAID/Ethiopia | RFP# SOL-663-16-000002 15

The number of kabeles with input supply systems under AGPI is currently at 1,194. Under AGP-II, the GoE intends to increase the number of woredas and kabeles served. These estimates will be revised based upon the baseline analysis (See section F.5 and F.6).

1.2 Output: Expanded use of improved technologies and practices by male and female smallholders, including youth

Scaling adoption of technologies and practices that increase the productivity of male and female smallholders is necessary to achieving system-wide changes that improves the competitiveness of the entire value chain. The activity will help farmers invest in productivity- enhancing technology.

Fostering relationships between input suppliers and their clients to provide services and other incentives is critical to scaling adoption of technologies.

AGP I promoted a wide range of improved technologies and practices, including hybrid chickpea, which was promoted in partnership with ATA, and maize in the AMSAP partnership with DuPont.

In AGP II, these technologies and practices will be brought to scale while identifying other promising technologies. The Direct Seed Marketing program, in which rural agents are authorized by the GoE to sell seeds, will be highlighted. This program was piloted in only a few districts in the last two years and will scale to 100 in 2015/2016.

1. Collaborate with ATA and development partner projects to improve seeds, livestock, pest management, and fertilizer application.

2. Expand the Direct Seed Marketing Program in parallel with veterinary services.

3. Collaborate with financial services providers, including rural SACCOs, microfinance institutions (MFIs) and banks to facilitate access to finance for input suppliers.

Expected Outcomes:

The outcome of the technical assistance is that the beneficiaries will have adopted and used improved technologies to produce commodities. The indicators focuses on the number of small farmers served under the program. The target reflects the ambitions of AGP-II. Since the activity has not commenced, the baseline is set at zero (0). The annual targets allow for slow startup and then nearly linear progress.

Output 1.2: Expanded Use Of Improved Technologies and Practices By Male and Female Small

Holders Including Youth.

Indicators, Baseline and Performance Targets

Indicator Baseline and Target Annual Target Achievements

Indicator Base-line

Target 1 2 3 4 5

4.5.2-5: Number of farmers and others who have applied new technologies or management practices as a

0 1.53 M 0 .15 M .8 M 1.4 M 1.5 M

USAID/Ethiopia | RFP# SOL-663-16-000002 16 result of USG assistance

(disaggregated by sex, new/continuing)

1.3 Output: Increased availability of, access to and consumption of safe, diverse foods.

Aside from improving the inputs to small holder farmers, this activity is designed to improve nutrition of the farmers and their household members. Diversified diets are highly correlated with caloric and protein adequacy, percentage of protein from animal sources (high quality), and household income. Increasing dietary diversity will require increasing the availability of nutritious foods at the household level and in markets. The availability of nutritious foods in market and homes is a consequence of increasing both household agricultural and livestock production and the productivity of value chains.

Producers need more nutritious produce available for their own consumption as well as a surplus to sell at local markets or to value added processors. Simply increasing the availability of products is insufficient to improve the nutritional status of producers’ households. Women need to be empowered to make decisions about how much produce to retain for household consumption as well as for savings and investment.

Given the existence of other donor and USG nutrition-oriented activities, this activity is designed to operate in close collaboration with the Feed the Future’s ENGINE activity (and its follow-on

Growth through Nutrition). ENGINE has developed communication-change approaches in Ethiopia and training materials and job aids for agriculture development agents which can be incorporated into this activity. Food-borne illnesses and public health threats such as aflatoxin and other mycotoxins, pesticide residues on foods, bacterial counts, and zoonosis hinder the value chains. They can be mitigated with improved management and handling. Effective control over threats to the food chain such as on-farm post-harvest practices decrease losses and increase viable produce for consumption and/or marketing.

Since smallholder agriculture is often accompanied by non-agricultural or related small cottage industries, non-agricultural activities are important sources of income that can be used to diversify nutritious products for local consumption. Cost-sharing mechanisms to startup small processing businesses, facilitate formulations of products, provide entrepreneurship and business training, and facilitate access to credit and markets for these businesses and small household farmers (particularly women) have all been shown to be effective indirect ways to promote rural household food consumption. As such, this activity is designed to work in tandem with other USAID/ Ethiopia initiatives, such as the POTENTIAL activity, to train women and youth on the necessary workforce skills.

1. Leverage community behavior change communication efforts supported by USAID nutrition activities.

2. Help families improve produce storage and sales techniques to increase the consumption of nutritious foods and products.

USAID/Ethiopia | RFP# SOL-663-16-000002 17

3. Support food preparation and processing capacity at household and firm level to increase consumption of nutritious foods.

4. Leverage educational programs to provide basic workforce skills that can be used on and off the farm.

The expected outcome is that smallholder households will have increased availability to safe, diverse foods and consume them. The indicators focus on nutrition for children and women. The baseline estimates are derived from recent analyses about dietary diversity. The target (30% improvement) is set using Feed the Future recommendations. The annual targets allow for slow startup and then nearly linear progress.

Output 1.3: Increased Availability Of, Access To and Consumption Of Safe Diverse Foods

Indicator Baseline and Target Annual Target Achievements

Indicator Base-line

Target 1 2 3 4 5

Percentage of households in the

ZOI reporting that children have a minimally acceptable diet (4 food groups).

4.3% 5.6% 4% 4.5% 4.7% 5.2% 5.6%

Percentage of households in the

ZOI reporting that women have a minimally acceptably diverse diet (4 food groups).

11.7% 15.2% 12% 12.3% 12.9% 14.0% 15.2%

Sub-purpose 2: Strengthened inclusive market systems and trade

Efficient and highly productive farmers need access to equipment and methods to transport their goods to market. AGP II and this activity will scale market value chain models that lead to: 1) a more organized market system for outputs in which transactions are structured, quality standards are embedded, and producers rewarded with price premiums; and 2) actors are linked and act collectively in ways that reduce risks and increase access to supporting services and markets throughout the value chains. A more organized and structured market system will enable the value chain actors to buy in bulk from input and service markets and sell in bulk to output markets, and thus realize economies of scale from aggregation that enable them to better access regional and domestic markets. Since increased trade and value added processing generates higher incomes and savings, producers can reinvest or search for new opportunities. These new investments stimulate greater supplies and opportunities for new product development both on farms and among non-farm enterprises (NFEs). Finally a more organized market system can facilitate the cooperation and collective action needed for actors to solve industry-wide or systemic problems.

The primary indicator for strengthened value chains is greater sales from output. As such, the indicator to be used here is value of incremental sales (USD in millions) for the direct beneficiaries of the activity. Since it is likely that many of the producers will continue to work with the Selected

Contractor, the baseline here is derived from recent reports for AMDe and LMD. The target represents approximately a 22% increase in incremental sales.

USAID/Ethiopia | RFP# SOL-663-16-000002 18

Sub-Purpose 2: Strengthened Inclusive Market Systems and Trade.

Indicator Baseline and Target Annual Target Achievements

Indicator Baseline Target 1 2 3 4 5

Value of incre-mental sales

($USD

millions)

(9.78)

(15.2)

(1.3)

(1.47)

(2.94)

(6.4)

(10.0)

(18.2)

(1.74)

(7.7)

(4.9)

(9.9)

(15.5)

(3.0)

(4.1)

(10.2)

(15.9)

(1.52)

(3.1)

(6.7)

(4.3)

(10.8)

(16.7) a (1.45)

(1.59)

(3.2)

(7.0)

(4.5)

(11.2)

(17.4)

(1.66)

(7.4)

(4.7)

(11.7)

(1.73)

2.1 Output: Strengthened market access & organization of the market system

Working within existing markets, individuals and SMEs (collectors, processors, transporters, and buyers) search for business models that cost-effectively scale SMEs’ outreach to smallholders, improve supply chain management, lower transportation and transaction costs, and improve the profitability. In collaboration with ATA, individual stakeholders and FCUs will seek business models that decrease smallholder risk for adopting quality standards, improve market access, and improve the profitability of SME lead firms. Some of the most salient needs arising from all of their collected efforts include improved supply-chain and inventory management, procurement planning, business planning and development, financial, and export management.

Given the nature of these cross-cutting business issues and the cross-cutting development issues discussed below, there are opportunities to reduce costs across value chains. The AGP-II and this activity will leverage those opportunities to achieve systemic efficiencies and broaden their impact.

For example analyses routinely identify factors that inhibit women’s ability to participate profitably in markets. Although households in which women participate in cooperatives do better than otherwise, female membership rates in cooperatives are very low among female-headed households and even lower among male-headed households. Similarly, households which control the income gained from their own labor tend to do better nutritionally and commercially. Those earnings can be retained, reinvested, used to move to adjacent activities within a value chain, expand other non-agricultural activities, and improve household nutrition. Investments made by more empowered

USAID/Ethiopia | RFP# SOL-663-16-000002 19 women would actually strengthen the performance of value chains, enabling actors across them to become more effective and profitable.

1. Strengthen or introduce contract farming or out grower schemes between buyers and suppliers.

2. Reduce the transaction costs associated with acquiring inputs and delivering goods to market in the value chain.

3. Support and assist smallholder farmers (especially female headed households), cooperatives and other farmer-based organizations about market requirements for quality, quantity and timing, including SPS standards.

4. Create or strengthen regional and market clearance and publication systems using ICT.

5. Map logistic routes for commodities, identifying ways to reduce storage time and spoilage risks.

6. Identify investment opportunities that might support the modernization and extension of the value chains.

The expected outcomes are improved access to the market and increased participation by smallholder farmers (especially by women). The two indicators selected here focus on heightened participation by women in cooperatives and one measure of value chain efficiency, post-harvest losses. The baseline measures are derived from recent reports from AMDe and LMD. . The second output indicator is female participation in cooperatives. The most recent estimate for female participation in cooperatives is 1.75 million.

The annual targets allow for slow startup and then nearly linear progress.

Output 2.1: Strengthened Market Access & Organization Of The Market System

Indicator Baseline and Target Annual Target Achievements

Indicator Baseline Target 1 2 3 4 5

Post-harvest loss at farm gate (% of harvest).

(9.5%)

(13.7%)

(3.2%)

<3%

(13%)

(3.2%)

(>3%)

(12%)

(10%) a

(3.0%)

(<3%)

(5%)

(2.9%)

(3%)

(2.9%)

Female participation in coopera-tives (millions of women)

1.75 M 2.05 M 1.74 M 1.8 M 1.87 M 1.96 M 2.05 M

USAID/Ethiopia | RFP# SOL-663-16-000002 20

2.2Output: Increased Access to Financial Services

Producers and value chain actors require capital and advisory services to manage their affairs. This activity provides technical assistance to improve access to capital as well as to public and private services which help make decisions about how to allocate it. It treats access to finance and support services individually to emphasize their distinct roles and technical requirements.

Access to both collateralized debt and equity finance is critical to value chain development.

Therefore improving the performance of the financial sector and its linkages to agriculture is one of the principle objectives of AGP II. Ethiopia is poised to increase mobile banking and agent banking that could extend financial services to both borrowers and lenders. Under the auspices of AGP-I, the

ATA, AMDe, and LMD piloted financial products and information systems for banking, credit, and insurance (both crop and livestock). There are many opportunities to build on their efforts. For example, a combination of cost-share, loan, and grants might reduce small holder farmers’ risk of post-harvest losses while improving the return on investments in warehousing, processing, packaging, transportation, and retail. USAID’s Development Credit Authority (DCA) guarantees can be used to builds on financial access models currently working in East Africa as well.

1. Collaborate with donors and financial institutions to invest in techniques and equipment that reduce post-harvest loss, improve packaging, and promote food safety.

2. Experiment with retailers as they develop rapid farm-to-shelf delivery systems.

3. Scale up financial products that have already been piloted in Ethiopia.

4. Align new financial service product development with input supply scale up activities.

The expected outcome is that smallholders have easier and more affordable access to finance. The indicators match the value of new private investment, loans, and the adoption of improved technologies and techniques by value chain actors. The baseline estimate for the value of private investment is set at zero to emphasize the focus on the activity. While the AGP-II target for investments is $280 million, the target included here is the sum of the average investments that might be expected based on recent history for the value chains served by AMDe and LMD. It does not include the potential for investments stemming from other value chain activities undertaken by the

ATA on wheat, sesame, and honey. The annual targets allow for slow startup and then nearly linear progress. The baselines and targets will be reconsidered upon completion of the baseline.

Output 2.2. Increased Access To Financial and Other Supporting Services

Indicator Baseline and Target Annual Target Achievements

Indicator Base-line

Target 1 2 3 4 5

4.5.2-38: Value of new private sector investment in the agriculture sector or food chain leveraged by FTF implementation

($ US millions)

0 M 125 M 25 M 25 M 25 M 25 M 25 M

USAID/Ethiopia | RFP# SOL-663-16-000002 21

4.5.2-29: Value of

Agricultural and Rural

Loans ($ US millions)

3.9 M 5.9 M 0 4.1 M 4.4 M 5 M 5.9 M

2.3. Output: Increased Access to Non-Financial Supporting Services

Markets for advisory and business services (e.g., post-harvest, processing, transport, and business development services) can help small holder farmers who reside farther away from schools and roads while building up each segment of the value chain.

Services to stem post-harvest losses are important because they affect incremental sales, amount of food for consumption in the household and gross margins. Constraints include inadequate storage, poor quality at the farm gate, and limited awareness of failure to adhere to health and other quality standards and procedures (such as testing for mycotoxins). Service providers typically lack sufficient equipment for processing and testing for quality. Collaboration with the public extension service could facilitate the dissemination of information and strengthen the effectiveness of the service itself.

Domestic and international trade is constrained by the lack of routine product safety standards, equipment, and practices. Piloted contract arrangements between producers and processors that provide access to improved inputs have proven successful across commodities chains. Given the success of AGPII, there are many opportunities to scale and improve methods. Stakeholders agree that a comprehensive approach to improving the quality of processing, storage, packaging, transport, cold chain storage, and wholesale services must involve both the private and public sectors.

Producers need threshing, grading, weighing, and packaging equipment. Some of the more promising opportunities for innovation include dairy processing, fortification and blending with high protein commodities to…