The Maendeleo Agricultural Enterprise Fund will identify and support projects through:
- A Competitive Value Chain Fund (CVCF). FARM-Africa will advertise calls for proposals. Funding will be up to ,000 per project; most projects will last for c.3 years, although there will be some flexibility around this. Over five years, FARM-Africa will fund approximately 48 CVCF projects and based on our experience through MATF, each project will benefit an average of 2,000 farmers directly
- Where promising approaches are identified that need further testing, an Innovation Incubator Fund will provide funding
- A Scale Up Fund will provide co-funding for projects which demonstrate the potential to benefit large numbers; FARM-Africa will use this Fund to leverage investment from other donors/partners. FARM-Africa estimates that this Fund could directly benefit 225,000 farmers.
- Monitoring & evaluation: For each project, a baseline study will be conducted. Grantees will be trained in monitoring and evaluation methods. Every quarter projects will report on progress and FARM-Africa will conduct an annual monitoring visit. Impact will be assessed through qualitative methods (interviews, case studies) and quantitative methods (baseline studies, impact studies).
- Secure investment partners
- Recruit staff
- Launch Fund
- Advertise first call for proposals, assess applicants, fund projects
- Advertise second call for proposals, assess applicants, fund projects
- Mid-term evaluation of projects; use preliminary results to identify and target investors for scale up
- Advertise third call for proposals, assess applicants, fund projects
- Conduct impact evaluation on first round projects; identify potential projects for scale up
- First scale up project/s launched
- Conduct impact evaluation on second round projects; identify potential projects for scale up
- Further scale up project/s launched
- Plan future of Fund and seek further investment
- Conduct impact evaluation on third round projects; identify potential projects for scale up
- Further scale up project/s launched
- Finalize further investors in Fund
Counter to global development trends, Africa's food and livelihood security situation is deteriorating. Seventy percent of the population of sub-Saharan Africa are farmers, but the availability of food per person is decreasing. Most families do not produce enough food for their own household consumption, let alone a surplus to sell. In July 2010, the United States Department of Agriculture released its Annual Global Food Security Assessment which projected that, while there are likely to be notable improvements in Asia and Latin America, the food security situation in sub-Saharan Africa will deteriorate after 2010. By 2020, out of a population of approximately 1 billion, more than half will be food-insecure.
Agricultural productivity in sub-Saharan Africa has been limited by weak government extension services and a lack of access to credit and inputs, such as high-yielding or drought-resistant seeds. Most farmers only have access to small areas of land, which hampers economies of scale without effective farmer groups or marketing associations. Agricultural research institutions have developed new varieties of crops, disease management techniques, and cultivation methods that can increase yields, but these inputs and approaches often fail to reach farmers' fields.
Farmers that do manage to generate excess produce tend to operate individually, and sell to brokers and middlemen in small quantities and at low, variable prices. Farmers lack up-to-date information and skills on accessing market prices, and limited storage or processing facilities mean that farmers sell their produce soon after harvest or collection when prices are low. There is little farmer organization for bulking or collective negotiation and marketing with traders, brokers, or retailers.
Development practitioners have been searching for new technological, institutional, and outreach approaches which offer more potential for improving technology transfer and raising productivity and incomes quickly, cost effectively and sustainably. Rather than focus on approaches to raise output per unit resource, practitioners have identified a need for approaches that address the whole agricultural product value chain. Such approaches, however, tend to call for new patterns of partnership, with stronger roles for NGOs, grassroots institutions, and the private sector.
FARM-Africa plans to address these issues through the Maendeleo Agricultural Enterprise Fund ('maendeleo' means 'development' in Swahili). FARM-Africa has a strong track record of transforming lives and of managing a similar fund successfully. Founded in Kenya in 1985, their vision is of a prosperous rural Africa. Their mission is to reduce poverty by enabling small scale farmers and herders to develop innovative and effective approaches to natural resource management. Farmers are able to increase production and move from a subsistence existence to farming as a profitable business. FARM-Africa's core values are embedded in a fundamental belief in the potential of small scale farmers, and they always work to promote farmers' interests within the marketplace.
As mentioned previously, learning has led us to embed the MAEF approach across their entire portfolio of agricultural investments. Farm Africa are in the process of designing a tailor made package of TA support that they plan to offer promising SMEs throughout their routine value chain interventions, but this approach is rarely fully funded by institutional donors, who often prefer to invest in the farmer facing interventions only. They are seeking approximately $1,000,000 over three years to provide this support, support SMEs to network on key issues of common concern (e.g. traceability for export to European markets), helping them to grow and build sufficient capacity to unlock broader sources of finance, and ultimately, help them to work with more farmers, engaging them in growth markets and creating jobs.