Nrgp value chain overview & experience jsr june 22, 2011 paschal final

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PRESENTATION AT AGRIC. SECTOR JOINT PRESENTATION AT AGRIC. SECTOR JOINT REVIEW REVIEW

NRGP EXPERIENCENRGP EXPERIENCE

GRAND MENSVIC HOTEL GRAND MENSVIC HOTEL ACCRA ACCRA

JUNE 22-24, 2011JUNE 22-24, 2011

BY: PASCHAL B. DEREBY: PASCHAL B. DEREVALUE CHAIN SPECIALISTVALUE CHAIN SPECIALIST

Paschal B. Dere VCS-NRGP

04/13/23 2Paschal B. Dere VCS-NRGP

04/13/23Paschal B. Dere VCS-NRGP 3

4

FARMER

Banks/FIs

•Warehouse

•Commodity Dealers•Processor

s

Input suppliers

BDS & Agro-tech Advisors

04/13/23Paschal B. Dere VCS-NRGP

5

Is farmer/FBO creditworthy?

B/FI Advises Farmer/PO on how to improve credit worthiness

Farmer/PO Assesses her credit needs & puts application to Banks/FIs

Pre-season planning & Interface meeting b/n Marketing Company/Input supplier/Bank/FI-& Farmers/PO to confirm market for commodity (tentative px formula/qty/qly)

Bank/FI vets Farmer/PO Farmer for credit worthiness & diligence tests

Bank/FI does final diligence tests and approves loan

No

Farmer/PO acts on B/FI Advice

Yes

Farmer/FBO does final reading and understanding of loan conditions & terms of payment and contracts loan

Farmers/FBOs authorize Bank/FI to pay suppliers based on countersigned Invoices.

Farmer/FBO contracts services/goods from suppliers

STAGE 1.


6

Farmer/PO comply with GAP recommendations from MoFA & FAs

Pre

-seaso

n P

lann

ing &

Inte

rface

m

eeti

ng b

/n M

ark

eti

ng C

om

pany/Inp

ut

supplie

r/B

ank/F

I-&

Farm

ers

At harvest farmer/FBO delivers produce to pre-designated buyer with whom contract has been signed at pre-season planning session (Processor, Commodity Dealer, Warehouse Receipt Operator, Cold Chain Operator etc)

The pre-designated buyer pays off farmer indebtedness (Joint Cheque farmer or FBO /Bank) to the Bank, using monetary equivalent of part of crop delivered. Balance of crop reserved for farmer to decide on when , how much and to whom to sell

STAGE 2

Has Farmer/FBO successfully repaid

loan?

NoStudy and understand reason(s) for loan default and take appropriate action

Yes


7

Bank /FI Quantum of Funds Disbursed

No of FBOs

No of Farmers

District Location of Farmers

Nandom Rural Bank 10,582.00 7 89 Lawra/Lambusie

Lawra Rural Bank 14,766.00 9 96 Lawra

Sonzelle Rural Bank 10,125.00 9 95 Jirapa/Lambussie

Sissala Rural Bank 94,991.00 24 316 Sissala West and East

Builsa Rural Bank 55,352.00 27 120 Builsa

BESSFA 14,750.00 15 206 Garu-Tempane

Yapra Rural Bank 4,611.00 3 24 Pru

Kintampo Rural Bank 6,644.00 2 24 Kintampo South

AgDB 841,640.00 661058

Wa Muni/Bawku W/Yendi/Tamale metro

Total 1,053,461.00 162

2028


VALUE CHAIN ACTORS: Private Sector Firms, individual farmers, traders, processors who are key participants / drivers along the commodity value chains.

CHAIN PROMOTERS/FACILITATORS: Development Organizations and those entities implementing projects/programmes using the Value Chain Approach.

VALUE CHAIN SUPPORTERS: Consulting Firms, Trainers, Technical Advisors, Financial Services Providers and Business Development Services Providers.

VALUE CHAIN POLICY MAKERS/INFLUNCERS: Ministries, Departments and Agencies.


Knowledge sharing EVENT “MARKET ” for commodity value chain

products and services Institutionalize & professionalize value

chain practice in Ghana Cost-Share EVENT-No free riders,

eventually fully paid GOAL-BOT (build, operate & transfer

MOFA) MOLE SERIES, Professional Event Two such fora have been held so far in

November 2009 and January 2011. The 3rd VCPF is planned for January 2012


Established a core working Group (9-11 member)

Temporarily hosted in MOFA (Value Chain Desk as Clearing House)

Mandated to draft Vision & Mission Statement

Action plan for 2011 Share knowledge electronically on List-serve

platform (Protocol the rules for sharing this list-serve) Update present list of practitioners Monitor the outcome of Buying & Selling

session at VCPF Next meeting 1st July 2011


Should, and how can collaboration of Value Chain Practitioners and harmonization of Value Chain Programmes/Projects in Ghana be fostered?

Should Value Chain Practitioners Forum be an annual event?

What form of governance structures should be put in place for the VCPF?

Which method of Value Chain Development should we in Ghana adopt-USAID-MicroLinks, GIZ-ValueLinks

3. THE NRGP COMMODITY VALUE CHAIN BUSINESS MODELS DEVELOPED TO IMPROVE THE SMALLHOLDER

FARMER INCOMES

Special Purpose Vehicles

- Nucleus / Best Farmers

LEAD FIRM

CONTRACT FARMING

SFMC Ltd(Aggregato

r)PROCESSORS(VESTOR OILS, GHANA NUTS)

Small scale

farmers/FBOs

PROCESSORS(VESTOR

OILS, GHANA NUTS)

Small scale

farmers/FBOs

EXPORT, DOMESTIC HIGH END

SHOPS

Small scale

farmers/FBOs

NUCLEUSE FARMER (Kharma Farms, Bogu)

VEPEAG

A. Striving for Volume (3)

B. Striving for Better Price (1)

WAREHOUSE RECEIPTS & INVENTORY CREDIT (YAPRA RURAL BANK & PRU-

SENE FBOs)

3.1 THE LEAD FIRM MODEL

LEAD FIRM

SFMC Ltd(Aggregato

r)PROCESSORS(VESTOR OILS, GHANA NUTS)

Small scale

farmers/FBOs

Services provided

• Assured market

• Product quality specification

• Quantity specification

3.2 THE SPECIAL PURPOSE VEHICLE FINANCING MODEL

SPECIAL PURPOSE

VEHICLE FINANCING

PROCESSORS(VESTOR

OILS, GHANA NUTS)

Small scale

farmers/FBOs

NUCLEUSE FARMER (Khama farms)

Services provided

• Assured market

• Tractor & other mechanical services

• Fertilizer, herbicides, best production

methods

• training in group cohesiveness

• Quantity specification

3.3. THE CONTRACT-OUTGROWER FARMING MODEL

CONTRACT FARMING

EXPORT, DOMESTIC HIGH END

SHOPS

Small scale

farmers/FBOs VEPEAG

-

SMALL-SCALE FARMER

Farmers are integrated into a the production, input, financing, processing and marketing.& information exchange aspects of the value chain

CONTRACTOR

Business usually contracts farmers as producers and supplies inputs, training, technical services and point of sale

Services provided• Small farmers and contractor are interdependent

BUSINESS MODEL

No.FBOs/ Farmers

Loan Req’d (GHC)

Acres Source of

FundsExpected

Repayment

LEAD FIRM

FBOs

899

Farmers3,528,435.80 29,846

RCBs, ADB,

STANBIC100%

SPECIAL PURPOSE VEHICLES

(KHAMA Farms,

BOGU S&F Assoc

Farmers

K- 930

B-700

Kharma-138,000

WC,-55,000EQ

Bogu-148,000WC, 22,000EQ

Approx.

K-2000

B-1500

STANBIC 100%

CONTRACT FARMING

(VEPEAG)

5 FBOs

Farmers

601,865,000 60 STANBIC 100%

FBOs/FarmersBanks/FNGOs

Warehouse

Receipt

Storage loan

Crop deliveryReceipt

3.4. 2011 Pilot WR Model ( Expansion of Inventory Credit Scheme)

STAKE 1: INTAKE

FBOs/Farmers

Warehouse

Banks/FNGOs

3.4. 2011 Pilot WR Model

STAGE 2: OFF-LOADING

Repayment

Saving

s acc

ount

Withdrawals as needed

Farmers FBO identified

Pre-season meetings concluded IPB

Contracts signed

DZVCC established

Facilitation Agencies Recruited

STAGE STAGE CBP

done

Industrial crops

Yes Yes Draft Done fine-tuning in progress

Yes Yes Ongoing No

Fruits & Vegetables

YesYes buttimed

Draft Done fine-tuning in progress

No No No No

WomenCrops

Yes Yes Draft Done fine-tuning in progress

Yes Yes Ongoing No

Animals No Contract at review stage

Draft Done fine-tuning in progress

No No No NO

Certified Seed

Yes No No No No NO


1. Fine–tune Cashless Transactions Model for sustainable financing of agricultural commodity value chains in Ghana

2. Professionalize & Institutionalize Value Chain Practice in Ghana

Nrgp value chain overview & experience jsr june 22, 2011 paschal final

Self Improvement

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