One Country, Two Models: Adjusting Financial Services to Fit Smallholder Input Supply Systems
Establishing lasting business and financial linkages in staple crops is challenging because of their role as both a cash and food security crop, the numerous side-selling options on less demanding markets, and the intrinsic climate risk associated with rain-fed crops.
USAID/Senegal’s Projet Croissance Economique (PCE), or Economic Growth Project, is a Feed the Future initiative that aims to boost the incomes of smallholder farmers engaged in the country’s rice, maize, and millet value chains. The project has developed and mainstreamed contract models, which have enabled farmers to link with input dealers and access financial services designed to address their initial lack in collateral. These arrangements now guarantee timely access to quality inputs and have secured loan reimbursement rates nearing 100 percent -- resulting in significant gains in yields, income, as well as sustainable access.
Initially designed as buyer-driven input systems, USAID/PCE’s work in the irrigated rice and rain-fed maize value chains progressively evolved into two models, adapted to the specific contexts.
Jean-Michel presented these two different case studies to illustrate the role of contracts and financial services in securing timely access to inputs by smallholder farmer groups. It also stressed the importance of focusing on the overall value chain skill set that contributes to the robustness of the transactions. This includes: farmer forecasting and tracking capacity, quality assurance norms, testing methods, crop insurance, warehouse collateral systems, among other topics.
Please note that this seminar was held at a new location: Washington Room in the City Club of Washington. Please use the entrance on 13th Street, beside Warner Theatre. Once inside, look for the spiral staircase in the atrium. City Club is located at the bottom of the stairs. Elevators are also available in the atrium.
Jean-Michel Voisard is the Chief of Party of the USAID/S
enegal Economic Growth Project, a Feed the Future initiative implemented by IRG/Engility, which aims to boost the participation of small farmers in the country's rice, maize, and millet value chains. Over the past 20 years, Voisard has played a key role in the design and implementation of value chain initiatives for the World Bank and USAID across West Africa. The industry and business-to-farmer interventions he manages link the private sector with grassroots rural organizations to boost agronomic productivity, introduce high-value products and technical innovations, streamline logistics and traceability systems, implement quality management and certification, scale-up small business financing, and promote trade.