Combating Counterfeit Agriculture Inputs in Uganda Through Market Facilitation

This post was written by Susan Pologruto and was originally published on Agrilinks. See an earlier post on prioritizing and sequencing interventions in market systems here.

Understanding how markets shape and are shaped by the broader system in which they are embedded is critical for making them work better for food-insecure families and poor farmers. Through market facilitation combined with ongoing learning, USAID Uganda’s Feed the Future Agriculture Inputs Activity changed its approach after gaining a better understanding of the influences on the agriculture market system that were adversely impacting the intervention.

The Market Systems Global Learning and Evidence Exchange (GLEE) in June brought together USAID staff and practitioners to discuss approaches for leveraging market forces in agriculture to advance global food security. Rita Laker-Ojok, Chief of Party, gave a brief presentation about the market facilitation activity trying to address the problem of counterfeit agriculture inputs in Uganda. The focus of the activity was on creating incentives for actors to use high quality agricultural inputs, including seeds and fertilizer, while decreasing the prevalence of counterfeits on the market.

• If the sanctions (both informal and formal) for selling counterfeits or poor quality products are higher than the incentives, businesses selling those products will either improve or exit the market, creating a better competitive environment;
• If there is improved competitiveness that yields reasonable profit margins for businesses, businesses will have an incentive to invest in new practices and business strategies that prioritize smallholder farmers;
• If agro-inputs businesses invest in a range of customer-oriented practices that achieve growth through providing superior quality and service, customers (smallholder farmers) will have greater access to quality, genuine products that they know how to use;
• If smallholder farmers have greater access to quality, genuine products that they know how to use, smallholders will use more inputs and increase their yields.

By the second year, the activity was not having the type of impact that was expected, and it was clear that increasing availability of high quality agricultural inputs and improved services was not enough of an incentive to encourage change within the system. The assumption was that market pressures would reward quality and sanction counterfeits. This was not the case (yet).

A mid-term assessment identified too much competition from counterfeit input providers that created a disincentive for providers to offer better service and better quality inputs. This led to a different strategy -- adjusting the “rules of the game” in an effort to push bad businesses out while improving the competitive environment.

To address the problem, the Activity focused on building a coalition with a new range of stakeholders including government, industry associations and farmers associations, to enhance the demand for quality inputs, provide farmers with a way to identify quality inputs and increase the regulatory pressure on counterfeiters. While the assumptions listed above remained the same, the theory of change was revised, and the activity re-organized around seven task forces to address these inter-related components within the system. One of the activities was focused on seed certification.

Uganda was well positioned to become a major seed producer for the continent but seed quality needed to be addressed. To create a positive incentive, the activity focused on helping Uganda meet the Common Market for Eastern and Southern Africa (COMESA) standards to enable them to be more competitive regionally. If Uganda could meet COMESA standards, they would enjoy free trade with other member states. A central component of the seed certification activity was the development of an online application for real time GPS located entry of inspection data into a central database to allow traceability of seed from first germination to final sale of tested seed to customers. In addition, private sector actors proposed a joint venture called AgVerify – a logo and e-verification label. To learn more, watch the 10-minute video of Rita Laker-Ojok’s presentation below.

The success of the USAID Uganda’s Feed the Future Agriculture Inputs Activity required an adjustment to the approach and the cooperation of a number of different actors. In Rita Laker-Ojok’s words, “…the sustainable response to complexity has to arise from opportunities within the system, work with a coalition of key stakeholders, draw on international best practice, build a customized win-win solution with strong local ownership, and be flexible enough to respond to emerging issues as the situation evolves.” In her concluding remarks, she also emphasizes that the commitment to continuous learning and adapting will be fundamentally critical to long-term success and sustainability of this particular solution.

Resources

The briefer on Local Systems and Market Systems is an overview of two complementary frameworks: the local systems framework and the inclusive market systems framework.

The 5Rs Framework describes how to support sustainability and local ownership in projects and activities through ongoing attention to local actors and local systems. It highlights five key dimensions of systems — Results, Roles, Relationships, Rules and Resources — that can serve as a lens for assessing local systems as well as a guide for identifying and monitoring interventions designed to strengthen them.

The Collaborating, Learning and Adapting (CLA) Framework and Maturity Matrix tool is designed to help USAID missions think more deliberately about how to plan for and implement CLA approaches that are appropriate for the country context and can assist in achieving development objectives.