Action - Purchase for Progress (P4P) Pilot Initiative - Conditional cash transfer - Adult men and women

Programme: Purchase for Progress (P4P) Pilot Initiative

Programme description

As the world’s largest humanitarian agency, WFP is a major staple food buyer. In 2012, WFP bought US$1.1 billion worth of food – more than 75 percent of this in developing countries WFP buys locally in developing countries when its criteria of price, quality and quantity can be met. P4P is a logical continuation of this local procurement with the intent to achieve a higher developmental gain with WFP’s procurement footprint by buying increasingly in a smallholder-friendly way. 

Through P4P, WFP’s demand provides smallholder farmers in 20 pilot countries with a greater incentive to invest in their production, as they have the possibility to sell to a reliable buyer and receive a fair price for their crops. It is envisioned that in the wake of WFP purchasing in a more smallholder-friendly way, other buyers of staple commodities including Governments and the private sector will also increasingly be able to buy from smallholders.

P4P at the same time invests in capacity building at country level in areas such as post-harvest handling or storage, which will yield sustainable results in boosting national food security over the long term. The five year pilot P4P (2009 - 2013)[1] rests on three pillars:

  •  Demand: Through P4P, WFP tests innovative ways to buy staple food and promote marketing opportunities for smallholder farmers.
  • Supply: P4P links WFP’s demand with the expertise and resources of partners who support farmers to achieve better yields, reduce their losses after the harvest and improve the quality of their staple crops.
  • Learning and Sharing: P4P will gather and share lessons on effective approaches to connect smallholder farmers to markets in a sustainable way and share them widely with stakeholders.

WFP usually buys food through large competitive tenders. Through P4P, WFP is testing new procurement approaches more suited to smallholder farmers and: 

  1.  Buys directly from farmers’ organisations through direct and forward contracts or modified, smallholder-friendly tenders. Most of the food so far contracted under P4P has been purchased through direct contracts with farmers’ organisations Forward contracts commit WFP to buy from farmers’ organisations in the future at an agreed price, and enables the farmers to increase their production. 
  2. Supports emerging structured trading systems such as warehouse receipt systems in Uganda and Tanzania and         commodity exchanges in Ethiopia, Malawi and Zambia.
  3. Buys from small and medium traders, agrodealers or NGOs who work with smallholder farmers.
  4. Develops local food processing capacities that source the staple commodities required as raw materials from smallholder farmers.

Programme type

Multi-national

Cost

US$168 million for technical capacity, including sub-grants, for 5 years (food not included)

References

Status: 
On-going

Start date:

January
2008

End date:

January
2013
Area: 
Rural
Peri-urban
Place: 
.
Target group: 
Adult men and women
Delivery: 
Commercial
Community-based
Implementation details : 

Country approaches to P4P are tailored to suit the opportunities and constraints within each country. Generally, however, each programme has applied one or more of the general approaches:

Approach #1: Farmers’ organisations and capacity building partnerships:

  • WFP buys from FOs of varying capacities
  • Procurement modality selected to match FO capacity/needs with progression strategy ending in capacity for competitive tendering
  • FOs • receive support on production and marketing

Approach #2: Support to emerging structured trading systems

  • WFP supports establishing warehouse receipts systems (WRS) in two ways:
    • direct support for establishing WRS
    • purchasing through WRS
  • Purchasing • through cereal fairs or commodity exchanges to create a “pull-in/follow-in effect”
  • Working with FOs to build capacities for structured trade

Approach #3: Small and medium traders

  • Enhance competition among buyers
  • Provide an alternative market for farmers’ surpluses
  • Buys from traders through modified tendering
  • Train traders on WFP procurement and contract requirements
  • Invest in marketing equipment – stitching machines, weighing scales

Approach #4: Developing local food processing capacity

  • Connect farmers’ organisations to established food processors
  • Develop local processing capacity – biscuits, supplementary feeding products
Target population size : 
770 farmers’ organizations in Africa, representing more than 740,000 smallholder farmers (over 38 percent of whom are women)
Coverage level (%): 
.
Outcome indicator(s): 

.

M&E system: 

M&E system specifies data collection and analysis methods designed to track a number of indicators of programme performance.

The M&E system collects data from a number of sources including:

  • Large scale panel surveys of farmers’ organizations and smallholder farmers. To accommodate capacity constraints at both the country office and headquarters levels, these surveys are conducted every other year. To facilitate rigorous impact assessment, selected countries collect survey data from both treatment and comparison groups.
  • Surveys of traders conducted every other year.
  • Bi-annual case studies with selected smallholder farmers, farmers’ organizations, and traders to collect in-depth information about how and why P4P is working.
  • Detailed information on farmers’ organizations aggregation and sales activities gleaned from farmers’ organization records.
  • Market price data collected largely from secondary sources.
  • Procurement data obtained from WFP and P4P procurement records.
  • Secondary data from agricultural statistics services, partners, etc.

The M&E system also incorporates peer review to identify and validate best practices. At the country level, these include stakeholder meetings, workshops, and annual reviews. At the regional level, WFP is using writeshops and regional workshops to consolidate and validate learning. At the global/programme level, a Technical Review Panel meets annually to review and help interpret results and to guide implementation. Peer review meetings, annual reviews, internal (to WFP) stakeholder groups, and external evaluations also serve to validate results.

Managing the learning process for a programme with the scope and scale of P4P has been challenging and the design and evolution of the M&E system reflect these challenges. In particular:

  • The donor’s insistence on assessing P4P’s impact on household income dictated a rigorous quasi-experimental design approach that has taxed the data collection and management capacities of both the P4P Coordination Unit and country offices. Recognizing the challenges of obtaining a reliable measure of household income, the Coordination Unit also specified collecting data on alternative welfare measures (i.e., expenditure, food consumption score, asset score). Also, to limit the data collection burden, the Coordination Unit accepted the recommendation of the Technical Review Panel and limited the number of countries for rigorous impact assessment and scaled back the household survey to every other year. WFP has now engaged the African

Economic Research Consortium (AERC) to manage collection and analysis of the quantitative data.

  • It has proven difficult to maintain the comparison groups necessary for impact assessment. In some cases, country offices began to incorporate comparison group members into P4P. In others – i.e., Rwanda – the government decided to replicate the P4P intervention nationwide. In others, where there was little geographic separation between treatment and comparison farmers’ organizations, members began to migrate from comparison groups to treatment groups.
  • Using FOs as the point of contact for capacity building may also raises a risk that capacity building will not be transmitted effectively to smallholder members. In response, country offices are developing strategies to limit the potential for elite capture.
  • Bringing together the learning across the 21 P4P countries also presents a challenge. NB. The Coordination Unit has initiated a series of writeshops beginning to coalesce and document learning.
Post-intervention: 

Indicators of farmers’ organization capacityo Sales volume, aggregation capacity, number of buyers, membership, services offered, value addition activities.Farmers’ production and welfareo Surpluses, sales and percentage of sales through the farmers’ organization, prices received, post-harvest practices/losses, household income, food consumption score, asset score, expenditure, household income, net buyer/seller status.Procuremento WFP purchases from smallholder farmers, transformation of WFP procurement practices.

Outcome reported by social determinants: 
Socio-economic status

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