SPARK Conducts Market Assessment and Value Chain Analysis for Agro Businesses

The study was conducted in the counties of Margibi, Bomi, Cape Mount, Bassa, Rivercess, Sinoe and Grand Kru. The selected counties are predominant producers of the selected crops. “Results from the study revealed three (3) widely grown crops and their economic viability and profitability. This further suggested that these three crops (cassava, plantain and pineapple) were predominantly the most preferred in the study locations and had the best chances of being transformed into reliable and sustainable income generating opportunities for commercial smallholder farmers.” The Problem The study was designed to determine the production levels, farming practices, marketing and distribution outlets, profitability, value-addition and processing potential, export opportunities and job creation prospects of the selected value chains and to provide valuable data that contribute to national discussions on developing viable agricultural markets. The Solution The market assessment highlights the key business opportunities and possible areas of interventions of the three (3) best performing crops across the study locations. Here is the summary table: Value Chain Opportunities Cassava  Provision of primary processing equipment and warehousing for processing businesses  Support key processors in branding and marketing  Production of High-Quality Cassava Flour  Introduction of improved packaging materials  Contract farming agreements between SHFs and Aggregators/Traders/Processors Plantain  Production of plantain flour  Production of plantain baby formula  Support key processors in branding and marketing  Basic farm management and reporting training to facilitate accountability and transparency  Contract farming Agreements between SHFs and Aggregators/Traders/Processors  Creating warehousing systems across production clusters to control price and supply chain Pineapple  Development and expansion of vegetable kiosks and booths to increase marketing outlets for pineapple  Post-harvest handling training to prevent losses  Support key Processors in branding and marketing  Contract farming Agreements between SHFs and Aggregators/Traders Keys to Success Judging from the findings of the study, the overwhelming economic interest and sustainable income generating production activities of communities under the study were largely concentrated around three (3) crops that showed signs of fast growing and partially well-established entrepreneurship ventures. The table below shows there were more representative samples of cassava, plantain and pineapple farmers and traders to engage than the rest of the crops. The three promising crops also show more business prospects since there are more traders as compared to the other three crops involved, as are shown below: Crop Farmers Traders Cassava 22 23 Plantain 22 27 Pineapple 13 21 Moringa 3 6 Cowpea 10 14 Groundnut 8 18 The study also revealed that with some policy enforcement and shifts, structural changes, and capacity building as well as creating the enabling environment, the below crops can be transformed into sustainable business opportunities, food security safety nets, and income generation ventures; thereby alleviating poverty and restoring sustainable livelihoods for commercial SHFs. For example, promotion of the High-Quality Cassava Flour for bakeries in Liberia and the sub-region is a huge market opportunity for stakeholders of the sector and for an effective substitution of imported wheat flour. Recommendations Following the conclusion of the Market Assessment and Value Chain Analysis, the Team was pleased to advance two (2) distinct categories of key recommendations which would comprise of General Market Recommendations and Specific Programme Recommendations. The recommendations are as follow: 1. Facilitate the establishment of Agro Dealer Shops in Rural Farming Communities During the conduct of the study, the Team observed that SHFs do not use fertilizers and other essential agro chemicals to either boost production or minimize pest infestation. There are limited access to technical extension services and the Ministry of Agriculture (MOA) assigned extension workers in farming communities are either overwhelmed or hampered in their coordination by logistical challenges. It is against this background that certified agro dealers could be empowered to create extension service centers through their agro dealer shops. These certified agro dealers can be equipped with handy soil testing tool kits that will be very useful in providing appropriate technical guidance. 2. Coordinate the creation of specialized storage facilities for Specific Commodities The study revealed that SHFs loose very significant portions of their harvests as a result of poor post-harvest handling and transportation. SHFs are either pressed to sell immediately for instant cash purposes or obliged to use intermediaries for the sake of accessing markets at sometimes heavily discounted prices. Owing to these constraints that place SHFs in extremely vulnerable situations, the use of specialized storages will help in preserving specific commodities and allow them to sell at favorable market conditions. 3. Work with key private sector actors to provide mechanization services to SHFs and processors. In five of the communities we visited, Talia in Cape Mount and Porkor in Rivercess, farmers are still producing gari using manual grating methods. These farmers can increase production if they are provided with machines, business development training and are linked to markets. There must be a plan for farmers to obtain machines as they require through some program established at the local level and connected to the Moonlight Incorporated in Gbarnga. Farmers can also be trained to repair and maintain their machines. The certified Cassava Processing Mill manufacturer that can provide spare parts and repair services is Moonlight Garage & Metal Works in Gbarnga (Phone: 0886-562-568). 4. Strengthen the relationship between the Value Chains Aggregation Networks and Commercial SHFs and ordinary farmers The team notes that the relationships between aggregation networks and smallholder farmers within the surveyed areas are not as strong as it should be. The cassava factories in Bomi and Bassa for example are not adequately supplied with cassava raw material. The factories have the capacity of producing 2 tons a day of gari but currently are all running at about 20% capacity. This inefficiency is due to limited supply of cassava raw material and limited linkage to markets within the main markets. It is noted that there is a huge periodic supply of gari from the Sierra Leone side of the border that enter the Liberian market and is absorbed. A follow up study should be conducted to identify raw material production areas, volumes and markets for finished products, possibilities of setting up forward contracts and sales agreements. 5. Strengthen existing farmers’ businesses; Many of the current farmer’s businesses have limited knowledge of farming as a business. They have limited knowledge on weights and measures, pricing, warehousing and storage, and information. If farmers can be extended production information, they also must be provided information on farming as a business. 6. Facilitate the establishment of Commodity Warehousing Receipt Systems; Access to finance is a huge issue with farming businesses. Also, since most Liberian farmers depend on rain-fed agriculture, they all plant and harvest at the same time thereby creating a temporary drop due to the oversupply of goods, in this instance gari or flour. In a proposed warehouse receipt system (WRS) processors will deposit their goods (usually Gari or Flour) in exchange for a warehouse receipt (WR). A WR is a document issued by warehouse operators as evidence that specified commodities of stated quantity and quality have been deposited at a location. Usually prices slump right after harvesting time. By deciding to sell the goods later, when prices have picked up, the depositor can avoid price risk. The warehouse operators may also be able to provide pre-financing or loans. 7. Support Processing Activities through Entrepreneurship Initiatives The study also uncovered the use of manual and rudimentary tools for processing cassava by farming communities. The tasks are either heavily labor intensive or damaging to the health and safety of rural processing communities. In this light, the Team very strongly proposes a paradigm shift so as to boost production, improve quality and minimize health risks to the general population. The paradigm shift must involve the use of motorized equipment for processing and the change must be managed by selected entrepreneurs.