Component 1: Value Chain Development

This Component will enhance and develop the efficiency and profitability of each value chain. It entails support to organisation development, communication, planning and investment.  The value-chain actors are put in the driver’s seat to identify new ways of working together, reinforce well-functioning practices and attract new players to the chain. The Value Chain Analysis (including identification of actors and markets) for the selected commodities is the tool that will inform all actors about the constraints and the possible areas of intervention. The analyses of the value chains of potato and onion were conducted during the inception phase. During the Programme implementation the Component will focus on forming (or activating existing) groups, cooperatives and networks along the value chain. It will encourage development of business plans and action plans and it will facilitate access to technical services as well as to business management advice. Value Chain Platforms for the respective commodities at Woreda level will lead the process. The groups, cooperatives, associations or networks will identify common actions that will increase their productivity and innovation capacity and also yield access to the Agro-BIG Funds. They will increase their bargaining power and they will be able to acquire and use quality service provision and financial assistance.

The potato and onion value chains have been chosen for the initial Agro-BIG support. A set of specific criteria  will be applied when choosing other value chains for support later during Programme implementation.

The Value Chain Analyses and promotion of networking
Once a value chain has been chosen for support, the Programme will carry out a Value Chain Analysis for that particular value chain.Value Chain Platforms will be established comprised of actors at Woreda level. These Platforms are informal networks that will strengthen contacts amongst the actors with the aim to put the private sector in the driver’s seat. The Platform meetings will (at the start) be facilitated by the Agro-BIG Programme Support Unit. The findings of the Value Chain Analysis will be fed back to the Value Chain Platform which will then develop a WoredaValue Chain Action Plan for the actual commodity. This process will form the basis for identifying scope for funding from the Innovation, Demonstration and Research Fund. Private and public sector can apply to this Fund. The component will also enhance communication along the value chain and develop ICTtechnologies (including for use of mobile phones in banking services) that will support this development.

Supporting value chain development
In response to the Value Chain Analysis, this Component of the Programme will act together with the Service Delivery agencies in the Woredas to develop and fund relevant training programmes. These could cover production increases, post-harvest technologies, processing and technology demonstration and market development. Additional topics could be business plan development, financial management, how to apply for funds, etc. Such trainings will be developed at Woreda level.

Formation and/or identification of farmers’ groups, associations and cooperatives, etc. will be promoted. Furthermore the Programme will provide information about what service delivery is available in the Woreda and at Regional level, as well as what financial assistance can be obtained. Individual advisory services will be made available through the already existing service providing agencies.

The Value Chain Analyses help identifying areas for further studies and research. The findings will be shared with relevant Regional Bureaus and Agencies.

Component 2: Service Delivery Development

This Component will develop private and public service provision to the value chain actors. The activity under this Component focuses on human resource development - accessing services that can facilitate group formation (including farmers’ groups, associations and cooperatives), input supply, action planning, quality control, standardisation, market information and market intelligence, accounting, auditing, business development planning and applications for assistance from Funds and Financial Services according to the detailed needs identified by the value chain actors. Services can be developed within both the private and public sectors. New services can be developed with the assistance of the Agro-BIG Value Chain Development Fund.

This component will improve vertical and horizontal integration of private and public service providers with producers at all stages of the value chain. Therefore it is important that there is a cadre of trained private as well as public sector service providers.

Public and private sector service providers can apply for funds from the Innovation, Demonstration and Research Fund to support development of new technologies, innovative ideas, equipment or practices.

For the service delivery to effectively facilitate action planning with the value chain actors it is important for them to increase their general awareness of the problems and opportunities of the specific value chains.

Furthermore the service providers at Regional and Woreda levels need to share experiences, for example with other donor-funded and Government programmes in AmharaRegion.


Component 3: Access to Funds and Financial Services

Value Chain Finance Component of AgroBIG works in partnership with the Amhara Savings and Credit Institution (ACSI) to strengthen saving and credit services and availability of funds for farmers along the value chain and launch mobile banking in the support districts to benefit farmers for easier access to banking services.
Grant funds are available through:

·         Innovation, Demonstration and Research Fund provides a minimum of 50% of the grant funds to private sector actors and all access is based upon sound applications for innovative proposals. The Fund will only respond to private and public initiatives around the needs identified in the chosen potato and onion value chains. Own contribution of 15% is required. The maximum grant for an approved project is 50,000 Euro.

·         Value Chain Fund has been established to support the farm production and market participation of emerging groups such as cooperatives, farmers’ associations, irrigation users’ groups etc. in the onion and potato value chains. Own contribution of 15% is required. The maximum grant for an approved project is 2,000 Euro.

·        Matching Grant Fund for larger investments, especially in processing and post-harvest handling is serving micro, small and medium scale enterprises. Own contribution of 50% is required. The maximum grant for an approved project is 100,000 Euro.

The above grants are now available and concept notes for proposal are accepted. The deadline of the first round of grant applications is August 15, 2014.

Other activities of the Value Chain Finance component will promote inclusive finance by training in financial literacy. Support to the introduction of M-Birr mobile banking services for at least 5,000 farmers in the two Woredas will start in August, 2014.