Sierra Leone Agricultural Value Chain Analysis
Sierra Leone Agricultural Value Chain Analysis
A Feed the Future (FTF) program is being planned for Sierra Leone, encompassing diversified, nutrition- sensitive agriculture. It will focus primarily on one district (Tonkolili or Bombali), to be identified per research and discussions with the Government of Sierra Leone (GoSL). In order to inform program design and focus, USAID contracted the present analysis of several agricultural commodity value chains in Tonkolili and Bombali: 1) animal protein (excluding fish and cattle), 2) grains (for food and feed), 3) horticulture (excluding tree crops), and 4) legumes/pulses (for food and feed).1 A well-designed FTF program for Sierra Leone would aim to enhance food security, nutrition and incomes while mitigating the secondary economic impacts of the Ebola Virus Disease (EVD); fostering women’s empowerment and gender equity; building climate change resilience, and avoiding negative impacts on the environment (including climate). The potential impact of investments in each value chain will be characterized in terms of i) inclusiveness (households reached), ii) income generation, and iii) nutrition.
The research team selected target commodities for analysis and FTF program consideration according to their estimated contribution to the above objectives, per desk research and initial fieldwork: chicken eggs, goats, sheep, maize, millet, chili pepper, eggplant, leafy greens, okra, groundnut and pigeon pea. Among these, several were selected as top priorities after field work, due to higher overall estimated contributions: chicken eggs, maize, chili pepper, okra and groundnut.
Sierra Leone and the target districts are an excellent focus for FTF. Sierra Leone is a defined low-income country with a Human Development Index (HDI) rank of 183 out of 187 countries in 2014 (UN 2014). In 2014, 52.9 percent of the population lived in poverty, and gross national income per capita was $702 (World Bank 2015), or $1,815 in PPP terms (UN 2014). It falls below other Low-HDI countries in these measures (UN 2014). Tonkolili, in particular, has the highest rate of food insecurity and the second-highest rate of EVD (WFP, 2015); and the team perceived lower access to agricultural development resources there than Bombali. Yet it has a sufficient foundation for program success, and strong production and trade/market hubs that could anchor a program, leading the team to view it as a priority focus area. Ebola has had significant economic effects, with the World Bank (2015b) estimating a two to three percent contraction annually for 2014-2015. Agricultural producers, who are already on the edge of poverty or below, were significantly affected due to transit restrictions that left them unable to sell their commodities and purchase inputs for subsequent seasons, and work on their farms in some cases. Ebola prevention bylaws banning the sale of bush meat virtually eliminated it from household incomes and as a food source. The Government of Sierra Leone is very supportive of agricultural development, but has limited resources to implement its programs.
This value chain assessment considered consumption and production of the target commodities in the Bombali and Tonkolili districts. The inquiry followed the value chain from production through end markets. The team traced production from the target districts to in-country end markets (including exporters), and from in-country sources (production and imports) to the target districts. Additionally the team assessed cross- cutting services, both sector-specific (e.g., inputs, equipment, extension) and cross-sector (finance, ICT, transportation), and the enabling environment (policies and norms). The figure below depicts the value chain analysis framework. The assessment combined primary and secondary research, with primary research including individual interviews and focus groups; and used both qualitative and quantitative data.
• A diversified, integrated production system would have broad-based benefits for pro- ducers and other value chain actors. It would allow for risk diversification, income smoothing, improved nutrition and food se- curity, and broad market opportunities.
• Farmers in both districts are already produc- ing such an integrated system, but are not using modern practices due to limited re- sources and training. As a result, yields are low and post-harvest losses are high
• Farmers in the target districts can produce the target commodities competitively, and there is strong mar- ket demand for them. Thus, there is potential for upgrading, and inclusive growth.
• Upgrading is needed across the value chain, from farm to market, to raise incomes, and reduce poverty.
• There are many common constraints across value chains, particularly access to finance (to support mod- ern practices), technical capabilities among farmers and service providers, and market linkages.
• Storage and post-harvest loss are major issues across value chains.
• Commodities such as chili pepper, groundnut, maize and millet have the potential for on-farm value addi- tion, which can raise incomes and further diversify market opportunities.
• Some chains provide opportunities for youth employment, such as groundnut paste production.
• The private sector is thin. In sub-sectors such as fertilizer, government intervention has constrained the development of independent, private-sector entities.
• Veterinary services are very limited in availability, resulting in high livestock mortality due to lack of pre- ventative and curative care.
• Women’s empowerment and gender must be addressed in any program. Fieldwork indicated that women bear a significant share of the total labor burden across commodities, providing the majority of labor for vegetables and groundnuts (with men generally handling more arduous tasks across commodities). How- ever, they reported that they generally do not have control over land, income or other assets. They also factor highly in retail, and trade in some cases, so such efforts must cover the value chain.
• Climate change impacts such as changes in average temperatures, and the timing and intensity of rainfall, have not been severe to date, but have begun, and continued effects are predicted (World Bank 2015c). Thus, efforts to support adaptation are important and will position producers well for the future. Pro- grams should seek to avoid negative impacts on the environment and climate, such as habitat loss and emissions from converting primary forest and other native lands into agricultural land.
The following interventions address key constraints that the field team identified as limiting outcomes in the target value chains, and are thus important to consider for FTF programing. Many are linked, and thus should be implemented in concert, to achieve positive, optimal outcomes.
• Facilitate access to pre-season finance for seeds, fertilizer, storage bags and livestock; to increase output and profits. This was the major constraint seen across commodities. Value chain financing and financial institutions seem to be the most sustainable sources of financing.
• Foster market linkages. Many farmers and traders indicated that they had few buyers, and/or wanted more direct buying relationships. Such relationships would foster mutual gains in terms of efficiency, quality and mutual profits. The cost/benefit of direct sales must be evaluated, as these require the buyer or seller to bear transport costs that an intermediary would otherwise cover.
• Provide technical and financial training to farmers and linked value chain (VC) actors, in dual-gen- der/joint spouse training. Producers showed a keen willingness to learn about better practices and to be able to access pre-season financing. TechnoServe has found that joint spouse training (e.g., Coffee initia- tive, East Africa) drives higher women’s empowerment in the household, and higher farm output. Mutual understanding across the supply chain can return mutual gains.
• Organize farmers for collective post-harvest processing and marketing, and build capacity for ownership and management of collective ventures. Basic post-harvest processing such as shelling and drying peanuts can deliver measurable added income. Appropriate facilities, such as clean drying areas, are essential. Fos- ter the expansion of ABCs to the target commodities, with the provision of business and management training, and democratic leadership and decision-making structures. This will enable farmers to take own- ership of ABCs and undertake sustained operations with equitably shared benefits.
• Facilitate on-farm value addition, and improved post-harvest handling and storage. Simple processing such as making groundnut paste and grain flour can diversify income streams and grow incomes. Post- harvest handling must be improved with respect to food safety and quality, particularly in terms of drying grains to a standard moisture content that meets end market demands.2 High post-harvest losses, due to insects and rats, can be prevented through better bags, such as PICS bags or double-bagged poly bags. This would enable off-season sales, which bring higher prices and foster income smoothing.
• Facilitate the development of independent private sector input/service producers; with consideration for tactics that help private suppliers compete in distorted markets, and address this distortion. The govern- ment has intervened in the fertilizer sector in particular, limiting the number of enterprises, which in- creases prices and reduces availability. The continued provision of large amounts of free and subsidized inputs by NGOs and government has distorted markets and makes them unattractive/non-competitive for the private sector. In a recent report on Ebola effects on the agricultural sector, Mercy Corps (2015) note this issue, and recommended vouchers as a means of addressing this. Producers would use vouchers that offset part of the cost to purchase goods from private firms, maintaining purchasing behavior and fostering a buyer-seller relationship. At the same time, it is critical to engage the government in changing policy to reduce distortion, and promote free completion that draws more suppliers to the sector. Private sector development in inputs and service provision can also cover gaps in extension and vet services (due to limited funding at MAFFS), and supplies of animal inputs such as vaccines.
• Facilitate the development of financial products tailored to agriculture, with features such as longer pay- back times to enable end-of-season repayment. Other products such as savings and weather (index) insur- ance would be valuable. Mobile banking can be scaled up to reach more rural households (e. g., MPESA in East Africa), though ICT limitations (network coverage and smartphone use) affect potential reach at present. As part of this, train farmers on financial management and loans, and train lenders on agricul- tural production cycle needs and risks, so they can engage more confidently and successfully.
• Implement behavioral change communication to increase vegetable consumption, and thus micronutrient intake. Vegetable growers reported selling a high proportion of their output, a phenomenon that key in- formants also reported for major vegetable regions such as Koinadugu. This indicates that households need education to understand the health benefits and economic value of home consumption.
• Advocate for the implementation of MAFFS’ gender policy, to provide for sustained gender equity. MAFFS stated that they have a defined gender policy but need resources and support to implement it.
• Foster smallholder-friendly climate adaptation such as planting hedgerows to mitigate winds, using drought tolerant varieties where available (e.g., pigeon pea), and planting crops along farm edges to re- duce erosion.
• Facilitate in particular market re/inclusion of communities that were highly affected by Ebola, particularly due to stigma associated with areas of high incidence, such as Tonkolili and quarantined communities. Incorporate program elements that transition households receiving emergency Ebola support, such as free inputs and food, back to market-based systems (e.g., market systems development and facilitation).
This value chain assessment considered consumption and production of the target commodities in the Bombali and Tonkolili districts. The inquiry followed the value chain from end markets to production. The team traced production from the target districts to in-country end markets (including exporters), and consumption from in-country sources (production and imports) to the target districts. Additionally the team assessed cross-cutting services, both sector- specific (e.g., inputs, equipment, extension), cross-sector (finance, ICT, transportation), and the enabling environment (policies and norms).
Primary research took place in the Western Urban (chiefly Freetown), Bombali, Tonkolili and Koinadugu dis- tricts. The team visited twelve villages in nine chiefdoms across the three latter districts; in addition to Freetown/Western Urban district.
RESEARCH PROCESS AND TEAM
Prior to fieldwork, a small team of ACDI/VOCA staff conducted desk research and conferred with the Mission to develop an initial list of target commodities. USAID specified the commodity groups and target geographies. In late July through early August, a team of eleven researchers undertook the fieldwork (five VC-specific, inputs/services, climate, finance, gender, policy/political economy, field coordinator). The fieldwork began in Freetown (Western Urban district) with three days of end market surveys, and interviews with key informants and value chain actors. Eight days of up-country work followed (by district: three in Bombali, four in Tonkolili and one in Koinadugu), with daily writing and team debriefs. The team then returned to Freetown for three days of focused writing, additional end market surveys and interviews, and final debrief. Figure 3 indicates the research and analysis process.
RESEARCH AND ANALYSIS METHODS
The assessment involved the following research activities:
1. Desk research: Beginning prior to field work and continuing through final report completion, the team undertook secondary research using pertinent studies and reports on the target value chains, Sierra Le- one, focus regions, and cross cutting issues; production and trade statistics databases, climate and meteor- ological databases; and government policy documents.
2. Key informant and value chain actor interviews: As noted above, the team interviewed value chain actors (producers, aggregators/traders, processors, manufacturers, retailers, input and service providers, relevant private sector, government, NGO, research, and other stakeholders. These interviews utilized both quan- titative and qualitative survey instruments, which are in the appendix.
3. Data analysis and interview synthesis: Team members synthesized interviews to identify and prioritize key constraints and issues (e.g., fertilizer and seed availability and affordability, access to finance; women’s participation), and characterize value chain dynamics; and evaluated economic, production and demand data such as pricing at each level of the value chain, yields, consumption and imports.
4. Mission briefings and report reviews: The country team lead and senior researcher conducted a pre-field- work brief with USAID to align on initial commodities and the field work plan. USAID identified some key contacts and issues to note in the field. The team lead conducted a brief with USAID after the field- work to present initial findings and gather additional questions to address in the report. USAID provided comments on draft reports thereafter.
The competitive analysis for each commodity used the Porter’s Five Forces framework (Porter 2008).