SUPERMARKETS and MOZAMBIQUE: Small-scale farmers become entrepreneurs

In Mozambique if you shop at Shoprite, Africa's largest food retailer, with operations in 16 countries, you'll be buying vegetables produced locally by small-scale farmers.
The IFAD-funded Agricultural Markets Support Programme (PAMA) supports the implementation of major economic reforms launched by the government during the 1990s, including the commercialization of small-scale farming through better access to markets and improved linkages with private-sector operators.
The programme, funded by a US$23.6 million loan, enables small-scale farmers in Boane, 30 km south of Maputo, to grow cabbages, potatoes, tomatoes and other cash crops in the rehabilitated irrigation schemes that were severely damaged during 16 years of civil war. Today, in the Boane area, the irrigation schemes cover 405 ha of land and the programme works with approximately 400 farmers.
The PAMA team worked hard to get the farmers to where they are today. "Before we came into the picture, farmers produced low-quality products. They were unable to sell directly to the buyer and had no idea of how to link up with big buyers. At best they sold their goods through intermediaries or at farm gate, and had little or no negotiating power," said Rui N. Ribeiro, PAMA coordinator. "Now they are organized in associations and as a result have more bargaining power."
PAMA's vision was to enable farmers to produce high-quality products and to link them directly to the market. Thanks to the programme, farmers are using fertilizers and improved seedlings to produce high-value crops that they sell to supermarkets, hotels, restaurants and the main hospital in Maputo.
Strengthening capacity and institutions, and influencing policy To enter the market and trade with commercial entities, farmers needed to issue invoices and receipts. To do that they needed to become a legal entity, and consequently they had to organize themselves into associations. PAMA facilitated the creation of farmers’ associations, organized marketing committees and helped farmers conduct market research.
"Before the programme's intervention, registering as an association was a costly affair and immense challenge," said Alessandro Marini, IFAD Country Programme Manager for Mozambique. "The programme, together with other stakeholders, lobbied with the government and raised awareness about the importance of having an easy process for registering associations," said Marini.
As a result, the Government of Mozambique passed a new law on decentralizing registration formalities to the district level. The government is also developing and implementing marketing strategies and pro-poor programmes supporting market linkages.
Thanks to the efforts of Ribeiro and his team, the farmers’ associations are now well established in the market. Each association has a president, treasurer and secretary.
The programme is providing marketing and production specialists and two supervisors who provide continuous technical assistance. The associations now are supported by a marketing committee responsible for coordinating production and marketing activities. The marketing committee meets with buyers to determine their needs, negotiate prices and deliver products.
Building social capitalFarmers’ associations built their credibility and reputation by encouraging buyers to visit their plots to check the quality of products. To ensure that quality was up to par, the project arranged for a visit by a nutritionist who examined and approved the products.
Subsequently the farmers visited the supermarket, where they were able to examine the quality of the products on the shelves.
"We took this opportunity to discuss our needs with the farmers," explained Pine Oppesmon, fruit and vegetable manager at Shoprite. "For example, we told them we needed tomatoes that were half-green because they have a longer shelf life, and that we would buy potatoes from them only if they had been washed."
"Since we started buying from the associations, the supermarket’s revenue has increased by 4 per cent," said Oppesmon. "You know, labour is much cheaper here than in South Africa. Now I am buying 25 per cent of products locally. I hope one day I'll be able to buy 80 to 90 per cent of products locally." He added, "These guys have a great potential, they are producing at European standards. If they get a bit better in packaging, they will make a quantum leap."
Going one step further "My vision is to expand the association's activity and start working with agro-processing industries and become equipped to do better packaging," said Mula, the Massaca association’s president. "Today farmers sell excess or low-quality products as animal feed. Linking them to agro-processing industries would mean, for example, that they would be able to sell ripe tomatoes for tomato paste and increase income-generating activities.”
For further information, please contact: Alessandro Marini, Country Programme Manager, Eastern and Southern and Africa DivisionEmail: a.marini@ifad.org