Next Steps in Achieving Agriculture-Led Food Security

Greeting Colleagues,

On behalf of USAID's Office of Agriculture, we thank you for participating in this interesting and lively discussion on using financial services to help move agriculture-led food security activities forward. The insights, experiences, and expertise you have shared during this Speaker's Corner will provide provide us with rich material to think about and work with as we develop new approaches to implementing our part of the Feed the Future Intiative. We are glad we had this opportunity to collaborate with the Microenterprise Development Office to bring you this Speaker's Corner and hope you have found the time spent worthwhile. Thank you again and have a good weekend.

Cheers,

Zachary Baquet
Knowledge Management Advisor
USAID/EGAT/AG

Hi Terry,

In response to the questions, we provide the following:

1. What would be your top 3 priorities (and why) in order to improve financial services to better serve agriculture markets (and indirectly improve food security through improved access and availability)?

One of the major challenges we have found is having able bodied persons to work on the land in order to assure food security, in rural and post conflict areas. In order to entice them to remain in villages, there is need to have sufficiant food until harvests. Therefore, we see the priority in providing access to consumption loans and funds/loans to purchase of seeds and services/materials for praparing the land, cultivation and harvesting. The provision of the services should however be through local organizations (such as Producer organizations) or banks. However, we have found that banks are very hesitant to provide financial services to familes without land or other forms of guarantees. Therefore, initial financial services can be assured through POs.

The second priority is having systems to assure continued availability of fiancial services in rural settings as most agricultural production is carried out there. This can be assured by either having a unit within POs to provide savings and access to loans or negotiating with banks once the POs are strong enough to open accounts. 

The third priority is having services to market the produce. This can be assured when designing the interventions where there is a unit or transportation value chain. Another option is establishing community/cooperative shops in communities to purchase and negotiate sales.

2. How does your program measure "success" in terms of defining a successful financial service intervention? Is it or does it necessarily have to be credit-led?

We would consider that the financial services were successful if the family that received the service, arrived at selling a portion of the harvest to pay the loans, had sufficient food until the next harvest and was able to purchase nutritious food items. Our experience is that it has to be credit-led as most of the families are too poor to save sufficiently at the start. However, this changes over time and can be come savings - led.

3. Describe your "vision" of either a perfectly designed financial service or a good interaction between a financial service product and vulnerable small holder household? What is your "gold" standard?

My vision of a perfectly designed financial service is one that prevents migration of the able bodied as they are fed and enables the family to purchase all maaterials and services needs to prepare the land, cultivate, harvest and market the produce.

Thank you,

Sunimal Alles

Consultabt, Conflic prevention and Livelihoods,

MATCOS,

Sri Lanka.

Skype: sunimal.alles

I completely agree with John's great comment above. Financial access and income generation must be local, integrated and insurance is an astonishing comfort to those for whom 'safety nets' means 'family loans if they can offer them' at best.

I wanted to applaud John for posting about drudgery reduction. Any of us who have spent time in rural villages are blown away time and time again about how much time women do things that we take for granted, from fetching firewood and pounding the food to cook a meal (we turn on our stove) to walking miles and waiting for water to bring back 50 liter drums (we turn on a faucet).  As it is fantastic to make women-centered development a priority, from getting them access to seed and credit to empowering them via meetings, I often wonder when they're to do all of this, in addition to the childcare, elder-care, school- and health-care maintenance for their families, household tasks, their own small projects etc...

I know of one project that CARE did in Southern Africa during the drought/ AIDS crisis in the early 2000s. They paid women (in food I believe) to staff 'creches' where infants and small children were cared for (with some Early Education processes too I think) during a part of the day. The HIV-affected mothers were free to do all the other tasks they needed to care for their HIV-infected family member, including clinic visits to fetch ARVs, do vegetable gardening, etc.

I'd love to know what other projects people have seen that have freed women from drudgery that keeps them from participating more fully in the financial independence many crave!

Enjoying the discussion very much,

Jindra (Cekan Consulting LLC)

Great comment John, thanks for sharing this. The attention to women, empowerment and integration seems key.

You draw attention to interesting priorities to improve financial services to better serve agriculture markets- low cost, long term, local, and integrated by women.

I think they are all important, and especially the integration of financial services products with other activities. I  would highlight and add agriuculture and food security focused ones (ie nutrition education, agricultural training in processing, market groups, etc).

Best,

Meaghan, QED GRoup

Women Small-holder direct economic empowermentment is our starting point for answering all three questions, as women feed our world despite receiving virtually no support.

1) Our top three priorities are:

(a) Access to financial services must be low cost, long-term (seasonal), local (within 10km) and controlled by the women involved if it is to overcome deeply entrenched gender discrimination as well as economic barriers.

(b) Financial services are most effective when they are integrated with capacity building, drudgery reduction, storage and access to health care, given the multiple burdens on women, ie, women with sick children are often unable to repay loans.

(c) Insurance instruments that protect the portfolio are very important to the sustainability of the system (more of a priority, say, than health or life insurance).

2) Our key milestone for success is when our women-run rural banks achieve government recognition. Leading up to that we look for steadily improving portfolio quality. Our program is initially credit-led with mandatory savings, hopefully growing the role of savings as the culture of savings takes hold.

3) Our vision for our epicenter women-run banks is that they become so successful at mobilizing savings that they can fully meet a growing demand for financial services and become an economic engine for a vibrant local rural economy.