Market-making for Burundi’s farmers

Supporting the 'resilience' agenda in African agriculture is a key plank of EU policy. [CIAT / Flickr]

One of the main causes of food insecurity for farmers in rural areas is limited access to agricultural inputs.

In a bid to combat that, international donors and the Food and Agriculture Organisation of the United Nations (FAO) have instigated input trade fairs and voucher schemes to provide poor, vulnerable and food insecure farmers with access to seeds, fertilisers and tools.

Similar schemes are being promoted by the EU, which has placed support for ‘resilience’ in farming and food security at the heart of its projects in sub-Saharan Africa. That includes building links with agri-businesses and promoting access to finance, such as crop insurance schemes.

Edenred, a French company, is probably best known in Europe for its lunch voucher system, but it has been running agriculture voucher schemes in sub-Saharan Africa for a number of years. In Burundi, the Ticket Agri scheme was launched in 2013, with the support of the government, to increase food security through the use of adapted fertilisers.

The rationale for the scheme was that the high cost of fertilisers was limiting crop production. The vouchers were part of a national fertiliser subsidy.

The scheme is simple enough: one voucher buys a bag of fertiliser. Four and a half years on, and 3.3 million vouchers have been used by more than 300,000 farmers in Burundi, one of East Africa’s smallest and most fragile states.

Encouraging the fertiliser market quickly increased production and income for small-holder farmers, generating an average 18% increase in revenue for local farmers.

The voucher scheme has also served as a market-maker. Farmers were initially only contributing 25% of the price, with the Burundian government subsidising the remaining 75%. That subsidy is now down to 25% and is likely to be scrapped now that the market is thriving and farmers can afford it.

“There was no fertiliser import, we were trying to bring back the importers. That created a market for merchants,” says Edenred’s Public Programme Manager, Nolwenn Bertrand.

The firm ran a similar pilot scheme in the eastern Kivu regions of the Democratic Republic of Congo in 2015 and 2016 with the national fertiliser organization. That was administered digitally, via a plastic card that merchants could read. It was used by 3500 beneficiaries. Projects in Mali and South Sudan, meanwhile, were halted by civil wars.

So what’s the attraction of such schemes over cash hand-outs?

For one, they can be targeted at specific commodities and communities that are most in need of assistance.

“We know when the merchants have asked to be reimbursed, who got them – we can see the life-cycle of the vouchers,” said Bertrand.

A cashless system, meanwhile, is also far less susceptible to fraud. Merchants are far less likely to be robbed of vouchers – whether digital or paper –  that have no value to anyone outside the ecosystem than if they were carrying cash.

Donors also like such schemes because of the need to have a close relationship with the host government, who agree on how the money is spent. They contend that such schemes are also a reliable means to alleviate rural poverty—by improving yields, and offering smallholder farmers the opportunity to scale up and increase their own investment in their business.

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