Linking public procurement and sustainable production systems: opportunities and open questions

May 02, 2016

Linking public procurement and Linking public procurement and sustainable production systems: sustainable production systems: opportunities opportunities and open questions and open questions

Israel Klug - [email protected] coordinatorNutrition and Food Systems Division

Structure Outline of the presentation

• Introducing the concept of a food public procurement programme with multiple objectives;

• PAA Africa project scope and methodology;

• Some assumptions of inclusive food public procurement effects on farming practices and farmers’ organizations;

• General profile of farmers and agriculture in Sub-Saharan Africa;

• Potential public food demand and local food availability (Ethiopian case);

• Results of piloted experiences (Niger and Senegal);

• Scaling-up challenges;

• Opportunities, considerations and questions: linking public procurement and sustainable production systems.

Food access for vulnerable people: e.g. focused on minimal caloriesand protein intakes (food aid)

Food systemregulation: prices, strategic food reserves

Food access and promotion of nutritious food habits: e.g school feeding

Catering services for public employees

Nutritional programmesor interventions

Procurement criterias:standard requirementslower price

Food public procurement objectives

Procurementmechanisms

Other public interests and related

public or private policies

Promote inclusivenes ofpublic purchases: e.g. for smallholder farmersand small and medium enterprises / “market creation”Promote sustainable farming systems

Promote sustainable farming systems for a specific group of producers

Aditional criterias and principles

Principles of legality,impartiality, morality,publicity and efficiency

Principles of sustainability

Principles of social justice, food sovereignty

Principles of legality,impartiality, morality,publicity and efficiency

Public food procurement from smallholder farmers -a possible premise to promote market linkages:PAA Africa phase II - scope and methodology

Partnerships with different levels of public administration FO and NGOs

Innovations and experimentation

Exploratory studies and analysis in support to policy dialogue or planning and operational decisions

Exchanges of lessons learned and political dialogue

Public food procurement from smallholder farmers -a possible premise to promote market linkages:PAA Africa project scope

Farmers Cooperatives Procurement and logistic

SchoolsStudents

Food

Agricultural inputsTrainings

Quality controlProcessingTrainings

Quality controlPurchasesLogistic

BasicInfra-structure

Trainings

FarmersOrganization

s

Quality controlProcessingTrainings

• Targeted, predictable and regular food public procurement is adaptable to the small farmers´ needs and promotes inclusiveness of public food procurement.

• Targeted purchases may positively interfere on non competitive markets and on farmers’ revenues, promoting market inclusiveness for smallholder farmers;

• Predictability of prices and contracted quantities may reduce farmers’ risks of engaging on food production and marketing, by providing information of future variables and therefore supporting better planning;

• Regularity of contracted quantities may provide a learning curve opportunity to farmers and farmers’ organizations, in order to progressively improve quantity (productivity/aggregation) and quality of food produced in a timely manner;

• Diversified and/or context based procurement (traditional local products) may be adapted to farmers' skills.

Public food procurement from smallholder farmers -a possible premise to promote market linkages:Public food procurement from smallholder farmers -some assumptions on potentialities to promote improvements on farming and farmers’ organizations :

Aggregated and general profile of agriculture in Sub-Saharan Africa

>570 million farms in the world>500 million of these are owned by families>475 million farms are less than 2 hectares in size >410 million farms are less than 1 hectare in size

Mostly rain fed agriculture with lack of :

-Financial services-Technical services-Technologies-Structured value chains-Infra-structure-Enabling regulatory environment

Worldwide:

(FAO, ESA working paper 14-02)

How much responsive the small farming and farmers’ organizations would be to the scaling-up of local governmental food purchases?

(FAO, PAA Africa, Flavio Freitas, 2012 )(FAO, PAA Africa, Flavio Freitas, 2012 )

Estimated Ethiopian HGSF annual demand (2012): -561,581 tons of maize (62% of the maize supplied by national producers).-160,816 tons of haricot beans (78% more than farmers’ supply).

* Estimates do not consider elasticities.

PAA Africa programme implemented in the region of Kédougou – Senegal (2012-2013)

Farmers’ profile - Senegal Productive support provided by FAO and MoA

- One or two hectares of rice, with severe constraints related to their access to productive assets;

- 55% of households do not produce enough cereals for even half of their annual needs;

- illiteracy is high among household heads;

- Yearly incomes revolve around USD400.

- Inputs subsidies – free distribution of seeds and fertilizers;

- Peer-to-peer farming technical assistance;

- Processing rice facilities and packing;

- Transportation and packing services (WFP).

Results:

-Purchase contracts signed with five unions of FO for the provision of 200 tons of peeled rice for school meals (WFP);-An increase in productivity from 800 kg/ha to 2.5t/ha in the 2012-2013 campaign, and to 3t/ha in the 2013-2014 campaign;-Low compliance levels of procurement contracts (25% of what was agreed) in the 2012 campaign, which improved in the following campaigns;-An average increment of US$27 in each farmers’ revenues, which represents around 7% of their declared income. (FAO, Rosana Miranda Et al., 2016)

Up-scaled and inclusive public procurement of food relies on several regulations of public procurement, agricultural commercialization and food safety rules as well as on productive assets and services.

Public administrative proceduresLaws and regulations

Public policies

Food

Enabling environment for production and marketingProgrammes

Opportunities, considerations and open questions

In principle, public food procurement programmes may contribute to boost initiatives of sustainable production or agroecology;

Predictable and guaranteed public demand is probably not enough to sustain sustainable farming practices;

The relative size of the public food purchases is a key information for the design, programing and scaling-up of such initiatives (e.g. potential organic food demand / total organic food supply + elasticities);

Trade offs between procurement and production objectives (prices);

Agricultural policies and programmes, agricultural services and productive assets, food safety regulations, legal frameworks and public services (registry of farmer’s associations) are key for an up-scaled and operational programme of food public purchases which includes multiple objectives (e.g. targeting small scale family farmers, or agro-ecological products).

Thank you!

Questions and comments are welcome!

[email protected]