Africa Improved Foods (AIF), IDH and Agriterra are collaborating on a cooperative graduation model to unlock AIF’s maize sourcing in Rwanda.
AIF, IDH and implementing partner Agriterra are taking steps to structure AIF’s sourcing maize sourcing engagements within a cooperative graduation model, and through this, enhance farmer productivity, and support access to finance for farmers through cooperatives. These focus areas will support maize farmers and cooperatives to operate within a competitive supply chain and will contribute to the broader goals of improved livelihoods of farmers and rural communities, improved agricultural practices and strengthening the capacity building of cooperatives.
AIF is a public-private partnership involving DSM, the Government of Rwanda, IFC, and FMO, and provides scalable and sustainable solutions to malnutrition, distributed to different parts of Africa primarily through the World Food Program and in Rwanda to support the Government’s Nutrition Program. Under its Value Chain Development program, IDH has a strategic partnership with AIF to support the development of its local sourcing strategy.
IDH is supporting AIF in developing sustainable sourcing channels to maximize Rwanda’s potential to supply maize via a premium market offered by AIF. Particularly, the project’s cooperative graduation model provides a structured and comprehensive approach to ensuring maize supplier readiness in accessing and managing inputs on credit.
Ahmed Sylla, Country Manager of Africa Improved Foods
Professionalizing cooperatives through transparent ranking combined with training, support and incentives
The partnership, called Invest in Cooperative Sourcing, will run until July 2024, which entails implementing a cooperative improvement track (or graduation model) with transparent scoring and ranking of cooperatives, combined with training, support and incentives to cooperatives to move up the ranking. The design of the Cooperative Development Track is based on the outcomes of a Service Delivery Model Analysis conducted by IDH’s Farmfit Business Support in 2021, which demonstrated that AIF can reach its sourcing objectives through strategic and targeted sourcing from a lower number of cooperatives, with the recommendation to AIF to embed its sourcing within a cooperative graduation model (a public version of the SDM report can be found here).
With improved access to inputs, combined with AIF as a committed off-taker for grade one maize, and establishing an inputs pre-financing facility, the partnership has the potential to be a significant contributor to the increased incomes and improved livelihoods of maize smallholder farmers in Rwanda. IDH will be engaging financial institutions in Rwanda to initiate the setup of an inputs pre-financing facility.
Invest in Cooperative Sourcing will also entail the structured training of a team of nine cooperative coaches. These cooperative coaches will sit within AIF’s sourcing team and will increasingly take over the work conducted by Agriterra, ensuring that AIF has the capacity to continue the Cooperative Development Track beyond the duration of this project.
It is important to also ensure a ‘pipeline’ of cooperatives within the development track. Under Invest in Cooperative Sourcing, the aim is to onboard a total of 40 cooperatives into this development track. With an average of 500 farmers per cooperative, this will entail engagements with approximately 20,000 maize smallholder farmers in Rwanda. If successful, this will lay the foundations for future scaling in AIF’s maize sourcing.
Maize value chain in Rwanda
Maize in Rwanda is grown in three seasons per year, with Season A being the biggest (running from February to May). Despite increased production, Rwanda is still a net importer of maize to accommodate domestic demand. For grade one maize, quality constraints relating to aflatoxins and moisture content are key criteria, with rainy periods, lack of sufficient storage, drying and logistics facilities being key contributors. If not mitigated or managed adequately, the result can be high post-harvest losses.
Combined with AIDF’s model of purchasing maize on the cob from supplying cooperatives, and supply chain partnerships to unlock storage, drying and logistics capacity, AIF has been able to significantly reduce post-harvest losses in its supply chain. While AIF is increasing local sourcing, the company is still challenged on how to achieve 100% maize supply from Rwanda of annual requirements of 30,000 mt. The project aims to ensure long-term and sustainable high-quality maize supply to AIF by facilitating farmer access to premium maize markets and the ability to increase volumes of maize, and through this, contributing to improving farmer livelihoods.
Cooperation part of the IDH Value Chain Development model
The work with Africa Improved Foods is part of the IDH Value Chain Development model, which focuses on Africa and is aimed at creating economically viable, inclusive, and resilient agricultural value chains. It supports SMEs and smallholder farmers to meet the quality, volume and compliance requirements of global brands, retailers and traders.