1. WFP School Feeding Model Study Tracy Cheung Mayuresh Oke Michael Perling Danae Ringelmann June 7, 2007

2. 2 Agenda Value-Add of WFP model o WFP Overview o Comparison of central versus local purchasing o Comparison of processed versus non-processed staples o Benefits to stakeholders in value chain Review of supply chain of WFP food basket commodities o Methodology o Industry supply chain sustainability analysis o Viability of current and potential suppliers Recommendations for GSFP integration Model Comparisons Supply Chain Assessment Recommendations WFP Model

3. World Food Program Model 3 Corn soya blend (fortified) Palm oil Iodized salt Domestic agro-processors Currently reaching 35,000 students in 76 schools in 3 northern regions Goal to reach 100,000 students in approximately 250 schools by 2010 740 cedis per student per meal Food Basket Procurement Students & Schools Cost Model Comparisons Supply Chain Assessment Recommendations WFP Model

4. Landscape 4 Centrally ProcuredLocally Procured Processed Non-Processed WFP GSFP Emphasis Community-Based Milling Model Comparisons Supply Chain Assessment Recommendations WFP Model Centrally Procured Perishables

5. Comparative Model Assessment 5 Micronutrient fortification Protein Energy (calories) Meets GSB standards Consistency of quality Nutrition Opportunity to purchase in bulk Reduction in handling and transport costs Cost & Economies of Scale Direct benefits to local farmers and producers Assurance of reaching surrounding community Impact on Community Model Comparisons Supply Chain Assessment Recommendations WFP Model

6. WFP Value Chain and Benefits 6 Agro-processorWarehouse Schools Local Farmer Training Inputs Better crop yields Price and volume stability Brand association Expertise & knowledge transfer Stable business Nutrition Reduced exposure to price and supply fluctuations of local markets Model requires sustainable industries… WFP model benefits all stakeholders along the value chain Model Comparisons Supply Chain Assessment Recommendations WFP Model

7. 7 Supply Chain Analysis - Methodology Factory visits and interviews with management teams at existing/potential suppliers Interviews with officials in Ghanaian Government o Ministry of Local Government o Ministry of Agriculture o Ghana Health Services Food Standard Bodies and Research Institutes o Food Research Institute o Ghana Standards Board o Food and Drugs Board WFP Staff o Program Directors, Procurement, Food Technologists Model Comparisons Supply Chain Assessment Recommendations WFP Model

8. Cereals: Maize and Soya 8 Model Comparisons Supply Chain Assessment Recommendations WFP Model Agro-processing of cereals is in early stages of development o 13% of cereal consumption is agro-processed o Remaining amount is milled locally Suppliers vulnerable to maize price volatility and competition from imports o Scaled and robust agro-processing industry can help stabilize prices (e.g. cocoa), which would benefit farmers Blended food markets remain limited in Ghana, however several suppliers are launching brands o Market opportunities within specialized segments including: HIV patients, WFP Supplementary Feeding Program, pregnant women and children Educational campaign around nutritional benefits of fortification extended beyond wheat and vegetable oil Utilize school feeding as a catalyst to spur growth of agro-processing industry

9. Palm Oil 9 Well developed industry o Mature end market, twelve main Ghanaian producers Commodity market with low price variance among domestic producers o Not subject to major substitute product threats at current price level o Industrial usages and bio-fuel demand driving global prices higher Quality and safety concerns associated with cottage industry producers (e.g., Sudan red) Financial contribution is secondary to knowledge transfer and implicit endorsement due to low WFP share of aggregate revenues Model Comparisons Supply Chain Assessment Recommendations WFP Model Therefore, select medium processor to ensure quality Therefore, WFP should select suppliers based on commitment to out- grower schemes and emphasize non-monetary transfer of value Find substitute oil solutions (e.g., soy bean oil) if prices escalate

10. Iodized Salt 10 Model Comparisons Supply Chain Assessment Recommendations WFP Model Highly fragmented industry with large disparity in execution of iodine fortification o 4-5 large scale producers supply over 50% of salt consumed in Ghana o Over 1,000 small-scale “cottage” producers representing 30%-40% of industry  Mostly non-iodated, lower quality salt Continued growth in domestic market dependent upon stricter enforcement of salt iodization standards among producers and educational campaign among consumers Opportunity for significant expansion into the export market, particularly in West Africa Land usage rights in Ghana hinder stable development of large-scale producers WFP/GSFP should source from large producers to ensure quality in near-term, and experiment with salt banks to act as catalyst for change in business practices of cottage producers in long-term

11. Recommendations for GSFP Integration 11 Model Comparisons Supply Chain Assessment Recommendations WFP Model Leverage existing WFP model and supplier relationships o Stringent selection process of suppliers with processes and systems that ensure local procurement of raw materials o Use suppliers as agents to implement out-grower schemes Scale and widen program incrementally by first building confidence in the utility of WFP food basket through targeted approach that educates primary stakeholders and stabilizes agro-processing industry growth o Communities in greater need o Younger students who benefit most from nutritional components o Lean season o Across time o Other commodities (e.g. rice, soy oil) Pilot similar models using processed, locally-procured foods o Community-based milling and fortification o Salt banks