WFP Zimbabwe Local Purchase Initiative

Better Prepared And Ready to Help Emergency Preparedness Mission Nepal February 2011 P4P and Zimbabwe’s Local Purchase Zimbabwe IS NOT a P4P country BUT CO is utilising WFP Procurement systems of tenders to traders to target smallholder produce from specific locations known to produce surplus grains within the country The initiative, like P4P was developed with an aim to improve smallholder marketing opportunities. The initiative was inspired by P4P which provided general legal basis and framework.

WFP’s Local Purchase Activities in Zimbabwe: WFP is using its demand for grains to assist the development of rural markets, by making WFP an output market for smallholder commodities. Procurement is done through Local and Regional tenders to agro-traders on WFP’s supplier database. Registration of traders on the database is ongoing, and currently there are 30 Zimbabwean traders listed.

Better Prepared And Ready to Help Emergency Preparedness Mission Nepal February 2011 Localized Tenders as procurement modality : Localized tender invitations are to Zimbabwean traders for Zimbabwean grain, specifying the delivery place at district or ward level. The delivery place is ideally an area where the production surplus is close to an area with food insecurity. Upon receipt of tender, traders are inclined to procure close to delivery places to improve their competitiveness by minimising transportation costs. Benefits of localized tenders include Ability to influence where the commodity is sourced resulting in smallholder market development. The identified production surplus area enjoy s improved output marketing opportunities as WFP registered traders come to farmers door-step to compete for produce. WFP commodity supply chain is shortened as handling and transportation costs minimized, due to proximity of procurement delivery place to area with food insecurity where the distribution occurs.

Localised Tenders: Value for money Sustainability Smallholder focus Flexibility Adherence to WFP rules

Better Prepared And Ready to Help Emergency Preparedness Mission Nepal February 2011 Increased donor support for rural marketing systems. Access to finance for agro-traders has reduced their costs and risks, and has increased competitiveness in WFP tenders. Traders continue developing rural buying networks of smallholder commodities, e.g. agro-dealer networks and mobile buying stations. Expansion of WFP’s Local Purchase Initiative from maize procurement to smallholder grains, such as sorghum and pulses. Importantly, this is: 1) introducing farmers to the concept of producing drought resistant small grains and pulses in dry areas 2) serving as a ‘start-up’ market and encouraging more players Improved performance of local traders to WFP tenders. Since June 2011, 3,477MT maize and 120MT sorghum has been procured locally. Entrance of regionally linked traders on Zimbabwean market, e.g. Cargill (SA) and Olam (SA). Successes :

Better Prepared And Ready to Help Emergency Preparedness Mission Nepal February 2011 Cleaning and packaging of maize grain at traders remote buying point

Better Prepared And Ready to Help Emergency Preparedness Mission Nepal February 2011 Availability of resources to launch localized tenders which target Zimbabwean companies for the procurement of Zimbabwean commodities. National production deficit in 2012 reduced available crop and minimised procurement opportunities. WFP Procurement regulations are more favourable to Regional tendering as compared to localized tenders for which donor approval must be sort. Regional pricing: Pricing of maize from Zambia deters traders from sourcing maize locally when Import Parity prices are lower. Inexperience of local traders in supplying small grains such as Sorghum and Millet. Lack of credible market information on commodity surpluses to enable increase of localized tenders. Challenges:

Better Prepared And Ready to Help Emergency Preparedness Mission Nepal February 2011 Looking Ahead: Increase coaching of suppliers on WFP’s procurement process to improve local trader performances. Increase synergies with partners /communities involved in food production Develop a pilot for localized procurement from a specific location over a prolonged period of time and gauge the impact on productivity and market development. Review WFP supplier database to remove non-responsive companies and assess new applicants. Introduce multiple payments for partial deliveries to improve local supplier cash-flows. Provision of packaging to local suppliers which will reduce costs and the time associated with packaging. Funds permitting - continue with localized tenders of maize and small grains to build on previous successes.

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