National Smallholder Producers Engagement

Session15 May 2014

Pretoria – South AfricaWFP Lesotho Initiative

WFP Procurement Principles

Fair competitionInvite at least 3 potential suppliers for competitive bidding. Exceptionally,the waiving of competition may be authorized

TransparencyAll steps in the procurement/contracting process are accuratelydocumented

Separation of DutiesNo one individual is in charge of the entire procurement process

EthicsAll staff must maintain an impeccable standard of integrity in allbusiness relationships

AccountabilityStaff are accountable to the Executive Director for their actions inmanaging WFP resources

Fair competitionInvite at least 3 potential suppliers for competitive bidding. Exceptionally,the waiving of competition may be authorized

TransparencyAll steps in the procurement/contracting process are accuratelydocumented

Separation of DutiesNo one individual is in charge of the entire procurement process

EthicsAll staff must maintain an impeccable standard of integrity in allbusiness relationships

AccountabilityStaff are accountable to the Executive Director for their actions inmanaging WFP resources

Import Parity

WFP procures on the basis of import parity which means that a comparison of all potential options against one final destination is made.

Even when there are donor restrictions regarding the potential origin of the commodities WFP procures, the concept of import parity is still applied within the country / countries in which WFP is allowed to procure.

Additional costs such as transport, storage, packing, inspections services, port / border operations, commodity transformation (i.e. milling) are added to offers received so that the comparison between offers can be made.

WFP procures on the basis of import parity which means that a comparison of all potential options against one final destination is made.

Even when there are donor restrictions regarding the potential origin of the commodities WFP procures, the concept of import parity is still applied within the country / countries in which WFP is allowed to procure.

Additional costs such as transport, storage, packing, inspections services, port / border operations, commodity transformation (i.e. milling) are added to offers received so that the comparison between offers can be made.

What WFP Purchased

Purchase For Progress (P4P)

WFP’s pro-smallholders initiative in 20 Countries (4 in SADC)

Pilot Period: 2008-2013

Built on 3 pillars: Demand, partnership, learning & sharing

400,000 MT (USD 106 million) procured during the pilot period

Innovative buying modalities:

Competition: Pro-smallholder tenders, commodity exchanges, cereal fairs

Direct contracting

Warehouse receipt system

Forward contracting

Processing opportunities

WFP’s pro-smallholders initiative in 20 Countries (4 in SADC)

Pilot Period: 2008-2013

Built on 3 pillars: Demand, partnership, learning & sharing

400,000 MT (USD 106 million) procured during the pilot period

Innovative buying modalities:

Competition: Pro-smallholder tenders, commodity exchanges, cereal fairs

Direct contracting

Warehouse receipt system

Forward contracting

Processing opportunities

The Lesotho InitiativeDIRCO Donation: ZAR180 million (approx USD 18 million) for

Lesotho

Estimated number of beneficiaries: 226,000 people yearly (for 2 years).

Estimated total quantity of food: 17,212 metric tons (USD 10.5 Million).

Estimated tonnage to be purchased from smallholder farmers: 3,900 MT.

Achieved smallholders’ food purchases: 268MT (USD 71,366).

Duration: February 2013 to November 2014.

All food commodities to be purchased must be of South African origin.

WFP should endeavor to source a target of 40% of cereals (about 3,900 MTs) from South African smallholder farmers (SHFs), while ensuring that the critical and timely food needs of target groups in Lesotho are not compromised.

WFP plans to buy 3,500 MT (3,000 MT of Maize and 500 MT of beans) in 2014 from 8 Provinces

Capacity building of smallholder producers in 8 Provinces

DIRCO Donation: ZAR180 million (approx USD 18 million) for Lesotho

Estimated number of beneficiaries: 226,000 people yearly (for 2 years).

Estimated total quantity of food: 17,212 metric tons (USD 10.5 Million).

Estimated tonnage to be purchased from smallholder farmers: 3,900 MT.

Achieved smallholders’ food purchases: 268MT (USD 71,366).

Duration: February 2013 to November 2014.

All food commodities to be purchased must be of South African origin.

WFP should endeavor to source a target of 40% of cereals (about 3,900 MTs) from South African smallholder farmers (SHFs), while ensuring that the critical and timely food needs of target groups in Lesotho are not compromised.

WFP plans to buy 3,500 MT (3,000 MT of Maize and 500 MT of beans) in 2014 from 8 Provinces

Capacity building of smallholder producers in 8 Provinces

Procurement Process

Identification of SHFs: DAFF/PDOA

Registration of SHFs

Competitive bidding – Receiving offers from SHFs

Evaluation of offers and approval of contract award

Quality and Quantity Inspection

Contracting – contract signing

Delivery – Uplift of commodity (Incoterms 2010)

Invoicing and supporting documentation

Payment

Details of the process is in the “Lesotho Initiative Smallholder Farmers Food Procurement Process Guidance Note 1”.

Identification of SHFs: DAFF/PDOA

Registration of SHFs

Competitive bidding – Receiving offers from SHFs

Evaluation of offers and approval of contract award

Quality and Quantity Inspection

Contracting – contract signing

Delivery – Uplift of commodity (Incoterms 2010)

Invoicing and supporting documentation

Payment

Details of the process is in the “Lesotho Initiative Smallholder Farmers Food Procurement Process Guidance Note 1”.

Smallholder Farmers Registration

No ProvinceNumber of Smallholder Producers Registered in WFP

Suppliers Roster1 Free State 202 North West 133 Mpumalanga 44 Gauteng 105 Limpopo 196 Eastern Cape 27 KwaZulu Natal 08 Northern Cape 0

  Total 68

No ProvinceNumber of Smallholder Producers Qualified for Registration

in WFP Suppliers Roster1 Free State 02 North West 03 Mpumalanga 24 Gauteng 255 Limpopo 96 Eastern Cape 07 KwaZulu Natal 18 Northern Cape 1

  Total 38

Smallholder Farmers Capacity Building

Identification of needs

Stock-taking – mapping needs with the right CB activities

Identification of existing expertise

Sourcing of required CB expertise and equipment

Identification of beneficiaries

Implementation of CB activities

Exit/handover

Long term goal:

To transform the smallholder farmers into viable marketing groups who can profitably engage with the big buyers and sellers in the value chain (e.g. Millers).

Identification of needs

Stock-taking – mapping needs with the right CB activities

Identification of existing expertise

Sourcing of required CB expertise and equipment

Identification of beneficiaries

Implementation of CB activities

Exit/handover

Long term goal:

To transform the smallholder farmers into viable marketing groups who can profitably engage with the big buyers and sellers in the value chain (e.g. Millers).

Thank You! End!