Consultant – Engagement of end Market Buyers in Output Market Development

DAI is recruiting a Consultancy Services - Engagement of end Market Buyers in Output Market Development, to be based in Nampula, Niassa and Cabo Delgado, Mozambique.

Description

• Background on PROMAS: The Promoting Sustainable Agricultural Market Systems (PROMAS) project, funded by the Swiss Agency for Development and Cooperation (SDC), is implemented in the provinces of Nampula, Niassa, and Cabo Delgado in northern Mozambique by DAI Global UK (DAI). PROMAS project goal is increasing income and employment opportunities for female and male smallholder farmers (SHFs), youth, and Micro, Small, and Medium Enterprises (MSMEs), through their engagement in resilient market systems
• To facilitate systemic change to drive increased income and employment opportunities for smallholder farmers (SHFs), women, men, and youth, a conducive enabling environment is required. Government policies, programs, resource allocation, provision of essential services, and infrastructure development should work to promote SHF production and the marketing of crops. While a project like PROMAS cannot significantly influence large-scale infrastructure development or fiscal resource allocation, it can support the government in delivering better services and programs. This can be achieved by sharing evidence from practice to influence approaches, supporting government agencies in testing and implementing new strategies, and facilitating multilateral representative bodies to promote dialogue for an improved policy environment

Background to the Intervention

• PROMAS seeks to enhance market linkages by improving quality standards in agricultural output markets. PROMAS builds on previous experiences where the InovAgro project (until December 2021), supported over 30 Commodity Aggregation Traders (CATs) to set up fixed buying points (FBPs) to extend the purchase distribution network. The FBPs were equipped with trust enhancing technologies (digital scales, price boards) and quality enhancing technologies (use of canvass to evaluate quality on site and moisture meters). InovAgro also linked some CATs with processors and large commodity buyers , so that they could procure produce for guaranteed markets
• The main findings revealed that:
• The quality of the grain delivered was mostly of poor quality with high moisture levels, contamination, and damage from poor storage. Farmers often sell grain stored from previous seasons, which would be damaged due to poor storage practices and lack of appropriate facilities
• End markets have strict quality preferences (e.g., maize with high conversion rate and low fat/oil content, white pigeon pea over red or mixed pigeon pea)
• The big buyers prefer to buy maize and other crops from certain regions, where the SHF grow a certain variety, rather than try to influence what maize varieties are grown in other regions.
• The market is a spot market, with no communication between the big buyers and the traders and producers. The end market penalizes for poor quality and less preferred varieties through lowering prices. This unfortunately sets a discounted prices for all farmers, including those who deliver better quality produce
• The big buyers are the sole quality gatekeepers. They test maize and groundnuts for aflatoxins, clean and grade, leading to a low “pack-out ratio”. The big buyers pay lower prices to CATs to discount for poor quality. The CATs in turn pay lower prices to farmers to discount for the poor quality. This creates a negative spiral, sadly affecting the producers with poor and good quality alike
• In most instances, the big buyers do not pay any premium for quality, acting as a disincentive for producers to care about quality and traders to work on improving quality
• Early harvesting due to financial pressure leads to high-moisture maize, which affects processing. (grits or flour)
• Overall, there is no communication between the end buyers (who know what the markets want), the CATs, who buy whatever the farmers produce, and the farmers, who do not know anything about the market needs

The METL Pilot

• In 2023, PROMAS conducted a pilot initiative with METL, a maize milling company, based in Nampula City. The pilot aimed to create feedback loops between CATs and processors to improve quality. Six CATs visited METLs facilities to understand quality requirements and the grading process. The CATs and METL staff then workshopped what they had observed/learnt and how they could apply this to improve in quality. The next stage was for the CATs to bring quality assurance to their buying points agents and the farmers. Unfortunately, that stage could not be implemented in the same year because this exercise was done in mid-August when most CATs had already disbanded their buying points for the season

Big Buyer Market Requirements

• Processors have very demanding end markets. The maize grits for the beer industry are very stringent on fat content in maize and the World Food Program (WFP), have very stringent specifications. High value sesame and pigeon pea end markets require grain sorted by colour. Formal production of fortified maize flour for the common market is still subject to minimum standards and quality requirements from government inspectors. Among others, the following quality challenges are experienced:
• Aflatoxin – which is found in maize and groundnuts. It develops due to poor post-harvest drying and storage conditions, especially in warm and humid environments. High aflatoxin levels pose serious health risks, leading to rejection by buyers and limiting access to premium markets
• Produce is often received with foreign materials, accidentally or deliberately inserted by farmers. In some cases, these materials are accidentally mixed in due to inadequate cleaning at the farm level. However, some farmers deliberately add foreign substances to increase weight and earn more money, which compromises quality and leads to additional processing costs
• Moisture, often above the standard 12% for maize milling, requires processors to do additional drying, leading to expenses and weight loss. However, due to poor drying practices and inadequate storage, deliveries often exceed this limit. High moisture content accelerates mold growth, increases the risk of aflatoxin contamination, and forces processors to incur extra costs for drying. Additionally, drying results in weight loss, reducing profitability for buyers
• Percentage of fat/oil, which is above the maximum 2% (for maize grits in beer production). If the fat content is too high, it affects processing efficiency and product consistency. Excess fat also reduces the shelf life of the product, making it less desirable for industrial buyers
• Damaged grain and grain with uneven sizes. Grain damage occurs during harvesting, drying, storage, and transportation. Mechanically broken, shriveled, or unevenly sized grains reduce milling efficiency and overall product quality. Buyers prefer uniform grain sizes for consistent processing, and excessive damage can lead to downgrading or rejection of produce
• Buyers want to work with suppliers who can deliver consistent volumes of produce for them to develop a relationship. Most CATs are still small and have erratic suppliers. Buyers seek suppliers who can consistently meet their demand, but most CATs are small-scale operators who rely on unpredictable smallholder farmers
• This inconsistency makes it difficult for them to establish long-term relationships with buyers, affecting business sustainability

Duties

Feedback Loops Intervention

• The proposed activity requires that the control of quality be done at every stage from the seed supply , production, aggregation, and transport, with the processors remaining the final quality gatekeepers. The relationships designating grain flows, information flow and technical expertise will be as shown in Annex 1.
• The table below outlines the roles played by the actors in the supply chain of the proposed feedback loop:

Supply Chain Level / Actor - Big buyers (Processor / Large Commodity buyers)

• Places orders with specifications of their needs and purchases from trusted CATs who meet the quality requirements
• Invites the CATs who regularly supply them, to tour their milling / clean/grading plant to witness first-hand the challenges big buyers experience in addressing quality deficiencies
• Trains the CATs on what they and the farmers can do to improve quality
• Works with PROMAS to produce reference materials for ensuring quality at various levels
• Gives regular feedback to individual CATs on the quality gaps with their deliveries
• Pays a premium for quality produce or other incentives

Commodity Aggregation Traders (CATs)

• Mobilizes produce of high quality from regions of purchase, informed by big buyers’ needs
• Ensures produce is free of foreign objects, is at the right humidity and low on aflatoxins
• Trains buying agents to ensure quality awareness and practices are adopted
• Buying agents train farmers on how to ensure quality parameters are met
• Invests in the right equipment at buying points to ensure quality assessment (moisture meters, quality sampling tools, canvasses for random inspection, cleaning and drying, etc.)
• Builds warehouses with the right materials, ventilation and knows about and applies preservation practices to reduce damage during storage
• Provides the equipment and support to buying points to ensure they train farmers and ensure quality control before delivery of produce

Buying Point Agents

• Brings to the attention of lead farmers / community influencers on the importance of ensuring quality of supply
• Provides training to lead farmers/community influencers on how to ensure quality of produce (from varieties produced, when producers should harvest, harvesting practices, grain selection, shelling practices, storage conditions, grain treatment under storage, etc.
• Uses quality enhancing technology to transparently assess quality
• Ensures that most obvious quality issues are addressed at buying point (moisture, aflatoxins, foreign bodies, etc.)

Producers

• Knows about and grows varieties most desired by their target markets
• Learns and participates in training to improve on quality enhancing practices
• Practices first line of quality assurance – ensuring low moisture, knowing, and carrying out practices that ensure minimum aflatoxins, improved storage technologies such as Hermetically Sealed Technology (HST) bags

Seed Companies

• Liaises with end buyers and CATs on varieties of seed that the markets they serve require from their purchase regions
• Source and provide the varieties that would be rewarded in the market

Local authorities

• Liaise with CAT representatives to self-regulate and agree on start date for purchasing of maize, no earlier than June
• Enforce the regulation by delaying selling Cadernetas de Comercialização until the agreed dates

PROMAS

• Supports bringing an understanding of the value proposition at every level of the supply chain
• Supports organizing the CATs awareness and training workshop at big buyer sites
• Supports end buyers to produce technology pamphlets that inform actors at various levels of the supply chain to have reference material
• Support the CATs to carry out training of FBP agents on quality enhancement and in turn the latter will cascade to select farmer representatives with influence in communities
• Support CATs to deepen understanding of quality enhancing practices at buying points and community levels (farmers’ representatives)

Assignment for the Consultant

• To successfully implement the feedback loop model, it is essential to secure the active commitment of end buyers beyond their traditional role of purchasing produce. They need to take a proactive approach by influencing the selection of crop varieties and setting clear quality expectations. Additionally, they should engage with upstream partners to provide market information and mentorship to improve the quality of agricultural produce
• This is a change from their normal practice of waiting for suppliers. It requires an investment in time and resources, including visits to the field and provision of training and materials to guide upstream levels of the supply chain
• To effect this change, they need to have a value proposition that they buy into, leading to them willing to pilot the “feedback loops” model. Because it is a start, there will be a need for PROMAS to handhold them in doing and co-investing in activities that they would normally not have to do. The consultant will play a key role in securing buy-in from these buyers, structuring their participation, and ensuring the sustainability of their engagement in the feedback loop

Objective of the assignment

• To contract at least three big buyers to actively participate in the feedback loops, ensuring continuous market engagement and quality improvement

Specific Objectives

• Identify at least six potential big buyers through desk research and stakeholder consultations (such as other projects, calls to CATs) to understand the major players
• Develop a clear understanding of the generic value proposition to encourage big buyers’ participation
• Engage at least six buyers operating in northern Mozambique market to participate explore their appetite to participate in the feedback loops intervention
• Draft terms of engagement for the PROMAS to formalize partnership
• Produce a final report summarizing findings, lessons learned, and recommendations on how to do this assignment in future

Scope of Work

• The consultant will:
• Conduct desk research to identify potential buyers
• Organize and facilitate engagement meetings with big buyers
• Develop business cases and value propositions to attract buyer participation
• Draft memorandums of understanding (MoU’s) or partnership agreements
• Provide strategic recommendations to PROMAS based on market insights

Expected Results

• At least three big buyers formally engaged in the intervention
• Increased awareness and commitment among buyers to influence upstream quality improvements
• Development of structured partnerships for ongoing quality enhancement
• Buyers demonstrate willingness to offer incentives (e.g., quality premiums)

Staffing and Days

• PROMAS requires the services of an experienced Consultant, with demonstrable experience dealing with, negotiating, or working and structuring deals/partnerships with big enterprises (processors, big buyers, and others). Knowledge of the agribusiness sector in northern Mozambique will be an added advantage
• The assignment will require an average of 3 days per partner engaged (preliminary engagement, negotiations and closing deals). The partners are in Nampula City and Nacala Port. It is anticipated that the assignment will take a maximum of 24 days, including preliminary work, partnership agreements and end of assignment report

Notes

• Only shortlisted applicants will be contacted
• Indicate the source of this job post: emprego.co.mz
• Application: Bids are invited from people with demonstrable and relevant experience and educational qualifications to present their proposal of no more than 7 pages. The proposal should demonstrate a clear understanding of the dynamics in the output marketing sector in northern Mozambique, their experience dealing with big players/lead firms in the agricultural sector, and their proposal on how to implement the assignment
• Submission Details and Deadline: Deadline for submission: by 17:00 hours on the 16th of May. Subject Line: “Consultancy Proposal – Engagement of End Market Buyers”

How to Apply

1. Documentation

• Interested candidates should submit their applications, including:
• A technical proposal detailing their approach to the assignment
• A financial proposal outlining the consultancy fees and any with breakdown of cost
• An updated CV highlighting relevant experience
• At least two references from previous assignments of a similar nature

2. Application

• Send your Documentation to dai.promas@gmail.com with the Subject line “Consultancy Services - Engagement of end Market Buyers in Output Market Development”