Applying a Market Systems Development (MSD) lens, Horti-Sempre worked in the provinces of Nampula and Cabo Delgado to unlock the growth potential in the horticulture sector. The provinces constitute 29.2% of the national population and 69% of the households in the provinces are based in rural areas, where agriculture (including horticulture) is a primary income generating activity.
To expand production, horticulture was seen as a sector that would encourage farmers to expand; it was and is high value and has had a growing market. The demand for vegetables has been the driving factor for Horti-Sempre’s success in key areas, where the total volumes traded at Waresta market has seen an overall growth despite some fluctuations due to extreme climatic and political events in the region.
The selection of Horticulture as a sector proved valid given the changing dynamics in the northern provinces. The growth in horticulture can be largely credited to the increased demand for vegetables due to increased government, donor, and private sector investments in a range of sectors. Improved infrastructure allowed better accessibility to urban centers, a range of development programmes injected new money into the provinces and a growth in trade and oil and gas investments by private sector created new income earning opportunities. In this overall context, the initial growth in the demand of vegetables was filled by other provinces and imports given the constraints in the local production of vegetables, an area where Horti-Sempre’s contributions played an important role.
Horti-Sempre contributed to introducing improved seeds varieties, creating the incentive for farmers to invest in irrigation technologies, tools to reduce post-harvest losses and building a local supply for vegetable seedlings that led to unlocking the growth potential of horticulture, however, its role in improving access to information is highlighted, which generated the greatest results within Horti-Sempre’s portfolio of interventions.
The limited information on commercial vegetable farming was a deterrent for farmers to invest in seeds and other inputs.
Vegetable farming was done for household consumption and surplus sold in the market, but the risks to invest in a crop that farmers were not familiar with were too high.
The public and private sector saw the need for information dissemination but did not have the expertise available, moreover, the private sector lacked local connections with farmers to disseminate the information.
The volume of traded vegetables in Northern Mozambique had registered a threefold growth between 2013-2015. While the demand was growing, this demand was largely met by imports. For example, in 2014, almost 100% of potatoes, 80% of the cabbages and 45% of the tomatoes were imported due to a lack of local production.
A major contributor to this limited local production was the use of retained seeds as opposed to using improved varieties being sold by many input suppliers. Moreover, the seeds sold by the input suppliers were also not of adequate quality as they did not see the demand for improved quality seeds. Horti-Sempre saw the context and directed its efforts to facilitate the introduction of new imported varieties in the corridor, particularly those suited to climatic conditions in Northern Mozambique.
The approach the programme took was to engage with importers in Mozambique, regulatory and research bodies and exporters of seeds in Brazil to facilitate the introduction of improved varieties. While the programme efforts in this regard were sincere and potentially valid, the supply-side focused intervention did not yield the expected results in terms of either sales volumes of outreach. Based on the learnings, the programme realised interventions weren’t addressing a core problem in the market, that was, the demand for improved seed varieties from farmers.
The learning was a crucial one, as the programme’s identification that the market lacked suitable seeds was correct, but it missed the follow-up question on why that remained the case. As the programme convinced importers and regulators to introduce new players in the market, the challenge on the demand side remained; the farmers were neither familiar with the new varieties nor willing to invest in higher priced seeds.
Registration of new varieties was only one part of the equation; the other part was to make these varieties commercially available at scale. This was a pivotal juncture for the programme to further understand the demand challenges and addressing them.
The pivot here was not to introduce a new solution to the problem of the lack of appropriate seeds in Northern Mozambique, but to understand why that was case. As the programme investigated this question, it became clear that the challenge was a demand-side challenge, and the interventions needed to focus on increasing farmer awareness on the benefits of using improved seeds.
The private sector’s willingness to pursue increased sales in Nacala corridor was low, mainly due to the high costs of accessing farmers in the area, low sales of commercial seeds and other inputs such as fertilisers, and lack of local expertise available on vegetable farming to provide extension services to farmers. The market wasn’t functioning well as the farmers needed information and the private companies didn’t have the inhouse expertise to provide that information or the will to invest in it, as horticulture was only a small proportion of their sale portfolio.
Horti-Sempre’s response to this challenge was led by a strong relationship building phase, with both the public and the private sector. The approach meant increasing programme visibility with relevant actors by taking up a more direct role as an information hub for vegetable farming while looking for partners to take over that role.
Within the sub-system of information dissemination, the programme focused on extension services through a range of relevant actors and then aimed at scaling up the impact through curriculum development and mass media content.
The recognition was followed up by partnerships which were crucial to build an information eco-system in Nampula and Cabo Delgado.
To address the gaps in the information, Horti-Sempre utilized its own inhouse technical expertise and supported private, public and non-governmental organizations to improve the capacity of their staff. The aim of these activities was to exhibit the significance of information dissemination regarding vegetables to the different actors.
To deepen the impact, Horti-Sempre engaged with a range of local institutions to introduce horticulture relevant course content into existing curricula. The contents of the specialisation course on management and improvement of vegetable production were designed in a participatory manner with 3 universities (UniRovuma, Lúrio and Academia Militar) and 8 agricultural vocational training institutes (ADPP, Mecuburi, Murrupula, Ribaue, Ebenezer, Nacuxa, Moeria and Carapira).
Simultaneously, Horti-Sempre used the content to develop videos for the trainers on horticulture farming to aid them in their trainings and made the videos publicly available. While this was independently developed, given the demand for such information, the videos were aired by a local TV show independently of the programme. Partners also launched a radio shows to promote horticulture production in the provinces and engaged with the Horti-Sempre on the show content.
Horti-Sempre’s work on building an information eco-system for horticulture achieved two main behaviour changes from market actors.
Availability of local expertise for horticulture extension
Horti-Sempre’s work on curriculum development led to the training of 400 technicians from Northern provinces available to public and private sector to engage in their extension work for horticulture. Inclusion of horticulture courses at the local level reduces the cost of training for the private and public sector and encourages faster roll out of extension work. Moreover, the capacity of local institutes to continue producing agriculture graduates with horticulture knowledge has been built.
Investments in expanding extension networks
To exhibit proof of concept on the commercial value of extension work, Horti-Sempre partnered with input suppliers, NGOs and the public extension services directly to reduce their risks. Horti-Sempre support led to the hiring of 65 extension workers by its partners alone, validating the value of extension services for these partners.
Moreover, these partners independently initiated activities to expand their outreach to a larger number of their clients. All companies recognised the importance of reaching out to remote communities producing less-perishable vegetables given their longer distance to the market centres.
Estimates made by Horti-Sempre partners suggest that only 1-2% of the farmers purchased advanced hybrid seeds in Nampula and Cabo Dalgado provinces in the years 2016-2017, which has reached an estimated 30% of farmers purchasing the same in the year 2021.
Moreover, the growth in the purchase of improved vegetable seeds has also increased sales of fertilisers and crop protection material from input suppliers. Given the high value received from vegetables, input suppliers see it as the door to opening the potential of selling a range of technologies to further aid farmers including advanced drip irrigation technologies or micro-nutrients. Horticulture has been the means to bring more dynamism into the whole agriculture sector of the northern provinces.
Horti-Sempre’s information dissemination facilitation involved support to ensure that information also reaches women farmers. This is reflective from an encouragement of including women farmers during the extension sessions and monitoring the results of the interventions by separating female beneficiaries to understand how the interventions are also benefiting them.
Between January 2020 and June 2021, there were an additional 9,484 farmers who purchased improved seeds from Horti-Sempre partners, of which 40% of the sales were made to women farmers.
Analysis – rigorous and recurring
As the programme matured, it recognised the demand side challenges of introducing improved seeds. Reaching this recognition took multiple years and interventions, which might have been reduced by investing more in the initial analysis before initiating the interventions.
This learning is critical for both programme implementation teams as well as the donors, to recognise that a successful MSD programme’s first achievement is not the interventions that it initiates but the quality of its analysis. The quality is reflected in asking the appropriate “why” questions around the key market constraints before investing in interventions.
In thin markets, where some market functions are simply missing due to a lack of players can tempt programmes to make direct investments into those functions, however, it is crucial to analyse the incentives of the local players as opposed to directly addressing market constraints.
Where programmes struggle to find local partners to address a specific market constraint often indicates the weakness of the analysis as opposed to the capability of local players. A rigorous analytical phase for Horti-Sempre could have meant the success it had later in the programme coming much earlier.
A firm understanding of the market constraints is what any good MSD programme offers, the solutions to those constraints are often a mixed bag of successes and failures, upon which programmes adapt their strategies. It is essential to keep a portfolio view, continue to improve market analysis and build on the successes that the programme achieves to sustainably address market constraints.
In Horti-Sempre’s case, its activities to build its credibility among local players played a crucial role in convincing them of the commercial potential of investments in addressing the information gap.
It is important to recognise that every market problem is complex, which makes it difficult for existing market players to address them. When any development programme facilitates the risk taking to address systemic constraints, there is often as much to be learned as there is immediate impact. MSD programmes need to respond to these learnings in a timely and effective manner to take advantage of the opportunities in the market. It was this approach that enabled Horti-Sempre to take advantage of its existing relationships with key market players and move towards building the information eco-system in Northern Mozambique.
In the last year of Horti-Sempre’s operation, the most valuable contribution it was making was to build the connections between farmer groups, private, public and the NGO sectors. This does not always require a formal arrangement, but a clear set of shared responsibilities and a rigorous monitoring approach to assess the results of those arrangements. Horti-Sempre exhibited that no cost and informal partnerships were as valuable to building the information eco-system as the partnerships that were inked.
The programme’s shift to engaging with the existing actors was where it achieved most success.