Support to Farmers and Agribusiness Enterprises (SFAE)
Component 1: Support to Farmers and Agribusiness Enterprises (SFAE)
The SFAE Component aims to increase the degree of smallholder commercialization in Zambia by promoting the development of a network of well-functioning and competitive value chains. The component has three sub-components; namely, Supply Chain Credit Facility, Market Improvement and Innovation Facility, and Rural Roads Improvement Facility.
(a) Supply Chain Credit Facility (SCCF):
The aim of the SCCF was to provide a line of credit, on a demand driven basis, to support investments geared to improving the supply chains of existing and emerging contract farming systems. The sub-component would enable those Zambian agro-enterprises, traders or nucleus and commercial farms working with smallholder farmers, under out-grower schemes or other forms of contract farming, to borrow in foreign exchange to finance capital investments, seasonal inputs and export activities. Because of institutional issues within the Apex Unit under the Bank of Zambia, and now under the Development Bank of Zambia, that is responsible for managing the facility, the sub-component has not been able to disburse any funds. Hence, the funds allocated to this sub-component have since been re-allocated to other performing components to avoid holding back disbursements. Support under the sub-component is now limited to financing selected capacity building activities of the Development Bank of Zambia that currently houses the Apex Unit.
(b) Market Improvement and Innovation Facility (MIIF):
The MIIF aims at providing financial resources, on a matching grant basis, for the development of innovative business linkages between smallholders and other players in agricultural value chains. Eligible applicants under this facility include: (i) organized producer associations and related smallholder organizations with developed or developing linkages to agricultural value chains, and supporting the development of smallholder farmers; (ii) agribusinesses linked with smallholders, involved in processing, trading, and marketing of agricultural and food products/commodities which help to improve the growth and competitiveness of smallholder farmers; (iii) input suppliers; (iv) nucleus commercial farms working with smallholders; and (v) publicly and privately funded agricultural and industrial institutions and trusts.
(c) Rural Roads Improvement Facility (RRIF):
The project provides resources for the rehabilitation and maintenance of a network of selected feeder and district roads of economic importance in high agricultural potential areas of Choma, Chongwe, Katete, Chipata and Lundazi Districts. This network of roads, with a total distance of 1,130 kilometres, connects major agricultural production areas in the five districts to main road networks leading to major agricultural markets. Activities under the RRIF include: (i) road rehabilitation and maintenance works using the Output and Performance Based Road Contracts (OPRC) concept; (ii) supervision services for OPRC contracts; (iii) capacity building and training for Road Development Agency (RDA) and National Road Fund Agency (NRFA), the main implementation agencies of the RRIF, to enhance their OPRC management capacity; and (iv) resources for the Environmental Impact Assessment (EIA) studies.