The ADSP is an agricultural development project whose primary implementation agency is the Ministry of Agriculture and Livestock. The Project is financed by the World Bank’s International Development Association (IDA) through a Sector Investment Grant of US$37.2 million.
Project Development Objective
The project development objective is to support increased commercialization of smallholder agriculture through improved productivity, quality and efficiency of value chains where smallholders participate. The project’s central aim is to improve smallholders’ access to markets and the competitiveness of their agricultural commodities. The project, therefore, focuses on high potential agricultural areas and adopts a value chain approach to make sure that all levels of the chains are operating efficiently and increasing value added.
The ADSP has employed a value chain approach to address challenges faced by smallholder. The value chain approach requires working with all players in potentially profitable agricultural supply chains. Thus, the project beneficiary groups include not only smallholder farmers but also agribusiness enterprises, large-scale estate and commercial farmers, input suppliers, processors, traders, and financial institutions, who form part of the value chains where smallholder agricultural producers exist.
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 work 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.
The Institutional Development Component aims to improve the capacity of the public sector to provide core public services required to enhance commercialization of smallholder farmers.
Through this Component, the ADSP provides capacity building support to the Ministry of Agriculture and Livestock (MAL) Department of Policy and Planning, Agribusiness and Marketing, Seed Control and Certification Institute (SCCI) and Zambia Agriculture Research Institute (ZARI).
In addition, given the fact that cotton is a major smallholder commercial commodity in Zambia that is organised through contract farming arrangements, involving over 200,000 smallholders, the ADSP provides support to the industry-specific public-private sector partnership institution, the Cotton Development Trust (CDT). Support is also provided to the MAL Financial Management and Procurement and Supplies Units to strengthen their capacity to handle the incremental workload associated with the implementation of the ADSP.
The aim of this Component has been to strengthen the capacity of the Ministry of Agriculture and Livestock to implement the ADSP and other projects. Through this Component, the Ministry has established projects management and coordination institutions such as the National Project Steering Committee (NPSC) and the National Coordination Office (NCO). The NPSC is responsible for reviewing and approving Project Annual Work Plans and Budgets (AWPB), providing guidance on Project implementation and resolving any issues of policy nature.
The NCO is responsible for the day-to-day management and coordination of Project activities. The NCO consists of a National Coordinator, a Monitoring & Evaluation Specialist, a Safeguards (Environmental and Social) Specialist, a Project Accountant, a Project Assistant, and support staff. Recently, an Agribusiness Specialist and a MIIF Field Coordinator were hired to strengthen the NCO’s capacity to manage the Market Improvement and Innovation Facility, which was until December 5, 2011, was being administered by Africare Zambia.
