Building on two decades of experience in agriculturally-focused economic growth across sub-Saharan Africa, AECOM supports USAID’s development goals of reducing poverty and enhancing inclusive agricultural sector growth in Mali. Through hands-on training, partnership development and reducing barriers to trade, L4G, financed by Feed the Future, seeks to strengthen livestock value chain actors’ competitiveness, responsiveness to market demands, and access to quality agricultural inputs and services. These vital elements of the program feed into L4G’s four major strategic objectives: to increase livestock productivity, improve domestic and export trade, strengthen the entrepreneurial capacity of livestock value chain actors, and improve the business environment in Mali.
- 9,000+ women have been targeted by L4G’s agricultural trainings.
- 1,000+ hectares of land have been planted with improved peanut and legume seed varieties.
- Promoted the use of forage choppers to increase use of post-harvest plant waste by 300%, creating forage for animal fattening.
- 30 new business plans were created by livestock value chain actors.
- 5 memorandums of understanding have been signed between partnering organizations to promote sustainability of livestock value chain improvement efforts.
Project Highlight: Increasing Trade and Access to Finance for Livestock Value Chain Actors
Mali Livestock for Growth (L4G)’s main focus is to increase the incomes of livestock value chain actors. In 2017, the project made significant strides toward this effort with an activity that aimed to increase trade and access to finance for small farmers. The primary constraint to economic growth in Mali and throughout Sub-Saharan Africa is reliable access to affordable financing. Despite holding large sums of capital, local banks and other formal financial institutions are often reluctant to lend to agribusinesses, even though agriculture is the primary industry in Mali. Unfortunately, those financial institutions have collateral requirements for loans that most farmers just cannot meet.
In spring of 2017, L4G facilitated the business relationship between Producer Organizations or POs (in this case, L4G cattle-selling client) and LAHAM Industries (Mali’s first large-scale slaughterhouse). LAHAM has a demand for upwards of 300 heads of cattle per day and is eager to find a steady supply of high-quality livestock to meet this need. L4G worked to convince them that L4G-partnered POs were capable of offering a supply of quality cattle. LAHAM agreed to a pilot program whereby they paid for the transport of POs’ cattle to the slaughterhouse in several shipments. After several trial runs over a six-month period, the business relationship was refined and L4G is proud to report that activities with LAHAM are scaling.
In late 2017, LAHAM signed “forward” contracts with L4G-partnered POs that formalized and regularized the supply of cattle to the slaughterhouse. For most producers, LAHAM is the first formal agribusiness they have partnered with, and this relationship will allow POs to sell animals year round. By December 2017, nearly 50 producers had earned US $31,000 in revenue through this new relationship—an unprecedented sum for this group—representing a potential driver of economic growth for Mali.
Producers will now be able to capitalize on this formalized relationship with LAHAM to secure access to financing, allowing them to scale their businesses and purchase young animals and improved fodder for animal fattening. Financial institutions requiring financial guarantees to issue loans will accept these “forward” contracts as a form of collateral. As sales are completed, LAHAM will provide the POs with a certified check. The POs will then deposit the check at their bank and the bank, in turn, deducts the loans before giving them the remainder as their gross margin. This process can then be repeated and the POs will have a real chance to significantly increase incomes and expand trade.