Managed by Connexus, this Pay-for-Results prize competition incentivizes private sector actors and producer groups in Senegal to upgrade warehouses and develop storage-based finance schemes for smallholder farmers. The five-year project employs monetary prizes to incentivize private sector warehouse owners and managers to engage with financial institutions (FIs) and producer organizations to offer storage-based financing services to small farmers. These financial services enable small farmers to use their crops as collateral for credit while also storing their crops in a secured warehouse while waiting for higher prices following harvest. Target value chains include cashew, rice, maize, millet, cowpeas, onions, and groundnuts. In five years, the project is expected to increase smallholder profits by $9.7M and enable them to access over $35M in service. By safely storing crops, farmers will reduce post-harvest losses, increase revenues by selling to premium markets, and improve household incomes and food security.
The project is being implemented in two phases each year:
- Phase 1 awards competitors up to $6,000 per facility for upgrading their warehouses to achieve quality standards so that banks are willing to lend against commodities stored in warehouses. Competitor activities in this phase include investing in warehouse upgrades, engaging farmers and FIs, and securing a license to participate from the Government of Senegal. For the 2022 spring cashew season, the project awarded $38,000 of Phase 1 prizes to nine smallholder producer organizations/collateral manager teams to prepare warehouses for cashew storage.
- In the 2022 Cashew Competition, seven smallholder producer groups stored more than 650 MT of cashew in eight AgResults-approved warehouse facilities, mobilizing approximately $460,000 (274,144,948 FCFA) in bank loans against the inventories submitted as collateral.
- In the 2023 Cereal and Legume Competition, more than 15 producer groups received more than $70,000 of Phase 1 prizes to upgrade their warehouse facilities and engage professional collateral management firms to train their staff in WRS management.
- In addition to the eight cashew producer groups that participated in the 2022 Cashew Competition, an additional 10 producer groups have applied to compete in the 2023 Cashew Competition for a total of 18 producer groups competing in 2023.