Objectives

In southwest Madagascar, AFDI supports the Maison des Paysans (MdP) [Farmers’ House] in its effort to develop services enabling growers to improve their incomes. The region is marked by major weather variations and by market instability, and the food security of rural households depends on subsistence-type farm production and marketing of products. In 2004 the MdP established a collective storage service in partnership with a micro-lending institution (MLI): the MdP advises growers and the MLI provides supervision focusing on credit management.

Activities

The principle is simple: the farmers store their products at harvest time, when the massive supply of products brings prices down. They receive a loan based on 70% of the value of their stock, which enables them – immediately after the harvest – to finance the campaigns for other crops or to invest in new activities. When prices go up again during the transitional period, the farmers take their products out of storage and sell them collectively, then repay their loan and keep the profit.

The stock constitutes the MLI’s collateral, which facilitates access to loans for family farms.  The system includes three components: storage, the loan and its recovery, and release from storage associated with an analysis of the season. Within each group, a technical agent has been trained in one of the components, and there is a management committee within each basic organisation (OPB).

Results

The quantities stored per farmer and per group have increased: for maize, quantities rose from 120 tonnes in 2005 to 480 tonnes in 2007 (all groups).  The average amount of the storage loan in 2008 was about 325 Euros by family, a large amount for these farmers. The profit realised is estimated at 30%, and most households renew their loan operation from one season to the next. The close relationship developed by the MdP with the farmers is essential, especially given their geographic isolation and lack of other support of this type on the ground. It develops decision-making tools and provides technical support to the OPBs. Today member farmers benefit from training and collective loan applications; they also work together more easily to find common solutions. The MdP now wants to strengthen the organisation of the OPBs based on a common professional plan and give the members responsibility by assigning them specific follow-up and audit duties.