FY2019 – YEAR FIVE ANNUAL REPORT
VALUE CHAINS FOR RURAL DEVELOPMENT
Above: During Year Five (FY2019) of the USAID Value Chains for Rural Development project, partners gathered at collaborative learning and business-to-business (B2B) events to review progress, link to new markets, and strengthen connections between market system actors. They also planned for the future, identifying challenges and adapting business and market strategies to sustain growth. Above, from top-left: 1) private sector partner Sein Lan Wai promoted soybean for the domestic market, strengthening linkages between market system actors and drawing high-level government participation including from the Shan State Minister of Agriculture, U Sai Lon Kyaw; 2) high-end fresh produce buyers shared information about end-market requirements to import ginger to Europe at the project’s final ginger B2B event; 3) U Myo Aye, Chairman of the Myanmar Coffee Association, is interviewed by MITV about growth in Myanmar’s specialty coffee value chain at the project’s #CoffeeNext event; and 4) three of the first melon producers to earn certification for Good Agricultural Practices were honored at an event organized by VCRD and the Myanmar Fruit, Flower and Vegetable Producer and Exporter Association.
This publication was produced for review by the United States Agency for International Development. It was prepared by Winrock International under Cooperative Agreement No. AID-482-LA-14-00004, as an Associate Award under the Farmer-to-Farmer LWA Cooperative Agreement No. AID-OAA-L-13-00006. USAID/Burma’s VCRD Program AID-482-LA-00004 FY201 (Year 5) -- Annual Report
TABLE OF CONTENTS ACRONYMS ...... 3 EXECUTIVE SUMMARY ...... 4 INTRODUCTION AND CONTEXT ...... 7 Y5 BY THE NUMBERS ...... 9 Y5/Q4 VALUE CHAIN STORIES ...... 11 THE COFFEE VALUE CHAIN ...... 11 THE SOYBEAN VALUE CHAIN ...... 18 THE GINGER VALUE CHAIN ...... 25 THE SESAME VALUE CHAIN ...... 30 THE MELON VALUE CHAIN ...... 35 KNOWLEDGE MANAGEMENT AND SHARING (CROSS-CUTTING) ...... 41 Communications and Outreach...... 41 Monitoring, Evaluation, and Learning ...... 43 ROLE OF VOLUNTEERS ...... 44 OPERATIONS AND CLOSEOUT ...... 45 ENVIRONMENTAL IMPACT ...... 45 Plans for Q1 of Y6 ...... 45 ANNEX A: SUCCESS STORY ...... 47 ANNEX B: LIST OF TOWNSHIPS AND VILLAGES ...... 49 ANNEX C: VCRD EMMP – UPDATED ...... 49
USAID/Burma’s VCRD Program AID-482-LA-00004 FY2010 (Year 5) -- Annual Report
VCRD YEAR FIVE ANNUAL REPORT: OCTOBER 2018 – SEPTEMBER 2019
PUBLIC VERSION: December 10, 2019
DISCLAIMER The authors’ views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government.
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USAID/Burma’s VCRD Program AID-482-LA-00004 FY2010 (Year 5) -- Annual Report
ACRONYMS
B2B Business-to-Business CBO Community-Based Organization CDZ Central Dry Zone CQI Coffee Quality Institute DAR Department of Agriculture Research DOA Department of Agriculture EMMP Environmental Mitigation and Monitoring Plan FG Farmer Group FTF Feed the Future FY Fiscal Year GAP Good Agricultural Practices GEA Green Eastern Agri GM Gross Margin ha Hectare ILO International Labour Organization IR Intermediate Result kg Kilogram lb Pound LOP Life-of-Project MCA Myanmar Coffee Association MCG Mandalay Coffee Group MEL Monitoring, Evaluation and Learning MFVP Myanmar Fruit, Flower and Vegetable Producer and Exporter Association MMPEA Myanmar Melon Producer and Exporter Association MOALI Ministry of Agriculture, Livestock and Irrigation MMK Myanmar Kyat MSR Myanmar Survey Research MT Metric Ton NES National Export Strategy NGO Non-Governmental Organization Q4 Quarter Four (Q1 = Quarter One, etc.) SFDA Sesame Farmer Development Association USAID United States Agency for International Development USG United States Government VCRD Value Chains for Rural Development Y5 Year Five
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USAID/Burma’s VCRD Program AID-482-LA-00004 FY2010 (Year 5) -- Annual Report
EXECUTIVE SUMMARY
The U.S. Agency for International Development’s (USAID’s) Value Chains for Rural Development (VCRD) project is a five-year initiative focused on improving the prosperity of Myanmar’s smallholder farmers in five agricultural commodities (ginger, soybean, coffee, melon and sesame.) The project’s strategy is based on building inclusive market systems to deliver competitive products for sale to higher-value markets, resulting in higher incomes for farmers.
During Fiscal Year (FY) 2019, 4,109 new households directly benefited from VCRD or partner interventions aimed at improving on-farm productivity through intensification and diversification, with 49,527 hectares (ha) under improved technologies at the end of the year. In Year 5 (Y5), VCRD supported the uptake of nine new/improved technologies and/or management practices, including sustainable, agronomic approaches such as cultivation of pesticide- free ginger, intercropping and agro-forestry, and use of improved seeds and safer/more responsible use of inputs, bringing to 79 the total number of tested and transferred technologies and practices over the life-of-project (LOP), with 33,706 farmers in targeted areas now applying one or more improved agriculture technologies or management practices as a result of USAID assistance. VCRD helped to foster the development and sustainability of new, farmer- focused companies and private extension services and inputs enterprises that are now linked to new markets, and which are increasingly collaborating with the Department of Agriculture (DOA) to promote improved technologies and Good Agricultural Practices (GAP).
Evolving market systems
In its final year of implementation, VCRD continued its facilitative approach toward market actors, to enable more competitive value chains built on inclusive and sustainable relationships to accelerate development of key elements of the broader market system. This approach has fundamentally changed the way agribusiness is conducted in supported value chains.
For example, in 2018 VCRD reported that farmers in all five value chains had established direct relationships with end- customers for the first time. Producers who utilized VCRD-introduced technologies and practices produced products with higher quality, and were rewarded by customers with price premiums. Other farmers and market actors took note, and by late 2019, new relationships and expectations had begun to offer profound opportunities for more competitive, inclusive and sustainable market systems.
Clear incentives to meet quality standards
As farmers began interacting directly with customers, “quality” has become increasingly understood, quantifiable, and a key determinant of price competitiveness. When linked to pricing, the adoption of quality standards also opens doors to less subjective, more transparent pricing mechanisms. As a result, all five value chains are using product standards that are becoming widely recognized and measurable. Measures from newly adopted tools (such as moisture meters in soy and coffee, or litmus paper in sesame) that validate customer requirements are becoming widely adopted as a common language between farmers and buyers, and VCRD has played a central role in facilitating this dialogue, leading to increased exports of about $107 million in FY2019.
With higher prices on offer, farmers now have a powerful incentive to change behaviors, especially to adopt new technologies that would allow them a pathway to improve quality, reduce costs and improve productivity. This year for
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USAID/Burma’s VCRD Program AID-482-LA-00004 FY2010 (Year 5) -- Annual Report
example, over 90% of VCRD farmers are applying one or more improved technologies introduced by the project, and by the year’s end gross margins had increased in three out of the five value chains.1
Additionally, influential industry players are now promoting quality standards. For example, for the first time this year, the National Coffee Cupping Competition and Cupping Awards Ceremony was organized by the Myanmar Coffee Association (MCA), newly published national melon standards were officially adopted by the national melon association and the DOA, and foreign certification bodies such as EcoCert began to promote services in Myanmar, initially through participation in VCRD’s B2B events. These organizations are actively promoting quality standards established between farmers and buyers, and often also providing critical services to achieve them, such as testing, certification or training.
Innovations in sales and distribution
Hand-in-hand with quality awareness, a structural shift away from traditional channels of sales and distribution is becoming increasingly necessary for VCRD beneficiaries. Because differentiated products cannot be aggregated with traditional commodities, many traditional channels are not useable. To ensure that high-quality products can reach high-end markets, sales/procurement innovation now is occurring in every VCRD value chain.
These innovations in post-harvest aggregation build on direct needs of farmers and buyers. For example, ginger processor and exporter Snacks Mandalay bypassed suppliers at Aungban to purchase chemical-free ginger directly from Shwe Chin Sein Farmer Group because ginger brokers are not setup to handle chemical-free product in parallel to traditional product. This capacity gap is proving to be an opportunity for other aggregators with better capabilities. For example, Aung Kyun Thar Co., a local sesame exporter buying for Japan-based Mitsubishi Corp., entered a three-year partnership deal with the Sesame Farmer Development Association (SFDA) and now supplies Mitsubishi with SFDA’s GAP-certified sesame by segregating it within the supply chain. Unlike the Aungban traders so far, they have acted on their incentives to innovate supplier relationships and their supply chain capability.
For farmers too, a desire for new sales channels is taking root, accompanied by new behaviors. Once reluctant to participate in traditional channels that are not inclusive, they have begun exploring new ways of reaching the market. Indigo Mountain Coffee Co., of Hopong Township, for example, traveled to the Specialty Coffee Association’s World of Coffee trade show in Berlin with samples of their coffee seeking new buyers. Shwe Chin Sein appointed a marketing representative who met with processors throughout Myanmar before beginning to work directly with Snacks Mandalay. Melon farmers visited China and formulated a plan to establish a controlled production zone with a direct corridor to buyers of GAP-certified melons across the border. Shwe Taung Thu Coffee Co. appointed a sales manager and began offering packaged tours for international coffee buyers visiting Shan. Rather than being exceptions, this new customer-oriented mindset is now becoming the norm.
Crowding in of new market actors
As product standards and sales channels transformed this year, new agribusiness opportunities presented themselves to entrepreneurs and other market actors. For example, in the soybean and sesame value chains, where quality seed is a critical bottleneck for farmers, independent farmers are now stepping in as seed growers, producing
1 See “Y5 By the Numbers,” on page 9, below, for details on gross margins and other annual data. 5
USAID/Burma’s VCRD Program AID-482-LA-00004 FY2010 (Year 5) -- Annual Report
specific varieties in high demand and selling at a premium. In the sesame value chain, the Department of Agriculture Research (DAR) only produces enough seed to supply about five percent of Myanmar’s sesame farmers, and growers are now filling a critical market need by beginning to source and multiply registered seed from DAR for farmers. Similarly, Sein Lan Wei, a provider of agri-services that became registered as a business last year, has made rapid inroads identifying and bridging gaps between the needs and expectations of various market actors. In partnership with Myanmar Nice Bean Products Factory, it now provides extension services to soybean farmers and assists Nice to procure the quality of grain it needs from these producers. It also buys quality seed from seed producers, which it then sells to farmers or the DOA for a fee. Sein Lan Wai is also now working with a women’s farmer group to develop nutritious soy-based snack products, which its members produce for Sein Lan Wei to distribute commercially. This innovative new service provider has also become adept at organizing professional B2B learning events on behalf of a growing list of important clients including the DOA, and though they started out as soybean experts, they are now collaborating with the national maize producers’ association and other important stakeholders, including producers of elephant foot yam and in the fresh vegetable sector.
Other agri-entrepreneurs finding new opportunities within VCRD’s value chains include providers of Bokashi fertilizer, automated land preparation services, soil testing services, solar dryers, grain sorters, drying tables and packing materials, to name just a few. Many of these entrepreneurs got their start by listening to farmers describe challenges at B2B stakeholder events facilitated by the project and partners. For example, a machine intended to dry peanuts was redesigned for soybeans when it became clear that buyers need help determining moisture content. In addition to the private sector, services provided by government agencies also began to make inroads in VCRD-supported value chains. Notably, DOA provided GAP extension services and climate resilience and mitigation training, MyanTrade cooperated with private sector partners at B2B events, and the DOA’s Cooperative Department dispensed loans to soybean seed growers. Donor-funded organizations including the International Labour Organization and the United Nations Industrial Development Organization partnered with the project to increase the capacity of farmer organizations working with VCRD. New market actors are now helping to increase the competitiveness of each value chain, strengthening relationships between inclusive market actors, and opening doors to new opportunities. As a testament to this improved cooperation between market actors, a record nine new Public-Private Partnerships (PPPs) were facilitated by VCRD in 2019.2
Access to finance
VCRD has seen a steady increase in long-term investment pouring into its value chains, reaching nearly $3.6 million this year in value chain infrastructure, and about $10 million over the life of the project (see Figure 1, at right).
Increases in long term investment are the result of increased clarity in business outcomes, reduced perceived business risk and more confidence in value chain partnerships. This is best illustrated by investors Figure 1, above, shows increased private sector investment facilitated by who have made follow-on investments, following earlier VCRD since the beginning of the project.
2 A number of these PPPs are described below in the value chain stories section. 6
USAID/Burma’s VCRD Program AID-482-LA-00004 FY2010 (Year 5) -- Annual Report
investments with larger ones as they became convinced of the potential returns. This year, International Best Manufacturing Co. and Jaguco Myanmar International Co. made just such follow-on investments in the sesame and soy sectors. Multi- year contract terms, such as SFDA’s and Myanmar Nice Bean Products Factory’s contracts with business partners, also reflect business confidence and growing trust.
Nowhere is this more apparent than with the growing number of loans financial institutions have begun to make to market actors participating in VCRD’s value chains. This year, six new firms (and additional repeat firms) received more than $899,000 in financing, confirming continued confidence in economic growth and business sustainability.
Project transition
VCRD successfully completed an orderly close-down of most technical activities for the coffee, ginger and soybean value chains in Q3 of FY2019, with the Innovative Grant to the national horticulture trade association in support of melons closing in Q4. As part of the process, VCRD worked closely with partners in each value chain to organize events that not only celebrated key achievements, but emphasized the importance of collaborative partnerships and stakeholder commitments to further market systems change. VCRD included all stakeholders in planning the next phases of activity needed to boost growth in each value chain, highlighting potential opportunities and partnerships. VCRD also continued to research, develop and share “Stories of Transformation” focused on important market system changes and lessons learned in the value chains (one for each crop and two focused on cross-cutting learning and access to finance themes) to capture and share knowledge gained during implementation over the past five years.3
In Q1 of FY2020, the project’s activities focus mostly on coaching important partners in the sesame value chain as the 2019 harvest concludes, as well as supporting key partners through its collaboration with MyanTrade.
INTRODUCTION AND CONTEXT
The United States Agency for International Development in Burma (USAID/Burma) awarded Winrock International a Cooperative Agreement on Sept. 22, 2014 for the VCRD Project. This project is part of the Global Presidential Initiative, Feed the Future (FTF), and is supported and overseen by USAID/Burma.
VCRD is built upon Winrock’s previous Farmer-to-Farmer,4 volunteer-based platform for agriculture technical assistance to support USAID/Burma’s goal of supporting inclusive smallholder agriculture modernization and decreasing poverty. The overall goal of VCRD is to sustainably reduce poverty and hunger in Myanmar by improving smallholder productivity and profitability, strengthening value chain linkages and competitiveness and increasing private sector engagement to support value chain upgrading. Per the Cooperative Agreement (Section A.5 2.2), Winrock is required to submit an annual report one month after the end of each fiscal year. This report describes accomplishments and progress during Y5 (FY2019) compared to the targets and FY2019 Annual Work Plan. This report covers work completed over the period from Oct. 1, 2018 through Sept. 30, 2019.
3 As of the end of FY2019, crop-specific learning pieces were complete and published for the coffee, sesame and ginger value chains, with soybeans and melons completed and under internal review. A cross-cutting learning piece also has been published, while an access-to-finance piece was nearly ready. These are not required deliverables but VCRD is committed to sharing key lessons learned and sharing information about remaining challenges with the broader agriculture sector. All pieces are uploaded to a publicly-accessible page on Winrock’s website and shared with partners upon completion. 4 Implementation by Winrock of USAID’s five-year Asia Farmer-to-Farmer program ended in November 2018. 7
USAID/Burma’s VCRD Program AID-482-LA-00004 FY2010 (Year 5) -- Annual Report
VCRD has implemented a suite of activities to support firms and farms in five value chains in southern Shan and the Central Dry Zone (CDZ). As of the end of Y5, support to four out of the five value chains has transitioned to monitoring and follow up with core activities ended upon completion of the ginger, coffee and irrigated (dry season) soybean harvests earlier in the year. The VCRD Innovative Grant to MFVP in support of melons officially closed as of the end of September 2019. By agreement with USAID, final project activities focus on providing coaching and support as needed to local and private sector partners in the sesame value chain through the end of the sesame harvest in November 2019.
VCRD is organized into specific value chain teams with support from senior team leaders and technical staff who oversee cross-cutting synergies including access to finance and capacity building of multi-sectoral service providers. This approach allows the project to achieve inclusive agricultural growth by identifying value chain specific constraints and facilitating market-based solutions. VCRD’s cooperative agreement drives two Intermediate Results (IRs): 1) Improved Agricultural Productivity; and 2) Increased Market Access and Trade. To achieve these results, VCRD engages market actors including farmers, input suppliers, service providers, aggregators, processors and end-market players to identify transactional and systemic constraints and inefficiencies. This has led to increased sales and profits (compared to baselines) for all parties, prioritizing activities to improve smallholder agriculture productivity, empowerment, and access to more lucrative markets. Buyers—including processors, traders, exporters, and retailers—have consistently complained about low volumes, low quality and unreliability of smallholder production. VCRD engages market actors to play a role in reversing these trends by participating in the capacity building of their supplier base.
The project has helped demonstrate the business case for such service delivery, empowering farmers with business and organizational skills to meet market demands and leverage their collective economies of scale to capture a greater share of the end-market price through increased productivity, aggregation, quality control and an improved negotiating position. In Y5, the project focused on issues of market access, working with partners to develop a deeper understanding of the dynamics of selected value chains through ongoing analysis, and developing competitive strategies in partnership with lead firms and farmer groups (FGs) where possible, while strengthening support for value chain upgrading and investment.
The project has been implemented in collaboration with various grantees and sub-awardees.5 At the close of Y5, all VCRD sub-awards had ended, including the award to the Coffee Quality Institute (CQI) for specialty coffee processing technical assistance to meet international standards and coffee trade expertise, and the award to MFVP, which provided extensive on-farm and market linkage support to melon farmers. Other local partner organizations and private sector enterprises supported through previously ended cost-shared Innovative Grants include Lilypad Co. (Behind The Leaf Coffee), Mandalay Coffee Group, (MCG), and Amayar Women’s Coffee Producer Group in the coffee value chain; Myanmar Nice Bean Products Factory (formerly known as “Nike Tofu”), T-Brand Tofu Co. in the soy value chain; the Myanmar Agri-Business Group and the Myanmar Institute for Integrated Development in the ginger value chain; and Sustainable Action for Rural Advancement in the sesame value chain. In addition to companies and organizations connected to VCRD through Innovative Grants, in Y4 and Y5, the project’s network of private sector partners, informal collaborators, trade associations, producer groups, CBOs, public entities and global organizations expanded significantly.
In Y5, the project continued to use an adaptive work planning and management approach, enabling staff to reflect on progress and results, share lessons and challenges across the team on a quarterly basis, and modify project activities in response to changing market forces and business environment. This new structure enabled collection of field data more frequently. The project also continued to utilize expert volunteers to effect “people-to-people” assistance to local partners
5 In addition, the project worked extensively during the first two years with Internews on activities to disseminate market and extension information via radio, television and web media outlets, and over the first three years via a service agreement with a CBO, Shwe Danu, on coffee extension activities. 8
USAID/Burma’s VCRD Program AID-482-LA-00004 FY2010 (Year 5) -- Annual Report
this year, placing nine experts on customized assignments with partners ranging from farmer organizations to small businesses and processors.
Y5 BY THE NUMBERS • Farmers’ gross margins in FY2019 rose compared to FY2018 in three out of the five value chains supported, with ginger profits increasing by 98 percent from $1,406 per ha to $2,7886 while melon and sesame margins also increased, though less dramatically. Irrigated soybeans exhibit a dip (by 10 percent) in margins with producers experiencing earlier than expected heavy rains, affecting their bottom lines.7 Coffee gross margin per hectare was lower than targeted by 14 percent, resulting from a huge, partially unanticipated increase in hectares under cultivation with young plants (41 percent) compared to last year, while sales also were lower by about 5 percent this year than in 2018.8 • Incremental sales for coffee were about 33 percent lower than VCRD’s internal target (i.e., $584,621 this year against a targeted $878,759). Coffee production missed 2019 targets for volume of sales by about 17 percent and value of sales by about 16 percent. The main reason was that global coffee prices plunged in 2019, continuing a downtrend since 2016, as the impact of the coffee rust disease lessened, increasing the global availability of marketable coffee.9 • In all during FY2019, more than 4,109 new households directly benefited from interventions aimed at improving on-farm productivity through intensification and diversification, contributing to improved quality of product, farmer profits and food security in Myanmar, while more than 6,300 individuals benefited, well exceeding project targets for the year, in part due to the dynamism of private sector entities like Sein Lan Wai which continued to independently provide training on practices and technologies originally promoted by VCRD.10 • Private sector investment reached nearly $3.6 million in FY2019, including follow-on purchases of a second Insta-Pro oil extruder from the U.S. by a key project partner in the soybean value chain, bringing the total amount of private sector investment leveraged to more than $10 million over of the LOP. International Best Manufacturing Co., an important sesame buyer and collaborator of the SFDA, invested $2 million in its new sesame roasting and powdering plant in the CDZ, positioning itself for further growth and increased exports of higher-quality sesame, while coffee, melon and ginger processors associated with the project also purchased new machinery and equipment. • Total exports across all supported value chains11 exceeded $107 million, the bulk of which comprised high-value melon exports to China, which annually purchases around 80 percent of all melons grown in Myanmar. Total coffee exports increased in FY2019 to 238 metric tons (MT)12 valued at almost $1.5 million,
6 The steep increase in ginger margins can be attributed to supply and quality problems in regional markets including India, Bangladesh and China, which helped to drive up prices and demand for Myanmar ginger this year, an effect that is likely to continue into FY2020. 7 In the final year of the project, VCRD surveyed only soy production during the irrigated season, by agreement with USAID. 8 Notwithstanding the low gross margin per hectare for coffee, performance can also be viewed relative to baseline. Compared to 2015 baseline, the number of beneficiaries in the coffee value chain has increased more than seven times, from 1,055 at baseline to 8,060 in 2019, an indicator of the effective outreach of VCRD among coffee producers. Total units of production have increased also at about seven times, from 507 hectares at baseline to 3,557 hectares in 2019. While the ratio of production area per beneficiary has reduced by 8 percent, from 0.48 hectares per beneficiary at baseline to 0.44 hectares in 2019, production per beneficiary on the other hand has zoomed up 558 percent, from 0.18/MT at baseline to 0.99/MT in 2019. This means that coffee producers have significantly intensified investments into coffee production over the life of project which could be attributed to the popularization of Myanmar coffee's brand in the international market as specialty coffee. Worth noting from the survey among producers is their increase by 38 percent in the value of sales per hectare, from $568/ha at baseline to $783/ha in 2019. 9 At the time of survey, many community producers were still waiting to sell their harvest, working through their coffee association (Shwe Taung Thu). The association is now negotiating prices with customers based on the global drop in coffee prices. The association’s leaders anticipate slower sales than last year. Please refer to the deviation narratives submitted with VCRD’s FY2019 FTFMS report for further details. 10 Sein Lan Wai independently trained farmers (secondary direct beneficiaries) with no direct cost to VCRD, pushing the total number of documented participants 26 percent above the project’s target for the year. 11 Excluding soybeans, a food security crop produced for domestic human consumption. 12 This figure includes estate-grown coffees exported by MCG. By comparison, total exports in FY2018 were 188 MT valued at just over $1.1 million. 9
USAID/Burma’s VCRD Program AID-482-LA-00004 FY2010 (Year 5) -- Annual Report
including 15 MT of USDA organic coffee purchased by a Texas company, Chameleon Coffee, which launched a new Joint Venture with Myanmar women coffee producers, called The Lady Coffee Co. • Scaling up for the coming harvest, in September 2019 the Shwe Chin Sein Ginger FG signed its first contract with a local processor, Snacks Mandalay/Three Stars, to cultivate 56 MT of ginger for an organic produce buyer in France. The group successfully negotiated an increased price over the processor’s initial offer based on quality and size. • VCRD and partners facilitated nearly $900,000 in loans to producers and processors in FY2019, strengthening farmer-owned enterprises and helping farmers finance their pre-season needs including purchases of improved compound fertilizers and other inputs, acquisition and distribution of improved seeds, and other transactions. Over the life of project (LOP)), VCRD has helped connect partners to nearly $4 million in bank financing, microfinance and affordable credit, and helped partners attract investment from companies like Nespresso, which is now supporting coffee growers in Hopong Township, in a region once known more for poppy production than for its cultivation of high-quality coffee. • VCRD and partners helped make nine new technologies available for uptake during the year including new Thai soybean seed varieties trialed and distributed by T-Brand Tofu (an Innovative Grantee) and Sein Lan Wai to soy farmers, a sesame reaper-binder machine introduced by Jaguco Myanmar International Co.,13 and other new technologies now utilized by coffee processors including refractometers, pH meters and infrared thermometers introduced by MCA and CQI. • The project and partners facilitated formation of a total of nine new PPPs during Y5 including formalizing an innovative alliance between MyanTrade (the Ministry of Commerce agency responsible for increasing exports and sales of Myanmar products), VCRD and key partners such as the Myanmar Melon Producer and Exporter Association to promote increased trade, visibility and raise the profile of smallholder-grown crops; other PPPs include helping a pair of soybean Seed Grower Associations to link to the DOA for the first-known loans to soybean seed producers from DOA’s Cooperative Department.
Below, the technical sections of this report focus on key developments with emphasis on activities conducted in Quarter 4 (Q4) of FY2019 and not previously reported. Using the conventional Springfield Centre market systems diagram as a reference, this report documents the most important developments catalyzed in each value chain. The diagrams at the head of each crop narrative highlight market actors, their actions and their achievements facilitated by VCRD and/or partners. This format helps illustrate important features of a complex dynamic, with the goal of conveying a holistic view of some of the positive changes and new connections between actors evolving in each of the market systems, now driven by incentivized industry participants adopting new behaviors.
13 Though Jaguco bought and imported 20 mechanized reapers from China and sold three sets of them (two-wheeled machines), they ultimately proved unpopular amongst sesame farmers because Myanmar sesame varieties tend to lose lots of seed when the stalk is cut. While the machines are widely used by other sesame- producing countries they have not yet caught on in Myanmar. 10
USAID/Burma’s VCRD Program AID-482-LA-00004 FY2010 (Year 5) -- Annual Report
Y5/Q4 VALUE CHAIN STORIES
THE COFFEE VALUE CHAIN
VCRD’s strategy in the coffee value chain is to shift Myanmar from a producer of low-grade commodity coffee to a producer of high-value specialty coffees that can be sold in global and domestic markets.14
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14 Shown in the map/graphic are elements of the Myanmar coffee market system mapped out with facilitative Q4 interventions. The map highlights how some of the work facilitated by VCRD during Q4 of Y5 helped connect market system actors to drive systemic change and strengthen value chains. Jointed lines show which different actors and/or components were connected through work performed by VCRD and/or partners. Numbers correspond to numbered stories in the narrative, below. 11
USAID/Burma’s VCRD Program AID-482-LA-00004 FY2010 (Year 5) -- Annual Report
INTERMEDIATE RESULT 1: AGRICULTURAL PRODUCTIVITY IMPROVED
1 Shwe Taung Thu grows as an industry leader with new partners, possibilities and confidence
What happened in Y5/Q4? Shwe Taung Thu, a cooperative FG registered in 2018 representing 18 specialty coffee producing villages in Ywangan Township, organized and held its third annual General Assembly with support, participation and financial contributions from important private sector partners including the MCA and Marga Group, developers of a new “crop-to-cup” specialty café set to open before the year’s end in a high-end shopping mall in Yangon. Other specialty retailers contributing to the event included Easy Café/Gentleman Coffee Roasters, and Sawbwa Coffee, both of which contributed equipment to enable members to brew and appreciate their own, locally produced Arabica. These firms have become incentivized to build relationships with Shwe Taung Thu and other local coffee communities, such as Indigo Mountain Coffee Co., in Hopong, over the past two seasons in order to obtain a share of their award-winning Arabica coffees, which are now featuring more prominently in specialty cafes, restaurants and in hotels around Myanmar. At the meeting, Shwe Taung Thu queried its membership to determine production targets for the upcoming 2019/2020 season, transparently elected new leaders, and even held their own “Cup Tasters’ Competition”, in which farmers attempted to identify one coffee with a unique sensory profile out of a set of three cups after sipping. Twenty contestants enthusiastically participated, with four winners selected after two rounds.
How did VCRD facilitate this? VCRD coordinated with Shwe Taung Thu and Above: Members of Shwe Taung Thu express appreciation for sponsorship and coffee rd partners throughout Y5 to support the making equipment presented by private sector coffee industry stakeholders at their 3 Annual General Assembly in Ywangan, southern Shan. cooperative’s sustainability and ability to independently foster smallholder-driven growth in the heart of Myanmar’s most important Arabica production region. Shwe Taung Thu leaders sought VCRD’s advice as they planned the General Assembly and strategies to engage membership and ensure involvement of private sector partners as the project transitions out of the coffee value chain. Earlier in the year, VCRD coached Shwe Taung Thu as it finalized the terms of its first bank loan, issued by Ayeyarwaddy Farmers Development Bank (A bank) with a guarantee by Rabobank Foundation, enabling the group to cover pre-season costs for member communities and begin purchasing cherries locally for the upcoming season. As of the end of FY2019, Shwe Taung Thu continued to seek buyers for an estimated 30 MT of Arabica left over from the previous harvest, but remained optimistic about selling it after new potential buyers from Taiwan and Hong Kong requested samples.15 VCRD also accompanied Shwe Taung Thu, MCA, Indigo Mountain and other Myanmar coffee leaders, including Amayar Women’s Coffee Producers Group and the Myanmar Women’s Coffee Alliance to important trade promotion events during the year held in Bangkok, Berlin and Boston, providing advice and connections as Myanmar coffee stakeholders, grow their marketing and management skills.
15 For example, in October 2019, representatives of Greenfeed Trading Co. requested and received Arabica samples from Shwe Taung Thu in advance of a potential purchase on behalf of Taiwanese buyers. These buyers heard about VCRD’s #MarketNext B2B event, requested permission to attend, and met representatives of Shwe Taung Thu and Amayar Women’s Coffee Producer Group, later requesting the samples for roasting and cupping. 12
USAID/Burma’s VCRD Program AID-482-LA-00004 FY2010 (Year 5) -- Annual Report
Why is this part of our strategy? As the project winds down, producer groups like Shwe Taung Thu and Indigo Mountain Coffee will play a major role in continued growth in the coffee value chain, and serve as a model for other groups interested in developing the coffee value chain in other production zones in northern Shan, Chin and Karen states. After several seasons of engagement with VCRD, Shwe Taung Thu is now capable and committed to providing on-farm extension and post-harvest advice to ensure volume and quality targets are hit. Its leaders also have developed the skills and confidence to engage the private sector and potential customers through trade promotion trips abroad and at inclusive stakeholder conferences and domestic B2B events. They are committed to protecting farmers’ business interests in negotiations with buyers and financers, potential investors, government and trade association representatives. Some of VCRD’s final activities with Shwe Taung Thu in Y5 included training on principles of Price Risk Management to help the group understand pricing strategies, global market trends and important considerations when negotiating procurement contracts and other deals. These and other skills will help provide a solid foundation for sustainable growth.
Myanmar Coffee Association expands reach, staffs up and leads growth
2 What happened in Y5/Q4? Over the course of Y5, MCA continued to evolve as an inclusive and nationally representative coffee trade association capable of leading growth in Myanmar’s coffee sector and connecting producers to new opportunities and markets. The association now boasts 10 individual clusters, each with elected leaders representing producers and coffee stakeholders from all coffee production zones across the country. In Q4, the association hired three staff members including an administrator and two assistant coordinators, all women, who received informal, on the job technical assistance and coaching from VCRD’s coffee and private sector staff. During these sessions, VCRD helped to brief new MCA staff on professional communications standards, use of technology tools for office management, guidelines for responding promptly and professionally to inquiries from association members, the private sector and from buyers looking for connections to producers, how to develop an event agenda and coordinate planning (in advance of events like the Myanmar Coffee Festival, sponsored by MCA and planned for early October 2019), and how to maintain a membership database and financial and accounting documentation, among other important skills. Also in Q4, MCA began working closely with a long-term, professional business consultant funded by a grant to MCA from GIZ, the German development agency. MCA consulted with other coffee stakeholders to develop new coffee sector initiatives to pitch to GIZ for funding through the agency’s Coffee Innovation Fund, which was officially launched during the quarter. One of these projects will enable MCA to develop new coffee extension and training centers in Ywangan Above: Sara Morrocchi, a global coffee market expert, returned to Myanmar in Q4 to deliver intermediate-level training on price and Hopong (in southern Shan) and Pyin Oo Lwin,16 staffed by risk management to members of MCA and other coffee stakeholders, helping them develop strategies to cope with market uncertainty and price fluctuation.
16 These three areas are the densest Arabica production zones in Myanmar, and where farmers already have demonstrated ability to connect to high-end markets for sales. MCA will pilot the extension centers in these areas and consider expansion as skills and markets grow in other coffee production areas. 13
USAID/Burma’s VCRD Program AID-482-LA-00004 FY2010 (Year 5) -- Annual Report
experts, helping coffee farmers find solutions to common production and post-harvest problems.
What did VCRD do to facilitate this? VCRD invited MCA’s new staff into its offices for informal on-the-job training in August 2019, modeling professional business practices and mentoring the new employees as the association geared up for the 2019/2020 specialty coffee harvest. VCRD briefed the new staff members on all existing extension, training and marketing tools and guides developed by the project and partners. Also in Q4, VCRD participated in a series of meetings with MCA to brief its new business management consultant, hired under the GIZ grant, assisting MCA to provide a thorough assessment of the association’s strengths and needs, as well as opportunities for growth. In Q4, VCRD and MCA coordinated to provide Level 2 training on Price Risk Management to its directors and cluster leaders through an expert on global coffee market pricing trends. The consultant, Ms. Sara Morrocchi, is familiar with the rise of Myanmar’s specialty coffee and trusted by Myanmar coffee stakeholders, and has helped link European buyers to Shan producers for successful exports over the past two seasons. She walked MCA leaders through scenarios involving harvest evaluation, price fixing and hedging strategies, prompting coffee sector leaders to think further ahead, project and plan for unanticipated crop problems, price fluctuations, the possibility of difficult or failed negotiations with suppliers and buyers, and other contingencies aimed at ensuring sustainability of the coffee sector.
Why is this part of our strategy? The national coffee trade association will play a key role in continued growth of Myanmar’s coffee sector, but can’t carry out its work without capable human resources. By coaching association staff and mentoring leaders as they plan for expanded services (such as opening regional extension centers) and link to new sources of support for organizational capacity building, and by facilitating access to expert advice on risk management and pricing strategies, VCRD is helping to ensure MCA’s long-term success.
INTERMEDIATE RESULT 2: MARKET ACCESS AND TRADE INCREASED
Myanmar’s own specialty coffee retailers are now driving 3 industry growth “Myanmar is fast becoming the ‘golden child’ when it comes to the best coffee in Asia, but a What happened in Y5/Q4? Specialty cafes and roasters have become lot of their beans are mainly exported. Easy Café is paving the way for specialty coffee in increasingly important to the growth of the coffee sector in Myanmar, the city.” – This is how www.bigseventravel.com, actively engaging in important market building and promotional events a trendy travel website, qualified Gentleman Coffee Roaster’s Easy Café. The site ranked Easy Café this that are opening doors to new sales and connecting smallholders to year as the 14th best coffee shop in Asia. direct buyers in Myanmar’s burgeoning high-end café scene. Further, about a dozen domestic retail/roaster firms are now supporting coffee communities directly, offering advice, market options and even pre-season microfinancing on affordable terms in return for a promised share of the harvest.17 One example is Easy Café/Gentleman Coffee Roasters, which two seasons ago signed a pre-financing agreement with producers in Ga Naing Yar Village, transferring a modest loan in installments to the producer group, which the community used to build a drying station and begin procuring fresh cherries from community growers. Last year, the firm provided similar pre-financing to both Shwe Taung Thu and Indigo Mountain Coffee. In Q4 of FY2019, Easy increased its pre-financing to both organizations, helping the communities get a jump on the upcoming season, while ensuring that Easy gets to purchase and serve some of the best, award-winning coffees produced by local growers.
17 Other local retailers/outlets now serving and/or purchasing coffee directly from Myanmar smallholder coffee producers include Sithar, Shwe Yin Mar, Sawbwa Coffee Co., Promart, Café Burma, Origin Café and Locale, Sharkey’s, Organic Green Hill, Bar Boon, Coffee Circles/Element, The American Center, The American Club, and others. 14
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What did VCRD do to facilitate this? Easy’s owner, Javier Phua, first learned through a magazine article written by a VCRD staff member in 2016 that high-quality Arabica grown in Myanmar was beginning to attract attention from specialty buyers. Phua was later invited to attend the annual Myanmar Cupping Competition Awards Ceremony in Ywangan, where he met for the first time directly with Shan coffee farmers. “During that ceremony, it deposited and birthed something in me when I could see the pride and smiles on the faces of the farmers. Little did I know that today I would be working so closely with them and visiting them so frequently,” said Phua, who soon after, began purchasing Shan coffee for his cafes and roasting business. His experience incentivized him to organize a series of coffee buyers’ tours to the Shan coffee lands in 2018 and again in 2019. These private tours have involved more than two dozen Singaporean roasters and buyers, many of whom purchased coffee for export as a result of their visits and have provided farmers with direct feedback on quality. “All this would never have been possible or even imaginable without the work of VCRD” Phua said. “The linkages formed to access specialty coffee, endless support on the communication front, activities and training courses were critical for us. Continual strengthening of those relationships, as well as the educational input and support will continue to play an important part in our coffee journey going forward.”
Why is this part of our strategy? Building the domestic market for Myanmar’s high- end Arabica is essential to create continued pull for high-quality product and open new markets. Moreover, as local producers observe their finest products served in Myanmar’s best establishments, it instils pride and motivation amongst farmers and processors. As Phua said: “Loving their own produce is inspiring and helps them to more
convincingly persuade prospective buyers,” Above at right: Javier Phua, owner of Easy Café/Gentleman Coffee Roasters, chats with adding that his company strives to maintain Thiha Gyawalie (at left), owner of a coffee estate in northern Shan, and Su Nandar Lin, a open dialogue with coffee communities and coffee farmer from southern Shan at a coffee trade promotion event in Yangon. Su Nandar Lin and Thiha Gyawalie formed a new company in FY2019, The Lady Coffee that is exploring expanded partnerships. “We exported 15 MT of organic coffee during the year in partnership with a U.S.-based would love to keep more specialty coffee in the importer. The two met at a VCRD coffee cupping training event two years ago. country to serve domestic consumers. We would also like to expand our financing and even technical support to more producers keen on getting on board with specialty. As for our existing partner producers, we would like to help them capture more value downstream in the roasted coffee space and support them with the infrastructure and skills development necessary to sustain or improve quality. Today, we see more producers asking us for their coffees to be cupped and evaluated, producers seeking help with improving their farm systems and quality, international buyers maneuvering …and consumers enquiring more about Myanmar specialty coffee. It can only bode well as these benefits filter to the producers with the support of the Myanmar Coffee Association.”
#CoffeeNext learning and B2B event spotlights private sector leadership
What happened in Y5/Q4? About 200 stakeholders including farmers, trade association leaders, processors, 4 finance providers, roasters, retailers, potential investors and buyers from Myanmar’s hotel and restaurant industry
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convened in Yangon at VCRD’s final project learning, sharing and B2B forum for the coffee value chain, in July 2019. The #CoffeeNext event included a look back at selected impacts facilitated by the project, which has provided training on improved production and post-harvest practices and technologies to nearly 10,000 coffee farmers, resulted in about 640 MT of exports to 16 different countries worth more than $4.1 million, created new opportunities for women producers and entrepreneurs and nearly doubled farmers’ gross margins from the 2015 baseline of $580 to $725 in FY2019. In collaboration with MCA and key private sector partners including grantees like Amayar Women’s Coffee Producer Group, MCG and Behind The Leaf Coffee (all coffee millers), the event helped industry stakeholders chart progress, develop action plans around remaining priorities for sustained growth, and facilitated new connections between established specialty coffee roasters and representatives of Myanmar’s hotel and restaurant industry at a special “Roaster’s Marketplace” and networking event.
What did VCRD do to facilitate this? VCRD consulted extensively with MCA, lead firms and partners in the design of the event, which was forward- looking, interactive, and helped create connections “Women have made remarkable contributions to Myanmar’s coffee between local suppliers and roasters, and potential new sector, both as farmers and processors, helping to establish Myanmar as a source of top quality specialty coffee. I have had the pleasure of customers in the hospitality sector. VCRD secured the meeting some of these women, such as Su Su Aung and the members venue, developed an agenda in agreement with MCA, of the Amayar Women’s Coffee Producers’ Group, and the members of the Myanmar Women’s Coffee Alliance. Soe Thinzar Aung, a leader invited participants, and created and shared a publicly of Shwe Taung Thu, a southern Shan producer group that comprises accessible QR Code to which all project extension, 300 producers from 18 villages, has represented the group at training and marketing tools were uploaded, including a international trade events this year in Boston, Berlin and Bangkok.” – USAID/Burma Mission Director Teresa McGhie, during remarks made at recently completed deep dive into the coffee value #CoffeeNext. “USAID and the American people are proud of the chain examining impacts and systemic market changes contributions Myanmar’s private enterprises in the specialty coffee 18 sector are making. As these private enterprises grow, more people will facilitated by VCRD. The project also worked with benefit from economic development. Ultimately, that means partners and the media to promote the event Myanmar’s economy will be more self-reliant,” McGhie said, moments extensively on social media and via partners to ensure before opening the Roasters’ Marketplace. good turnout.
Why is this part of our strategy? In partnership with MCA and the private sector, VCRD has helped to spark rapid growth in Myanmar’s coffee sector over the past four years, leading to improved production, increased quality and sales that support improved farmer livelihoods. With coaching from VCRD and increased private sector engagement, MCA and producer groups such as Shwe Taung Thu and Indigo Mountain, as well as processors like MCG, Amayar and Behind The Leaf, have become industry leaders, now able to teach best practices, measure quality, attract financing, export their product and connect to other stakeholders in the market system. MCA is now linked to farmers and processors from 10 clusters around the country, demonstrating that Myanmar’s people can work together across regions and ethnic groups to improve production and markets.
The project’s final coffee sector event offered evidence of the capability and desire of a range of market system actors to continue to build stronger connections, collaboratively explore new opportunities (such as the relatively untapped hotel
18 See “Myanmar’s Coffee Makes it to the Top Shelf” at https://www.winrock.org/wp-content/uploads/2019/05/VCRD-Coffee-Value-Chain-20190529.pdf 16
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and restaurant channel), and contribute to inclusive economic growth in Myanmar well beyond the project implementation period.
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The Soybean Value Chain
VCRD’s strategy in the soybean value chain is to support the growth of an inclusive soybean industry in Myanmar that meets the quantity and quality requirements of the domestic, food-based end-market.19
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19 Illustrated in the map are elements of the Myanmar soybean market system mapped out with facilitative Q4 interventions. The map highlights how some of the work facilitated by VCRD during Q4 of Y5 helped connect market system actors to drive systemic change and strengthen value chains. Jointed lines show which different actors and/or components were connected through work performed by VCRD and/or partners. Numbers correspond to numbered stories in the narrative, below. 18
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INTERMEDIATE RESULT 1: AGRICULTURAL PRODUCTIVITY IMPROVED
1 Public-Private Partnership expands farmer access to finance and new markets
What happened in Y5/Q4? Sein Lain Wai, an agriculture inputs and extension firm with roots in southern Shan, expanded its network and began collaborating with other private sector agribusinesses as well as the Ministry of Commerce to promote improved farming technology and practices, and boost access to new markets and finance across Myanmar. Though Sein Lan Wai—comprising former community-based Local Field Assistants trained by VCRD to deliver expert extension advice to farmers—is based in Shan, the Ministry in Q4 requested the startup firm’s help organizing a series of inclusive value chain learning and B2B events in other regions to support the domestic soy production and processing industry across Myanmar. For example, in August 2019, Sein Lan Wai coordinated and arranged 100 percent private sector sponsorship to cover costs of a large-scale soybean trade promotion event in Hinthada, Irrawaddy Division. The forum drew 408 participants, and was entirely funded by private sector sponsors including Yoma Bank, Thiha Development Co. and major food processors, inputs and machinery suppliers, who marketed their services and products (including access to quality/certified seed) directly to smallholder farmers. Just a few weeks before the Hinthada B2B, Sein Lan Wai conducted a similar event in Naung Hkio, in northern Shan and in July, Sein Lan Wai collaborated with VCRD to conduct the #SoyNext learning and B2B event in Naypyitaw. (See story below on #SoyNext for additional details about collaboration with Sein Lan Wai on the project’s final soybeans event.)
What did VCRD do to facilitate this? VCRD provided advice and mentoring to Sein Lan Wai’s leaders as they
broadened their reach, opened a new Above: Yoma Bank brought a large team of outreach representatives to explore financing office in Pindaya and linked to options with soybean farmers at a soybean learning and B2B event organized in Hinthada by producers in different areas of the VCRD partner Sein Lan Wai in Q4. country. VCRD helped link the extension and inputs distribution firm to key Myanmar government agencies responsible for increasing trade (such as MyanTrade), who now see the value of the market information dissemination and soybean seed and grain production advisory services the company is providing. VCRD provided advice on agenda development, key participants to invite, and methods for ensuring high-level interaction and engagement to facilitate opportunities for successful B2B connections at the various events organized by Sein Lan Wai in Q4 and earlier in Y5.
Why is this part of our strategy? In just two years, Sein Lan Wai has established itself as a new kind of agri-services provider—one that is not only interested in its own bottom line, but also committed to helping farmers source the best inputs (such as certified seed, Rhizobium and Effective Microorganisms), learn improved practices, cultivate high-quality products and link to new, premium-paying customers. This “farmer first” approach has helped them earn trust in the communities where they work, and is now drawing the attention of government trade and agriculture officials, who are increasingly emphasizing soybeans as a critical crop for food security, nutrition and livelihoods due to volatility in export 19
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markets for other important staple crops produced in Myanmar. As VCRD winds down, Sein Lan Wai has ramped up, and is now a key, market-oriented facilitator and services provider whose skills are in demand from other private sector actors, as well as the Ministry of Commerce and DOA. Government ministries are now collaborating with the company to organize outreach and learning events aimed at helping farmers connect to other market system stakeholders, source certified seed, produce higher-quality grain, find financing and new customers to lift rural incomes.
2 Quality premiums for better soybean grain are “the new normal”—even for local traders
What happened in Y5/Q4? Surveys and other information gathered by VCRD and partners revealed that in FY2019, local soybean traders in the heart of Myanmar’s intensive soybean production zone (southern Shan) in townships such as Lawksawk and Kyauktalone Gyi are now paying quality premiums directly to farmers using improved practices and technologies introduced over the past four years by VCRD and community partners. Previously, soybean farmers in these areas could only hope to earn quality premiums by selling their best grain directly to high- end tofu processors, such as Myanmar Nice Bean Products Factory, State Star Co. or T-Brand Tofu, located in other regions. Now, however, farmers in southern Shan are able to command prices ranging from $422-$463 per MT—or between 20-25 percent higher than previously—directly from local traders for high-quality grain, provided it meets moisture, color, size and quantity specifications. Why? Because information about quality standards, requirements and premium pricing from end-buyers is less opaque and is now reaching farmers. As farmers’ production and post-harvest care improves and as they learn more about the value of their crop, new premium markets have opened. Soybean trade promotion and B2B events have helped spread information about quality standards and premiums, prompting community-based traders to realize that unless they, Soybean traders are now on board with paying quality-based premiums to producers able to grow better soybean grain that meets moisture, color, lack too, pay better prices for quality grain, they will lose of dirt/debris, volume and other end-market requirements. Above: farmers market share. As a result, township traders (in check out a grain dryer in use in southern Shan. addition to tofu manufacturers) are now demanding lower (14-16 percent) moisture, dust-free, no-shrivel grain, and are willing to pay for it.
A ripple effect of this market system change is that improved farmer storage and care practices have enabled traders to obtain high-quality grain even during the off-season, as more farmers properly dry and store soy in now widely-available airtight, polyethylene bags. This has enabled farmers to sell some of their grain at better prices, when traders’ supplies dwindle. Soybean traders from Pindaya, Inntaw, Mong Kaing, Mong Pone and Hsihseng are now on board with paying better prices for better quality, with some traders even beginning to invest in their own moisture meters and improved storage systems, and now storing inputs and fertilizers separately from food storage areas. With the changing market structure at the township level, farmers have gained new bargaining power. 20
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What did VCRD do to facilitate this? VCRD worked with community partners and processors in the soy sector over the past four years to help farmers organize, focus on quality, aggregate, attract bank and microfinancing, and tap into new direct-market sales channels with an improved product. This resulted in uptake of new, informal quality standards shared by tofu manufacturers and suppliers of quality seed (like Sein Lan Wai), paving the way for premium pricing. The model is now catalysing further changes, including in the way that township soybean traders interact with producers, resulting in better prices for farmers.
Why is this part of our strategy? To facilitate inclusive market systems, dissemination of information about the connection between quality standards and market pricing is crucial. For decades in Myanmar, local traders have kept an iron grip on this kind of information, which has enabled them to control markets and set prices for farmers regardless of quality. Unloosing and sharing information about quality and other requirements of end-buyers is evening the scales, enabling farmers to conduct better-informed negotiations with an expanding range of buyers.
INTERMEDIATE RESULT 2: MARKET ACCESS AND TRADE INCREASED
3 Innovative agri-services provider with expertise in soy expands to new crops, finds new customers
What happened in Y5/Q4? Sein Lain Wai began successfully promoting additional new technologies to empower farmers, many of them women, as well as partnering with producers of other crops in new regions. In September 2019 the Pindaya- based firm organized a training in Kyaukme, northern Shan, sharing information about improved production practices and increased market demand for elephant foot yam20 to 318 famers from six different villages. The event was hosted and funded entirely by a CBO, the Tai Youth Organization. Also in September, Sein Lan Wai formed an alliance with women farmers belonging to a Self-Reliance Group (part of the May Doe Kabar Myanmar Rural Women’s Network) in Kalaw, helping them learn how to cultivate chemical- free vegetables using a virtual farm management system provided by Green Way, a local agri-application developer that helps farmers find and share extension and market information. In addition to the Kyaukme and Kalaw events, Sein Lan Wai also began collaborating in FY2019 with a Danu women’s group as it endeavors to become a township-level Soy Food Association in Pindaya, offering new avenues to women entrepreneurs in agriculture. The firm also entered negotiations with the Karen Women’s Organization, which has offered to invest in Sein Lan Wai in exchange for its agreement to open a branch office to provide extension and market advisory services in Karen State.21
Above: Members of a Danu women's group that processes soybean grain Also during Q4, the Pathein Department of Consumer to make snack food products, examined a solar drying rack at Sein Lan Wai's new facility in Pindaya, southern Shan. Affairs invited Sein Lan Wai to design and implement a
20 Elephant foot yam is produced primarily in Chin State, but can be grown in other regions, including Shan. It is exported primarily to China, Japan and Korea, with 2019 prices for the tuber significantly higher than 2018 prices. Reference: https://www.globalnewlightofmyanmar.com/foreign-demand-lifts-elephant-foot-yam-prices- this-harvest-season/ 21 Discussions about the possibility of opening a Karen office continued as of the end of the fiscal year, per Sein Lan Wai. 21
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“Market Development Workshop for Legumes and Pulses” in collaboration with the Township Traders’ Association, the Myanmar Soybean Farmers’ Public Co., and ICCO Cooperation, a Dutch non-governmental organization (NGO). This event was funded through sponsorships provided by the traders’ association, Green Way and government, and involved 468 farmers.
How did VCRD facilitate this? VCRD has coached Sein Lan Wai since its formation two years ago, providing organizational and business management planning advice, advice on how to build new connections to buyers and processors, how to engage government and establish trust with farmers and producer groups. In Q4, VCRD engaged as a participant in all of Sein Lan Wai’s market promotion and B2B events, and provided guidance as needed concerning grain and seed sales issues. This has included mentoring Sein Lan Wai as it grew its own network, linked to women groups and technology developers (e.g., Green Way) and gained expertise in professional events planning and management, including development of sponsorship packages and strategies for designing engaging events aimed at strengthening linkages between market system actors.
Why is this part of our strategy? Sein Lan Wai’s extended, multi-region reach and strategy of promoting quality and best practices in tandem with sharing market information, is knitting previously disparate and disenfranchised market actors (including women producers) more closely together, creating new opportunities for growth. As a result, Sein Lan Wai, which is officially registered with the Government of Myanmar as an enterprise under the Directorate of Investment and Company Administration, is now positioned in a market systems web that includes suppliers, seed and grain producers, processors, traders, government institutions, and CBOs across soybean growing regions, and has become an important facilitator of market growth for additional crops, including maize, groundnut, elephant foot yam, fresh vegetables and ginger. Sein Lan Wai developed its capacity by providing quality control services for established tofu manufacturers including VCRD grantees Myanmar Nice Bean Products Factory, Mandalay T-Brand Tofu and approximately 40 traditional food processors. It has now expanded linkages to farmer groups in additional regions including Irrawaddy, Pegu, Karen, Kachin, Mon and Shan states, inclusively helping producers and other stakeholders in these areas to learn about best practices and tap new market opportunities.
Self-reliance and commitment: 4 #SoyNext highlights how to take Myanmar’s soy sector to next level
What happened in Y5/Q4? More than 80 stakeholders representing the entire soybean market system gathered in Naypyitaw to collaboratively design plans for expanded domestic investment and growth. Above: groups representing various components of the soy market system collaborated The #SoyNext learning and sharing event, to identify major challenges, consider solutions and delegate responsibility to help overcome bottlenecks to systemic changes at VCRD’s #SoyNext planning, learning and facilitated by VCRD with extensive private B2B event held in collaboration with private and public sector partners in Naypyitaw. sector involvement, provided space for key actors in the soy market system—including women-led smallholder farmer groups, Seed Grower Associations,
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microfinance and banking representatives, inputs/extension providers and government officials charged with improving trade and supporting increased agricultural production—to chart progress over the past few years, map opportunities and plot a course for continued self-reliant agricultural growth. Facilitated by VCRD and partners like Sein Lan Wai, Jaguco Myanmar International Co., the Myanmar Soybean Farmers Public Co. and leading tofu and edible oil processors, the event defined key challenges and strategies for unlocking continued growth across the inputs, production, post-harvest, processing and end-market points of the market-system. For example, a break-out group tasked with examining future opportunities to improve post-harvest handling cited the lack of access to modern, mechanized harvesting equipment, the high cost of labor and limited access to proper grain storage and drying technology as key constraints. They next proposed a range of solutions for stakeholders to cooperatively address including making grain dryers (such as those introduced and tested by VCRD through small in-kind grants to local traders) more available to farmers through group hire-purchase schemes; encouraging contract farming to spread costs for equipment; expanded bank and microfinancing, and increased coordination between producers, government and the private sector.
How did VCRD facilitate this? In addition to co-organizing the event, VCRD facilitated a series of curated discussions to encourage stakeholders to take ownership of problems preventing growth. As a result, participants made a series of commitments to take action to address various issues. The list following provides examples of some of the commitments to sustain momentum in the soybean sector, post-VCRD:
Public Sector
The DAR committed to continued testing of new (not yet widely available) soybean varieties to ensure farmers can access varieties best adapted to their climate and soil conditions. DAR also pledged to provide extension to soybean seed producing farmers, including on the use of Rhizobium to ensure soil health. MyanTrade committed to collaborating with partners in the private sector on additional trade promotion events to increase sales and exports. Private Sector
Yoma Bank committed to expanding its financial services to farmers across all value chains, and specifically, to provide financial support across the soybean market system (to include producers and processors). Sein Lan Wei agreed to continue working with DOA to provide extension services and market information to farmers, and to continue to position itself between producers and the market to share information transparently to both producers and buyers. Green Way will share information and training on mobile applications that assist farmers in keeping records and accessing peer-powered agronomic extension as well as market information and linkages. Ye Ye Myint, an expert on packaging, pledged to provide information and hands-on training on food safety issues, packaging and improved technology. Shwe May Thi Fertilizer Co. committed to providing high-quality fertilizer to farmers on credit. Jaguco Myanmar International Co. will continue to make and sell Effective Microorganisms, combined with advice on how to use it, as well as selling machinery with hire-purchase options. Yam Yam Co. will manufacture high-quality storage bags plans to develop a warehouse system in 2020 to make available to soy farmers. Wan Sein Oil Co., a miller in Aye Thar Yar now crushing soybean for oil, offered to open his facility to farmers interested in learning how to manufacture oil and cake.
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Daw Khin Aye expressed commitment to expand her specialty soybean food business in Pindaya through purchase of a dryer. Farmer Groups
Sein Yadanar Seed Grower Association in Lawksawk Township will grow and sell Yezin 15 quality seed. Kham Hla Yaung Seed Grower Association in Hsihseng Township will share the results of its trial collaboration with Shwe May Thi Fertilizer to test the efficacy of various fertilizers on soybean crops. Kyaukme Women’s FG: will expand soy production if the results of their 110 acre-soybean demonstration plot are positive; they pledged to share their knowledge to other FGs in the future. The Naung Hkio Women’s FG is interested in producing and selling quality seed as an enterprise. The Mohnyin Soybean FG will provide extension and aggregation services to its members. Donors and Foundations
PACT Myanmar committed to providing crop-based financing and hire-purchase services for machinery. Syngenta Foundation announced that they have a three-year project focusing on development of Myanmar’s seed sector and will consider adding producers of soybean to their current roster of supported seeds. Why is this part of our strategy? Soybean is an important crop for local nutrition and food security in Myanmar. Over the past four years, USAID has helped more than 11,500 smallholder farmers and other stakeholders learn about new quality-based practices and technologies that boost incomes and leverage new investments in processing and food safety. As a result, soy has become a strategic domestic crop for income generation and climate resilience, as well as an alternative to imports of palm oil, with government and private sector actors now crowding in to provide extension, finance and other support to stakeholders in the market system. The #SoyNext event provided an invaluable opportunity to diverse market system actors to compare notes, map out plans to address gaps, and sustain the collaboration, adaptation and momentum generated by VCRD and partners.
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The Ginger Value Chain
The project’s strategy in the ginger value chain is to support an inclusive ginger industry that meets increased quantity and quality requirements of domestic and international end-markets.22
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22 Illustrated in the map are elements of the Myanmar ginger market system mapped out with facilitative Q4 interventions. The map highlights how some of the work facilitated by VCRD during Q4 of Y5 helped connect market system actors to drive systemic change and strengthen value chains. Jointed lines show which different actors and/or components were connected through work performed by VCRD and/or partners. Numbers correspond to numbered stories in the narrative, below. 25
USAID/Burma’s VCRD Program AID-482-LA-00004 FY2010 (Year 5) -- Annual Report
INTERMEDIATE RESULT 1: AGRICULTURAL PRODUCTIVITY IMPROVED
1 Improved ginger production technologies and practices take on life of their own
What happened in Y5/Q4? On September 3, 2019, Ma Sandar Aye, a leader of the Shwe Chin Sein FG in Lawksawk Township, posted a series of pictures from her ginger farms on Facebook. Well-mounded rows, carefully weeded, with large spaces in between and intercropped with maize for light shading and to maximize the land’s profitability, the healthy ginger shoots showed no signs of infestation or disease. In fact, they looked like scaled-up versions of the smaller ginger demonstration plots she hosted back in 2017, after she and a group of like-minded farmers connected to VCRD and community-based extension trainers to test improved practices with reduced chemical inputs. To accompany her posts, she included a brief message: “I don’t know how much I will earn from my investment in ginger. I am full of strength and feeling satisfied with my ginger field. The ginger is without using pesticide and herbicide.” The photos drew words of encouragement, comments and positive reactions from hundreds of people, many of them, farmers in Myanmar who were excited to see that high- quality, export-grade ginger could be produced without use of pesticides, herbicides or fungicides.
With the decision to forego herbicides, a major problem still loomed, however: high labor costs associated with weeding, along with the difficulty of finding people to perform the work in the first place— a chronic problem faced by smallholder farmers across Myanmar. With the upcoming ginger harvest imminent, Shwe Chin Sein solved the problem on their own. They decided to increase spacing between rows widely enough to steer a mechanized inter-cultivator through, enabling weeding without damaging rhizomes. In all, 25 members of Shwe Chin Sein, including Ma Sandar Aye, used the hand-tractor method to control weeds (and further hill up their ginger crops) in advance of the Above: Ma Sandar Aye, a leader of the Shwe Chin Sein Ginger FG, proudly poses in her widely-spaced rows of ginger plants, intercropped with maize season. Afterward, they reported reduced labor costs, on her farm in Lawksawk Township, southern Shan. reduced time spent on weeding, and cultivation of larger areas. As a result, Shwe Chin Sein are further convinced it’s possible to completely eliminate herbicides when producing ginger, better protecting food, communities’ health and preserving the soil while meeting international market demand for safer, naturally grown products. They are now sharing their methods and findings with ginger producers in other areas.
How did VCRD facilitate this? VCRD collaborated with local farmers and extension experts to pilot best practices on Ma Sandar Aye’s ginger farm (as well as others) back in 2017, co-organizing Farmer Field Days that enabled farmers to see learn about the comparative costs of going chemical free vs. conventional farming methods. These activities, along with information about global market trends and links to new buyers interested in residue-free ginger (such as Green Eastern Agri, Heho Potato Co., Snacks Mandalay, FAME Pharmaceuticals, Biogarden and I Love Produce) incentivized ginger 26
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farmers in a half-dozen different areas to become better organized, focus on chemical-free production, and even improve Occupational Safety and Health practices. 23 Shwe Chin Sein has emerged as a true trailblazer, adopting best practices, adapting locally-available technology (such as the inter-cultivator), and ultimately, finding customers in new markets (see story, below, about Shwe Chin Sein’s first contract with Snacks Mandalay). In addition, the group has begun investigating production of healthy ginger rhizome seed as a business, partly to address chronic problems stemming from (seed-borne) bacterial wilt disease. With encouragement from VCRD, several group members, including Ma Sandar Aye, trialed techniques this year learned during a training-of-trainers on healthy rhizome seed production. The results, announced in Q4, are stellar. Ma Sandar Aye used soil that she was certain had never been infected before by rot, and used clean, large, sterile bags to transfer healthy mother rhizomes. She planted 124 ginger seedlings and is expecting to harvest around 400 kilograms (kg) of healthy seed, or enough to plant about an acre of ginger for next year’s harvest (in 2020). She is currently recording her production costs and will expand her seed production after analyzing costs and benefits. Above: ginger seedlings ready for planting in advance of the FY2019 Why is this part of our strategy? Shwe Chin Sein’s growth ginger season. mindset, willingness to explore new techniques and markets, and ability to share their knowledge (about new technology, inputs and practices) with others is the kind of approach needed to encourage positive change and innovation that contributes to growth in the agriculture sector. Their emergence as leaders in Myanmar’s movement toward safe, high-quality, high-value produce cultivated responsibly is opening paths for other smallholder farmers to follow.
INTERMEDIATE RESULT 2: MARKET ACCESS AND TRADE INCREASED
2 56 MT organic ginger contract signed between Snacks Mandalay and Shwe Chin Sein
What happened in Y5/Q4? Immediately following VCRD’s final ginger learning, sharing and B2B stakeholder workshop in May 2019, one of the workshop’s many private sector participants, Ms. Linda Reuse, a French importer of certified organic fresh produce including ginger, traveled to Mandalay to visit the Snacks Mandalay Snacks/Three Stars factory and meet with its owner, Dr. Pyae Phyo. Ms. Reuse also met U Zaw Min Oo, of Helvetas’ BioTrade Project, and representatives of EcoCert Group, a private organic certification agency, whose regional representatives had also attended the ginger event. Ms. Reuse invited Snacks Mandalay and Helvetas to visit her family-owned company, Biogarden/Sarl Reuse in
23 This was accomplished by a PPP between VCRD, the International Labour Organization’s Vision Zero Fund, local traders and FGs. 27
USAID/Burma’s VCRD Program AID-482-LA-00004 FY2010 (Year 5) -- Annual Report
southern France. The trip went well, and as a result of this new connection, Snacks Mandalay and Biogarden decided to begin doing business together, with organic certification review conducted by EcoCert and costs defrayed by Helvetas.
Biogarden proposed to start by purchasing eight shipping containers (around 120 MT) of Myanmar ginger and requested that EcoCert be the certifier, with Helvetas (a Swiss/German NGO) agreeing to cover up to 70 percent of the certification costs for the European exports, to get the deal moving.24 In both cases, Snacks Mandalay will be the “owner” of the organic certificates. In Q4, the deal was finalized, with Snacks Mandalay deciding to source 56 MT of the order Shwe Chin Sein Snacks Mandalay agreed to supply Biogarden up to 160 MT of fresh, organic, mature ginger rhizomes.
Though Shwe Cin Sein is only able to cultivate 56 MT of that portion in the upcoming (2019) season, this negotiation took place in a market context where the price for random ginger rhizomes, with no quality specifications, had reached up to $730/MT in July and around $330/MT for baby ginger (immature rhizomes that are harvested early and therefore giving providing an opportunity for farmers to grow another crop on residual moisture in the post monsoon season). Notwithstanding this market context, Snacks Mandalay initially proposed a lower than expected price. However, Shwe Chin Sein’s Board of Directors were Above: the owner of a French organic produce importer/distributer, Linda Reuse, meets directly with Shan ginger farmers at VCRD’s final ginger learning, sharing and B2B event in Aungban, held in FY2019. unimpressed with this offer, as Ms. Linda Reuse later invited the owner of Snacks Mandalay and a representative of an NGO working they are now better informed of with farmers on organic certification to visit her facility in southern France, resulting in an export deal involving Shan organic ginger FGs. prices on the global ginger market, are aware of the rising demand for high-quality chemical-free ginger and the higher prices paid for larger rhizomes earlier in the year. Because Shwe Chin Sein also understands the value of developing a long-term relationship with a high-end processor like Snacks Mandalay and a premium European importer, after further negotiation, they agreed to sell fresh, organic rhizomes at a pre-arranged price for rhizomes sized above 250 grams in size with another, lower price for rhizomes below 250 grams. The FG is responsible for ensuring the absence of all chemical residues in the produce, as well as for sorting out infected rhizomes and removing soil clots. Snacks Mandalay, meanwhile, will provide high-quality storage bags, labor to load and unload the trucks, and cover the costs of transport from Shwe Chin Sein in Lawksawk Township (southern Shan) to its factory in Mandalay. Also in Q4, 10 ginger samples sent by Shwe Cin Sein were tested and qualified as organic by EcoCert.
How did VCRD facilitate this? VCRD invited Biogarden to visit Myanmar to check out high-quality ginger and meet other stakeholders at the May 2019 B2B event. VCRD also introduced Biogarden’s representative to Snacks Mandalay, encouraged Ms. Reuse to visit Shwe Chin Sein and other chemical-free ginger FGs in the field, and previously, provided
24 Snacks Mandalay opted to use a different certification agency, Control Union, to handle future anticipated exports to the U.S. and Canada. 28
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training and training-of-trainers to community extensionists to support local FGs on improved agronomic practices and reduce chemical use. Other improved practices introduced by VCRD and partners included spacing, hilling, shading and contouring, as well as the use of natural composts and fertilizers and mulching. This work helped to identify lead adopters and change agents in ginger producing communities, and later expanded to include organizational capacity building and training on more complex subjects such as Price Risk Management to highly motivated groups like Shwe Chin Sein, boosting governance, capacity and confidence to negotiate, enter contracts with new customers and explore new markets. These enterprises and organizations are now interacting and doing business together without any support from VCRD.
Why is this part of VCRD strategy? Supporting inclusive market systems, facilitating the evolution of farming systems that thrive without widespread use of harmful chemical inputs, and empowering farmers to knowledgeably negotiate their own terms of trade, are among VCRD’s high-level objectives. Fostering connections between quality-focused producers and buyers whose business models are based on inclusiveness rather than extraction is now paying off, as evidenced by this promising first transaction involving Shwe Chin Sein, Snacks Mandalay, EcoCert and Biogarden.
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THE SESAME VALUE CHAIN
The project’s strategy in the sesame value chain is to support improved productivity and quality of raw sesame with the goal of increasing farmer income from sesame sold domestically or exported, and to work with private sector firms to explore and capture diverse, high-quality export markets.25
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25 Illustrated in the map are elements of the Myanmar sesame market system mapped out with facilitative Q4 interventions. The map highlights how some of the work facilitated by VCRD during Q4 of Y5 helped connect market system actors to drive systemic change and strengthen value chains. Jointed lines show which different actors and/or components were connected through work performed by VCRD and/or partners. Numbers correspond to numbered stories in the narrative, below. 30
USAID/Burma’s VCRD Program AID-482-LA-00004 FY2010 (Year 5) -- Annual Report
INTERMEDIATE RESULT 1: AGRICULTURAL PRODUCTIVITY IMPROVED
1 Public-Private Partnerships help farmers evaluate improved seeds and inputs
What happened in Y5/Q4: When the SFDA in Magway Township decided to expand its collective purchasing service for its members, it decided to establish a cooperative partnership with private and public sector entities. During Q4 (prior to the beginning of the sesame harvest season) they organized a joint program to test the efficacy of both seeds and fertilizers. These plots were organized in collaboration with Switzerland based Syngenta Foundation, DAR and Yara Myanmar, a Norwegian firm that is now licensed to distribute fertilizers in Myanmar, and which has made steady inroads with its products in the CDZ. SFDA handled management of the demonstration plots in order to ensure that results were shared with its members. The demonstration plots were arranged to test a new fertilizer available from Yara (“Mila Faster”) and seven different sesame seed varieties now available to sesame farmers through Syngenta Foundation. This tripartite coordination program (Syngenta+DAR+SFDA) of trialing new seed varieties enabled farmers to observe yield differences for themselves on a one-acre plot, and to observe whether different seeds offered improved adaptability to regional conditions. Yara representatives conducted testing of fertilizer demonstration on a three-acre plot at Thit Yar Kauk, Alae Bo and San Ma Kyi villages in the CDZ, to check the quality and effect of fertilizer. The end result: while farmers preferred the Science Black variety, they learned that Samon Net is in more demand from buyers, giving them better options and the ability to make informed decisions about which varieties to plant in future seasons.
How did VCRD facilitate this? VCRD advised SFDA as it facilitated the Farmer Field Day and seed trials held during Q4 at Hlaung Taw Oo. The event was sponsored by Syngenta Foundation with technical advice by the Magway Region DAR.
Why is this part of our strategy? Early in the project VCRD was more involved in designing and implementing on-farm activities aimed at improving farmers’ access to effective inputs and increasing farmer choices. Today, these opportunities are now being presented to farmers through linkages like those made between reputable private sector companies like Syngenta and Yara, who are incentivized to seek sesame farmers’ business as a result of the increased quality of their crops along with premium prices for GAP product. With GAP standards and premium pricing in place, DAR is now engaged in a technical advisory function and itself learning more about Above: sesame farmers participated in a seed trial led by SFDA with market requirements. In addition, SFDA is helping farmers private sector participation in Q4. The service-oriented association is helping to provide improved access to inputs for its members. explore methods to increase resilience by encouraging testing of new seeds and other inputs that can help prevent post-harvest losses. They also have established partnerships with other inputs and equipment providers (as 31
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reported in previous quarterly progress reports) including Sonalika, an Indian tractor manufacturer/supplier with which SFDA has arranged a tractor lease-hire program for members, and Good Brothers Co., a provider of high-quality compound fertilizers. Further, the association has expanded opportunities for members to access finance, particularly credit for inputs purchases and small loans. As of the end of the fiscal year, SFDA had linked members from 22 sesame producing villages with four different microfinance providers including Proximity, PACT, Sathapana and Alliance, with an estimated total of approximately $125,100 in loans.26
2 Thunderbird Emerging Markets Lab consultants support association strengthening
What happened in Y5/Q4? A team of four volunteer from the Thunderbird School of Global Management’s Emerging Markets Lab (Arizona) conducted five weeks of interviews and primary research focused on helping SFDA build its organizational capacity and begin planning for conversion to a for-profit entity in Q4.27 The team met directly with nearly all of SFDA’s closest partners and collaborators in Magway, holding discussions with SFDA’s Executive Council to examine their biggest “pain points” and conducted a thorough Strengths, Weaknesses, Opportunities and Threats analysis to rapidly target areas for improvement. The team included SFDA’s supply chain stakeholders in their analysis, including input providers and tractor owners, as well as member farmers and government representatives that have engaged with the association over the past two seasons. As a result of this review, the Thunderbird team in Figure 2: An organizational flowchart developed by the Thunderbird volunteer team that helped SFDA visualize new strategies for expanding its seed business. consultation with SFDA developed and presented to SFDA a set of recommendations on three main areas including 1) SFDA’s organizational structure; 2) development of seed multiplication business (see Figure 2, below); and 3) improvement in the marketing and communication structure of the company. The consultants proposed revising SFDA’s current seed multiplication model with the goal of keeping more seed-producing member farmers in the network. These recommendations will help SFDA as it seeks to transition toward a profit-oriented cooperative company able to increase bottom-line benefits for farmer members.
How did VCRD facilitate this? VCRD facilitated the technical assistance at the request of SFDA, which is eager to regroup and reconsider its business model to ensure financial viability. VCRD has had good results linking all-volunteer teams from Thunderbird with other private sector partners over the past five years, including facilitating capacity building assignments with ginger, soybean and coffee processors, all of whom have learned important strategies for improved business management and marketing through the collaboration. VCRD provided assistance to SFDA in designing a Scope
26 Of these amounts, approximately $18,800 came from Proximity, $12,800 from Sathapana, $18,700 from PACT and $7,800 from Alliance. Credit for inputs purchases from Good Brothers extended to SFDA members totaled about $33,000. 27 This assignment extended past the end of the fiscal year, ending in early October 2019. 32
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of Work, logistics and translation assistance for the Thunderbird volunteers, and served as facilitators to ensure SFDA communicated its needs and hopes for development a long-term business model and revised strategy.
Why is this part of our strategy? SFDA in its first two seasons has begun to find success and established itself as a new player in Myanmar’s sesame sector, but its leaders have little experience managing and developing a profitable cooperative association. Supporting the entity’s leaders with business management and strategy consulting services has provided new ideas for growth and development, with an eye on profits and sustainability, particularly as the association looks to gain additional traction in the seed sector.
INTERMEDIATE RESULT 2: MARKET ACCESS AND TRADE INCREASED
3 Private sector partnership unlocks three-year deal for collection warehouse
What happened in Y5/Q4? The SFDA successfully established its new collection warehouse in Q4 in collaboration with a local private sector partner, Aung Kyun Thar Co., a subsidiary of Japan-based Mitsubishi Co. The agreement between SFDA and Aung Kyun Thar enables SFDA to operate the warehouse on land owned by Aung Kyun Thar for three years, with SFDA covering costs for collection house construction and operation. The 2019 season marks the second harvest that SFDA has opened and operated a collection house for the benefit of its nearly 4,000 members, and as of submission of this report, SFDA had collected 24 tons of black and 54 tons of white sesame, (all GAP certified), with farmers earning GAP premiums of 1,500 Myanmar Kyat (MMK) per basket, and an additional 500 MMK/basket reverting to the Above: weighing bags of GAP-certified sesame at the new collection center in Magway Township established in Q4 of FY2019 by SFDA with private association to help cover some of the costs of running sector partners. the collection center.
How did VCRD facilitate this? VCRD provided advice to leaders of SFDA as they negotiated the agreement with Aung Kyun Thar to set up the warehouse, and as the association entered its first two procurement deals with both Aung Kyun Thar (for export of black sesame to Japan) and Kaung Ko (for export of white sesame to Korea). Those two deals require SFDA to collect up to 400 MT of sesame total, with other procurement deals in the works with repeat buyers including International Best Manufacturing Co. The contract with Aung Kyun Thar is for 300 MT of GAP quality black sesame with Aung Kyun Thar and 100 MT of GAP white sesame for Kaung Ko. Benefits for member-farmers of SFDA’s who choose to sell through the warehouse include guaranteed GAP premiums for farmers whose sesame meets GAP standards for minimum moisture of 8 percent or lower, two percent acidity and five percent or lower color mixing. In addition, SFDA members are charged no brokerage commission fees, ensured of transparent/fair weight measurement, with no extra charges for additional cleaning or sorting, and transparency throughout the sales process.
Why is this part of our strategy? SFDA, a key driver in strengthening the sesame value chain in the CDZ, has now established several long-term, market-based partnerships (with companies like Aung Kyun Thar, Kaung Ko and 33
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International Best Manufacturing). Advising SFDA as they independently manage and transact complex seasonal business while protecting the interests of farmers and ensuring delivery of services (such as aggregation, sorting, weighing, and negotiating premiums and transport) is key to ensuring sustainability of the association and growth in the sector.
4 Buyer outreach and sharing market information
What happened in Y5/Q4? SFDA worked hard during Y5 to attract interest from potential new, high-volume buyers in their members’ GAP quality sesame. Its leaders conducted a series of meetings with representatives of Kaung Ko, a Korean firm that earlier in the year expressed interest in partnering with SFDA on a branding initiative. SFDA followed through in Q4 when it arranged a buyers’ tour through the sesame production zone for representatives of Kaung Ko, Aung Kyun Thar (Mitsubishi Co.) and Shwe Thazin Co. These large company representatives met with SFDA’s board to learn more about their business model and commitment to GAP and best practices. SFDA introduced the buyers to other important stakeholder and market actors as well and presented potential buyers from both companies with samples. The buyers were interested and ultimately, resulted in early discussions about potential large-volume procurements and potential contracts.
How did VCRD facilitate this? VCRD advised SFDA as the association developed its plan and tentative itinerary for the buyers and acted as a sounding board for leaders as they considered potential outcomes from the trip, including the possibility of contract negotiations. When the buyers expressed interest in discussing potential sales deals for both white and black sesame, VCRD provided information about the evolution of the SFDA and its commitment to serving farmers, ensuring quality production, and working with a broad range of actors to contribute to local economic growth. As the negotiations advanced, SFDA’s leaders Above: Buyers from Shwe Thazin Co. check out GAP sesame during a Q4 buyers’ tour organized by SFDA early in the 2019 sesame harvest SFDA is took over and negotiated fair, premium price deals with now providing valuable benefits, including access to group procurement buyers, with the goal of building long-term relationships deals (sales), to its members. that create value for members.
Why is this part of our strategy? Both SFDA and local buyers were incentivized to strike procurement agreements this year to ensure consistent volume and price. With last year’s successful export and GAP standards clearly established, SFDA now has a track record of aggregating and delivering a quality product. VCRD’s goal in this final year of implementation is for SFDA to expand upon its early successes, explore relationships with important new customers through proactively arranging exposure/buyer tours, and solidify relationships with repeat customers like International Best Manufacturing (with whom procurement negotiations were set to begin, just after the close of the fiscal year.) As SFDA builds its reputation for delivering quality to buyers and providing value to members, its prospects for sustainability, success and membership development are enhanced.
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The Melon Value Chain
The project’s strategy in the melon value chain is focused on building efficiencies and relationships to strengthen market channels and increase income for melon farmers in the CDZ. VCRD and Innovative Grantee, MFVP, will build the capacity of the MMPEA to improve member production practices to increase sustainability and meet GAP criteria, reduce excessive use of pesticides, ensure appropriate fertilizer applications and establish sound crop rotation strategies, while on the market side, supporting expanded private sector linkages and exploiting new market channels for higher-quality melons.28
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28 Illustrated in the map are elements of the Myanmar melon market system mapped out with facilitative Q4 interventions. The map highlights how some of the work facilitated by VCRD during Q4 of Y5 helped connect market system actors to drive systemic change and strengthen value chains. Jointed lines show which different actors and/or components were connected through work performed by VCRD and/or partners. Numbers correspond to numbered stories in the narrative, below. 35
USAID/Burma’s VCRD Program AID-482-LA-00004 FY2010 (Year 5) -- Annual Report
INTERMEDIATE RESULT 1: AGRICULTURAL PRODUCTIVITY IMPROVED
1 Trade associations lead development of new National Export Strategy for melons
What happened in Y5/Q4? The Myanmar Fruit, Flower and Vegetable Producer and Exporter Association (MFVP), a VCRD Innovative Grantee, Myanmar Melon Producer and Exporter Association (MMPEA) and MyanTrade worked together to develop terms of reference and launch a National Export Strategy (NES) for melons, the first such strategy for any fruit crop in Myanmar. VCRD worked with MFVP to recruit and engage a volunteer consultant, who is familiar with Myanmar’s melon value chain and has conducted research on behalf of MFVP previously. Dr. Koji Kubo kicked off his work at a stakeholders’ consultation meeting in Mandalay in Q4 with extensive engagement by MMPEA, the melon producers’ association that recently turned one-year-old. The Mandalay meeting included nearly 60 representatives from across the melon market system including banks and microfinance providers, input and machinery suppliers, traders, melon farmers and leaders of melon clusters from various regions around Myanmar, government trade representatives and association leaders, who gathered to provide ideas and action plan around critical challenges and needs in the melon sector to be included in the NES. The goal is to create a national strategy to expand export channels for watermelon and muskmelon, especially higher-quality products that meet Myanmar’s new GAP standards for melons. Other objectives include improving access to better inputs (especially seeds) and technology, linking more melon farmers to finance, and advocating for government policy and trade development changes that Above: In one of its final activities under an Innovative Grant to MFVP, the association began help producers and traders, as well as working with MMPEA in Q4 to collaborate with MyanTrade to develop a new export strategy guiding more environmentally for melons that benefits farmers and better protects farmland in the sensitive CDZ, where intensive farming and overuse of chemical inputs can damage soil. Above: a kickoff workshop responsible investment in the melon for the NES for melons in Mandalay. sector—especially by extractive Chinese entrepreneurs, who have a reputation for overly intensive inputs usage and other unsustainable production practices.
How did VCRD facilitate this? Though Myanmar’s government announced two years ago that melons would be included in the country’s NES due to its status as Myanmar’s most valuable fruit export (with annual export volume, nationwide, estimated at 800,000 to 900,000 MT), it invested no funds or human resources in research or development for the plan. VCRD grantee MFVP decided late in FY2019 that, due to their experience implementing melon value chain strengthening in the CDZ over the past three years, as well as their increased organizational capacity, market knowledge and stronger connections to key melon sector stakeholders including the new MMPEA, they were uniquely positioned to kick-start the NES process. MFVP pitched the plan to begin developing the NES collaboratively with MyanTrade as one of its final activities under the Innovative Grant. The first draft of the NES is due to be submitted before the end of the calendar year, and MyanTrade (as a result of its partnership with VCRD) has agreed to help MFVP and MMPEA shepherd the plan through necessary government approvals to obtain buy-in and help ensure key recommendations are acted upon. 36
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Why is this part of our strategy? Though MFVP’s official grant The NES for melons will address challenges including land-lease implementation period ended in September 2019, their work issues and the environmental impacts of intensive melon production, as well as price fluctuation and the costs of strengthening the melon value chain is continuing, as illustrated conducting informal business with unregulated Chinese by their commitment to collaborate with government and melon investors. Overall strategic objectives include maintaining the trade association leaders to continue developing the NES for momentum of rural transformation in Myanmar from extensive cropping to intensive horticulture, increased access to and melons. Despite a rocky 2018 harvest season that saw steep coordination of business services including credit, inputs, and rises in input costs along with local watermelon overproduction transportation and insurance; Myanmar GAP as an instrument for environmental management to safeguard smallholder lessors that drove down sales, and an inauspicious beginning to the year against soil degradation (i.e., to help make melon cultivation with the closure of the main melon trading portal into China due environmentally sustainable); to diversify trade channels with to security concerns, watermelon and muskmelon producers China aimed at creating higher value for melon trade; and building responsible Foreign Direct Investment and a two-tier saw gains in FY2019. Gross margins for watermelon producers trading system (border trade as well as direct trade with rose slightly to $1,858 this year, while margins for muskmelon distributors in mainland China). The melon NES will provide an export development framework to improve Myanmar’s export producers rose as well, to $4,840. Led by MMPEA, farmers are performance and improve the competitiveness of Myanmar optimistic about the future. They are experimenting with new melons in local, regional and international markets. production systems such as Group GAP zones (see story below), as well as expanding connections to microfinance and commodity insurance, and linking to new direct markets including high-end domestic supermarkets, which are willing to pay premiums for GAP certification. Along with the forthcoming NES, these and other melon market changes are harbingers of some of the impacts resulting from VCRD’s collaboration with MFVP and other partners in the melon value chain. The inclusion of melons in the NES is a direct result of MFVP’s support to melon smallholders, and means the fruit crop has been identified as one of the most effective exports for driving socioeconomic development in Myanmar.29 It will help MMPEA continue to pursue sustainable development of the sector through increased trade.
Melon association makes expanding GAP 2 production a priority
What happened in Y5/Q4? For the first time, melons cultivated by MMPEA member farmers such U Khin Maung Tint from Mya Taung Village, Tigyaing Township, Ko Kan Htoo Aung from Sagaing region, and U Han Tun Yin, who produces muskmelons in Shan and Naypyitaw, began to earn premiums of up to 150 MMK more per kg for GAP-certified melons now available at high-end supermarket chains in Myanmar including City Mart. (U Han Tun Yin is also now selling his GAP-certified melons directly to a Chinese supermarket chain.) Incentivized by these budding market channels for higher-quality certified produce, U Khin Maung Tint in 2019 coordinated with DOA and MMPEA to pilot the first watermelon “Group GAP” production zone in Myanmar. Situated on 70 contiguous acres in Tigyaing, U Khin Maung Tint is trying out the new system Above: GAP-branded watermelons are now sold at City Mart, a with three other farmers, who together applied for group GAP domestic supermarket chain that began paying quality premiums to melon producers this year. certification from DOA. The application was under review as
29 Seven production sectors were selected initially by the Government of Myanmar to be included in the NES: 1) rice; 2) pulses, beans and oilseeds; 3) fish and crustaceans; 4) textiles and garments; 5) rubber; 6) tourism; and 7) forestry products. 37
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of the end of FY2019, but once certified, the Tigyaing GAP initiative is set to become the first such group certification GAP Zone for melons in Myanmar.
In a similar initiative, 30 muskmelon farmers from Chaung Oo Township also began planning together in 2019 to produce GAP-certified melons on around 150 acres. Due to the lack of available contiguous plots for melon production in Chaung Oo (and the farmers’ inability to obtain DOA-owned or managed land to establish one large plot), these farmers have opted to first apply individually (on their own plots) for GAP certificates in the 2019 season, with an eye toward converting to a Group GAP Zone next season if land can be obtained either from government of other sources. Regarding market incentives for GAP production, in addition to gaining traction with high-end domestic supermarkets such as City Mart, MMPEA is developing plans with a private sector partner, the North East Gate Company, as well as the Ministry of Commerce and MyanTrade, to open a “Green Channel” that would expedite export of GAP-certified melons at the Muse border. The company has tentatively agreed to establish the channel once a reasonable volume of GAP-certified melons are produced, further incentivizing Myanmar farmers to expand their GAP production and explore market options for GAP production.
How did VCRD facilitate this? VCRD grantee MFVP and partner MMPEA provided support to both muskmelon and watermelon producers as they planned and sought approvals for the two GAP initiatives during Y5. MFVP used its connections to DOA to provide technical advice as farmers developed the initiatives, successfully engaging one of DOA’s top GAP experts, Dr. Wunna Htoon, Staff Officer in DOA’s Horticulture and Plant Biotechnology Division for a series of Group GAP planning sessions in FY2019. Obtaining buy- in from DOA is essential as farmers pioneer the group certification concept. Earlier in the grant implementation period, VCRD helped MFVP to promote GAP practices by recruiting volunteer horticulture experts and consultants from the University of Georgia and Clemson University, developing the foundation for improved practices and helping MFVP to develop and distribute a comprehensive guide to best practices in melon production and Above: melon farmers held a tasting competition during post-harvest handing, later approved by DOA and translated into #MelonNext, MFVP’s final learning, sharing and B2B event held in Naypyitaw during Q4. Myanmar language.
Why is this part of our strategy? Momentum for broader adoption of GAP across melon production zones is clearly picking up as a result of MFVP’s advocacy and uptake by MMPEA, with farmers increasingly incentivized by price premiums and the possibility of entering new direct markets. Expanded GAP production is a component of the new melon NES, with farmers and government officials now grasping its advantages not only as a mechanism for achieving premiums and entering new markets but also to improve environmental management and stewardship of soil. As in the other crops supported by VCRD over the past five years, melon farmers are now communicating about improved quality, reached by adoption of improved practices and technology that present new sales options.
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INTERMEDIATE RESULT 2: MARKET ACCESS AND TRADE INCREASED
3 Risk-reducing insurance benefit for melon farmers to be replicated in other crops
What happened in Q4? A pilot commodity transport insurance scheme developed in collaboration between MMPEA and IKBZ Insurance Co. (the insurance arm of KBZ Group, best known for providing banking services in Myanmar) that began with just eight melon farmers has expanded and included more than 150 melon farmers as of the end of the fiscal year, with additional producers interested in joining, according to association leaders. The association began promoting the transport insurance product last year to its membership of 3,150 watermelon and muskmelon growers, in exchange for a percentage of premiums paid by members. MMPEA negotiated a 10 percent commission on premiums paid to IKBZ by melon growers, contributing to its operating budget. As reported in Q2, a melon farmer from Bago who signed up through MMPEA and paid 7,500 Myanmar Kyats (just under $5) to insure one load of melons worth about $2,950, got to test the new system, when a truck carrying his melons was involved in an accident involving partial losses in northern Shan. The insurer agreed to pay the farmer for the full value of the policy, which was more than he would have earned through sales of the full load, while the farmer was able to salvage and still sell part of the shipment.30 By the end of the year, the system had resulted in insurance coverage for more than 800 truckloads of melons sent to the border, according to IKBZ. What’s more, IKBZ said other associations are also now exploring offering the coverage, with mango farmers set to benefit, next.31 Above: U Naing Win, Chairman of MMPEA, accepts an insurance reimbursement check from IKBZ on behalf of a melon farmer whose shipment was damaged in route to the How did VCRD facilitate this? The Muse border checkpoint. MMPEA is now providing beneficial services to its members to project worked extensively with MMPEA help them protect against losses. over the year to build its business planning and development capacity, including leadership, communication and problem solving skills. VCRD introduced MMPEA to leaders of another farmer association in the CDZ, the SFDA, which encouraged MMPEA to develop services for members to help them reduce risks, such as the insurance scheme. During discussions, MMPEA revealed the enormity of losses incurred each year due to accidents and damage during transport, resulting in disputes between transporters and producers, which, absent the transport insurance, were almost always resolved to the detriment of the producers. MMPEA identified the provision of insurance as a priority service to offer its members and approached IKBZ. The system is working and even generating a small payback to the association.
Why is this part of our strategy? Unexpected losses on the trade route to the Muse border gate have long been a thorn in the side of Myanmar melon farmers and reduce profits. At the peak period of melon exports (between December and
30 The Farmer Journal covered the story of the melon farmer’s payout: see https://www.thefarmermedia.com/news/12568?fbclid=IwAR3UW2xA52Egk5Ndn- KQtTjW5Mn7fYsqapSxZYp1uwoUpvfC0bKg-7va2d0#.XIoQrbdnaJg.facebook 31 After melons, mangos are Myanmar’s second most valuable fruit export, with exports to China from the period 2011 to 2017 totaling 2 million tons. Source: Myanmar Times: https://www.mmtimes.com/news/three-year-study-aims-boost-mango-exports.html 39
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February), the North East Gate Co., which runs a major wholesale market, accommodates 500 trucks carrying 17 MT of melons daily. The innovative insurance scheme is evidence of how market-based solutions and partnerships are helping overcome systemic problems within value chains, and is now being considered by the leaders of other agriculture trade associations, unlocking economic growth in Myanmar’s agriculture sector.
4 Elevating MFVP’s profile through women’s leadership and empowerment
What happened in Y5/Q5? Ma Sandar Myo, Executive Secretary of MFVP and a key leader in implementation of the VCRD Innovative Grant to strengthen the melon value chain in Myanmar, was selected to participate in Q4 as one of 20 women leaders from around the world in the Women’s Global Development and Prosperity Initiative, a U.S. Presidential initiative to advance global women’s economic empowerment. During her trip to Washington, D.C., this MFVP leader ardently promoted USAID’s support for inclusive economic growth in Myanmar through the VCRD project, by highlighting examples of women’s entrepreneurial leadership in melons and other value chains, such as coffee. Ma Sandar Myo met with U.S. Senators and other high- level officials as part of the initiative, which supports increased women’s prosperity in the workforce and entrepreneurial success, with the goal of enabling more women to support increased economic growth. Just a month earlier, Ma Sandar Myo traveled to the U.S. in a different capacity, as leader of a delegation of 10 Myanmar melon association farmers on a trip to meet with U.S. melon farmers, observe successful post- harvest/packaging technology and engage with marketing executives to learn best practices and strategies for promoting growth in the melons value chain.
How did VCRD facilitate this? VCRD supported Ma Sandar Myo with extensive briefing materials about women’s economic empowerment facilitated by USAID over the five-year VCRD project, providing specific examples and success stories as examples of impacts and opportunities for women in supported value chains. VCRD, Winrock and MFVP also
helped to promote the event on social media, garnering thousands of clicks, likes, vi ews and shares and helping to inform the public in both the U.S. and Myanmar about USAID’s support to MFVP, one of Myanmar’s most important agriculture trade associations.
Why is this part of our strategy? Supporting and helping to create opportunities for women engaged in VCRD-supported value chains to learn, connect to other women entrepreneurs and promote economic growth through agriculture has been part of VCRD’s strategy to facilitate inclusivity, while building MFVP’s capacity to lead learning and sharing initiatives in the agriculture sector was a specific objective of the Innovative Grant. Ma Sandar Myo’s involvement in the pair of high- profile Y5 events (both the melons trade trip to the U.S. during Q3 and the Women’s Development and Global Prosperity Initiative) has helped to do both, increasing MFVP’s visibility and legitimacy as an association capable of inclusively leading agriculture-based economic growth in Myanmar.
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KNOWLEDGE MANAGEMENT AND SHARING (CROSS-CUTTING)
COMMUNICATIONS AND OUTREACH VCRD’s communications and outreach strategy has dual goals of promoting inclusive economic growth in Myanmar and increasing international understanding of USAID’s work in support of agricultural reforms and broad-based economic development in the country.
Though VCRD began winding down implementation in Q4 of Y5, both the project and its partners remained more visible than ever, organizing and/or participating in more than a dozen major outreach and networking events in July, August and September 2019, alone, that helped amplify USAID’s top-line messaging in support of inclusive, market-led agriculture growth that contributes to stability in Myanmar. Many of these events drew high-level participation from both USAID and Government of Myanmar officials and received media attention. They also yielded positive coverage of USAID, VCRD and partner impacts on national television channels including MNTV, MITV,
SkyNet, 7 Day TV, MRTV and MRTV4, as well as newspapers including The Myanmar Times Above: (clockwise) Pamela Fessenden, Deputy Mission Director of USAID/Burma, and The Farmer Journal and online news outlets gives a local media interview at #MelonNext; Dr. Wah Wah Htun, of MFVP, gives an 32 interview at a National Export Strategy workshop for melons; U San Linn recorded such as Mizzima.com. VCRD’s good a video for MMPEA about the advantages to farmers of joining the association; and relationship with Mizzima Media prompted its Teresa McGhie, Mission Director of USAID/Burma, is interviewed at #CoffeeNext. editors to develop a package of multimedia stories about VCRD’s work over the past five years, which included video interviews with USAID/Burma Mission Director Teresa McGhie and inputs from VCRD Chief of Party Nimish Jhaveri and Senior Private Sector Liaison April Su Yin Nwet. The package is scheduled for distribution in late October or early November 2019.
As part of its sustainability plan, VCRD transferred all of its on- and off- farm extension, marketing, outreach and training materials in the coffee, soybean, ginger and melon value chains to local organizations and partners including Shwe Taung
32 For examples of links to news coverage generated by VCRD and/or partner outreach events in Q4, see: https://www.facebook.com/VoA.Burmese.News/videos/2382930125261337/?v=2382930125261337 https://www.facebook.com/MOALInews/videos/690990197992832/UzpfSTEwMDAwMDY2NjM4NjE2NjoyNDI3NTUzMDczOTQzNTQ4/ https://www.youtube.com/playlist?list=PLTu1lGQLj1q8iwjP7-R6kYkd2sU0Bhaak https://www.youtube.com/watch?v=yCWrZcQ92ps https://youtu.be/1ujtPKTwVsU https://www.mediatop4.com/2019/07/26/%e1%80%a1%e1%80%b1%e1%80%99%e1%80%9b%e1%80%ad%e1%80%80%e1%80%94%e1%80%b9%e1%82%8f%e1%80%ad%e 1%80%af%e1%80%84%e1%80%b9%e1%80%84%e1%80%b6%e1%80%90%e1%80%80%e1%80%ac- %e1%80%96%e1%80%bc%e1%80%b6%e1%82%94/?fbclid=IwAR0WxoOdudaJimvQ4dxXitBFH6fLAqI2TGspLPEYkjh4IFb9-O89PXU4JOY http://www.mizzimaburmese.com/article/60191 https://www.myanmaritv.com/news/export-strategy-myanmar-melon-export-strategy-workshop-held
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Thu, Indigo Mountain, Shwe Chin Sein, the Food Security Working Group (FSWG) the International Labour Organization’s Vision Zero Fund and MFVP and MMPEA, among others.33 In all, more than 1,000 extension and outreach materials developed by VCRD and partners over the LOP including posters, manuals and DVDs subtitled in English and covering topics including coffee farm management, GAP and improved Post-Harvest Handling technology, and marketing techniques, as well as other topics, were distributed. In addition, VCRD uploaded all extension and marketing tools to an online platform publicly accessible on Winrock’s SharePoint website, and during Q4 created and distributed QR Codes that link to the tools when scanned by a QR Code reader application, available for free via downloads on iPhones or Android phones. Above: Thiri Tun, VCRD Communications Specialist, makes a presentation during a Mekong Institute training for young The project also conducted outreach and sharing via a range communications professionals on food safety in Thailand. Below: Nyo Me, a VCRD Farmer Organization development expert, was of networks, disseminating information about VCRD impacts selected to attend a YSEALI event to develop leadership skills of and progress at INGO Forum and Myanmar Agriculture young professionals in Indonesia. Network meetings, as well as at the Food Security Working Group’s annual General Assembly in August 2019. VCRD and partners organized final project learning, sharing and B2B events during Q4, #SoyNext and #MelonNext in Naypyitaw, and #CoffeeNext in Yangon, bringing together approximately 500 agriculture stakeholders representing the entire cross- section of market systems to connect, review progress over the implementation period and plan for the future. 34 (A ginger closeout and transition event was held earlier in Y5, while #SesameNext will be held in early November.)
Project staff also were active in sharing information about the dynamism and changes in VCRD-supported crops during the year. Two young Myanmar women staff members traveled regionally after they were selected to participate in a pair of separate leadership initiatives. Ma Thiri Tun, Communications Specialist, was invited to Thailand as part of a Mekong Institute activity encouraging outreach professionals to educate the public about the importance of improving food safety systems across Asia. She later took initiative to share knowledge gained about food safety at this event with 60 farmers during a pair of Q4 meetings with farmers and leaders of Sein Lan Wai, Shwe Taung Thu and Indigo Mountain Coffee. Ma Nyo Me Lwin traveled to Indonesia upon her selection by the prestigious Young South East Asian Leadership Initiative (YSEALI), sponsored by the U.S. Department of State, to
33 ILO’s Vision Zero Fund received several hundred ginger training materials including how to grow ginger using GAP practices, “Safe Use of Inputs” booklets and how to make Bokashi fertilizer. They plan to continue to distribute these materials while providing their Occupational Safety and Health training to ginger farmers in southern Shan beyond VCRD’s LOP. The FSWG runs a resources hub where farmers can access agricultural technology and extension in southern Shan, and received copies of VCRD extension materials covering all three supported Shan crops (coffee, ginger and soy). Farmer-owned enterprises such as Shwe Taung Thu, Indigo Mountain and Shwe Chin Sein also received hundreds of materials and will continue to use them to share knowledge about improved practices and technologies promoted by the project as VCRD phases out. 34 These events all included planning components aimed at encouraging market system actors to commit to actions that address specific gaps, issues or bottlenecks to growth. This forward-facing orientation and focus on sustaining momentum is why VCRD chose to incorporate “Next” into the title for the forums. 42
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participate in the U.S.-ASEAN Women’s Leadership Academy, where she shared information about USAID and VCRD efforts to help farmers organize, improve quality and enter new markets.
MONITORING, EVALUATION, AND LEARNING (MEL)
The project’s MEL strategy aims to employ knowledge gained through implementation to continuously improve the project and provide feedback to USAID/Burma regarding project contributions to the Mission’s goal of economic growth benefiting all regions of the country and all segments of society in Myanmar.
Throughout Y5, the MEL team supported management by collecting, sorting and analyzing data to substantiate periodic reporting, as well as providing the project’s technical and private sector teams with research-based information and data analysis for learning, decision-making and communication purposes. Major outputs of the MEL team in Q4 of Y5 included the following: • Collected, consolidated and analyzed FTF and custom indicator data for the 2019 Annual Report. This included collecting and consolidating output data from program implementation and coordinating and overseeing the outsourced services provided by Myanmar Survey Research (MSR) to conduct an Annual Survey to analyze project outcomes (relative specifically to FTF standard indicators) on improved agricultural technology adoption and market development.
• Conducted research in furtherance of data-driven decision making, including MEL team-supported inquiries into the 2018 spike in local prices paid for ginger. The team also sourced and provided information about important nationwide developments that could affect implementation and outcomes, such as Myanmar’s newly amended “Virgin, Fallow and Vacant Land Management Law,” which has begun to impact some sesame, ginger and soybean farmers in Magway and Shan. • Collected and disseminated bi-weekly Learning Briefings comprising news and information of relevance to the market systems that yielded deeper validation and contextualization of MEL data across all five value chains as well as the broader agriculture sector in Myanmar.
In Q1 of FY2019, VCRD participated in a Data Quality Assessment led by USAID/Burma to review the effectiveness of MEL systems put in place to ensure that project data were to be in compliance with USAID’s Data Quality Standards. The Assessment provided VCRD the opportunity to demonstrate the use of DevResults as the central repository for all project data. One important recommendation stressed the need to revise the project’s MEL Plan to clarify how some selected key outcome indicators should be calculated and assessed, with emphasis on strengthening the Performance Indicator Reference Sheet. Revisions to the project’s MEL Plan, approved in June 2019, provided the opportunity to align some of the indicator definitions to the July 2018 guidelines issued by FTF. It also incorporated one additional performance indicator for reporting, i.e., for counting participants under Indicator EG.3-2, recommended by USAID.
VCRD continued fine-tuning the project’s DevResults data platform throughout the year, focusing on improving data tables and templates. This work was designed to smoothen the transition for entry of data collected by field teams and Myanmar MSR into DevResults, in order to maximize the capacity of the platform to conduct data sorting, cleaning and analysis. From the previous manual direct entry method used by the MEL team in uploading survey data into the platform, the practice has transitioned to having raw data outputs inputted in survey data tables (e.g., the Technology Adoption Data Table and Volume and Value Data Table), and uploaded in DevResults for indicator calculation, aggregation and disaggregation, as well as storage. Data tables for activity trainings and other field monitoring outputs have also been
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designed for data storage and uploading in the web-based platform. As a result, VCRD has developed and made functional use of a more transparent and efficient instrument for long-term storage of vital implementation data. Internally, a number of key project staff departed during the year, both as part of an expected drawdown of project staff upon completion of harvests of the Shan crops (ginger, coffee and soy), and unexpectedly, as in the case of the project’s former long-term MEL manager. The project was able to quickly onboard an experienced MEL professional who had recently completed a consulting assignment with VCRD and who was already familiar with project MEL indicators and reporting infrastructure, ensuring a smooth transition for MEL and project reporting.
ROLE OF VOLUNTEERS
Over the course of the project, VCRD targeted 75 volunteers to provide 80 person-months of pro bono expertise to farmer groups, small- and medium-scale agribusinesses and CBOs to improve farmer productivity and profitability, diversify production and processing, improve access to quality and affordable inputs, and improve food security and nutrition. As of September 30, 2019, the project fielded 68 volunteer assignments and five more volunteers will complete assignments early in Q1 of FY2020, for a grand total of 73 volunteers mobilized over the LOP, representing 13 countries and providing 2,368 days (about 78.9 months) of pro-bono expertise. Table 2, below, includes details about these volunteer assignments.
During FY2019, nine volunteers provided technical assistance and advisory services on business management and organizational strengthening for agribusinesses, coffee processing, national melon export strategy, and association management. Volunteers with business and organizational development expertise are highly sought-after, given that small businesses and processors that the project is working with are new businesses emerging due to the transformation in the market system and have not received business development support in the past. To provide targeted volunteer technical assistance in this area, VCRD worked closely with the Thunderbird School of Global Management to mobilize five Master’s level student teams over the LOP, for a total of 18 volunteers, to support six nascent agribusinesses and associations in Myanmar.
Over the LOP, VCRD and partners engaged volunteers on the program in analyses, technical demonstrations, technical and organizational capacity building, and market linkages. In early years, the volunteers provided more direct training and technical assistance, but as the country progressed, volunteer technical assistance became more facilitative – focused particularly on emerging service providers and supporting sustainable market interventions. VCRD applied an adaptive management approach and stayed cognizant of the contextual shifts and local capacity, using this knowledge to plan proposed volunteer assignments accordingly. This has been an important aspect of our approach: assignments address emerging needs and shift as the market evolves.
Table 1: VCRD volunteer assignments, LOP
Associate Award Reporting for Leader Award Value Chains for Rural Development
No. of Volunteers Persons Directly Persons Trained Assisted Male Female Total Number of Male Female Total Male Female Total Volunteer Days Completed Y1 (Oct. 2014 – 4 1 5 91 201 81 282 201 81 282 Sept. 2015)
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Associate Award Reporting for Leader Award Value Chains for Rural Development
Y2 (Oct. 2015- 5 3 8 97 50 109 159 50 109 159 Sept. 2016) Y3 (Oct. 2016- 15 11 26 854 3,276 2,046 5,322 269 165 434 Sept. 2017) Y4 (Oct. 2017- 17 3 20 652 151 84 235 146 83 229 Sept. 2018) Y5 (Oct. 2018- 5 4 9 225 65 81 146 57 22 79 Sept. 2019) Y6 (Oct. 2019- 5 0 5 449 0 0 0 0 0 0 Dec. 2019), expected LOP Total 51 22 73 2,368 3,743 2,401 6,144 723 460 1,183
OPERATIONS AND CLOSEOUT During Q4, VCRD formally closed its Taunggyi office in a two-step process. All technical activities were completed by July 31, 2019 followed by operational closeout in August. The VCRD operations team oversaw asset disposition to local partners. Though most material had originally planned to be transferred to ACDI/VOCA, due to delays, VCRD instead transferred all office assets to local partners such as Shwe Taung Thu, Shwe Chin Sein, Sein Lan Wai, and others. All Taunggyi-based staff, with the exception of three who are now tele-commuting, departed the project, and Winrock’s Taunggyi bank account was closed. Other closeout activities during Q4 included notification to landlords, vendors, and others of the project’s impending end date, as well as the MFVP sub-award end date, files and documentation review, USD bank account closed, and continued closeout planning and preparation for Magway and Yangon offices.
ENVIRONMENTAL IMPACT
The project Environmental Mitigation and Monitoring Plan (EMMP) was completed in Y1 and submitted as Annex 2 of the Q3 FY2015 Progress Report. The plan was approved by USAID in Q4 of FY2015. Key elements from the plan will be incorporated into trainings so that participants are fully aware of environmental impact implications of the work. VCRD monitors all project activities to ensure no adverse environmental impacts. No new environmental impact issues were identified during Y5.
PLANS FOR Q1 OF Y6
Plans for Q1 of FY2020 are listed below. For more details, please refer to the Q1 Y6 YF2020 Annual Work Plan. Please note: major activities in the coffee, soy and ginger value chains ended as of July 2019 upon completion of the harvests in those three crops, while the Innovative Grant to MFVP to support the melons value chain ended on Sept. 30, 2019. Work remaining in FY2020 (with the exception final Price Risk Management training) is focused on informal support to ensure sustainability of key partners.
Coffee • Advise MCA and other private sector partners upon request for planning and implementation of the Myanmar International Coffee Festival and/or other planned trade events; • Conduct Price Risk Management training sessions in collaboration with MCA, Myanmar Women’s Coffee Alliance and private sector actors in the coffee value chain to build knowledge and confidence for price planning and contract negotiations; 45
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• Assist MCA and other stakeholders upon request in development of proposals to tap GIZ’s Coffee Innovation Fund grants mechanism;
Soy • Continue to advise/mentor private sector partners (Myanmar Nice Bean Products Factory, State Star Co., Jaguco, T-Brand, Sein Lan Wai) to develop connections and as they develop growth strategies; mentor Sein Lan Wai as it builds out relationships to soy producers and processors in other parts of Myanmar, such as the Karen Women’s Organization and women’s Self-Reliance Groups in the May Doe Kabar Myanmar Rural Women’s Network;
Ginger • Mentor stakeholders as needed, as new export deals get underway, including the Shwe Chin Sein deal with Snacks Mandalay to export fresh ginger to Europe;
Sesame • Coach SFDA as it develops and finalizes export deals with Japanese and Korean buyers and maintains its collection warehouse; • Facilitate completion of a consultancy by Thunderbird Emerging Markets Lab consultants to examine possibilities for SFDA to reorganize as a for-profit cooperative and revamp/expand its seed multiplication enterprise; • Coordinate with partners to plan a final sesame learning and B2B event, #SesameNext in Magway;
Melons • Continue to liaise with MyanTrade, MFVP and the consultant to support successful completion of the National Export Strategy for melons;
Other • Conduct a final VCRD partner learning, sharing and B2B event, #MarketNext; • Finalize all required project deliverables, including Feed the Future Monitoring System data submission and the project’s final report; and • Finalize all administrative and operational closeout for VCRD, including disposition of equipment, closure of project bank account, and final staff payments.
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ANNEX A: SUCCESS STORY
Award-Winning Partnership Fuels Sustainable Growth in Myanmar’s Specialty Coffee Sector
In FY2019, all the hard work of Myanmar’s coffee farmers, supported by USAID with crucial private sector and market linkages, was recognized when the Value Chains for Rural Development (VCRD) project was selected as one of five finalists for the prestigious “P3 Impact Award,” presented annually by the U.S. Department of State Secretary’s Office of Global Partnerships, the University of Virginia’s Institute for Business in Society (part of the Darden School of Business), and Concordia, a nonprofit dedicated to elevating and sustaining cross-sector public-private partnerships “that improve communities around the world.”
The project’s collaborative work in the coffee sector was selected because it offers a powerful model of how innovative, market- oriented partnerships create impact and contribute to growth that benefits society. The project’s engagement with farmers groups representing different ethnicities, women-owned enterprises, associations, processors, exporters and buyers, as well as domestic roasters and retailers, was singled out for successfully developing and strengthening institutions that created improved business norms, increased exchanges of technical information and even financing necessary to increase capacity.
Before VCRD’s start in Myanmar in late 2014, smallholder coffee farmers grew mostly low-grade commodity coffee for low prices. So low, in fact, that many highland farmers once considered cutting down their skinny coffee trees to plant other crops. But as the project booted up and consulted with local producers, private sector partners and global market experts to consider which crops had good potential to increase incomes, coffee kept coming up.
A series of experienced coffee industry volunteers and analysts invited by project implementer Winrock International to take a look at Myanmar’s Arabica production and assess its quality confirmed that if smallholder coffee farmers could increase quality and consistency, and tweak post-harvest and processing practices, they could attract new buyers and higher prices. Early on, the VCRD project engaged the Coffee Quality Institute, the training arm of the global Specialty Coffee Association, through a sub-award to provide agronomic and marketing advice to farmers, processors and other coffee stakeholders in Myanmar.
With the introduction of improved agronomic, post-harvest and processing practices, as well as widespread promotion of globally accepted quality standards for assessing and grading Above: A farmer from the Mya Ze Di Community Coffee Group in Shan (left) visits with a specialty coffee, soon Myanmar’s coffee was coffee sorter at the Mandalay Coffee Group's processing facility in Pyin Oo Lwin. Coffee soon on the map. By 2016, smallholder coffee farmers, processors, suppliers, financers and buyers are now communicating and farmers in hard-to-reach areas in rural Shan collaborating closely to drive growth in Myanmar’s coffee value chain. State, including many women, who are centrally involved in managing coffee farms and running field-based collection and processing stations, were meeting directly with interested, high-end global buyers and roasters, and earning prices of up to $3-$4 per pound—more than double what they earned, previously. Smallholders soon began to export increasing volumes, ultimately reaching 16 different countries in North America, Europe, Asia and the Middle East, as well as Russia, Australia and New Zealand. Though unimaginable prior to 2014, smallholder coffee farmers with
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no collateral began to attract pre-season financing from wealthier industry stakeholders interested in buying into the sector. In 2017, banks began offering loans to coffee processors who had worked with the project through cost-shared in-kind grants to modernize their milling machinery and practices. By 2018, loans were flowing directly to coffee farmers through local banks, guaranteed by a global social lender, enabling farmers to tap into capital never before available to them.
As a result, Myanmar’s specialty coffee sector is now thriving. Despite a prolonged downturn in specialty coffee prices worldwide, Myanmar’s farmers are earning annual profits that are twice what they were in 2015. Producers are now linked to processors, supported by a national coffee trade association that provides marketing and other services, and high-end buyers are returning year upon year to snap up a portion of the country’s best beans, even as new specialty cafés open and link directly to Shan suppliers
To date, more than 10,000 coffee farmers have received training in various aspects of coffee production, processing, marketing, export, quality standards and association strengthening, with approximately 640 tons of specialty coffee exported worth more than $4.1 million, contributing to inclusive, agriculture-driven economic growth in Myanmar.
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ANNEX B: LIST OF TOWNSHIPS AND VILLAGES
(For a complete list of townships and villages organized by value chain as of September 2019, please refer to a separate Excel document, “Annex B,” submitted with the VCRD FY2019 Annual Report.
ANNEX C: VCRD EMMP – UPDATED
VCRD submits an updated EMMP to USAID/Burma each quarter, as a separate annex. While there were no major environmental impacts or changes to the plan previously submitted in Q4 of FY2019, this plan includes light edits and updates on VCRD partners both formal and informal.
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