Impact Assessment of Mercy Corps Agrifin Mobile Program
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Impact Assessment of Mercy Corps AgriFin Mobile Program: Agriculture Financing Model for Corn Farmers in Sumbawa Island, West Nusa Tenggara Final Report September 28, 2018 © This material is the copyright of Palladium Impact Assessment of Mercy Corps AgriFin Mobile Program: Agriculture Financing Model for Corn Farmers in Sumbawa Island, West Nusa Tenggara 01 Summary of Findings 02 Introduction 03 Methodology 04 Main Findings 05 Recommendations 06 Corn Farmer Profiles © Palladium 2018 Impact Assessment of Mercy Corps AgriFin Mobile Program: Agriculture Financing Model for Corn Farmers in Sumbawa Island, West Nusa Tenggara Summary of Findings © Palladium 2018 Impact Assessment of Mercy Corps AgriFin Mobile Program: Agriculture Financing Model for Corn Farmers in Sumbawa Island, West Nusa Tenggara - 3 - Summary of Findings Impact Assessment of Mercy Corps AgriFin Mobile Program: Agriculture Financing Model for Corn Farmers in Sumbawa Island, West Nusa Tenggara Tested using Underlying Impact on Key Impact Actual Results Hypothesis Indicators Assessment . Farmers who have . Impact Assessment . Contextual . Farmer’s productivity have been in the model for by interviewing over Information slightly increased but lower more cycles should 250 corn farmers . Business Model gross margins due to lower have better across three districts in . Economic corn market price. performance across all NTB. Gender Equality . Modest differences the categories in the . Field qualitative between farmer’s in the impact assessment. assessment to model and control group. complement survey . Training penetration and results socialization is still low. “Smallholder farmers that has been involved in more Agriculture Financing Model in NTB for more cycles would have greater access to products and services that Agriculture Financing Model provides that will lead to an improvement in their overall livelihood.” Hypothesis © Palladium 2018 Impact Assessment of Mercy Corps AgriFin Mobile Program: Agriculture Financing Model for Corn Farmers in Sumbawa Island, West Nusa Tenggara - 4 - Legend: Increased from SIA Result 2017 Summary of Findings Decreased from SIA Result 2017 Main findings in comparison with SIA 2017 Similar to SIA Result 2017 SIA Result 2017 2 Planting Cycle 1 Planting Control or More Cycle Group Profile and Contextual Increasing trend of Average Corn Production average corn production Information Area (Ha) 3.17 2.91 2.50 area compared to the SIA 2.35 2.11 1.64 2017 Average Land Under 2 Planting Cycles or More Group have a larger Agriculture Financing 2.04 1.71 0 average land under Model (Ha) 1.63 1.41 0 Agriculture Financing Model Seed usage fairly similar Amount of Seed Used for all groups. However, (kg/ha) 19.88 20.98 21.47 the control group farmers 20.8 20.2 20.1 tend to use more seeds ADB (Growing Protocol) Lower rates of access to Access to ADB (Yes) 55% 41% 4% ADB for all three groups compared to SIA 2017 68% 44% 12% ADB Training penetration is still low, 2 Planting Training to ADB (Yes) 38% 22% 0% Cycles or More Group have a lower rate 46% 20% 0% compared to SIA 2017 Cost Average Fertilizer Cost (in Farmers increase their 1.83 1.94 1.93 spending on fertilizers million IDR) across the three groups 1.75 1.41 1.39 © Palladium 2018 Impact Assessment of Mercy Corps AgriFin Mobile Program: Agriculture Financing Model for Corn Farmers in Sumbawa Island, West Nusa Tenggara - 5 - Legend: Increased from SIA Result 2017 Summary of Findings Decreased from SIA Result 2017 Main findings in comparison with SIA 2017 Similar to SIA Result 2017 SIA Result 2017 2 Planting Cycle 1 Planting Control or More Cycle Group Finance and Access to Finance There is no change in Insurance 100% 100% 58% access to finance rate (Main Source) compared to SIA 2017 100% 100% 58% YES NO More farmers joined the Socialisation of Access to socialisation of Access to Finance 22% 78% Finance even though the 15% 84% rate is still fairly low. YES NO Less farmers are able to Financial Literacy Training 6% 94% join financial literacy training this year 14% 86% This year, less Agriculture Financing Model Farmers Access to Crop Insurance 68% 60% 4% claim to have access to 80% 86% 2% crop insurance. Harvest All farmers across three Yield (Tons) 7.19 6.95 7.01 groups have better yields this year. 6.93 6.33 6.22 The market price for corn this year is much lower as Average Price (IDR/Kg) 2,964 2,933 2,979 farmers obtained an average price of < IDR 3,420 3,439 3,396 3,000 © Palladium 2018 Impact Assessment of Mercy Corps AgriFin Mobile Program: Agriculture Financing Model for Corn Farmers in Sumbawa Island, West Nusa Tenggara - 6 - Legend: Increased from SIA Result 2017 Summary of Findings Decreased from SIA Result 2017 Main findings in comparison with SIA 2017 Similar to SIA Result 2017 SIA Result 2017 2 Planting Cycle 1 Planting Control or More Cycle Group Economic Average Revenue The farm revenue is lower 21.4 20.4 20.7 this year due to lower (in million IDR) market price of corn 23.8 21.9 21.2 Average Cost A slight increase in cost 9.7 10.4 9.7 across all three groups (in million IDR) compared to last year. 8.9 8.9 8.5 This year, the gross margin is lower due to Gross Margin corn market price; (in million IDR) 11.8 10.0 11.0 however 2 Planting Cycle farmers still have the 14.9 13.0 12.7 highest gross margin Gender Equality Women Influence in Women has a strong influence in deciding corn Deciding Corn Farming 97% 98% 96% farming as a profession in Profession the farmer household Women generally still Women Ownership in have a lower rate of major Major Asset (Yes) 27% 27% 35% assets ownership in the household Decision Maker in Women have an important role in deciding Obtaining and Usage of 92% 85% 79% and utilising their Loans (Both & Wife) household loans © Palladium 2018 Impact Assessment of Mercy Corps AgriFin Mobile Program: Agriculture Financing Model for Corn Farmers in Sumbawa Island, West Nusa Tenggara - 7 - Introduction © Palladium 2018 Impact Assessment of Mercy Corps AgriFin Mobile Program: Agriculture Financing Model for Corn Farmers in Sumbawa Island, West Nusa Tenggara - 8 - AgriFin Mobile Program Context Goals: The AgriFin Mobile Program aims to achieve increased food and livelihood security of male and female smallholder farmers as a result of accessing bundled rural advisory services (RAS) and financial services through mobile technology platforms. Sustainable and scalable The Objectives of the business models for the delivery of bundled RAS and AgriFin Mobile Program financial services are established. Knowledge of business Male and female smallholder models, services and farmers have access to, and products is captured and make accurate use of RAS shared widely to influence and financial services. policy, share learning and enable replication. © Palladium 2018 Impact Assessment of Mercy Corps AgriFin Mobile Program: Agriculture Financing Model for Corn Farmers in Sumbawa Island, West Nusa Tenggara - 9 - Agriculture Financing Model (Model Pembiayaan Pertanian) Description of the Agriculture Financing Model in West Nusa Tenggara, Indonesia The business model of the Agriculture Financing Model: • Microfinance loan of IDR 10 million/hectare, in the form of a package of agriculture inputs (high quality seeds and pesticides) and cash money. • Financial literacy module and training. • Access and Training on Syngenta’s Start it Right (Awali Dengan Benar). • Agricultural insurance if the farmer experiences crop failure from 75% due to drought or cyclone. INNOVATIVE FINANCE FOR CORN FARMERS IN BIMA, DOMPU AND • Access to interactive SMS SUMBAWA DISTRICT. based information. The Agriculture Financing Model takes a user-centered approach to provide smallholders • Farmer Groups. farmers with agriculture inputs and financial products. The model works with different • Linkages to Guaranteed Off- partner such as OK Bank Indonesia, BPR Pesisir Akbar (rural bank), ACA Insurance, takers (Grain Traders). 8villages and Syngenta. © Palladium 2018 Impact Assessment of Mercy Corps AgriFin Mobile Program: Agriculture Financing Model for Corn Farmers in Sumbawa Island, West Nusa Tenggara -10- Agriculture Financing Model in West Nusa Tenggara Model Progress throughout the years Current Locations in West Nusa Tenggara: Bima Dompu Sumbawa Phase 1 Phase 2 Phase 3 Phase 4 (Targeted) Number of Farmers 194 Farmers 642 Farmers 805 Farmers 1,228 Farmers Land 385 Ha 1,202 Ha 1,546 Ha 2,350 Ha Coverage Yield 20% ~10% ~10% ~10% Increase Bima, Dompu, Bima, Dompu, Geographical Bima, Dompu Bima, Dompu Coverage Sumbawa Sumbawa © Palladium 2018 Impact Assessment of Mercy Corps AgriFin Mobile Program: Agriculture Financing Model for Corn Farmers in Sumbawa Island, West Nusa Tenggara -11- Impact Assessment Objectives Purpose of conducting an impact assessment on the corn farmers in NTB • Mercy Corps Indonesia has been leading the Agriculture Financing Model in Sumbawa Island, West Nusa Tenggara Province; An initiative that aims to increased food and livelihood security of smallholders farmers. • Mercy Corps Indonesia wishes to assess the social impact assessment of the Agriculture Financing Model on smallholders corn farmers. This is as a follow-up impact assessment to see the progress of the model after Phase 4. • This year assessment was based on a similar hypothesis with a greater focus on Farmer’s contextual information, business model and overall livelihood. • Hypothesis: “Smallholder farmers that has been involved in more cycles of Agriculture Financing Model would have greater access to products and services