|Managing risks in the Fertilizer Value Chain in West Africa
|IFDC announces an international training programme
Venue: Accra, Ghana
|27 April 2010 - 1 May 2010
|International Fertilizer Development Center (IFDC)
Program Fee: $1,200 (by March 28, 2010) or $1,400 (after March 27, 2010)
Registration Due by March 28, 2010
It is ironic that the agricultural sector, which accounts for about 30 percent of GDP, at least 40 percent of export value and between 70 and 80 percent of employment in Sub-Saharan Africa (SSA), has received inadequate attention. Over the last 30 years, SSA’s population has been growing at 3.1 percent per annum compared with food production growth of 2.1 percent per annum. The challenges facing agriculture in West Africa are immense, given its size and diversity. Its current population of 290 million is expected to reach 430 million within the next 15 years, and as much as 60 percent of that population is expected to live in urban areas by 2020 (OECD, 2006). The agricultural sector is characterized by small family farms, dependence on rain-fed agriculture, traditional methods of soil fertility maintenance and low market participation.
The large increase in population over the past several decades has increased pressure on land, and farmers can no longer fallow their fields to regain fertility. Therefore agricultural intensification is widely seen as a necessary condition for enhanced food security and as a major driver for overall economic growth in SSA. To this end, the Comprehensive Africa Agriculture Development Program (CAADP), the African Union/NEPAD initiative in Africa, strives to revitalize agriculture as the engine of economic growth to improve food security and reduce poverty across the continent.
The use of fertilizer in Africa remains well below recommended levels; it currently is estimated at only 8 kilograms/hectare (kg/ha) -- less than 10 percent of the world average. The low use of fertilizer accounts for the low productivity, poverty and hunger. Therefore, any strategy to reduce poverty must be centered on the efficient and sustainable use of fertilizer. The late Dr. Norman Borlaug referred to fertilizer as “the fuel that powers the Green Revolution” and there is evidence that no country in the world has been able to reduce poverty and achieve food security without significantly and efficiently increasing agricultural productivity through the effective use of fertilizers.
Several reasons account for the low use of fertilizer in Africa. They include limited purchasing power, poor access to credit among small-scale farmers, unavailability or irregular supply of quality fertilizers, high risk and a perceived lack of profitability.
The risks associated with the fertilizer business include production and handling risks; inventory, storage and environmental risks; market, price and credit risks; transport and policy risks. Whether from external or internal sources, the risks along the fertilizer value chain must be identified so risk management and mitigation plans can be developed.
As the Alliance for a Green Revolution in Africa (AGRA) enters its third year of operations, African governments remain committed to agriculture through CAADP and the Abuja declarations to make fertilizers strategic tools for development. This training program has come at the appropriate time to provide the tools and techniques necessary to reduce risks associated with fertilizers. It will draw on lessons and best practices of IFDC and partner organizations in Africa in the area of fertilizer supply chain management.
Training program objective
The objective of the five-day training program is to provide fertilizer stakeholders from the private and public sectors (policy makers, wholesalers, dealers, exporters, farmers, investors, bankers, development agencies, NGOs and opinion leaders) with an in-depth knowledge and sound understanding of the operation of the fertilizer value chain. It will also equip participants with the tools to analyze risks along the value chain as well as the ways to create values from these risks and to manage negative risks. In particular, the training program will help identify the primary risks that affect actors and operations in the fertilizer value chain, examine the risk management strategies and instruments available to these actors and propose a framework for incorporating risk management in the development of the fertilizer market in West Africa.
The training program will allow all interested fertilizer stakeholders to create networks for future exchanges and enhanced linkages, mainstreaming of approaches and long-lasting professional collaborations and strategic alliances.
Who should attend
A value chain refers to a sequence of activities performed by different actors by which value is added during every activity. This training program will be as inclusive of all stakeholders as possible. It is designed to meet expectations of all the stakeholders in the fertilizer value chain in Africa, notably the fertilizer importers, wholesalers, representatives of fertilizer dealers’ association, farmers’ organizations at regional levels, financial institutions, Regional Economic Communities, UN agencies and other international development agencies, NGOs, African Governments and ministries involved in agriculture, trade, economic planning and policies, procurement, standards and quality control.
The program will cover various topics including but not limited to:
- Fertilizer value chain conceptual framework
- Value chain approach and fertilizer value chain mapping
- Vertical and horizontal linkages in the fertilizer value chain
- Case studies on fertilizer value chains in Africa including exercises on the relative contributions of the major costs to total price
- Upgrading the fertilizer value chain
- Risk management conceptual framework including quantitative and qualitative analysis of risks
- Fertilizer risks mapping and analysis along the value chain including assignments of “risk owners”
- Impact of risks on fertilizer value chain competitiveness
- Risks management strategies and tools along the fertilizer value chain.
- The role of information management, including the use of cell phone-based communication among value chain stakeholders (for example polling and aggregating fertilizer needs from farmers prior to the season and communicating data to dealers and importers)
- Lessons learned from field visits (e.g., the Tema port, fertilizer warehouse, farmer’s fields and demonstration plots)
Adult learning cycle will be the principal method of training. This will cover theory as well as practice in the work group sessions, case studies and field visits. Both analytical and case study approaches will be used to help develop analytical and planning skills. The interaction of participants, with the faculty and among themselves, will help everyone learn from the experiences of the others and reinforce the program lessons. Group discussions and recommendations will form a critical core of training deliberations. A one-day field trip will be included.
The program will be facilitated by IFDC specialists in fertilizer value chain development and risk assessment and management. In addition, highly experienced external resource persons in several aspects of the fertilizer industry will be act as guest speakers.
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