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Agriculture is the main economic activity in Mozambique, with about 3.2 million smallholder farmers accounting for 95% of the sector’s output. The proportion of smallholder farmers with access to credit in Mozambique has steadily declined over the past decade, while inefficiencies in production and distribution have undermined the competitiveness of domestic products. With funding from the European Commission and the Government of Mozambique, FAO launched an e-voucher programme at the start of the 2015/2016 agricultural season, which aims to enable access to markets for agricultural inputs and improve the distribution of quality agricultural products through the involvement of agro-dealers. The programme supports two categories of beneficiaries: small emerging farmers and subsistence farmers, with a special focus on rural women and female heads of households.
At the beginning of the 2015/2016 agricultural season, FAO launched an e-voucher programme in Mozambique, which aims to enable farmers to obtain agricultural inputs (mainly seeds and fertilizers) from the market and improve the distribution of quality agricultural inputs through the participation of various agricultural dealers. The programme targets two categories of beneficiaries: small emerging farmers and subsistence farmers, with a special focus on rural women and female heads of households.
Vouchers are a form of financial credit used to purchase inputs such as seeds and fertilizers from quality-controlled agro-dealers, co-financed by the beneficiaries. Helping farmers gain access to improved agricultural inputs can improve yields, technical know-how, food security, incomes, and boost the development of the marketing and distribution sectors.
This financial inclusion tool was successfully piloted in Manica Province during the 2015/2016 agricultural season and will be extended to Sofala, Zambézia and Nampula Provinces during the 2016/2017 agricultural season. It will gradually replace the paper voucher scheme that has been in place since 2013.
Increase crop yields and capital gains
Smallholders and emerging family farmers, who need secure market prospects and risk underwriting facilities, currently lack sufficient funds to invest and expand their farms due to limited capacity for agricultural industry development.
Eduardo Lino, a local farmer who attended the launch of the e-vouchers in Susongdenga, Manica Province, in November 2015, was excited about the new initiative. As a beneficiary of paper vouchers, he was familiar with the structure: the beneficiary pays a portion of the total voucher value, and FAO pays the rest. Once the voucher is activated, the beneficiary can get a wide range of inputs from any agro-dealer participating in the programme.
FAO strictly monitors the quality of seeds available for purchase under the programme, which Lino says is a big advantage for him. “Last year, my crop yields increased significantly after using the inputs I purchased with paper vouchers,” he comments, and hopes that “the increased choice of inputs with electronic vouchers will increase my yields again this season”.
Another beneficiary of the paper voucher scheme who is preparing to switch to the e-voucher scheme, Augusto Janota, attended an e-voucher workshop organized by FAO in his hometown of Chimoio, Manica province. “I have found that my crops have a much better chance of growing when I use the treated seeds from the FAO voucher scheme and the post-harvest insecticide that comes with the package,” he noted at the workshop. “I like this approach because outside the scheme, I sometimes spend more money on very poor quality products.”
Improve electronics knowledge
Walter De Oliveira, Coordinator FAO implements MDG 1c sub-programme in Mozambique The Bank of Mozambique, in its National Financial Inclusion Strategy 2016-2020, states that “electronic vouchers will not only allow farmers to be more flexible in their production decisions, but will also improve their knowledge of electronic money systems. In addition, it will help reduce the unfamiliarity of smallholder farmers with technology, especially with electronic money services.”
Next step
The program will run until 2018, after which it will be taken over by the Mozambican government. Marcelo Chaquisse, representative of the Ministry of Agriculture and Food Security, noted that the ministry “is very optimistic about the e-voucher program. It fits in with the strategic plan of the ministry, which is committed to increasing farmers’ productivity and production.”
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