In Africa, more than 500,000 women and children die each year because they do not receive enough Vitamin A in their daily diets. Vitamin A deficiency causes blindness, a greater susceptibility to infection, stunting, and slowed growth in children. In Zambia, approximately 31% of children and 21% of women are affected by this preventable illness.
The AgResults Zambia Biofortified Maize Pilot is a five-year, US $7 million pull mechanism that incentivizes seed companies and millers to increase the awareness and consumption of biofortified, pro-Vitamin A (PVA) maize. The competition targets both maize millers and seed companies to increase demand and supply of PVA maize meal and seed respectively.
The pull mechanism, consists of two parts: 1) performance-based grants in order to incentivize seed companies to produce and sell PVA maize seed to farmers; and 2) similar grants to commercial millers who purchase PVA maize from farmers and subsequently mill and sell maize meal. The pilot is managed by Agribusiness Systems International (ASI).
AgResults employs a tax bracket style incentive of sales thresholds that incentivizes seed companies and commercial millers to increase both supply and demand of PVA maize. The competition provides threshold payments that participating companies can receive if they sell a certain amount of seed or maize meal.
The amount of money a company can win is calculated as 1) a base threshold payment based on the total sale threshold reached, and 2) an additional per unit payment for each metric ton of PVA maize seed or meal sold above the applicable thresholds. For instance, if a seed company sells 52MT of PVA maize seed in sales period one, they will receive an award payment of US $30,300 [US $14,700+($300*52)]. If participating companies fail to reach the initial grant thresholds, they will not receive any grant payments.
Millers will have three sales periods between April 2015 and March 2019 in which they can compete. Seed companies will be able to compete in two sales periods between June 2016 and May 2018.