Legumes are nutritious crops, high in protein, fiber, and other nutrients. Additionally, they improve soil health through nitrogen fixation and provide opportunities for increased income and yields for smallholder farmers across the world. Due to demand uncertainty, barriers to working capital, and opportunity costs, seed companies often do not diversify to produce legume seeds and ultimately limit nutrition, soil health, and income potential.
AgResults’ Uganda Legume Seed Pilot is a six-year project that employs a pull mechanism to incentivize seed companies to produce and sell quality verified bean and soybean seed varieties to smallholder farmers across Uganda. The pull mechanism, also referred to as a pay-by-results, consists of two parts: 1) an annualized prize that provides a premium on seed sales growth; and 2) access to cold storage to allow companies to carry over unsold seed from one season to the next. Prizes will be distributed after an independent verifier confirms the amount of seed sales reported. The Uganda Legume Seed Pilot is managed by Lutheran World Relief.
The annual prize is 20% of the sales price up to a maximum of 20% of growth relative to the prior year.
The prizes, totaling US $1.6 million, encourage seed companies to increase legume seed sales as much as possible while providing the necessary working capital to reinvest and grow their business.
In order to increase legume seed production and sustain supply in the market, participating seed companies will be provided access to cold storage facilities in order to carry over unsold seed from one season to the next and preserve the additional value of the seed processing.
To ensure a reliable and transparent quality seed market, seed companies must participate in a private sector seed quality verification consortium known as AgVerify. AgVerify, which is owned by Heartland Global, Chemiphar, and UgoCert, is a self-monitored, audited, and independently verified system that verifies seed to internationally recognized standards such as COMESA and ISTA. AgVerify will verify the quality of seed; only seed that has passed AgVerify’s seed verification standards can be labeled as AgVerify. All seed companies participating in the Uganda Legume Seed Pilot must also participate in AgVerify’s quality verification scheme.