October 29, 2021
On October 28, the AgResults Senegal Crop Storage Finance Challenge Project, which encourages warehouse owners and smallholder producer groups to upgrade warehouses and develop storage finance schemes, officially launched. A virtual event brought together public and private stakeholders from the country’s agriculture sector to recognize the potential of the prize competition.
The webinar began with welcoming remarks and then Project Manager (PM) Connexus Corporation presented the project’s competition structure, prizes, and timeline. The project uses a Pay-for-Results prize competition structure to build on new Warehouse Receipts Systems (WRS) laws and regulations in Senegal by encouraging warehouse operators, farmer cooperatives, and finance providers to coordinate to establish storage-based finance schemes that benefit smallholder farmers.
By incentivizing these actors to upgrade warehouses, obtain WRS licenses, and provide collateral-based financing for smallholder farmers, the competition will increase the accessibility and availability of storage. Using WRS, farmers will increase sales revenue and have better access to finance through their ability to collateralize their crops to obtain loans. These goals align with AgResults’ broader objectives to improve links along entire value chains and transform market systems.
Following the PM’s presentation, several representatives from key organizations spoke, including La Banque Agricole, CNAAS, Cadre National de Concertation des Ruraux (CNCR), as well as the Ministry of Agriculture and the Ministry of Commerce.
Anita Campion, President of Connexus Corporation, acknowledged the value of improving access to finance for smallholder farmers and her organization’s role in advancing the goals of the project.
“For several years Connexus Corporation has actively participated in the economic development of Senegal through various projects,” she said. “We are delighted to participate in this exciting work for the development of the country and will spare no effort, through our team on site, to ensure the total success of the project for the benefit of rural producers.”
The Secretary General from the Ministry of Commerce recognized the importance of the WRS and the need for collaboration to spark private sector development in a way that is inclusive and sustainable.
“In Senegal, access to finance is a recognized obstacle to private sector development. To remedy this, the Government of Senegal, with the support of the World Bank, has set up a support mechanism called the Warehouse Receipt System,” said the Secretary General. “The Ministry of Trade and SMEs will spare no effort to support the AgResults - Senegal project and I wish the team responsible for its implementation every success.”
On behalf of the AgResults donor committee, Corry Van Gaal, Agriculture and Food Systems Bureau Director from Global Affairs Canada, shared excitement for the launch of the project.
“For eight years we have tested how best to use Pay-for-Results prize competitions to transform markets and improve the lives of smallholder farmers,” said Ms. Van Gaal. “I look forward to seeing how the competitors find creative ways to overcome pressing challenges and develop sustainable business solutions.”
Over four years, the project is expected to improve access to finance for 44,000 smallholder farmers, increasing their profits by $9.7 million and enabling them to access $35 million in financing. By introducing the benefits of storage-based finance schemes, smallholder farmers can reduce post-harvest loss and demonstrate more agency and influence in the market.
For more information, visit the AgResults Senegal Crop Storage Finance Challenge Project page. Please note that this page will continue to be updated through the rest of 2021.
The project is part of AgResults, a $152 million collaborative initiative between the governments of Australia, Canada, the United Kingdom, the United States, the Bill and Melinda Gates Foundation, and the World Bank Group that uses prize competitions to incentivize the private sector to overcome market barriers and create lasting change. Through AgResults’ Pay-for-Results model, these competitions encourage actors to achieve predetermined results thresholds and quality for monetary prizes.