March 23, 2015
Guest Post by Denise Mainville, Evaluation Team
As the qualitative lead on the AgResults Evaluation Team, I am tasked with assessing the effects of the AgResults pilots’ incentives on private-sector involvement in the market for promising agricultural products and services. For example, the AgResults Zambia Pilot seeks to catalyze the development of a commercial market for bio-fortified pro-vitamin A enriched maize (aka orange maize) by incenting industrial millers to enter the market and develop and promote their own branded vitamin A enriched maize meal. This is one of several AgResults pilots, along with others in Kenya, Nigeria, and Uganda, that leverages “pull mechanisms” to pay for results that promote food security, health and nutrition.
During a recent trip to Zambia in January-February 2015, I conducted more than 40 interviews with farmers, millers, agro-input dealers, traders, retailers, and other industry experts about their understanding and perspectives of the market for vitamin A enriched orange maize. One of the primary challenges that Zambian millers face is stimulating demand for the product among consumers, most of whom are entirely unfamiliar with orange maize and many of whom confuse it with the yellow maize—a product was once distributed as food aid during a famine and which many people associate with famine, food aid, and animal feed, and generally view as inferior. Yet another challenge lurks—the need to ensure and protect the integrity of orange maize product—in a word, its quality.
The orange maize quality challenge manifests in several ways in the Zambia pilot. From a demand perspective, the millers, each of whom will be competing with other millers to enter the market and establish market share, need to introduce orange maize to consumers in a way that will convince them that it is a nutritious, tasty, and high-quality product. Miller decisions of how to price the product will be particularly important here—if they introduce orange maize by discounting it relative to the white maize that consumers are accustomed to purchasing, they may stimulate consumers to experiment with the product and get a foothold in the market in the short run, but they risk hampering the long-term development of the market by implicitly signaling to consumers that the orange maize is an inferior product. Millers who introduce the orange maize at a discount may also face resistance if they later try to increase the price of the product to more sustainable levels.
On the supply side, the integrity and quality of the product must also be ensured, particularly given the potential for some suppliers to feel an incentive to “cheat” by marketing white or yellow maize as orange maize in order to receive any price premium that orange maize might bring, without incurring the cost of producing it. While the Zambia Bureau of Standards has published standards for white maize that protect against encroachment by yellow maize, no such standards exist yet for orange maize. Currently, Harvest Plus, which developed the vitamin-A enriched orange maize, is working with the Zambian government to promote the development of standards for orange maize.
The supply side challenge is further complicated by a new entry to Zambia’s maize market—Advanta’s PAC 6M 745. This is an orange maize seed that has only recently been introduced to the market for use as stock feed, but which is not a bio-fortified variety. Agro-input dealers interviewed during field visits reported stocking PAC 6M 745, but didn’t know whether the maize it would produce was intended for human consumption or animal feed. They also tended to confuse it with the vitamin A bio-fortified maize which a few were also newly stocking. Apart from highlighting the need to educate agro-input dealers on the differences between the two types of seed, the introduction of PAC 6M 745 also complicates the challenge of ensuring that any orange maize meal on the market produce is really vitamin A enriched. Without PAC 6M 745, millers had the option of qualifying their acceptance of orange maize on the basis of the color of the grains. Now they must confront the possibility that the orange-colored grain they have received is not an authentic vitamin A enriched product. Regardless of whether the mixing of grains is the result of confusion about the different varieties or an opportunistic attempt to cheat the miller, millers will need to closely monitor the sources of their vitamin A enriched maize or incur the costs and inconvenience of laboratory testing to verify the integrity of the product.
As evaluators, we’re interested in AgResults’ impact on the market—particularly whether the pilot incentive stimulates millers to engage in the market, what form this engagement takes (the millers’ strategies) and how other market actors including consumers, retailers, farmers, traders, and agro-dealers respond to the evolving market opportunities. Maize quality issues, the challenges they present, and different market actors’ responses to them will likely factor prominently into the success and impact of the pilot, and consequently present an important line of inquiry for us to follow as we move forward with our evaluation.