Client name: Australian Department of Foreign Affairs and Trade (DFAT)

Duration: July 2007 – October 2013

Location: Cambodia, Fiji, Indonesia, Laos, Papua New Guinea, Southern Philippines, Solomon Islands, Timor Leste, Vanuatu


Contributing to poverty alleviation by improving the efficiency of supply chains and increasing opportunities for agricultural providers and their supporting communities throughout Asia and the Pacific. 

Situation

Commercial enterprises in this region face market challenges to business ventures. The business environment is considered high risk with limited local market opportunities and few comparative advantages. This has deterred investment and support from financial institutions and missed opportunities for economic growth and improved livelihoods. In many countries, particularly in the Pacific, improving local agricultural supply chains is crucial in helping to overcome some inherent challenges and improving pro-poor outcomes for rural communities.

Solution

The Enterprise Challenge Fund (ECF) was a six year $20.5 million Australian Government initiative, matching grants to private sector enterprises in nine countries. It aimed to contribute to poverty alleviation by creating income generating opportunities and access to goods and services with a positive economic benefit for poor people.

Agriculture is a key industry in all the targeted countries of the ECF.

A majority (57% or 12 out of 21 funded projects) of ECF projects focused on improving agricultural techniques and technologies, and enhancing market access for remote communities that would otherwise find it difficult to capitalise on their natural assets and traditional agricultural practices.

In many cases, the projects included strategies to improve the efficiency of supply chains by increasing opportunities for disadvantaged suppliers, and supporting communities to improve agricultural productivity.  

Result

Agriculture is a key industry in all countries in the region and for future private sector development programs or challenge funds.

At the project’s end in October 2013, more than $11 million had been dispersed by the Enterprise Challenge Fund for 21 projects and has positively impacted the lives of more than 75,000 of the poorest people of the region.

More than $5.7 million of this were provided for agricultural projects in all countries (except Laos). A total of 4675 people benefited by more than $3 million over the course of the program. 

Examples include:

Future Forests, Fiji (grant value $190,000) is a teak nursery and plantation in the underdeveloped Ra province. Future Forests expanded and upgraded its teak seedling nursery as the first stage of a larger teak plantation and timber processing business.

Future Forests has partnered with 250 local landowners who were predominately subsistence farmers and supplied 30,000 teak seedlings for planting on their land for a future supply of teak. Teak is a long-term investment but considerable income will be realised in 10–20 years. Future income of F$150 per tree (A$80) when thinning in 8–10 years and F$300 (A$160) in 20 years when mature trees are harvested equates to F$2 million in future value for landowners.

Cagayan de Oro Handmade Papercrafts, Philippines (grant value of $407,139) developed a supply chain for abaca in the Philippines– a raw material in their handmade paper – with 300 farmer households in the remote area of Claveria, northern Mindanao. Cagayan de Oro funded one hectare of abaca or 400 plants per farmer, provided training on organic fertilisers and abaca grading, built a buying station and transported the abaca from remote hills areas to a cooperative buyer in town. Since the station opened in late 2011, more than 10 tonnes of abaca has been sold for P520,794 (A$13,211) and it is estimated the full benefit from the 300 hectares of abaca will be A$1 million into the rural areas. Farmers are also replanting abaca at an estimated rate of an additional half to one hectare of abaca each since Cagayan de Oro established the buying station.