Purchase for Progress is a pilot programme using WFP’s purchasing power to support agricultural and market development while helping smallholder farmers to benefit from those markets. It entails testing a range of procurement and programme approaches to support farmers to produce and sell their staple Commodities and, as a result, raise their incomes.

The initiative relies on a wide range of partners – governments, international organizations and private

Sector, etc – that provide technical expertise, training, facilitate access to farming inputs and credit or promote processing opportunities. By raising smallholder incomes, P4P makes WFP’s local procurement an effective tool to address global hunger.

WHAT’S OUR VISION OF SUCCESS?

Our vision is that by 2015, agricultural markets will have developed in such a way that many more low income or small-holder farmers, the majority of whom are women – will produce food surpluses, sell them at a fair price and increase their incomes.

GLOBAL FIGURES

• Countries: Pilot projects in 21 countries: Africa – Burkina Faso, Democratic Republic of Congo, Ethiopia, Ghana, Kenya, Liberia, Malawi, Mali, Mozambique, Rwanda, Sierra Leone, Sudan, Tanzania, Uganda, Zambia,

 NEW WAYS TO BUY FOOD

WFP is adjusting the way it purchases food commodities to help smallholder farmers market their produce:

• Competitive processes – Suppliers compete to sell WFP a commodity but under conditions Favorable to farmers’ organizations and small/medium traders:

• ‘Soft tenders’ – tenders with less stringent conditions to facilitate bids by smallholders or Small/medium traders – e.g. bag markings and/or performance bond not required, delivery point Closer to supplier, etc

• Cereal fairs – gathering of producers and traders to market their commodities. WFP is able to Select the seller based on quality, price of commodities offers and profile of the supplier

• Warehouse receipts systems – smallholder farmers deposit their commodities in a certified Warehouse in return for a receipt that can be exchanged for cash at a local financial institution. The Commodities need to meet certain standards of quality and grade. The value of the receipt is Equivalent to 60-70% of the market value. The difference is paid once the commodity is sold.

• Commodity exchanges – these are trading platforms where sellers (represented by their brokers) register what they have to sell and describe the location and quality of the commodity; WFP puts Bids against the offer.

• Direct contracting – at the time of harvest WFP negotiates directly with farmers’ organizations a Contract to buy a commodity. A competitive tender requesting bids by three suppliers is not required.
• Forward contracting – WFP makes an agreement with a supplier to deliver a specified quantity of a Commodity at some time in the future for a specified price or in accordance with a specified pricing formula.

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