May 11, 2008

Purchase for Progress

I haven't heard much in the news about the WFP's Purchase for Progress program, in fact a Google News search turns up exactly zero results, but it is the type of thing that I would like to hear more about, especially given all the talk currently making the rounds about how to address the global food crisis.  In a post entitled Food for the Hungry: The Case for Buying Locally over at the Ideas for Development blog Josette Sheeran mentions the program while bringing us up to speed on what the WFP is, has been and hopes to do doing regarding the local procurement of food for the hungry.  Here's a bit of what she has to say:  
. . . . in promoting local procurement in developing countries, I think we have been ahead of the curve. Where I would admit we may have been slower – until more recently – is in promoting the extent of WFP’s involvement in local procurement, the fact that we have been doing it for decades, and explaining the reasons why we think it is so important.

As a major player on global food markets, WFP has been in the business of buying basic food commodities from one source or another for pretty much the past forty years. One of our guiding principles is to get the best price for the food we buy, so we can stretch the precious money we receive off donor governments and use it in the most efficient way to feed the world’s hungry.

The experts who run WFP’s food procurement unit realised fairly early on that there were obvious advantages if food could be purchased close to where it is going to be used. Food that is sold by small farmers in regions like sub-Saharan Africa, might not be as cheap as that which you find in the sophisticated North American and European markets, but if you buy locally, you can cut down dramatically on the costs of transport and storage.

More importantly, these savings are among a number of positive advantages that come with local procurement. Foremost among these is the opportunity to use WFP’s local procurement policy as a way of investing in the sometimes fragile agricultural economies of the developing world.

With our “purchasing power” we can make a real difference. In 2007 that meant ploughing US$612 million into developing countries where we purchased more than 1.6 million tonnes of food from small farmers. To put this in perspective, by virtue of our local procurement policy, WFP put more money into Africa in 2007 than the World Bank.
There are a lot of ways to dissect that last sentence but I'll leave it alone for the moment and get on to the bit about Purchase for Progress:

The question we are now asking ourselves is how we can use this big “purchasing footprint” - that stretches from Uganda and Ethiopia to Pakistan, Colombia and beyond – to support small farmers in a way that helps their business grow and contributes to the evolving economies of the developing countries where they live.

Our first step has been to set up a “Purchase for Progress” unit at WFP headquarters in Rome, which is launching a set of pilot activities – primarily in Africa – to explore how we can take this exciting concept further. We want to work with a broad range of partners, including governments, UN agencies, non-governmental organisations, farmers, traders and research institutions to see how we can use WFP’s purchasing power to sustainably develop the agricultural sector.

If, in fact, the WFP can figure out ways to leverage its "purchasing footprint" to move more in the direction of sustainable development of the agricultural sector rather than focusing on procurement for emergency relief efforts that would be an encouraging development (no pun intended).  Like I said there isn't that much more in the way of details out there about the Purchase for Progress program.  About the only thing constructive I've been able to track down regarding specifics of the program are these documents (pdf) from a briefing held at the beginning of April.   From the overview:

The question may well be, why now? It is a combination of factors. The realities of a rapidly changing global environment and economy, climate change, high commodity prices, fuel costs and freight rates mean that WFP needs to revisit its modus operandi to meet challenges ahead and reposition itself strategically for the future. It is against this backdrop and in expectation of a rise in beneficiary needs that WFP is placing even more emphasis on local and regional procurement practices.
. . . . . .

In sum, priority will be given to local food purchases when this does not conflict with other requirements of WFP operations, namely the provision of adequate and timely food assistance. Procurement activities will also help producers and service providers to build the skills and capacities they need to produce higher-quality food able to reach more developed markets, thereby promoting sustainability. WFP will create synergies by conducting procurement that complements supply-side interventions by other partners such as micro credit and seed inputs.
This has the chance to be constructive, proactive, sustainable policy that has the potential to alleviate not only emergency hunger but to put farmers more firmly on the path out of subsistence - it will be interesting to see how much of it bubbles to the surface.

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