FAO launches the first electronic voucher scheme in Mozambique

FAO enables market access to agricultural inputs for smallholder farmers in Mozambique.

Key facts

Agriculture is Mozambique’s primary economic activity and around 3.2 million smallholder farmers account for 95% of this sector's production. The percentage of smallholder farmers with access to credit facilities in Mozambique has steadily decreased over the past 10 years, while inefficiencies in production and distribution have weakened the competitiveness of domestic products. Funded by the European Commission and the Government of Mozambique, FAO launched an electronic voucher scheme at the start of the agricultural season 2015/2016 to enable market access to agricultural inputs and to improve distribution of quality agricultural products through the involvement of agro-dealers. The programme supports two groups of beneficiaries: small emerging farmers and subsistence farmers with special attention being given to rural women and women heads of families. 

At the beginning of the agricultural season 2015/2016, FAO launched in Mozambique an electronic voucher scheme aimed at enabling market access to agricultural inputs (mainly seeds and fertilizers) and improving the distribution of quality agricultural inputs through the involvement of various agro-dealers. The programme targets two groups of beneficiaries: small emerging farmers and subsistence farmers, with special attention given to rural women and women heads of families.

The voucher serves as a financial credit for the purchase of inputs, e.g. seeds and fertilizers, from quality-monitored agro-dealers and is co-financed by the beneficiary. Facilitation of farmers’ access to improved agricultural inputs can increase production, know-how, food security, revenue, as well as the development of marketing and distribution sectors.

The financial inclusion tool was successfully tested in the Province of Manica during the agricultural campaign of 2015/2016 and will be extended to the Provinces of Sofala, Zambezia and Nampula in the agricultural campaign of 2016/2017. It will gradually replace the paper voucher scheme run since 2013.

Increasing crop yields and capital gains
Due to limited agro-industrial development capacities, smallholder and emerging family farmers are in need of secure market prospects and risk-covering facilities, and are currently lacking sufficient capital to invest in and expand their farms.

Eduardo Lino, a local farmer attending the launch of the electronic voucher in Sussundenga, Manica Province in November 2015, is excited about the new scheme. Already a beneficiary of the paper voucher, he understands the structure in which the beneficiary pays part of the total worth of the voucher, while FAO puts forward the rest. Once the voucher has been activated, the beneficiary has access to a wide range of inputs from any of the agro-dealers involved in the scheme.

FAO carefully monitors the quality of the seeds available for purchase within this scheme, which Lino remarks was a significant advantage for him. “I had a much better crop yield after using inputs bought with the paper voucher last year”, he comments, and is hopeful that “the increase in input choices with the electronic voucher will again improve my production this season”.

Another beneficiary of the paper voucher scheme preparing to transfer to the electronic scheme, Augusto Janota, attended a workshop on the electronic voucher FAO held in his home district of Chimoio, Manica Province. “I have discovered there is a much greater chance of my crops growing when I use the treated seeds of the FAO voucher programme, as well as the post-harvest pesticides that come with the package,” he noted during the workshop. “I like this because outside the scheme I sometimes pay more money for really poor quality products”.

Improving electronic knowledge
Walter de Oliveira, coordinator of FAO’s Millennium Development Goal 1c Sub Programme in Mozambique – which specifically targets to halve the proportion of the chronically undernourished - explains that "the electronic voucher will not only make farmer’s production decisions more flexible, but it will also improve their knowledge of electronic money systems. Furthermore, it helps to reduce smallholder’s lack of familiarity with technology, particularly with e-money services, as indicated by the Bank of Mozambique in its "National Financial Inclusion Strategy 2016-2020".

Next Steps
The programme runs until 2018, after which the Government of Mozambique will take over the helm. Marcelo Chaquisse, speaking on behalf of the Ministry of Agriculture and Food Security, noted that the Ministry is “very positive about the electronic voucher scheme. It is in line with the strategic plan of the Ministry, which is dedicated to increasing the productivity and production of our farmers.”

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