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July 2015

Market-Driven Productivity Increases in Mozambique’s Soya Sector

Soya production in Mozambique has been increasing in response to the rapid growth of the poultry industry. Donor programs to promote soya production for Mozambican smallholder farmers have encouraged thousands of farmers to enter the sector. But their productivity was low, limiting their competitiveness. A 2011 analysis by the Swiss Agency for Development and Cooperation-funded InovAgro project showed that poor seed quality was the critical constraint to increasing productivity, exacerbated by farmers’ failure to observe good agricultural practices.

InovAgro’s demonstration of the significant increases in productivity and profitability afforded by the proper use of better seed spurred farmer demand for certified seed, even though it is more expensive. At the same time, input suppliers had to be convinced that there was a market for the premium seed in Mozambique; InovAgro responded by organizing a separate demonstration for suppliers that confirmed the effective demand for seed, and also by assisting them to develop their supply chain to reach the farmers.

Another constraint on the supply side has been the policy of government and NGOs to give away or heavily subsidize seed and inputs. This approach has reduced the incentives to invest in developing input supply enterprises and crowded out private firms. In response, InovAgro helped launch the National Seed Platform for Dialogue, bringing together the private sector, government, and donor agencies to diagnose and address systemic constraints to the industry. Owned by the market actors themselves, this complementary initiative should lead to a more viable and market-driven industry.


Photo of Bill Grant

Bill Grant is DAI's Global Practice Lead, Market Systems Development.