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Regional East African Community Trade in Staples REACTS

Graduating Smallholders to “Farming as Business” through Inclusive Regional Food Markets

Funder: IFAD
Status: Ongoing

IFAD has provided a grant to Kilimo Trust for the implementation of Regional East African Community Trade in Staples (REACTS) project. The project will use the network of the Projects financed by IFAD in the EAC Partner States, to build a foundation for a long-term programme that will leverage investment by others to effectively link the small-scale farmers (women, men and youth) producing food commodities, to regional and/or cross-border markets (esp. urban) in East Africa. In support of the East African Community Food Security Action Plan, the REACTS project will be part of a long-term and ambitious program of KT to support the transformation of food and nutrition security in the EAC Region away from high risk subsistence farming into lower risk trade-based systems. The vision of success is, within 15 years, to see:

  1. Specialization in production of staples to:
    • effectively utilize comparative advantages;
    • enable smallholder producers of key food commodities to “farm as business” and become competitive.
  2. A structured regional trade in food driven by business linkages among the private sector in each commodity.
  3. A high proportion of the food commodities (especially perishables) produced in the EAC, being transformed to differentiated value-added products preferred by the final consumer.
The REACTS project contributes to the IFAD’s goal to see that: ‘poor rural women and men in developing countries are empowered to achieve higher incomes and improved food and nutrition security’. It will do this by promoting innovative approaches for supporting small holder farmers in the EAC to focus more on regional cross-border markets and trade. REACTS will enable the projects funded by IFAD and others to: a) re-orient their support to enable smallholders build farming enterprises by competitively targeting regional cross-border market opportunities; b) support the development of efficient linkages of smallholders to regional markets; c) link and work more effectively with large programs facilitating trade in the EAC such as the Trade Mark East Africa (TMEA) and the USAID’s East Africa Trade and Investment Centre (EATIC). REACTS will facilitate awareness raising, advocacy and policy dialogue on issues of importance to the poor smallholder farmers and traders (women, men and youth) employed in the food sector, with respect to key obstacles affecting regional cross-border trade. The focus will be on influencing actions by key actors with respect to the “operational” obstacles that go against approved policy, legislative and regulatory frameworks. Using “the glass is half-full” approach – REACTS will start with what is possible under EAC Custom Union and common market as well as under COMESA and WTO, to help a critical mass of value chain actors, (from the smallholder farmers, to retailers)to understand and take full advantage of opportunities for regional cross-border markets and trade in food products.

REACTS is designed to respond to policies and strategies of the EAC such as the “EAC Food Security Action Plan. Interventions planned under REACTS are important because currently, regional markets are, for all intent and purposes, left out of national strategies for food security, by both surplus and deficit countries – limiting opportunities for: i) enhanced incomes for producers, and/or ii) providing good nutrition at prices that low-income earners in rural and urban areas can afford. Despite large investment by IFAD and others to enhance agricultural productivity, productivity continues to be low and/or fluctuating. This is driven by a “low–yields trap”, itself driven by frequent negative gross margins attained by smallholder farmers. Consequently, structures (such as irrigation and warehouses) installed by projects are under-utilized, smallholders fail to attract off-takers (e.g. millers/processors) due to lack of sufficient and consistent supply of quality raw commodities – which completes the vicious circle because the off-takers decrease their investment, leading to reduced access to markets even further.....Read More

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