Local Agro-Processed Products Should Reach Formal Markets

Posted December 29, 2021

We need to get more local products to the formal market by removing the barriers that prevent them from doing so. Photo Credit: UNDP Eswatini

By Mavie Thwala

Generally, agricultural development projects are designed to enhance production while less attention is paid to creating market linkages and strengthening value chains. As such, the development of value chains and market linkages remain somewhat an afterthought. However, awareness on the importance of value chains and market linkages has improved in recent times because of the economic gains associated with value addition.

I think there are several reasons why market penetration for agro-processed products is poor in developing countries including Eswatini. One of the most significant reasons is the lack of a proactive project design that considers closing the processing gap by not only improving productivity but also:

·       Exploiting the full value chain.

·       Linking products with markets.

It makes sense to integrate all three steps at the conceptual phase in a project design to ensure their seamless interconnectivity. There are intricate details of each step that must link with the next stage. For example, potato production for French fries must be responsive to market requirements given that the preferred variety is genetically different from any other potato. I strongly believe that the poor market linkage integration in project planning results in:

·       A lack of a market-responsive product variety.

·       Inadequate production to supply market demand.

·       Poorly structured market linkage.

Having observed these challenges, the UNDP Eswatini Accelerator Lab is on a journey to understand how prohibitive factors to market linkages such as value addition for agro-processed products can be addressed. The Lab has noticed that smallholder farmers mainly focus on production and barely consider value addition. Additionally, locally-produced agro-processed products seldom make it to the mainstream markets, yet they dominate the informal sector.

There are technical barriers that impede the market penetration of these products related to food health and hygiene. Those that attempt to add value to their products tend to use their home kitchens (cottage enterprises), which is a practice that is frowned upon because it does not comply with international standards for food health and hygiene.

Therefore, the Buy Eswatini Campaign has three components that are independently designed to work towards testing different technical solutions to understand the prevailing challenges. By partnering with a major retail outlet that has an Enterprise Supplier Development Programme (ESDP) and collaborating with government entities with a mandate to develop Micro, Small and Medium Enterprises (MSME), the Buy Eswatini Campaign attempts to produce a blueprint to support agro-processors to overcome these technical barriers that impede market access.

1.      Enterprise Supplier Development

The AccLab has partnered with Pick N’ Pay (PnP), one of the major food retailers in Southern Africa, to launch a call for local agro-processors who qualify to enter the PnP ESDP. The selection criterion has been designed in collaboration with SEDCO, a parastatal that supports MSMEs. Qualifying applicants will be subsequently enrolled in the PnP ESDP and stand a chance to benefit from SEDCO’s incubation and business development support.

2.      Product Development Support

Working with the Home Economics Department (HED) under the Ministry of Agriculture and SEDCO, a group of women will be supported with production inputs and a processing facility. This will help this group to produce at a level commensurate with retail outlets’ standards. Again, this is meant to help the beneficiaries to comply with regulatory requirements and identify partners to work with in getting certified to access the formal market. 

3.      Development of High Impact Agriculture Value Chains

We then structured the last component to approach market linkages from a value addition point of view. The Acc. Lab has partnered with Eswatini Water and Agricultural Development Enterprises (ESWADE) to identify a honey-producing group at Magele in the Shiselweni Region. This group will be supported with basic honey-processing equipment and technical support to add value to their produce. SEDCO has availed an incubation facility to be used for processing. PnP will be at hand to also enrol this product under their ESDP to provide branding and packaging support.

(Mavie Thwala is the Head of Exploration at UNDP Eswatini AccLab.)