Mozambique Rural Financial Services and Value Chain Study, Kula and Farmer/USAID, 2004

Description
This study describes the horticulture and oilseeds value chains in Beira's agribusiness cluster. It identifies access to financial services, particularly by the larger processing firms that buy from MSEs, as a crucial constraint; the recommendations therefore cover measures that are needed in order to address those financial constraints.

The Paper is included here, primarily because of the sectoral analysis presented. It does, however, raise a more fundamental question about managing knowledge on value chains; there are already databases for financial systems, BDS and the business environment, but value chain material cuts across all of these. Do we need another website for inter-agency materials on value chains?

Summary of results
This assessment found that there is enormous potential for growth in incomes and trade (transactions) through investment in horticulture and oilseeds; increased investment in the horticulture and oilseed value chains is transforming smallholder agriculture and generating significant increases in income for smallholder farmers. Improvements in the enabling environment over the last five years have been significant in attracting domestic and foreign direct investment in the Beira Corridor, and this investment has triggered demand for a wide range of services leading to the emergence of an agribusiness cluster in the Corridor.

However, current levels of investment still fall far short of amounts needed to take advantage of existing market opportunities. The financing gap requires increasing the supply of both equity and debt capital, short and long term, but particularly products tailored to the cash flow characteristics of agriculture enterprises.

Moreover, despite relatively rapid growth in investment, business environmental constraints hinder future growth in employment and incomes in the Beira agribusiness cluster. Finally, the team found that coordination and cooperation among all stakeholders - small and large, private, public, and donor - is critical to developing and maintaining the competitiveness of the cluster.