Mercy Corps, AED Assessment of the Hot Pepper Value Chain, Liberia, 2006

Description
The past three years have seen significant changes in Liberia, including the end of the fourteen-year civil conflict and the election of a new government in late 2005. The stability brought about by these changes enables the Community Peace Building and Development Program (CPBD) communities to take a longer term view towards their livelihoods and increasing their incomes. CPBD is a five year - $12 million program jointly implemented by Mercy Corps (MC) and the Academy for Educational Development (AED). The program is designed to promote a greater role for civil society in the transition to improved social, economic and political conditions by working with rural communities. Given the growing focus on economic growth by the CPBD communities, MC and Action for Greater Harvest (AGHA) opted to use a market development approach to identify profitable, sustainable opportunities for communities to engage in high value markets.

Since the majority of community members are engaged in agriculture, opportunities to support subsistence farmers to increase their yields and transition into commercial agriculture by growing cash crops and moving into agro-processing offered the greatest potential. In May 2005, CPBD staff and local partners worked with a consultant to conduct a market assessment of the dried cow pea value chain, which was identified as a high potential crop that offered communities opportunities both to increase their incomes and food security. Based upon the research findings changes were made by CBPD staff and partners to the program.

The purpose of this second consultancy is to expand upon the program's economic development strategy through the addition of one to two high potential subsectors, while examining the lessons learned in working in cow peas. This will expand upon the potential sectors and resources available to CPBD community members interested in working in cash crops.


Summary of results
A second Market Assessment using the subsector and value chain frameworks found that the hot pepper subsector is particularly promising, since it offers potential returns of up to 300%. Hot pepper is in demand year round, and most of the CPBD communities already have some engagement in the sector, which will enable the program to build upon this interest. The greatest opportunities are in off-season production when prices are at the highest, as well as selling dry peppers in this period. Assisting communities to develop their capacity and the needed resources to follow a dry and hold strategy during the peak season could significantly increase their incomes. Additional research on the peanut subsectors indicates that at least for the counties in which CPBD currently operates, namely Monterrado, Grand Basso and Margibi, peanuts is not a very promising crop in terms of profitability. Rather than expending considerable resources on peanut production, the program would be better served in looking at other crops and activities. However, given the interest in peanuts some recommendations are made here in the event activities in the subsector are pursued.

In reflecting on the initiative last year for the CPBD program to engage in the cow pea subsector, the greatest challenges were consistency in communicating with the communities and in development of the resources needed to assist AGHA in implementing the strategy. This year these issues need to be addressed, and particular focus is needed to develop resources such as activity plans and meeting templates that farmers can use to organize their activities. Success in farm planning will assist communities to succeed in cow peas and any other crops they may choose to engage in, while building both the communities' and the local partners to exceed in other subsectors.

Looking beyond CPBD to the next phase of programming there are opportunities to work with communities in other subsectors such as rubber and palm oil. Liberia already exports rubber and there is great potential to revive the historical export trade in palm oil. The low purchasing power among consumers in Liberia limits the opportunities in the domestic economy, so ultimately the greatest opportunities will lie in exports. Many of the CPBD communities are already planning or engaging in palm oil and rubber, through palm seed harvesting and processing, cultivating rubber trees on community land etc. The capacity planning in farm management and engagements in markets at the community level via CPBD this year will build communities' capacity to engage in these growth opportunities for the country. Given the high levels of fragmentation and market-based governance in the country's agricultural sectors, a value chain approach could be very useful in promoting opportunities for greater coordination and collaboration. This will also promote peace dividends in the country via economic ties and opportunities for inclusive growth.




Associated Activities and Documents
Market Assessment
»	Mercy Corps Liberia Assessment of the Cowpea Subsector 2005