“Public policies for institutional purchases to support family farming ”

1. “Public policies for institutional purchases to support family farming” Fighting Hunger through Partnerships Ateneode Manila University., March 24, 2015 Marek Poznanski CSA (CollectifStratégiesAlimentaires)

2. CSA activities • CSA is a development NGO specialized in agricultural and food policy issues. • Our aim is to promote sustainable agriculture and food security by strengthening farmers' organizations and the promotion of food sovereignty in different regions of the world. • Since its inception in 1984, we maintained a strong partnership with the farmers organizations in Wallonia, the French speaking region of Belgium. • In 2009, CSA in partnership with the FWA applied for membership to AgriCord and since our integration in the AgriCordnetwork, alongside our historical advocacy work and the facilitation of direct links between farmers organizations, CSA has developed an activity of financing FO’s strategic plan and projects as well as a provision of technical assistance.

3. CSA collaboration with Pakisama on institutional food purchases • In the context of RIO +20 "Exchange of experiences and advocacy to involve FOs in public programs generating economic activities with a focus on employment and environment" • The program focuses in particular on institutional buying, or food purchases made ​​by government or international institutions. This is to share experiences and build on good practice in terms of involvement of FOs in procurement process, and to facilitate cooperation among FO’s and government at various levels (local, national, regional) to promote the involvement of FOs in institutional purchasing programs. • The program is conducted in three countries by organizations involved in institutional procurement process: CAPAD in Burundi, the CNCR in Senegal and PAKISAMA in the Philippines. Moreover, exchanges are organized at the regional level: the African Great Lakes, West Africa and Southeast Asia East. The exchange of experience involve also the FO’s of Belgium (FWA) and an important contribution of FO from Brazil (FETRAF).

4. Finding of the seminar on "Institutional purchases to support family farming" In the frame of the 2014 IYFF, CSA organized an international seminar witch brought together FO’s from developing countries, NGOs and agri-agencies, researchers and policymakers. It was an opportunity to consider: • the possibility of supporting family farming by institutional purchase, • the difficulties faced by the different actors (local and national authorities,…) wanting to engage themselves in institutional food purchase from family farmers, confronted with their obligations to respect the competition rules, the transparency and the risk of clientelism. • The constraints faced by producers and their organizations in order to meet institutional demand were discussed. • The targeting of producers and necessary accompanying measures were also discussed.

5. Public authorities have to intervene to support family farming through diverse instruments • For the social, environmental and food importance of family farming, combined to farmers’ weakness on markets, public authorities have the duty to intervene with the aim to support family farming through diverse instruments. • The supply management instruments constitute the most efficient means to intervene on farmers’ market power as well as on the structures of production, but they are also the most binding ones. • Demand-orientated approaches can complete the offer-orientated agricultural policies’ arrangements. In this case, the demand implies the offer and its quality. It is the large international institutions’ privileged option, in particular those in charge of trade issues. • Indeed, numerous institutions stock up on food markets, what confers them a part of market power. It does not imply however that they use the purchases as extending agricultural policies instruments, or others.

6. Demand-orientated approaches can complete the offer-orientated agricultural policies’. Diverse ongoing experiences try to use these institutional purchases as levers that enable to favor the national, and even local, offer, but also to target producers’ categories and production methods. • For several few years now, the World Food program (WFP) has been using its position of important foodstuffs applicant to favor the development of agriculture in the beneficiary countries of its food aid (Purchase for progress, or P4P). • The "Zero Hunger" program distributes farm products to the Brazilians who are in a situation of social and food vulnerability. It is the “Program of Acquisition of Aliments”, integrated in the “Zero Hunger program” that purchases the food at a remunerative price at family farmers’ level. It is probably one of the most accomplished programs on the subject that carefully targets the institutional purchases in order to support the family farming. • In the United States, the Farm Bill (489 billions $) intervenes heavily on the food demand since 80 % of this budget is intended to support the demand, with, in this case, more of a social purpose.

7. The legal framework plays a major role in the implementation and effectiveness of institutional purchasing programs The adaptation of regulations on public procurement is a key factor for the success of an targeted institutional purchasing policy, but the adaptation of other regulations such as health regulations, or those relating to companies and associations concerned by those markets. • An appropriate legal environment is necessary for governments to buy from family farmers to ensure access to these institutional markets; • Procedures for tendering often a major constraint and should be reviewed; • There is also a need for a legal definition of family farming targeted by institutional purchases; • The legal structure of producer organizations, especially cooperatives, must be adapted to allow them access to markets; • The tax and health legislation must also be adapted.

8. Policy and institutions • Importance of government commitment and support • But with a coordinated and collaborative approach with coordination of different policies, strategies and institutions ( not based on one single intervention, dependent on one single institution) • Institutional environment should address both demand and supply constrains • Legal Framework • ▫ Plays a fundamental role both for the creation and effectiveness of IPPs ▫ 3 main legal issues:  regulation of public procurement  development of a unified legal definition for small or family farmer at national level  legal structure and regulation of farmer organizations

9. Demand • Guaranteeing and maintaining a regular demand can be an important issue for IPPs • WFP: mainly dependent on timing and frequency of donors’ contribution • Brazil: operational issues can be also a constraint (lack of planning, delays and inadequate mechanisms for the transfer of resources) • Development and adaptation of procurement mechanisms • Adaptation of national public procurement policies and legal framework (Law on public procurement) • Adaptation of the buyer’s procurement instruments ▫ Testing different contract modalities ▫ Shortening payment times ▫ Provision of customized logistical and transport systems ▫ Customizing administrative procedures ▫ Provision of services for quality control

10. Supply side • Importance of adopting a capacity building strategy which enhance: ▫ (i) technical and (ii) managerial skills of smallholder producers ▫ (iii) their access to finance

11. Lessons learned from the different experiences • Relevance of multi-sectorial interventions and crossinstitutional and intra-policy collaboration • Importance of a proper legal framework adapted to support the development as well as the implementation of a procurement programme that aims to integrate small producers to institutional markets • Need of adaptation of buyers’ procurements mechanisms to align with smallholder supply • Lack of technical assistance to smallholder producers in managerial and technical skills to be able to

12. Institutional purchases in the service of family farming: lessons from the Brazilian experience (1) The presentation of the Brazilian experience by Rui Alberto Valença, coordinator FETRAF-Sul (Brazil) under the "Zero Hunger" program was essential to consider the pivotal role to be played by public procurement if they are oriented toward strengthening family farming. Brazil's strategy actually has its specificity in that it aims to combine the goal of achieving security and food sovereignty to the goal of strengthening family agriculture. The Zero Hunger program was established when the President “Lula” assumed the government in 2002. It was set up after a building process with organizations of Family Farming. More specifically, we can distinguish several objectives to "Zero Hunger" program: • Encourage family farming, by promoting her economic and social inclusion , promoting production with sustainability, food processing and industrialization and generation of income; • Encourage the consumption and the appreciation of food produced by family farming;

13. Institutional purchases in the service of family farming: lessons from the Brazilian experience (2) • Promote access to food, in quantity, quality and necessary regularity, for people suffering from food insecurity, from the perspective of the human right to adequate and healthy food; • Promote the food supply, which includes food purchases by government, including school feeding; • Promote the food supply, which includes food purchases by government, including school feeding; • Establish public food stocks produced by family farmers; • Support the constitution of stock by cooperatives and other formal organizations of family farming; • Strengthen local and regional circuits and commercialization networks • Promote and enhance biodiversity and organic and agro ecological food production, encourage healthy eating habits in local and regional level; • Encourage cooperative and associative development among family farmers.

14. Institutional purchases in the service of family farming: lessons from the Brazilian experience (3) The "Zero Hunger" strategy has several programs developed over time, complement each other to achieve the objectives: • The Food Acquisition Program (PAA)involves a wide variety of ministries, municipalities, organizations of civil society and the CONSEAs. • The food is purchased directly from farmers or farmers' cooperative and is then valued in consumption circuits managed by the public sector and civil society that are specifically aimed at people food insecure • As part of this program, the state also buys directly from producers in order to build public reserves that will overcome such potential crises or to ensure a fair and stable price. The amount of income received by farmers in this program is regulated and depends on whether the seller is independently or within an association. This program has been very successful for a real increase producer incomes and improved food security situation of a large number of people at risk. - The School Feeding Programme(PNAE), following the success of PAA), the school feeding program that has existed for a long time and worked on the basis of tender has been revised following a decision by Congress that establishes a portion of institutional buying for school canteens be made ​​directly with the family farms (a minimum of 30% of purchases). That, to secure funding to family farmers and promote local products for which priority is granted to products from organic agriculture.

15. Institutional purchases in the service of family farming: lessons from the Brazilian experience (4) ZeroHunger • Social control • Generation of income • Consolidation of familyfarming • Access to Food - Since these are public funds are involved, the system is driven by social control and participation, made ​​from commissions at all levels and bring together representatives of social organizations, unions, elected officials and representatives of the Executive . - For the success of the program, it was first necessary to define "family farming". This definition is based on several criteria: it involves the use of family labor and a requirement on the composition of revenues: • more than 50% of revenue must come from agricultural activities; • the same income can not exceed the total amount of R $ 360,000 (about 120,000 euros) . • The operating area is finally subjected to a variable maximum size, by region.

16. Institutional purchases in the service of family farming: lessons from the Brazilian experience (5) • Quotas limits by farmers for the marketing to the program: For example: • Individual Farmers : R $ 5,500.00; • Through associations or cooperatives: R $ 6,500.00; • Organic Producers: R $ 8,000.00. • Paymentmade by the government authorities (regional or local) directly to the Farmers account (bank Card). General data after 10 year of functioning of the PAA • Bought 4 million tons of food. • Amount invested R $ 5.3 Billion. • Farmers benefited 388,000 families, 37% women. • There are 23 000 entities benefited in 3915 • municipalities.

17. Institutional purchases in the service of family farming: lessons from the Brazilian experience (6) Economic potential dimension of the school Feeding Programme(PNAE) • Annual investments of R $ 3 billion, 30% Family Farming R $ 1 Billion. • 47 million public school students. • 250 thousand family farmers suppliers. - Establishment of the prize for the school Feeding Programme(PNAE) • Average price on 3 local, regional or national markets; • Premium of 30% for organic product; • Annual limit per farmer of the amount marketed: 20,000.00.

18. Institutional purchases in the service of family farming: lessons from Erechim Brazil (7) Erechimis the first municipality in the country including all school meals are supplied 100% of the products from family farming. This result is associated with many positive elements, such as building stronger links between community members and a real increase farmer incomes through higher purchase price and more substantial quantities. By analyzing this particular case of success, it is interesting to draw some essential elements: Upstream of the program: • Any initiative must be accompanied by a considerable amount of awareness: the teachers are, for example, asked to take regular load cooking classes; • The support of local political authorities is essential; • The structuring of family farmers unions or cooperatives facilitates success. To ensure sustainability, it must then ensure: • Continued political support; • Ongoing technical support; • The presence of associations of civil society involved in the program and economic actors.