Maize Milling Investment in Mozambique
13,500 smallholder farmers will have access to improved inputs and linkages to reliable markets

Maize Milling Investment in Mozambique

Background

Empresa de Comercialização Agrícola Ltd (ECA) is a market-oriented extension programme boosting the incomes of up to 13,500 farmers near Chimoio in the Sofala Province of Mozambique. ECA supplies inputs on credit and provides extension advice, engaging farmers with individual land holdings of 0.5 to 2 hectares.

ECA has received investment from AgDevCo and the Beira Agricultural Growth Corridor (BAGC) as the first public private partnership of its kind in the country for investing into sustainable and inclusive agriculture.

ECA produce maize, groundnuts and sesame seed through its members, buys the produce, sorts, cleans and packs, ready for trading on to the market. Prior to this project ECA had also setup a deal with SABMiller whereby they were contract milling maize into brewer’s grits using a third party miller close to Beira.

The vision is for ECA is to demonstrate there is a commercially-sustainable way of engaging large numbers of smallholder farmers in a formal marketing system, where farmers have opportunities to improve productivity and share in the benefits of value addition. ECA can also be a platform for offering innovative services to smallholders, such as mobile phone payments and weather index insurance.

The ECA model has already attracted positive interest from development agencies (e.g. FAO, Rabbobank Foundation) and the press. In countries like Mozambique where public extension systems are almost non-existent, and smallholder farmers have no reliable access to modern inputs, the ECA approach could be widely replicable.

Scope of Work

Reporting to AgDevCo/BAGC and the Senior Management Team of ECA, Wellspring were asked to project manage the development of a business plan, financial model and investor briefing documents for further investment into a downstream Maize Grits and Flour Milling operation.

The proposed investment was for a 2 ton per hour (13,000 MT/ year) maize mill and associated storage to produce:

  • a fine defatted maize grit/flour for “Chibuku” beer and brewer’s grits to supply Cervejas de Moçambique (CDM, part of the SAB Miller group) under an offtake agreement
  • high quality “Super” grade maize meal which commands a price premium in the Mozambican market
  • Bran by-product for the livestock sector

Outcomes

The investment was approved and contracts were put in place. The Buhler Isigayo Mill was selected as the most appropriate solution for the market and environment.

Impact

Over 13,500 smallholder farmers with access to improved inputs be linked to reliable markets, providing incremental incomes of $10.1 million over the first seven years of the project.

Increased uptake of improved farming practices by ECA farmers and other farmers in the region contributing to food security, higher incomes and improved environmental practices.

Opportunities for ECA farmers to access innovative services, e.g. micro-credit for farm inputs, mobile cash payments and weather-index insurance.