 My name is Keri Berge, I am the associate of the International and Environmental Development, IAED. I'm just going to give you a brief agenda after today's webinar and introduce the speakers. So, Emily Polak from IAED is a senior researcher in the Legal Tools team, a natural resources group. The first speaker, Juan O'Perman is team leader at Malawi, our team sector transformation program. And our second speaker, Snowden is secretary of the Cotton Farmers Association of Malawi. Thank you and good afternoon everyone, I'm Emily Polak. And as Keri said, welcome to everyone very much to the second webinar in a series focused on sharing experiences of promoting and supporting legal empowerment of small scale producers in commercial agriculture. So, we've got a great diverse group here with lots more people joining, so that's great to see. So, I'll just briefly introduce today's seminar and then hand over to our speakers. Engagement in commercial agriculture, as we know, can present small scale farmers and communities with opportunities to get local and global markets. But many also face a whole raft of challenges in not only securing a fair price, but in securing the necessary resource space, sustaining production, or negotiating business relationships. And in global supply chains, we know risks and rewards are rarely distributed equitably. Empowering producers in commercial agriculture, EPIC, is an IAED-led initiative seeking to generate lessons on how rural producers, their associations, and their wider communities can best empower themselves to articulate their priorities, make informed choices, and negotiate effectively for equitable partnerships with progressive private sector actors in commercial agriculture. So, EPIC is exploring the different ways producers are able to mobilize and overcome challenges in their commercial relations with other value chain actors. And that includes addressing challenges both upstream and downstream. One mode of exploring these issues is through inviting practitioners from around the world with relevant experiences to critically reflect on and share their work, much more in a lesson sharing mode than a promotional way, and to do this amongst the diverse group of practitioners from around the world, which is certainly what we have today. Today's event, as Jerry mentioned, will share and debate the experiences of incentive-based contract farming in Malawi. Contract farming is not a new mode of procuring materials from raw materials direct from smallholders, but continues to gain currency. And yet, evidence on the outcomes at the local level amongst farmers and their communities is hugely mixed, and instances of farmer indebtedness and other challenges have been well documented. And buyers continue to face challenges of side-selling amongst other things. So the incentive-based contract farming in Malawi was developed by the Malawi Oil Seed Sector Transformation Program as a way to move away from a system that focuses on sanctioning farmers for non-compliance and side-selling to a more positive incentive-based approach. So it seems interesting to hear about how this plays out in practice for different actors and what are some of the nuts and bolts of this approach. And our speakers today will also discuss an experience of linking farmers to agricultural commodities exchanges and vice versa as a way to address both upstream and downstream challenges and with the potential to get farmers out of ties to particular buyers. And this may be helpful in contexts where farmers are being squeezed by a monopolistic or oligopolistic players and behavior in the value chain. And in this instance, it offers producers a number of systems for trading their produce based on transparent pricing mechanisms at a time and or price that is optimum for farmers. So it seems, again, interesting to hear some of the nuts and bolts of this and also the risks and opportunities it presents for different actors and how do these approaches look going forward. So we hope that hearing from our two speakers on these experiences will stimulate many questions and comments for discussion to try and deepen our understanding of what lessons these approaches offer us both in Malawi and elsewhere. And we hope that many of you participating will also be able to contribute insights from your own experiences, your thoughts, your reflections and further questions for the speakers and to further broaden the range of insights and examples we can share and think about what context specific issues we have and what are lessons that can be shared between different spaces and geographies. So without saying any more, I'd like to hand over to Kuan, to our first speaker to give his presentation. Thank you, Emily. Pleasure to be here. The line is a little bit dodgy. I'm in rural Bangladesh at the moment. I'm not certain about how things will pan out in terms of internet connections. I'm the team leader of the most program that was conceived by DFID and contracted in September 2013. The program follows a market systems development approach and is coming to an end now in November. The program is being well received by DFID and has had several successes and far exceeded the target set by DFID. I think key to the approach and the program's approach was to really look and assess the particular market systems we were working in. We had a focus on oil seed crops and so we looked at cotton, sesame, groundnut, soybean and sunflower and really look at determining why the market is not functioning in the interests of the poor and what the underlying causes of exclusion for the poor from these market systems was. Not looking at symptoms that stemmed from it but rather looking at what the fundamentals were. We initially conducted market systems analysis and I'll initially focus on the cotton sector. This is pretty much applicable to many contract farming arrangements or the status quo of small holders around the world is that they have insufficient access to productivity enhancing inputs. In the cotton sector this is particularly around seed and crop protection products. The financial issues around this in the sense that a lot of programs are trying to look at some sort of financial arrangement to improve that access. But we felt that within the cotton sector the best approach was to get the cotton jinners to understand that the poor were an important part of their supply chain and to implement a contract farming arrangement that was to benefit of both the cotton jinners who needed the volumes to come through but then also to the cotton farmers who were fundamental to the process. The cotton sector in Malawi just to give the context it's got 250,000 tons of installed capacity and over the last few years the cotton production has ranged from a high of about 45,000 tons down to about 2 years ago about 8,000 tons of cotton. There's a lot of competition for the cotton, the market is relatively dysfunctional and a lot of this stems from the fact that the cotton smallholders are not receiving the inputs that they need to participate in the market. On the part of the cotton jinners the risk averse is a high degree of side selling and the coverage in the cotton sector would be around 30-40% at best and as such there was no incentive for the cotton jinners to make that investment in their supply side and support the smallholder farmers. They did however have the capacity for looking at contract arrangements that worked well for both sides of the equation for the smallholders themselves. So the most worked with the cotton jins and facilitated an approach where the smallholders were able to access productive inputs. If they went through a process and they fulfilled their contractual arrangement which is around delivery of a certain volume of cotton they would be in a sense rewarded and in the following season the input package would increase as well as the incentives that applied to that particular cotton farmer. So it's a stepping process and a graduation process and as long as the smallholder complies with the contractual arrangements they will continue to grow and continue to receive bigger and better incentives to remain in. The main area and this is where it was an interesting part that came out is that for the system to work the cotton jinn or the generalist of procuring cotton needs to pay the market price at a particular time of purchase. Should they not pay the prevailing price is the strong likelihood cotton smallholders would side sell. So in a sense this resulted in a fair price being paid to farmers rather than we are buying cotton at a discount because we provided you with certain incentives or certain inputs at the beginning of the season. Cost of the incentives were not discounted from the price. Price paid was per kilo of cotton on the prevailing price of that particular day and no discounts, no cotton supplied in lieu of payments for the inputs and as such every kilo of cotton the smaller the produced they were paid for. We added in further incentives in the form of drought input insurance and essentially this insurance ensures that the cotton farmers are not left with any residual debt it also includes fuel expenses insurance as a social benefit but that's been particularly successful as a motivator to smallholders to comply and remain within the system. Some of the challenges are trying to get the companies to understand particularly the gymnast to understand the concept and make sure that that cascades down through all the people that are engaging at small hold level and we use various tools to do this we've made little mini clips that can be sent out on WhatsApp to explain the structure of the insurance or the package and explain to the farmers that in the first year the package would be X and that if they performed the following year they would be added incentives or added inputs that are provided. The key thing is also to get the firms to understand that this is not a way of procuring their feedstock or their commodity cheaply this is around investing in the long term supply base that gives them a consistent volume and that they can plan around volumes coming through their processing facility. So ideally this sort of approach would have a 2 to 3 year window 3, 4 years probably better and in that time the firm is then able to really establish and expand their supply base. The firms benefit because they're making more money because they can plan ahead and receive the right quality and correct volumes of commodity. We started recording on cotton, started recording 95% of repayments value going up to 97% and this is a complete new paradigm within the cotton sector in Malawi. The small holders were able to participate in the market as they had now access to productive inputs. One of the key things is that their yields improved because they had access to failure feed and various other inputs that they required to improve their yields and it's now likely that the Cotton Council of Malawi will recommend this approach for the whole cotton sector as a way of building the market up to its former levels. We took the key lessons out of this and worked in collaboration with the Malawi Agricultural Commodity Exchange and really took out the parts about what is an incentive, what is a small holder required in order to engage effectively in the market and benefit from that market. So with the commodity exchange we established the Chutumba model and again it worked on the same key parameters as the cotton sector improved access to farm inputs, building a repayment history and productivity in increasing. The private sector and by this I mean the input supplies in terms of seed and the mock-ins in particular found that there was a new channel to sell their products and as a result of that we were prepared to take a certain amount of risk in the provision of those inputs as well as provide an eight month period of credit. With the commodity exchange it sort of introduced small holders to the services they offered and it increased the volumes that are traded across the platform but one of the key things, one of the reasons we worked with the commodity exchange was that they were then able to, we had a mechanism for price discovery so again the remuneration or the payments to small holders reflected the prevailing price at a particular time or date. As I see the program is coming to close in November we've done a short animation on the MERS program which you can see if you click on the high link you'll be able to see that. Thank you very much. Thank you everybody and welcome to my presentation. My presentation managed to agree with Curand, indeed in Malawi we've got a 70 base contract family. This is an improvement of some other models that were tried before which failed. Currently apart from those who are involved in the IBCF arrangement access to input in Malawi is still a very big challenge and those farmers of the IBCF were facing similar challenges. As you can see from my presentation and from what Curand has said there are a few geners that are willing to invest in current imports. Some of the geners just provide incomplete input packages no financial institutions are willing to finance current production in Malawi so farmers are facing difficulties to access inputs on time and the input that are available markets are very expensive poor quality and usually long distances to access them. The benefit of IBCF that farmers are now enjoying those performance which are on IBCF have a guaranteed source of inputs and they know that the inputs will be available which is a very great relief. There's also a guaranteed quality of inputs because the geners who are providing the input to farmers make sure that they get the high quality inputs. There's also an element of labor saving technology because in the package there's help such that are provided. There's also a guaranteed quality of markets. As Curand has said, the geners who are frustrating the IBCF they enter the market and they offer even better prices because of the lack of competition. They don't count about the investment which they have given to the farmers. They offer competitive prices. This year was a typical example. The company that is involved in this appraisal was one of the best appraisal provider on the market. So we have seen that those farmers on IBCF are just they are going to increase income and their poverty levels are reducing. Q&A has contributed the fact that non-repayment Malawi hovers around 30% but through IBCF arrangement. The repayment rate is as high as 85%-90%. One of the benefits that this program has brought is the issue of insurance. This is a very big incentive to both the farmer and to the geners. Farmers are much more motivated because this insurance package covers issues with the index issuers. There's also consumer expense issuers which is a very good innovation and it gives a very big relief to farmers because Malawi sometimes expense a lot of flooding. At times there's droughts which affect the co-production. And there's a lot of issue that affects other kinds of issues that affect the smogoda farmer. So when there's a funeral and this funeral incentive issuers brings a lot of dignity to the farmers which are on the IBCF. Currently, just as an overflow effect we have seen, as Kuyuna said, more geners are now interested in going to this base following this approach. We have also seen a lot of interest coming from financial institutions. Currently there are a lot of financial institutions that are turned to banks and some other micro-financial institutions that are coming in. We have seen the farmers which are on the IBCF being more organized. This is evidenced by the loan payment and the loyalty that is there. So there's also a pressure that a lot of farmers are willing to join the scheme. Through IBCF there are improved market efficiencies on the market, such as reduced asset selling, reduced free-liders, reduced sad buying. So among the farmer and the buyer there's improved trust and IBCF has also introduced a passbook system which is easy to trust farmers. In this program we have seen the following being beneficiaries. The main beneficiaries are smallholder farmers. These are resource-poor farmers who always have problems to access inputs and to access the actual market. Within the scheme there's also some medium-scale farmers. There's also a program spray service provider. These are people locally identified, trained, who provide spray services to the beneficiary but they do this at a fee. Because of this arrangement, genus are also part of the beneficiaries' input supplies. The insurance company that involved and because of increased productivity and production of cotton, we have seen at least there's an improvement which means there's an element of labor employment. So the labor market is also a benefit. Cough and cotton are indirect beneficiaries because the more organized the farmers are, the easier it is to link them to organized institutions and to the winning institutions and the financial service providers. This program is not going on without challenges. TURNS is supported that registration is facing instances of double interest. Sometimes those involved do create ghost farmers. Again, there's no proper software to capture and manage farmer data days. Some farmers, because of the audio habit, still want to repeat the system and still want not to default. We've got a problem with extension service because government has got few extension workers on the ground. On the part of the genus, the genus are complaining that because these programs learn as a commercial in nature and they've got a fixed assets, the programs become a bit excessive in their part. Currently, we have seen introduction of hybrid seed on the market which is selling at $20 per kg like the other varieties which are selling at $1.20. So this is raising the input package to be on the hard side. Also, M&E, to track the endowment progress, I think that's a shortfall. As we go forward, these program has just benefitted a few farmers. Even the first year, 4,000 farmers benefited. Last year, we saw the figures increase to 5,000 farmers. But now we've got more than 250,000 farmers to 300,000 farmers. So the starting is good and there's room for improvement. I think as an opportunity, there's room to organize more farmers and strengthen the umbrella institutions. What we want to say is farmers should be well organized so that they can engage with the input supply, with the genus on equal basis. The problem needs to be scaled up. As I said, it is covering just few farmers and few areas. In the cotton growing areas, as Q&A have said, we also have same farmers or some farmers growing other crops. So we see this incentive, this project can also be extended to some other crops like sesame. There's room to invest in the lower farmers to become part of extension service providers because of the shortage of the government funded extension service providers. So as we are doing with the spring service provider, we can also find some lower farmers and train them so that they can boost the extension system. The project in Malawi is being implemented by most one genus. But we still feel there's a room to the good core for cotton farmers association to do the mobilization and organization and registration and capacity due to the farmer. Cotton Council is crucial for the enforcement of some registrations to make the project a success. Otherwise, from cotton farmers and the farmers themselves, they are very excited and the people and the group of farmers who are on this project are really testifying that this project is very this approach is very good and because it is a win-win situation and farmers and genus are both both benefit from this. And as co-far we strongly recommend that this project indeed be in testified Malawi and whenever we see forward we have farmers can play as an equal pattern to the teaming companies and other service providers. Thank you for now.