Component 1: Building Producer Capacity for Climate Resilient Stronger Value Chains

This component will entail enhancing sustainable productivity, climate resilient and nutrition sensitive production and improved access to credit, inputs, and digital extension services for increased market participation. The NAVCDP will strengthen community institutions through community investments and extension service provision aimed at achieving the Project Development Objective ‘to increase market participation and enhance value addition for smallholder farmers in selected counties across Kenya’. Communities will be federated to FPOs and linked to SACCOs for affordable credit. This will be achieved through farmer capacity building investments and e-voucher support, FPO level investments and improvement of creditworthiness and bankability of CIG/VMGs and FPOs.

Sub Component 1.1 Farmer Capacity Building Investments and E-Voucher Support

The objective of this sub-component is to build smallholder farmer capacity for enhanced climate resilience, improved production and market participation. This will be achieved through strong farmer level extension and training on climate smart TIMPs, demonstrative micro-project investments to complement climate smart TIMPs trainings and farmer mobilization and technical assistance to support access to e-vouchers. Registered farmers will be linked to: the big data platform for dissemination of agro-weather and market information advisory services and e-voucher system. Individual farmers and CIGs will be linked to SACCOs to access credit for small scale infrastructure investments for primary aggregation and value addition. At the end of the project it is expected that 3.8 million farmers will have received e-voucher support.

Sub-component 1.2: Farmer Producer Organization (FPO) level Climate Smart Value Chain Investments

The objective of this sub component is to build farmers’ capacity on aggregation and participation in collective marketing through stronger FPOs by linking individual farmers/CIG/VMGs/IPs to an FPO. This will be achieved by supporting the federation and affiliation of CIGs/VMGs/IPs to form strong FPOs or join the existing ones, building the capacity of the FPOs, and value chain development for the priority VCs will be achieved through grants to the FPOs aimed at addressing identified gaps to unlock value chain development for the prioritized VCs. The sub-component will provide small inclusion grants to eligible FPOs towards recruitment of more members and support the development of and fund climate informed business plans (referred to as the Enterprise Development Plans – EDPs) to enable the FPO and its member farmers access to high quality and climate resilient inputs ( such as climate resilient seeds, breeds, and balanced fertilizers), aggregation and value addition including agro-processing. EDPs will provide technical assistance to support long term access to formal financing, enable linkages with agribusiness SMEs, e-commerce companies and large ag- tech startups, and build techno-managerial capacity for agribusiness operations. At the end of the project, it is expected that the project intervention will result to a increase in annual sales turnover of targeted FPOs and increase in income to the individual members.

Sub-component 1.3: Improve Creditworthiness of CIGs and FPOs

The objective of this sub component is to improve access to affordable credit by project beneficiaries for purposes of supporting increased adoption of TIMPs, modern technologies in FLID, food system incubation technologies at individual farmer and CIG levels for increased productivity and resultant cash flows to achieve commercialization of prioritized VCs. This will be achieved by encouraging individual farmers and CIG/VMG/IP to mobilize savings with a SACCO at which loans will be matched. To start off the SACCOs, Financial Inclusion Grants (FIG) will be issued to eligible SACCOs to support the SACCOs establish themselves, while Financial Matching Grant (FMG) will be issued to support the FIG supported SACCOs establish a revolving fund to be loaned to individual farmers/CIG/VMGs/IP. At the end of the project it is expected that 500,000 farmers will be accessing affordable financial services from the Agri-SACCOS