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MATCHING GRANT FACILITY FOR ASSETS ACQUISITION THROUGH PRODUCTION GROUPS/CLUSTERS

MATCHING GRANT FACILITY FOR ASSETS ACQUISITION THROUGH PRODUCTION GROUPS/CLUSTERS. A Presentation @ Orientation Workshop for Fadama III + AF Staff. Objective. This component will support the gender and youth empowerment agenda of the ATA with two subcomponents:

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MATCHING GRANT FACILITY FOR ASSETS ACQUISITION THROUGH PRODUCTION GROUPS/CLUSTERS

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  1. MATCHING GRANT FACILITY FOR ASSETS ACQUISITION THROUGH PRODUCTION GROUPS/CLUSTERS A Presentation @ Orientation Workshop for Fadama III + AF Staff

  2. Objective • This component will support the gender and youth empowerment agenda of the ATA with two subcomponents: • Inclusive targeting and gender equity in service delivery, and b) the agricultural machinery hiring service and access to Productive Assets

  3. How? For the AF, wealth ranking will be carried out especially among the women and youth to know those who will pay the mandatory beneficiary contribution before the matching grant from the Project. This is to increase the level of female and youth participation. No beneficiary contribution will be paid by those found to be poor and economically inactive after the wealth ranking. In general, however, the matching grant approach will be adopted. • Special consideration will also be given to women and youth willing to create wealth from converting wastes from the production clusters and the processing mills to income generating products.

  4. (a) Inclusive Targeting And Gender Equity In Service Delivery: Given that women and youth farmers often appear in particular parts of a particularly agricultural value chain, the component will support targeted value chain analyses and seek to expand the economic opportunities of these farmers wherever they are in the value chain- i.e. both crop producers and agro-processors. Further, at least fifty per cent (50%) of the funds provided under this sub-component will be given to women and youth farmers through a matching grant facility similar to the existing one under the parent project. Other farmer groups will be eligible to the remaining 50% of the fund under the matching grant facility to access productive assets for their income-generating activities.

  5. (b) The Agricultural Machinery Hiring Service (Matching Grant Facility With A Focus On Female And Young Farmers): • Under the matching grant facility, the project will support the Apex farmer association in the host state of the production cluster to own and operate Agricultural Equipment Hiring Enterprise (AEHE), under the private sector driven mechanization intervention of the FGN that will provide services to the farmers in the zone. One of such centres will be supported in each of the six (6) zones to be covered under the Project. • While the project will support AEHE through the matching grant, the construction of the agricultural machinery centre will be funded through the state counterpart contribution, which can be in kind should the state choose to use an existing infrastructure as Depot for the equipment/tractor centre. The beneficiary apex association will pay a counterpart contribution equal to 35% of the real costs of the machinery, while the project will provide the matching grant equal to 65% of the purchased asset/tractor.

  6. To ensure that women farmers that risk exclusion have equitable access to information on the program and equal opportunity to participate in Fadama III AF, out-grower type arrangements, strategies that specifically target women farmers will be developed and tested. This could include information and communications strategies targeting poorer or more excluded female farmers. • Essentially, this component seeks to ensure effective and inclusive targeting of women and youth for equitable access to services especially the poorer female farmers. They will enjoy matching grants in a ratio 30:70 (Group:WB) for productive assets especially those of the female friendly (easily operatable) technology. • Beneficiaries will acquire skills needed to operate and maintain the assets purchased under this component and will be provided under components 1 and 3.

  7. In order to ensure sustainability of this agricultural machinery service operation, service charge/user fee (which will be sufficient to pay for the management of the tractor/equipment hiring unit, repay back the loan and interest, and replacement for the equipment) will be deposited in an operating account of the hiring unit to be managed by the Apex farmer association . The structure of this service charge/user fee as well as the guidelines and procedures for the operations of this facility will be outlined in the operation guidelines. • The component will also fund activities targeted specifically at expanding opportunities female agro-processors. • The target beneficiaries will first be the communities that will be mobilized for participation in the production activities in the selected value chains within the production cluster—namely the unemployed youth and women who aspire to do farming as a business and, secondly, the FCAs and other EIGs/production clusters in the states. The project will expand the opportunities of female farmers (both crop producers and agro-processors) by targeted access to the matching grant.

  8. THE FADFAMA USERS’EQUITY FUND (FUEF) • The funds from the user charges and withholdings from sales of produce/products are owned by the FUGs. Agreement on the set of guidelines for the operations of the FUEF, including the provision for transparent, albeit simple mechanisms for funds utilization and management—as outlined in the relevant operational manual—will bea condition for disbursement under this component. The FUGs of the vulnerable groups will not be required to establish a FUEF, although they will be encouraged to set up savings and loan schemes.

  9. Linkages with established financial institutions/intermediaries will be sought from the outset to ensure the safe handling of funds and transparency and accountability in funds management. The FUEFs (as second-generation funds) would be invested by the FUGs at the community level according to priorities and mechanisms defined by them—as the sole owners of the funds. • The recovered amounts would thus remain as financial capital circulating in the community, or may take the form of physical capital depending on the investment decision made by the FUG/private individual. This would constitute the basis for the development of a sustainable savings and loan schemes. In addition, it would gradually evolve towards or link with existing financial intermediation systems (such as: savings and loan associations/institutions, credit unions and commercial banks, thereby, contributing to deepening of financial experience).

  10. Results • At least 60% of beneficiaries have access to market information (disaggregated by gender and age). • 10% annual increase in beneficiaries adopting improved techniques in investment areas (EIG disaggregated by gender, land use, crop, classes of technology, • By the end of the project, at least 1,800 number youth-graduates would serve as Nagri – preneurs.

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