A cooperative society evolves into a major fertilizer distributor in a flood-hit region

In 2010 and 2012 heavy rains hit the Chokwé district of Mozambique’s southern Gaza province, leaving more than 10,000 people destitute. Most of them were smallholder farmers. In an effort to reclaim their livelihoods, these farmers got together with partner organizations, including the Chokwé Irrigation Scheme Authority (HICEP), to create a cooperative society, the Limpopo Valley Agricultural Society (SAVAL).

The farmers were unable to acquire the fertilizers and other inputs they needed for rice production on time or in the required quantities because there were so few input suppliers in the area. As a result of the shortages, suppliers demanded high prices: in 2012, for example, a 50 kg bag of urea cost $51 in Chokwé.

SAVAL was set up to be responsible for the procurement and supply of inputs, mainly fertilizers, at affordable prices, as well as to develop markets for the farmers’ produce, provide extension services, and to develop supply lines for agricultural tools, machinery and animal products, says Mr. Roberto Lumbela, SAVAL’s administrator.

Its shareholders comprise smallholder farmers associations/unions (40%), commercial farmers and private entities (40%) and HICEP (20%), a parastatal responsible for the management and maintenance of the Chokwé irrigation scheme.

After SAVAL’s inception in July 2012 we managed to acquire only 45 tons of fertilizer that were supplied to 225 farmers in the Chokwé irrigation scheme. We couldn’t get more fertilizers due to limited funding,” says Mr. Lumbela.

In September 2013, AFAP stepped in to help SAVAL by providing an $85,000 supplier payment guarantee for fertilizer acquisition. This enabled SAVAL to sign a contract with Greenbelt Fertilizers Ltd to supply fertilizers on monthly revolving consignments. In 2013 SAVAL acquired 740 tons of fertilizer for $449,000, which it supplied to 5,600 smallholder farmers in Chokwé. By 2015 this had increased to 2,580 tons, worth $1,563,480.

In June 2016 SAVAL became the distributor for Greenbelt (now called YARA) in the Southern Region with an agreement that allows it to receive 7,500 tons of fertilizers on revolving consignments.

The fertilizer supplier payment facility provided by AFAP not only allowed increased fertilizer supply capacity, but the retail price of fertilizer fell from $50 per 50 kg bag to $38,” says Mr. Lumbela.

AFAP also provided training on the use of balanced fertilizers to HICEP and SAVAL extension agents. It introduced fertilizer deep placement technology, using urea briquettes, that helped to reduce nitrogen loss in rice paddies and lower the quantity of fertilizer needed.

Now farming has really changed for me,” says 54-year-old Ms. Elsa Guambe Covane, who has been farming in the Chokwé irrigation scheme since 1992. “I have been using granular urea for a number of years, but, with the introduction of briquettes, I can see a huge difference in the harvest I am getting at the end of the season.”

Under the AFAP Volunteer Program in partnership with the International Fertilizer Industry Association (IFA), a rural bank specialist developed a revolving loan fund for the Chokwé Credit and Savings Cooperative to provide credit to smallholder farmers to acquire fertilizers and other inputs from SAVAL.

SAVAL is now a specialized fertilizer and seed distributor, with 15 employees including managers, a sales team, extension officers and support staff.

AFAP’s integrated approach helped the whole agricultural sector in Chokwé by closing the existing gaps in the rice and vegetable value chains,” says Dr. Sefane, the chair of SAVAL.

SAVAL receiving fertilizer from supplier at their warehouse