A rapid analysis of value chain potential in Sofala Sofala has great potential in agriculture and local development based

on the availability of natural resources. Their potential lies in the production of both food and cash crops. However agriculture production is dominated by smallholder producers who produce for subsistence with the surplus sold basically to informal buyers who supplies the domestic food markets in the central and south of the country. The smallholders produce mainly maize, sorghum, rice and beans (nyemba) and cassava for family consumption and sometimes selling. Sesame, pigeon peas, pine apples, Irish potatoes and cotton are produced for sell. Production is done manually on individual plots of 0,5 to 2 hectares, though there are some individual farmers who produces on over 5 hectares pieces of land . Production is mostly organic with little use of chemicals and fertilizers as well as improved seeds. Less than 5% of the smallholder producers do have access to improved agriculture inputs. There are very few inputs suppliers and producers who supplies at provincial and district levels. The few existing ones do sell small implements suitable for manual production that is common in the province (thought some do supply bigger machinery on request). Some of the reasons of poor availability of inputs is related to poor buying power by the smallholder farmers due to depressed financial resources. There is also poor adherence to use of modern or simple, efficient technologies that can improve production and productivity, hence poor input demands. In some cases there is no culture of using such inputs, for instance animal driven plough for draft power (many projects fomented in this area failed because of lack of interest). Though for the past 20 years, many NGOs and the government of Mozambique have provided agriculture extension services (including subsidised seeds), introducing new production and conservation technologies, production and productivity and environmental conservation remain depressed, affecting the availability of smallholder producers and their ability to increase their income and improve their livelihoods and reduce risks of natural phenomenon like drought. Even though there was some increase in their net earnings per family along the last 20 years, this is not enough to contribute meaningfully to their livelihood needs and deliver them from abject poverty, hence their dependency on donor and government aid, as well as continued vulnerability to catastrophes caused by natural phenomenon such as floods, cyclones and drought. Extension services are still in short supply and the ratio of smallholder to one extension officer is still high, affecting the quality of service offered to farmers. The situation is worsened by inadequate funding and lack of other resources in public extension network, making it ineffective in dealing with challenges affecting agriculture, yet smallholder farmers depend on this network for assistance. Another serious problem the smallholder farmers faces is post harvest management of their produce due to lack of storage facilities and availability of processing facilities to increase the value and shelf life of their produces as well as facilitating storage. Most of their produce fetches low prices because of grading and storage problems, for instance pine-apples in Chibabava and Mushungue areas. Associativism and collective action that must form the backbone of smallholder farmer strength, is very weak. This makes it very difficult to involve or include them in meaningful Local Economic Development

There are very few well organised smallholder producer groups in the province with some notable ones in Buzi, Chibabava, Nhamatanda and Gorongosa. However, they lack resources and management skills to represent their members well. The lack of sound management skills has turned most of these associations and cooperatives into dictatorship hubs representing minority interests. Though there are few formal buyers of cereals and horticulture products, there are bigger companies like MoBeira, Export marketing, DECA and few others that are willing to develop value chains if an enabling environment is created. Their main problems are rural market infrastructure that is dilapidated or non-existent, a situation that increases logistic and transaction costs, a foot that forces them into offering lower prices to smallholder producers despite the fluctuation of food prices on the international market arena. Top on the list of challenges is the storage facilities, roads and communication networks, transport and banking facilities. Quality of produces offered to the market reduces the competitiveness of the final product offered to both local and international markets. This forces companies like MoBeira to import about 70% of their maize necessities and blend them with 30% local maize to produce their Top-Score brand for the upper mealie-meal market. The challenges the province is facing provide an opportunity to create horizontal linkages by strengthening the capacity the capacity of existing associations and cooperatives and help them to create strong forums and unions that are fully representative of their economic interests, goals and objectives rooted in Local Economic Development opportunities. These farmer led local organisations will then be linked , through their local small and medium enterprises (associations, forums, cooperatives, nucleos, etc) to more established companies with access to both local and international markets through inclusive business models that can improve their earnings. Likes can be achieved by participating in already existing networks like Mozambique Agribusiness hub, Beira Corridor initiative and DEL agencies. Partnership with other organisations linked to agriculture and rural development and governance programs can give an extra impulse in resolving issue besieging value chain development in the province. There is also some need to train and develop negotiations and business development and management skills to the smallholder producers and their organisations so that they can fully participate in decision making, governance and other activities in selected value chains they will be linked to. This can be achieved through various means including outsourcing service provision.