30220: Leiderman (information) - USAID "Madame Sara" program for Haiti? (fwd)

[Bob Corbett <corbetre@webster.edu>]

From: leiderman@mindspring.com


dear Readers:

also posted at www.fedbizopps.gov under "Haiti" is a new and very large contract offered for nationwide agricultural restoration, development and commercialization, connecting with tourism, handcrafts and other livelihoods.  here are excerpts from the documents that, together, are more than 100 pages.  but the contents are quite informative and give a sense of US and Haiti governments' direction.  in the right hands, this contract could do some good; in the wrong hands, just another weak link in 20-plus years of conventional foreign aid.  from experience, submitting a complete proposal will take a lot of work but I'd be happy to be of assistance to any NGO or company that'd like to pursue it.

thank you,

Stuart Leiderman
leiderman@mindspring.com

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[excerpted from www.fedbizopps.gov -- "Haiti"]

Date Issued: Wednesday, March 2, 2007
Solicitation Closing: Wednesday, April 18, 2007 @ 3:00 PM EDT

Subject: Solicitation M-OAA-DCHA-AFP-07-0011, Assistance to the Government of        Haiti

The United States Agency for International Development (USAID) requests proposals for the subject solicitation.

REQUIREMENT: The purpose of this contract is to build on successful prior USAID assistance developing market value chains in the agricultural sector to include other non-agricultural sectors such as tourism and handcrafts in Haiti.  In addition, to increase the number of Haitians involved in sustainable economic activities and the income derived from these market value chains.

PERIOD OF PERFORMANCE:  Three (3) year contract with two â one year option periods.

TYPE OF CONTRACT:  USAID anticipates a single award Cost-Plus-Fixed-Fee Term (Level of Effort) contract.

QUESTIONS:  All questions about the RFP must be in writing via facsimile (202-216-4433) or E-mail (E-mail preferred), to the attention of Ray Carmichael (rcarmichael@usaid.gov) with reference to the solicitation number

DUE DATES FOR PROPOSALS:    Wednesday, April 18, 2007 @ 3:00 P.M. EDT

B.1  PURPOSE

	This activity will build on successful prior USAID assistance developing market value chains in the agricultural sector to include other non-agricultural sectors such as tourism and handicrafts.  Specifically, whereas USAID has successfully supported the development of the Haitian agricultural export industry for a number of years and has also supported the handicraft sector under another separate initiative, its support for market value chain development will now be carried out across all sectors where there is the most potential for local, regional and export value-added.  The intent is to gain economies of scale and synergy by combining all value chain analysis and strengthening into a single market-oriented activity.

	The aim of this contract is to increase the numbers of Haitians involved in sustainable economic activities and the income derived there from.  As a result of this activity, USAID expects to see increased incomes, increased trade and investment in selected market chains; increased sustainable livelihood options, and better management of natural resources (particularly soil) by way of increased value of environmentally friendly (non-erosive) products.  The MarChE Project is expected to work in tandem to the maximum extent feasible with other ongoing and planned USAID development activities.


C.1 TITLE

Market Chain Enhancement Project (MarChE)


C.2 PURPOSE

The purpose of this Contract is to increase broad-based participation by Haitians in the economy by promoting the competitiveness of Haitian enterprises; expanding local sales and export market opportunities; and promoting value added production and private investment.  As a result of this activity, USAID expects to see increased incomes and wage employment, increased trade and investment, increased sustainable livelihood options, and better management of natural resources (particularly soil) by way of increased value of environmentally friendly (non-erosive) products.


C.3 STATEMENT OF WORK

1. Background

The MarChE activity will build on successful prior USAID assistance with development of market value chains in selected crops such as coffee, mangos, cacao, and to some extent non-traditional crops like yams, peppers and processed goods, and for non-agricultural sectors such as tourism and handicrafts.  USAID has supported the development of the Haitian mango industry for a number of years, and the mango producersâ organization is now able to cover the USDA pre-export inspection costs required for entry of the produce into the United States.  There has been similar success with specialty coffee and cacao exports.  The recent USAID support through these programs has achieved the following important results:

Stronger markets for tree crops and other closely associated crops:  The USAID-funded HAP successfully increased export markets for mangos, coffee, and cacao.  The incentives to invest in tree crop systems were compounded as stronger producer groups helped farmers get a higher proportion of the final price for their produce.  These incentives led producers to âreinvestâ in tree crops, thereby contributing to greater hillside stability.

Availability of a wide range of productive soil and water conservation measures and accompanying expertise:  Various USAID supported activities have introduced, pioneered, and extended a wide array of NRM technologies that have been taken up on a variety of landscapes.  Current activities provide training to private sector entities in such skills as grafting, pruning and food crop production technologies. Consequently, farmers have more opportunities to see for themselves the impacts of various technologies instead of having to go through the costly process of testing new technologies.  They also have access to competent technical assistance in building structures or doing grafting.

Favorable elements of public policy:  Policy change is slow and erratic in Haiti; however there has been progress.  The removal of penalties for cutting trees was the pivotal policy change that allowed farmers to integrate trees into their farming systems in far larger numbers and treat them as cash crops.  This created new incentives to plant trees.

Smallholding farmers and producer groups play greater roles in marketing and watershed management:  Producer groups have begun taking over more of the value chain during the implementation of current project activities.  This has resulted in better prices and increased involvement in premium markets.  In some cases, people are organizing around micro-catchments.

In the past however USAID support for market value chain development was carried out through isolated initiatives, such as HAP and the Handicraft Support Project.  The intent now is to gain economies of scale and synergy by combining all value chain analysis and strengthening into a single market-oriented activity.


2. Overall Project Objective

The overall vision is to encourage and facilitate the development of competitive market chains in various sectors of the Haitian economy.  This will be a key factor in increasing wage employment, sustainable Livelihood options (increased incomes, more stable and reliable incomes, build and protect assets) and to encourage better management of natural resources by way of increased value of environmentally friendly (non-erosive) products, including domestic and export agriculture, handicrafts, and tourism.  The involvement of the private sector to increase the number of Haitian citizens participating in the modern, formal economy is also key.


3. Current Situation and Illustrative Sectors of Opportunity

It is envisioned that the MarChE project will provide services in the agriculture, tourism and handicrafts sectors, as well as any other sector identified that has potential for achieving project objectives, and agreed upon with USAID. Opportunities to develop synergies among different sectors and different activities are to be actively exploited.  For example, tourism development will require collaboration among the agriculture and handicrafts sectors as well as with investors in tourism infrastructure, including hotels, restaurants, transportation services, national park and historical monument agencies, etc.  Likewise, there is a clear linkage among handicraft producers/artisans and agricultural producers of raw materials for handicraft production.  While there will likely be a need for specialists to develop specific sectors, USAID/Haiti believes that maximizing opportunities for cross-sector linkages seeking to develop economic and commercial relationships across sectors will result in the greatest sustainable impact.  Likewise, private-public partnerships to leverage USAID investments in these sectors will lead to more lasting impact than âprojectizedâ assistance alone.  Opportunities exist and can be developed with local private investors or foreign investors as well as with other sources of funds as described under the USAID Global Development Alliance.
See http://www.usaid.gov/our_work/global_partnerships/gda/


3.1. Tourism Development

While tourism development in Haiti under the current political and economic situation is daunting, there are some existing and potential opportunities for working on tourism in Haiti in the short to medium term.  The GOH is emphasizing tourism development in the context of separating Haiti from Port-au-Prince, and developing the tourism potential in three zones (specified below).  There are at least two distinct aspects of tourism in relation to this potential on which the MarChE project could work.  First, technical assistance to develop linkages between tourism, agriculture, handicrafts, as well as with other potential sectors has potential to grow and spread the benefits derived from this sector.  Producers of these inputs and the buyers (hotel/restaurant/ store operators and cruise operators) require assistance to facilitate the producer-to-buyer linkages, and to provide direction on specific issues related to producing for and marketing to the tourism market.

Second, the Ministry of Tourism (like most ministries) is resource poor and is trying to identify opportunities for tourism development and coordinate efforts.  In the short term, internal tourism and tourists from the Haitian Diaspora provide immediate opportunities for development, particularly in the South/Jacmel, and the CÃte des Arcadins.  In the medium term there is potential for tourism development in the North of Haiti, capitalizing on: a) the historical sites and monuments (the Citadel, Palace of Sans Souci, La Navidad); b) the beaches; c) its location on and current use by cruise lines; and d) proximity to the Dominican Republicâs north coast tourism resources.

Much of the development of this sector will depend on the investment into tourism by the private sector and the GOH.  Other private enterprise and site specific opportunities are currently under development, such as the former Club Med site in the CÃte des Arcadins; and the existing structures for cruise tourism (Labadie). Advising the GOH and investors on how to capitalize and duplicate this type of tourism has potential.


3.2 Handicraft Development

Haitian handicraft is known throughout the Caribbean, Americas and Europe, especially metalwork.  However, improving the design of Haitian handicrafts and finding new markets will be one of the areas which need special focus under the MarChE project.  Recent studies and the lessons learned under the Aid to Artisan project provide practical experience to further develop this sector.  The development of commercial private sector linkages within the sector and with international buyers/agents in order to increase the long-term financial viability of the players in this market chain needs special attention. Increased communication amongst different market actors (from producers to buyers) is also an area for improvement   Developing business relationships on a sustainable, commercial basis is critical and is a key objective of the MarChE project.  USAID has spent considerable resources in developing this sector over the past years and it has the potential to contribute significant employment in Haiti.  The overall objective of the MarChE project, with regard to handicraft development, will be to take the associated market chains to a higher level, leverage previous activities and achieve long-term sustainable relationships in order to make Haitian handicrafts competitive and gain name recognition in the global marketplace.  We encourage the MarChE project to also look into synergies with tourism especially in the area of Labadie, where cruise ships bring approximately 40,000 tourists every month.


3.3 Agricultural Development

The purpose of the MarChE project with regard to agriculture market development is to build directly upon the progress and lessons learned under the ongoing HAP and other agricultural activities implemented by cooperating sponsors and other donors.  These previous activities have had success, but have been limited in scope and have not benefited sufficiently from synergies with other activities and sectors.  MarChE can now coordinate closely with other projects, particularly the new IDB agricultural development project, the upcoming Watershed, Environment, Landscapes and Livelihoods (DEED) project and the PL 480 Title II funded MYAPs.  The development of standards and the certification of producers/ processors/ exporters has begun to show benefits while at the same time revealing potentially paralyzing weaknesses.  Opportunities to increase the development of the mango, cacao and coffee industries have been the traditionally targeted export products; however other agricultural products have potential and can be selected for the enhancement and expansion of both domestic and export market chains as well. Linkages among MarChE Project activities and the activities of the PL480 Title II food security implementers have only been loosely nurtured to date and have the potential to improve both the assets and the livelihoods of those producer groups.  Opportunities to overcome internal infrastructure constraints on agricultural development such as roads, storage facilities and irrigation networks, also merit further exploration.  Private sector investors and agricultural processors/exporters are available and waiting for facilitation for opportunities to be developed, grow and be replicated. Other opportunities include the following:

Mango: Mangos are Haitiâs largest agriculture export commodity. The current volume of exportation is approximately 2.5 million boxes annually. Mangos are sourced entirely from small scale rural farmers. Currently, nearly 500,000 people receive supplemental income from the sale of mangos for export, shipped to the United States.  Efforts under the existing Hillside Agriculture Project (HAP) have focused mainly on reduction of post harvest losses and top grafting of mango trees to increase exportable volume of high quality mango. Post harvest losses continue to remain high, however, especially in areas located outside the project zone. Production of mango in mid-altitude dryer production areas has also been initiated under HAP, however, this action was limited to some micro watersheds.  Given the need to reduce erosion in dryer zones, this model could be very viable in other major watersheds.   Mango exporters and medium size producers are also interested now in establishing orchards of mango trees to create concentrated mango production areas.

USDA regulates the importation of mangos through a mango pre-clearance program. This program treats the mangos using a hot water dip to kill any fruit fly larvae that may be present in the fruit to prevent infestations from occurring in the United States. To further reduce the chances of live fruit flies reaching the United States, USDA requires that fruit only be harvested from areas that have been found to have a low prevalence of fruit fly populations.  Haiti currently lacks the capacity to monitor the levels of fruit flies naturally present in the various production zones around the country.  This lack of ability to monitor the fruit fly levels present in the country puts the export of mangos in the future at risk. USDA has not yet enforced the requirement for monitoring fruit fly levels in Haiti. However, it is very likely that USDA will in the near future make such a program mandatory for further exports.

Coffee: USAID efforts have been mainly focused on the development and sale of a special brand of quality coffee: Haitian Bleu. This effort has created new dynamics in the Haitian coffee industry especially the production of washed quality coffee to sell in specialty market in the US, Europe and Japan. The Haitian Bleu coffee program is still very fragile due to institutional and financial problems faced by the Federation of Native Cafeiers Associations ( FACN ), the owner of Haitian Bleu and its affiliated members associations. Although the demand for Haitian Bleu is very high in the specialty market, FACN has never been able to reach the break even point.  However, the Haitian Bleu program has created a new image for Haitian coffee and many foreign buyers are now interested in purchasing natural Haitian coffee at very high prices.  Some local organizations are now exploring the opportunities of developing special brands of washed and/or natural coffee which could be sold at premium prices. These organizations are interested in having their own distribution network to sell roasted Haitian coffee in the US and Canadian ethnic market.

Cacao:  During the 1980s and 1990s prior to HAP, the price of cacao was very low.  For example, farmers interviewed during fieldwork reported they had been getting as low as four gourdes per pound in Port Margot.  Consequently, the farmers were gradually replacing cacao plantations with annual food crops such as corn and beans that fetched higher prices at that time on the local market.  Furthermore, local stands of cacao were old and marked by declining productivity.  Subsequently, chocolate processors became interested in buying high-quality, shade-grown cacao and were willing to pay a premium for it.    While this seems to bode well for producers, some have reported that the premium for Grade A is not sufficient to justify extra investment.  Haiti is reportedly meeting only 20 percent of current demand for Grade A from Haiti. It would be useful for a future program to carry out a more systematic investigation of the Haitian cacao sector and its potential.  M&M Mars has expressed great interest in exploring the cacao value chain in detail and has interest in making investments.

Vegetables: Vegetables are grown by thousands of small farmers throughout Haiti for local sale. In the early 1990s, before the embargo, there were several fledging operations to produce and export winter vegetables. These operations have since stopped. One firm however, JMB, now has a frozen vegetable plant targeting the regional Caribbean market. There is an opportunity to establish linkages between this firm and producers for the supply of raw materials.

There is also a tomato processing enterprise. This plant has the capacity to produce tomato paste and has a bottling line for catsup. Prior to the appearance of white fly infestation, the plant used to obtain its raw material from small farmers through contract farming. Presently this enterprise imports tomato paste in bulk from other countries.  With infestation control, locally-sourced tomatoes could once again become a reality.

Local marketing of vegetables is mostly done through traditional channels with producers selling to first stage intermediaries who sell to retailers and food service institutions (restaurant, markets, etc). There is little sorting and no grading involved.  Quality is very poor. There are opportunities to create value-added activities through better post-harvest handling and packaging.

Large-scale agri-business on the fertile plains:  A future ideal will not be attained by a rural population made up of millions of small plot hillside farmers. In short, intensive hillside agriculture is not the future. It still remains critical in the short to medium term to convert hillsides to tree-based perennial agriculture; however, this should be done in the context of national planning that takes into consideration food security issues and the speed with which regional urban centers can adequately support increasing populations.  Creation of large scale agribusiness on fertile plains is another option meriting exploration to create job opportunities for the landless or small hillside farmers.  Intensive food crop production on fertile plains should be considered because without adequate annual grain and pulse production, Haiti will become even more dependant on food imports.  Also, industrially produced food stuffs can out-compete small farmer production, and thus encourage the small landowner to switch to more profitable crops.  Small and medium enterprises (SMEs) wanting to pursue this opportunity will need help in structuring their market chains (including agreements with supermarkets and market women, and local market intermediaries known as Madame Saras) as well as conflict resolution skills.


3.4   Livestock, Fisheries and other Markets Chains

Livestock: As is the case for most developing countries, animal husbandry has always played a vital role in Haiti as an income generating activities for rural dwellers.  Ruminants account for 60 percent of all activities related to this category.  Poultry used to be an important industry in Haiti. However, during the last few decades imports from the Dominican Republic and the USA have mostly wiped out large local production. Currently there are some efforts underway to restart some poultry raising operations.

Fisheries: In Haiti more than 50,000 households (poor or extremely poor) are partially or totally dependant on fishing. Because of the lack of specialized equipment â including boats, refrigeration capacity, navigation equipment â fishermen are limited almost exclusively to coastal fishing and are unable to exploit the deep sea fishing potential.  National production is estimated at 8,000 metric tons (MT) per year.  Studies have calculated that the fish supply in territorial deep waters could allow for an annual production of approximately 23,000 MT, three times the current production. Imports are around 30,000 MT per year which represents approximately US $8 million. Market opportunities exist in both the national (import substitution) and export market. There are opportunities to work very closely with interested donors such as the IDB and private sector representatives specializing in fisheries.  Main issues to be addressed for improving fishing in Haiti are: lack of physical capital; lack of financing (investment loans); and lack of training.  Opportunities for fisheries development exist in seven high potential zones, from north-east (Fort LibertÃ) to south-west (Anse dâHainault) and south-east (Belle Anse).

Essential oils: The essential oils industry has a 50 year history in Haiti. There are five basic essential oil sources: vetiver, bitter orange, amyris, sweet lime, and ylang-ylang. Vetiver is the primary, with Haiti being the largest world producer (25-40% of world production). The main international markets are France, Holland, the UK, the US and Switzerland. The market is characterized by periods of under and over production, with the last market saturation crisis in 1994-98.  There are currently 17 Haitian distillers, involved in the production of essential oils.  Some of the major constraints affecting this industry include the lack of raw materials and operating capital and inadequate equipment.  There are ongoing efforts to modernize production, particularly among the artisanal distillers.

Organics: The organic market is growing in both Europe and the USA. The use of fertilizer is very limited in Haiti.  There is, therefore, a huge opportunity for Haitian produce in organic markets.  For example, HAP has initiated a network of certified organic mangos selling at premium prices and participating farmers have increased their revenues substantially.  This activity is still at an embryonic stage. Efforts are also underway in the Plaine du Cul de Sac area to develop organic banana for export.  The Dominican Republic has become one of the most important organic banana growers in the world, selling especially to the European Union markets which buy approximately 85% of its production -- that is, 160 thousand tons. This model has potential to be replicated in Haiti.

3.5 Other Possible Market Chains with Good Potential

The MarChE Project must be flexible enough to work in other sectors that could be identified as having good potential during the course of project implementation.  In other words, the MarChE project will take advantage of other potential growth opportunities when those opportunities arise.  Any activities in other sectors will require approval by USAID prior to the commencement of any related interventions, but are encouraged.  USAID anticipates a collaborative relationship with the Contractor to identify and agree upon potential activities to develop market chains in other sectors.


3.6 Other Market Considerations

Internal, Dominican and Caribbean Markets:  The most impressive, self-sustaining investments by small farmers have been motivated by cash crops sold on the internal market (hillside terraces for vegetables, gully plugs for plantains, terracing with sugar cane and pineapples, etc.)  There should be further exploration of crop varieties with early and late harvest cycles or slack season harvests that maximize the market price advantage, building on HAPâs work with off-season harvest of yams.  Yams were targeted for export, but did not succeed in that market because the groups could not meet quality standards, and, more importantly, high internal demand out-priced exporters.

Farmers readily respond to market forces and are open to change.  The export market chain for non-traditional crops has great potential but is not yet fully established; farmers and market-oriented projects must take fully into account the under-utilized potential of the internal market and should not focus only on the external market for such products.  Of note:

ï Madame Sara trading intermediaries operating within Haitiâs internal market system make an average profit of about 20 percent per voyage.
ï Madame Sara traders do not generally go above a 10,000 gourde ceiling in working capital, equivalent to about 270 dollars (at 37 gourdes for 1 USD).
ï The Croix-des-Bossales market in Port-au-Prince is the key reference point for all agricultural commodities produced and consumed in Haiti.
ï One of the potential interventions to improve efficiency is to improve security conditions on roads and markets for internal market produce.
ï Madame Sara is the potential start of a more modern and efficient marketing intermediary sector.

The Caribbean market has some potential to purchase Haitian products including non-agricultural handicraft and manufactured products. There is also a growing export market for goat to the Dominican Republic and goat is also consumed in other nearby Caribbean Islands.

SME Business Services: SMEs consist of traditional business models but also include community based organizations, associations, and 2nd tier brokers and buying agents. All of these organizations have the potential to develop partnerships with individuals or firms all along the market chain to provide viable business services to the agriculture, handicraft, tourism, or other sectors.  They can be involved in the production and marketing of agricultural inputs: tools, seeds and fertilizers for example, or in the area of storage, processing, or transportation.  There are also a wide range of small enterprises in urban areas where there are opportunities to work on product presentation and quality.

New Mutual Interest Coalitions: These coalitions are of particular interest because they reflect a new realism on the part of the Haitian elite and business classes: difficult problems can be solved by cross-class collaboration in which all parties benefit.  These projects are characteristically based on an economic engine with attendant financial and marketing plans, social development, and a concern for appropriate natural resource management.  Models include some of the following:
	Waste management through private firms and community organizations;
Agribusiness development through contract farming;
Eco-tourism through local NGOs and the local community;
Private-community partrnership.
A development area that could benefit from these coalitions is the above mentioned Large Scale Agri-Business on the fertile plains.

4. Grants Under Contracts

In an effort to provide innovative and flexible mechanisms to promote public-private activities as well as other agreed goals, a grants under contract (GUC) program will be initiated and managed by the prime contractor. The GUC component will comprise two distinct elements:  one for formal alliances with the private sector under the guidelines set by USAIDâs Global Development Alliance (see www.usaid.gov/gda) and the other for grants to not-for-profit associations, foundations, institutions, or cooperatives.  The GUC component is estimated to be approximately $ 3.6 million for the three years, or $ 1.2 million per year.  The GUC program will prioritize alliances with the private sector where USAID resources are leveraged at a minimum of 1:2 and where alliance objectives ensure achievement of project results, and sustainability.

Like all development investments, alliance activities at the country level that actively involve local leadership and local beneficiaries (this includes women and men) in design and implementation are the ones most likely to be successful and sustainable. Local ownership, leadership and beneficiary participation are still keys to success. Grants can also be made to groups who are implementing their own programs that have goals that support the objectives of MarChE. For example an existing producersâ organization that needs targeted assistance to address a marketing constraint, or a cooperative that envisions product diversification and cannot access seed money.  These groups, and others, would be eligible to request funding under the GUC component.  Grants to associations that have benefited from donor assistance in the past yet remain structurally deficient will be discouraged.  Criteria for these grants would be developed with USAID, but it is anticipated that preference will also be given to a) alliance proposals, and, b) those proposals that link the proposed activities to USAIDâs other SOs. In short, the strategic activities funded under the GUC component are expected to provide a catalyst to achieve broader goals and serve to leverage or attract additional support. By giving local coalitions the ability to manage funds and participate directly in projects, ownership of the larger development process and objectives should increase.

The Offeror shall identify in the Program Strategy potential targets of opportunity to establish alliances with the private sector and non-government organizations according to the USAID Global Development Alliance (GDA) (see www.usaid.gov/gda) model to match program funds.  Alliances should not be grants to organizations that have expressed an intention to seek third party partnerships that are not yet formed.  Alliances with the private sector where USAID resources are leveraged at a minimum of 1:2 and where alliance objectives ensure achievement of project results, and sustainability, are a priority.


Note:  Grants in support of alliances are a stand-alone requirement under the performance standards of the contract whereas other grants are to be used as an implementing resource to achieve project results.

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