This publication was produced at the request of the United States Department of Agriculture through Small Enterprises Assistance Funds (SEAF). It was prepared independently by African Research and Economic Development Consultants Limited Foreign Agricultural Service, United States Department of Agriculture TANZANIA FOOD FOR PROGRESS KASI AGRIVENTURES PROJECT MID TERM EVALUATION AUGUST 2020 DISCLAIMER: The author’s views expressed in this publication do not necessarily reflect the views of the United States Department of Agriculture or the United States Government. . MID TERM EVALUATION FOR KASI AGRIVENTURES PROGRAM The United States Department of Agriculture (USDA) Food for Progress (FFPr) program in Tanzania is being implemented by Small Enterprise Assistance Funds (SEAF) from October 1, 2014 to December 31, 2020. The program has been funded by the United States Development Authority (USDA). It invests in agribusinesses in three key sectors including (i) poultry feed production, (ii) horticulture processing, and (iii) Small and Medium-Size Enterprises (SMEs) lending. The program has also established a Center for Entrepreneurship and Executive Development (CEED), through which SEAF provides technical assistance and training to agribusiness SMEs (including investees), and communities where the program operates. The program contributes towards achievement of USDA’s Food for Progress Strategic Objectives 1 and 2, Increased Agricultural Productivity and Expanded Trade of Agricultural Products (into Domestic, Regional, and International Markets). Agreement Number: FCC-621-2014/054-00 Project Duration: October 1, 2014 to December 31, 2020 Implemented by: Small Enterprise Assistance Funds (SEAF) Evaluation Authored by: African Research and Economic Development Consultants Limited Authors: Timothy Waweru, Dr. Basili Liheta, Joel Maina, Erastus Mkojera, Deo Seimu, Aneth Kayombo, Dr. Ruth Taruss, Edwin Apunda This report will be made public and is free from personal identifying information, as well as sensitive or proprietary information. Timothy Waweru Managing Director and Lead Consultant African Research and Economic Development Consultants Limited i | P a g e TABLE OF CONTENTS TABLE OF CONTENTS ....................................................................................... i LIST OF TABLES ............................................................................................... iii LIST OF FIGURES............................................................................................. iii LIST OF ACRONYMS AND ABBREVIATIONS ...............................................iv EXECUTIVE SUMMARY .....................................................................................v 1 INTRODUCTION ................................................................................1 1.1 About the Report.......................................................................................................... 1 1.2 Overview of the KASI Agriventures Program.............................................................. 1 1.3 Assignment Objectives .................................................................................................2 2 METHODOLOGIES, APPROACHES AND LIMITATIONS ........... 3 2.1 General Approach.........................................................................................................3 2.2 Sampling Design...........................................................................................................3 2.3 Training and Pre-Testing ............................................................................................. 5 2.4 Data Collection Approaches......................................................................................... 5 2.5 Data Cleaning and Analysis ......................................................................................... 5 2.6 Study Limitations .........................................................................................................6 3 RESULTS AND FINDINGS ...............................................................7 3.1 Introduction ................................................................................................................. 7 3.2 Relevance of the KASI Agriventures Program ............................................................ 7 3.3 Program Effectiveness..................................................................................................8 3.3.1 Increased Agricultural Productivity ............................................................................8 3.3.2 Expanded Trade of Agricultural Products (Domestic, Regional and International)15 3.3.3 Effectiveness of the Program Monitoring .................................................................20 3.4 Program Efficiency..................................................................................................... 21 3.4.1 Timeliness of Program Activities............................................................................... 21 3.4.2 Efficiency on Utilization of Resources.......................................................................23 3.5 Program Impact .........................................................................................................24 3.5.1 Impacts of Program on Investees ..............................................................................26 3.5.2 Impacts of Program on Participating Farmers .........................................................28 3.5.3 Impacts of Program on Borrowers ............................................................................29 3.5.4 Impacts of Program on SMEs ....................................................................................30 ii | P a g e 3.6 Program Sustainability............................................................................................... 31 3.7 Lessons Learnt............................................................................................................33 4 CONCLUSIONS AND RECOMMENDATIONS ............................. 36 4.1 Conclusions ................................................................................................................36 4.2 Recommendations......................................................................................................38 5 ANNEXES ......................................................................................... 40 5.1 Annex 1: Terms of Reference for the Evaluation.......................................................40 5.2 Annex 2: Evaluation Matrix....................................................................................... 41 5.3 Annex 3: Composition of the Evaluation Team ........................................................44 5.4 Annex 4: List of Individuals Interviewed and of Stakeholder Groups and/or Communities Consulted.............................................................................................46 5.5 Annex 5: List of Supporting Documentation Reviewed............................................52 5.6 Annex 6: Summary of Tables of Progress towards Outputs, Targets and Goals .....53 5.7 Annex 7: Short biographies of the evaluators ...........................................................78 iii | P a g e LIST OF TABLES Table 2-1: Sample Size Achievement ................................................................................................4 Table 3-1: Summarized Results on Increased Availability of Improved Inputs..............................9 Table 3-2: Summarized Results on Increased Use of Financial Services ...................................... 10 Table 3-3: Number of Individuals who Applied New Techniques or Technologies...................... 14 Table 3-4: Revenue as a Result of Improved Chicken Feed........................................................... 15 Table 3-5: Statistics on Increased Value Added to Post Agricultural Products .............................17 Table 3-6:Statistics on Increased Access to Markets Agricultural Products ................................. 19 Table 3-7: Summary of Achievement of Program Activities ..........................................................22 Table 3-8: Fund Utilization Compared to Achievement of Program Results................................23 Table 3-9: Number of Individuals Benefitting from KASI Agriventures Program .......................25 Table 3-10: Jobs Created as a Result of KASI Agriventures Program ...........................................26 Table 3-11: Volume of Sales of Poultry Feed Investees .................................................................. 27 Table 3-12: Value of Sales of Poultry Feed Investees ..................................................................... 27 LIST OF FIGURES Figure 3-1: Uses of the Loan............................................................................................................ 12 Figure 3-2:Types of Training to Farmers........................................................................................ 13 Figure 3-3: Types of Training to Poultry Feed Distributors........................................................... 13 Figure 3-4: Impacts to Poultry Farmers .........................................................................................28 Figure 3-5: Attribution of Impacts by Poultry Farmers .................................................................29 Figure 3-6: Impacts of Program to Borrowers of Victoria Finance ...............................................30 Figure 3-7: Impacts of Program to Poultry Feed Distributors....................................................... 31 iv | P a g e LIST OF ACRONYMS AND ABBREVIATIONS AKMG AKM Glitters Company Ltd ASDS Agricultural Sector Development Strategy CEED Center for Entrepreneurship and Executive Development DQA Data Quality Assurance FFP Food for Progress FTF Feed the Future GAFCo The Great African Foods Company Ltd GOT Government of Tanzania HILL Hill Animal Feeds & Agrovet Supplies Company Limited LOP Life of Program M&E Monitoring and Evaluation MT Metric Tones PIRS Performance Indicator Reference Sheet PMP Performance Monitoring Plan PTT Performance Tracking Table RF Results Framework SEAF Small Enterprise Assistance Funds SMEs Small and Medium Enterprises SO Strategic Objective TA Technical Assistance TAHA Tanzania Horticulture Association TOR Terms of Reference TZS Tanzania Shillings USD United States Dollar USDA United States Department of Agriculture VF Victoria Finance v | P a g e EXECUTIVE SUMMARY KASI Agriventures is a five-year program, which started on 1st October 2014 and is expected to end on 31st December 2020. The Small Enterprise Assistance Funds (SEAF), with financial support from the United States Department of Agriculture (USDA), implements the program in Tanzania. The program invests in agribusinesses in three key sectors including (i) poultry feed production, (ii) horticulture processing, and (iii) Small and Medium-Size Enterprises (SMEs) lending. The program has also established a Center for Entrepreneurship and Executive Development (CEED), through which SEAF provides technical assistance and training to agribusiness SMEs (including investees), and communities where the program operates. KASI Agriventures works to strengthen the agricultural sector in Tanzania by adding value to agribusiness investees and their supply chain of smallholder farmers in order to increase agricultural productivity and expand the trade of agricultural products with the aim of helping investees’1 access new markets and increase revenues, which in turn creates jobs in their communities. This contributes towards achievement of USDA’s Strategic Objectives 1 and 2 (1) Increased Agricultural Productivity and (2) Expanded Trade of Agricultural Products (into Domestic, Regional, and International Markets). In October 2019, KASI Agriventures Program commissioned a mid-term evaluation to critically and objectively review and take stock of the program’s implementation progress, the implementers’ experiences and the implementing environment. The evaluation also assessed the investees’ use of SEAF investment funds, and the pre- and post-investment performance of those firms (investees). The evaluation further assessed whether targeted beneficiaries are receiving services as expected; whether the program is on track to meeting its stated goals and objectives; reviewed the results frameworks; and documented initial lessons learned. Finally, the evaluation attempted to identify and discuss necessary modifications or mid-course corrections that may be necessary to effectively and efficiently meet the program goals and objectives. The study used is a mixed (both qualitative and quantitative), consultative and participatory approach. The evaluation was based on the OECD Development Assistance Committee (OECD/DAC)’s five evaluation criteria of assessing development interventions namely: relevance, efficiency, effectiveness, impact, and sustainability as well as lessons learnt. Data was collected by comprehensively reviewing and analyzing existing program documents, reports and data as well as collecting primary data through Key Informant Interviews (KIIs) with program implementers and investees, Focus Group Discussions (FGDs) with farmers and surveys to beneficiaries of investees. Primary data was collected from all the program regions2 1 Hill Animal Feeds & Agrovet Supplies Company Limited (Hill) and AKM Glitters Company Ltd (AKMG) in poultry feed production, The Great African Foods Company Ltd (GAFCo) in horticulture processing and Victoria Finance in financial services 2 Dar es Salaam, Pwani, Arusha, Mbeya, Morogoro, and Dodoma vi | P a g e Generally, KASI Agriventures’ program design of impact investing3 in four (4) portfolio companies to increase agricultural productivity and expand agricultural trade was fairly successful. Both poultry feed producing companies have invested in new poultry producing lines using improved technology, with the one at Hill complete and supplying feeds to farmers and the one at AKMG almost complete. They are also providing technical assistance to their distributors and farmers. Implying, they are benefitting the farmers as well as enhancing their financial returns4 . Victoria Finance is already benefiting from financial returns by increasing their loan portfolio and ensuring more farmers access agricultural loans. Investment in GAFCo benefitted farmers with a market for their products and with technical assistance, however the company did not make financial returns. Tremendous strides have been made in achieving the programme objectives and outcomes. Overall, 12,003 out of 18,040 individuals were benefiting directly and 60,0165 indirectly through interventions such as trainings, financial services, access to markets for their products and employment. On the objective of increasing agricultural productivity, the program has successfully invested in two poultry feed producing companies and in a finance firm. The main results in the investment in poultry feed production firms includes: Increase of 74,032 MT of new animal feed available to farmers against a target of 62,500 MT (118%); the additional daily output of feed producers increasing by 49 MT against a target of 106 MT6 ; number of financially sustainable feed distributors linking feed producer with target area farmers increasing by 372 against a target of 7; volume of poultry feed sold by the companies increased by 58,117 MT against a target of 62,500 (93% achievement); value of poultry feed sold by the companies increased to achieve 98% of the project target . The achievement gaps of targets in the poultry feed investment are expected to be reduced if not met once the new production line at AKMG is fully operational. In addition to ensuring the availability of quality feeds to farmers, 159 of Hill farmers and 7,1537 of AKMG farmers were trained on improved technologies and techniques. As a result of the interventions, 58% of the farmers trained were applying new techniques/technologies such as pest management, disease management, improved feeds and value addition. The annual average revenue of Hill farmers increased by 62% per farmer. Achievement of increased availability of financial services has been positive. Victoria Finance disbursed an extra 116 loans to farmers against a target of 40 loans, with 97% of the loans being 3 investments "made into companies, organizations, and funds with the intention to generate a measurable, beneficial social or environmental impact alongside a financial return". All investments were made by the Small Enterprise Assistance Funds. 4 These returns are for Hill. AKMG is expected to benefit from financial returns after the new pelletized poultry feed producing plant is complete 5 It is assumed that each household of the direct beneficiaries has 5 members, and these are treated as the indirect beneficiaries 6 This increase in daily output is only for Hill (From 96 MT at baseline to 145 MT at Midterm) 7 This is a figure given by AKMG that is yet to be verified. It is reported to include 7,000 small scale farmers and 153 brooders. vii | P a g e for agricultural purposes. This increased the value of loans disbursed due to KASI Agriventures interventions by 95% . In addition to disbursement of loans, 28 Victoria Finance staff were trained on various aspects of loan management and 240 farmers/borrowers were trained on a number of new techniques. Despite the above achievements in the program objective of increasing agricultural productivity, lack of some raw materials and inputs and climate change were identified as the major challenges faced in achieving the objective of increasing agricultural production. On the objective of expanded trade of agricultural products, there were both positive and negative outcomes after the KASI Agriventures investment in GAFCo. The number of farmers having access to markets for their produce increased to 2,337 against a target of 10,000 farmers. Storage capacity was increased by 19,871 MT while volume of fruits, vegetables, and/or spices processed increasing threefold to 6,514 MT. This increase in volumes processed increased despite the processing capacity of fruit and vegetables not increasing and the daily output only increasing by 7 MT. The volume and value of sales of the firm also increased by over ten times . Despite, the positive achievements, GAFCo was not profitable leading to winding up of the company. This unprofitability was due to a myriad of issues that included: climate change; undeveloped value chain systems; weak partners’ capacity and unreliable markets. In terms of efficiency, most of the activities have been implemented in a timely manner. In activities on finance component, 2 activities out of 4 are at least 80% complete. On the poultry feed producer, 1 activity out of 7 activities have reached 80% level of achievement. This is expected to rise once the new production line at AKMG is producing pelletized feed. This is because the investment officer is expected to increase direct management support to poultry feed producers and the number of farmers educated on use of new type of animal feed is also expected to increase. For fruit, vegetable, and spices processor no activity is complete. The activities in the fruit, vegetable, and spices processor will only be achieved if the program engages other firms to support farmers in technical assistance and market linkages. Training activities under CEED began late but are on track with 3 out of 7 activities scoring achievement rates of above 80% mark. The business and technical mentorship activities were scheduled for the last year of the program implementation. On funds utilization, 84% of the funds have been absorbed with 21 out of 58 indicators having achievement rates of over 80%. Training of the farmers, distributors partnering with poultry feed companies and staff of the portfolio companies was identified in the evaluation as an effective intervention of achieving the objectives of increasing agricultural production and expanding trade. Poultry feed distributors working with AKMG and Hill who the farmers are familiar with and using a hub model increases sustainability of program benefits. Investment in an improved poultry feeds technology ensures that there is easy availability of quality feeds over the long term and the investees will have an increased customer base thus business sustainability. Providing loans to farmers that coincide viii | P a g e with the cropping seasons and with a grace period up to harvesting time ensures that farmers are able to repay their loans from their agricultural produce and thus increases their returns. CEED establishing a technical assistance fund for portfolio firms and transforming it into a subscription￾based member owned centre will ensure technical assistance for portfolio firms continues even after the end of the program. Mentoring sessions with international players and forming public private partnerships will also be key in ensuring sustainability of the investees. The key lessons learned is that continuous capacity building through training, exposure visits and provision of information as well as linking the beneficiaries with other stakeholders for partnerships are key drivers in achieving the objectives of the program. Supporting program beneficiaries to understand the business regulatory framework is key to the success of the program. The program responding to community felt needs such as ensuring availability of quality feeds, availability of agricultural finance and availability of markets for products has been identified as a critical success factor in the program. Linking farmers with financial institutions has been promoted by the program and should be enhanced. Programming the loans to coincide with cropping season and repayment at harvesting is success factor in the lending component. Working with stakeholders to change their farming approach is key to the success of agricultural programs. A predictable policy environment fairly implemented is necessary to attract essential private sector know-how and investment in Tanzania. The recommendations of the evaluation are as follows: i. The concept of impact investing program has potential for success of the agricultural SMEs and should be replicated while taking into account the lessons learnt. ii. Continuous training of the farmers, poultry feed distributors and staff of the portfolio companies should be emphasized. This will be important in building capacity of the stakeholders to improve their production and in marketing of products as well as change the approach of stakeholders to partner for mutual benefits to each of the stakeholders. iii. The program should fast track operationalization of the new pelletized poultry feed production line at AKMG because it will play a huge part in ensuring an increase in availability of inputs for farmers thus increasing productivity of the farmers . iv. KASI Agriventures should consider engaging a horticulture processing firm to support farmers in technical assistance and market linkages to the horticultural farmers. v. Mentoring sessions with international companies and forming public private partnerships should be emphasized in the remaining part of the program to ensure that the investees are able to expand their source for inputs and market for their products as well as improve efficiency in their operations. vi. To ensure that poultry farmers benefitting from the program are able to adequately access agricultural inputs and equipment, they should be linked with Victoria Finance. . vii. Supporting the investees and other stakeholders to have a clear understanding of the Country’s customs and tax rules, regulations and procedure should be prioritized. ix | P a g e viii. Organizing farmers into groups should be encouraged so that there are trainers in the communities, who will be training others on new agriculture technologies and techniques. This would increase the number of community members benefitting from the program. ix. The methodology adopted for this mid-term evaluation should be replicated for the end￾term evaluation. x. Recommendations for the revision of the program indicators are summarized in Annex 6 of this report. 1 | P a g e 1 INTRODUCTION 1.1 About the Report This “Mid-term Evaluation Report” comprises the final deliverable prepared by African Research and Economic Development Consultants (AFREDEC) Ltd in accordance to the Terms of Reference (TORs) for the consultancy services for “Midterm Evaluation for KASI Agriventures Program in Tanzania”. This report presents the key findings and the conclusions made from the assignment including implementation progress achieved as per the program indicators, the key challenges and the key lessons learnt. Chapter One (1) introduces the report, gives an overview of the KASI Agriventures program, the objectives of the study and the expected deliverables of the assignment as per the Terms of Reference (TORs) attached as Appendix I. Chapter Two (2) presents the evaluation methodologies, approaches, and study limitations. Chapter Three (3) presents the results and findings from analysis of the primary data while Chapter four (4) presents the conclusions and recommendations. 1.2 Overview of the KASI Agriventures Program KASI Agriventures is a five-year program, which started on 1st October 2014 and is expected to end on 31st December 2020. The Small Enterprise Assistance Funds (SEAF), with financial support from the United States Department of Agriculture (USDA), implements the program in Tanzania. The program invests in agribusinesses in three key sectors including (i) poultry feed production, (ii) horticulture processing, and (iii) Small and Medium-Size Enterprises (SMEs) lending. The program has also established a Center for Entrepreneurship and Executive Development (CEED), through which SEAF provides technical assistance and training to agribusiness SMEs (including investees), and communities where the program operates. Currently, CEED activities have benefited members and portfolio firms with activities in Dar es Salaam, Arusha, Mbeya, Morogoro, Dodoma and Coastal region (Pwani) of Tanzania. The goal of the program is to contribute towards achievement of USDA’s Strategic Objectives 1 and 2 i.e.: (1) Increased Agricultural Productivity and (2) Expanded Trade of Agricultural Products (into Domestic, Regional, and International Markets). Specifically, KASI Agriventures works to strengthen the agricultural sector in Tanzania by adding value to agribusiness investees and their supply chain of smallholder farmers in order to increase agricultural productivity and expand the trade of agricultural products. The project aims to help investees’ access new markets and increase revenues, which in turn creates jobs in their communities. The following are KASI Agriventures Project activities: i. To increase poultry feed production capacity through an investment into small and medium-sized poultry feed producer; ii. To increase horticultural processing capacity through an investment into a small and medium-sized fruit, vegetable, and/or spice processing facility; iii. To enhance agricultural finance using a lease-to-own lending mechanism through an investment in a finance company that provides equipment leasing finance or working capital to agribusiness SMEs, to increase affordability of farm equipment and to increase availability of working capital loans to farmers; 2 | P a g e iv. To establish a Center for Entrepreneurship and Executive Development (CEED) to provide technical assistance to poultry feed producers, fruit/vegetable/spice; and v. To expand trade of agricultural products through a mentorship program between international corporations and fruit/vegetable/spice processor(s), aimed at bringing the fruit/vegetable/spice processor(s) products up to international standards; and thus, increase access to international markets. 1.3 Assignment Objectives The purpose of this midterm evaluation was to critically and objectively review and take stock of the program’s implementation progress, the implementer’s experiences and the implementing environment. The evaluation also assessed the investees’ use of investment funds, and the pre￾and post-investment performance of those firms (investees). The evaluation further assessed whether targeted beneficiaries are receiving services as expected; whether the program is on track to meeting its stated goals and objectives; reviewed the results frameworks; and documented initial lessons learnt. Finally, the evaluation attempted to identify and discuss necessary modifications or mid-course corrections that may be necessary to effectively and efficiently meet the program goals and objectives. More specifically the evaluation was designed to address the following specific objectives: i. To assess the design of KASI Agriventures program and determine if it is still suitable to the overall situation of the Tanzania agribusiness finance challenges; ii. To determine whether program activities are sufficient to achieve desired program results; iii. To assess how the investees have been using USDA funds and how USDA support is affecting the performance of these firms; iv. To critically assess program progress to date against the planned short-term results and to determine whether the project is on track towards achieving its overall objectives; v. To assess whether positive results of the program can be sustained beyond program life cycle; and vi. To assess preliminary lessons learned from implementing program interventions. 3 | P a g e 2 METHODOLOGIES, APPROACHES AND LIMITATIONS 2.1 General Approach Generally, the mid-term evaluation used a mixed method approach of quantitative and qualitative research techniques through a consultative approach of all relevant stakeholders. The evaluation was based on the OECD’s five evaluation criteria of assessing development interventions namely: relevance, efficiency, effectiveness, impact, and sustainability as well as lessons learnt. The evaluation matrix is presented in Appendix 2. 2.2 Sampling Design Study respondents were purposively selected owing to their role in the KASI Agriventures program. The key stakeholders to be sampled for the study included the following: • Financial institution involved in Agribusiness SME lending, equipment leasing, working capital and term loans (Victoria Finance); • SMEs investing in poultry food production (AKM Glitters Company Limited and Hill Animal Feeds & Agrovet Supplies Company Limited); • SMEs investing in fruit, vegetable and spices processing (The Great African Food Company (GAFCo)); • Individual poultry farmers (producers); • Poultry feed distributors; • Clients of financial institution investee (Victoria Finance), which provides loans to smallholder farmers; • KASI Agriventures program staff; and • CEED management. Sampling design adopted for the evaluation was developed in collaboration with the SEAF and participating investees. Initially the study was designed to use panel data by interviewing the poultry and horticultural farmers interviewed during the baseline. However, changes were made since some of those interviewed at baseline were not beneficiaries of the program. For the purposes of this evaluation, farmer interviewees were selected using stratified random sampling with the strata being the type of intervention benefiting from and the region of residence while ensuring they are in the same locations as those targeted by the program baseline study. It is important to note that customers of Victoria Finance and feed distributors were included in the mid-term even though they were not interviewed during the baseline study. The sample sizes for the poultry producers, feed distributors and customers of the finance institution was determined using Cochran (1963:75) formula n0 =Z2pq e 2 where: n0 is the sample size; Z is the abscissa of the normal curve that cuts off an area α at the tails (1 – α equals the desired confidence level, e.g., 95%). The value for Z is found in statistical tables that contain the area under the normal curve; e is the desired level of precision (10%); p is the estimated proportion of an attribute that is present in the population, and q is 1-p. 5 | P a g e 2.3 Training and Pre-Testing A two-day training of the evaluation team9 and pretesting of the tools was conducted on 2nd December 2019 and 3rd December 2019 at Double View hotel, Sinza, Dar es Salaam. The evaluation team members were trained on the data collection tools and the digital data collection processes as well as on the overview of the of the KASI Agriventures program, quality control, research ethics and field work organization tips. Pretesting was conducted in Bunju, Tegeta and Ilala areas in Dar es Salaam region. The areas and respondents were selected through support of KASI Agriventures investees. Seven (7) poultry feed distributors, five (5) poultry farmers and four (4) Victoria Finance PLC borrowers were interviewed during the pre-test. Necessary revisions were made on the tool and updated. A pretest report was prepared and shared with the program team. 2.4 Data Collection Approaches Secondary data was obtained by review of the available relevant program data and reports. These included: KASI Agriventures baseline survey report; KASI Agriventures M&E plan; KASI Agriventures FFP semi-annual reports; KASI Agriventures Expenditure Report, 2019, Training feedback reports; relevant policy documents and national plans related to the agriculture sector especially on poultry, horticulture and agricultural financing/equipment leasing. More details on the documents reviewed is presented in Appendix 5. Primary data collection was conducted between 4th and 13th December 2019 in Dar es Salaam, Arusha, Dodoma, Morogoro, Pwani and Mbeya regions. Quantitative data collection tools for the poultry producers survey, poultry distributors survey, and Victoria Finance borrowers were digitized and uploaded into data collection tablets with CSPro Software for data collection. Additional quantitative data were incorporated in the Key Informant Interviews (KIIs) guides as well as Focus Group Discussions (FGD) guides that were used to collect data from identified key informants and farmer groups. For effective data collection, the field data collection was split amongst four teams, one for each of the cluster i.e.: Team 1: Dar es Salaam and Pwani; Team 2: Mbeya; Team 3: Morogoro and Dodoma; Team 4: Arusha. Each team comprised of a team leader and enumerators10. To further ensure data quality, the following strategies were implemented: comprehensive training of the enumerators; digital data collection and back up; supervised data collection process; daily quality checks on data consistency in the database and regular team meetings after days’ work to review. 2.5 Data Cleaning and Analysis The quantitative data that was generated by the enumerators were subjected to quality checks and clarifications sorting prior to the data being uploaded into analysis software. The data was checked for missing value, removal of outliers and recoding before the analysis process. SPSS data analysis software was used to analyze the data into the desired descriptive statistics. The resultant cleaned dataset was shared with the client in a spreadsheet for feedback. For the qualitative data, a multi-level analysis of the data was undertaken, combining the evidence from the desk review 9 The evaluation team is presented in Appendix 4 of this report 10 A comprehensive list of research team is attached in the appendices 6 | P a g e and qualitative research. The findings were analyzed by use of a mixed method content analysis. Directed content analysis was applied to gain useful insights of the quarterly and annual monitoring data that was being collected by SEAF. This was important in understanding the progress towards achievement of the program indicators and how efficiently the program was operating. More project documents were reviewed viz a viz other sectoral national literature to establish aspects of relevance and sustainability in the secondary data. It also assisted in identifying the data gaps that need to be filled using primary data. KIIs and FGDs conducted provided data that filled in the gaps in the research questions in relation to relevance, effectiveness, efficiency, and sustainability The study also applied summative content analysis to explain the results, decipher the lessons leant and in making recommendations from the study. Data triangulation was used to draw the findings together and to establish the degree to which these different data sources support or refute each other. 2.6 Study Limitations Some of the key study limitations included the following: i. The winding up of one of the investees. The Great African Food Company Ltd (GAFCo) was the sole investee in the horticulture component working within the KASI Agriventures program. This meant that the consultant was unable to reach out to individual producers working with GAFCo and thus unable to report conclusively on the impacts of interventions made within the SMEs investing in fruit, vegetables and spices processing. The evaluation thus relied on reports and key informant interviews for triangulation. ii. The program structure was such that interventions were done through investees who in turn implemented through distributors for the case of poultry feed manufacturers. It was therefore difficult for the farmers to attribute the outcomes and impact directly to the program rather than the intermediaries that they worked with. In many cases, farmers do not know KASI Agriventures or SEAF. iii. It was not possible to use panel data for the producers because the producers interviewed during the baseline survey did not automatically become program beneficiaries. For ease of comparison, the mid-term survey sampled program beneficiaries in the same areas where the baseline was done. It is also recommended that those interviewed for the midterm should form the sampling frame for the end term evaluation. iv. Data collection was conducted in the month of December, when most of the key informants were preparing for the festive season thus delaying the data collection exercise. Report – Midterm Evaluation for KASI Agriventures 7 | P a g e 3 RESULTS AND FINDINGS 3.1 Introduction This section discusses the results of the evaluation as enumerated in the terms of reference11 . Reporting follows the key result areas and the OECD Development Assistance Committee (OECD/DAC)’s five evaluation criteria. 3.2 Relevance of the KASI Agriventures Program The agricultural sector is a key pillar of achieving the “Tanzania Development Vision (TDV) 2025”. Currently, the agricultural sector contributes about 24 percent of GDP on average, compared to about 30 percent a decade ago; and it contributes about 24 percent of exports.12 Being a key sector that supports millions of Tanzanians, investments in the sector are always welcome. Investments that are targeted at increased productivity as well as increased incomes often leads to improved livelihoods and thus contributes to poverty reduction. The KASI Agriventures program’s investment in the agricultural sector is particularly relevant to the Government of Tanzania’s goal of having an agricultural sector that is modernized, commercial, market-oriented, highly productive and profitable, resilient, utilizes natural resources in a sustainable manner, secures food security throughout the country, expands export to regional and international markets and contributes to improved livelihood across rural and urban areas. The “Tanzania Development Vision (TDV) 2025” highlighted the small and medium-sized enterprises (SME) sector, most of which are in the agricultural sector, as one important contributor to the country’s long-term development. Hence the investment in the four (4) investees (Victoria Finance, AKM Glitters Company Limited, Hill Animal Feeds & Agrovet Supplies Company Limited and The Great African Food Company (GAFCo)) that are SMEs further illustrates the relevance of the program to the Government of Tanzania policies. Agricultural financing is an important element in the modernization and development of the agricultural sector. However, public and private sector agricultural financing in Tanzania is low.13 Investment by KASI Agriventures program in Victoria Finance enhances farmers’ access to finances for agricultural production. Financing of the poultry investees also ensures that farmers have access to quality and affordable poultry feeds and have learnt new techniques that improve their capacity to increase production. It is also expanding the trading capacity of the poultry investees by investing in more efficient feed processing technologies such as pelletized animal feed, as well as soybean meal production line – a key animal feed ingredient. Investment in GAFCo was also expected to increase productivity of horticultural farmers as well as expand trade of agricultural products. Establishment of a Center for Entrepreneurship and Executive Development (CEED) to provide technical assistance to poultry feed producers, fruit/vegetable/spice is important in enhancing culture change, understanding, and production capacities of the farmers. This often results in increased production where surpluses are traded thus increasing trade among the producers, investees and their agents. 11 Terms of Reference in Annex 1 12 Tanzania ASDS-II: Agricultural Sector Development Strategy 2015/15-2025/26 13 Tanzania National Agriculture Policy, 2013 Report – Midterm Evaluation for KASI Agriventures 8 | P a g e 3.3 Program Effectiveness Effectiveness assesses program progress against planned short-term results. To determine whether the project is on track in achieving its objectives, the major factors influencing the achievement or non-achievement of the outcomes are discussed in this section. This section also discusses the likelihood of the program achieving the targeted results as well as describing the most effective interventions. Mid-course changes are recommended in the program design and/or implementation to maximize the impact and effectiveness of KASI Agriventures where necessary. The results of the KASI Agriventures program at mid-term are discussed under the theme of the program’s strategic objectives i.e. (1) Increased agricultural productivity and, (2) Expanded trade of agricultural products (into domestic, regional, and international markets). The comprehensive summary of achievement of the program indicators are presented in Annex 6. 3.3.1 Increased Agricultural Productivity KASI Agriventures program envisaged to achieve increased agricultural productivity through interventions that would result in increased availability of improved inputs for poultry farmers, increased use financial services and increased knowledge of improved technologies and techniques. The achievement of the above results will eventually ensure that there is improved capacity of key groups in the agriculture production sector exhibited by improved revenues and application of the technologies and techniques disseminated. In addition, the program targeted to increase leverage of private resources through in-person mentoring sessions between international companies and management of feed mills and formation of public-private partnerships on agricultural production. 3.3.1.1 Results on Increased Availability of Improved Inputs The KASI Agriventures program invested in two poultry feeds manufacturing companies namely, Hill Animal Feeds & Agrovet Supplies Company Limited (Hill) and AKM Glitters Company Ltd (AKMG). These companies were advanced loans to establish new pelletized animal feeds production line and provide technical assistance to their farmers and agents/distributors. Resultant of the investments by the program, the amount of new poultry feed available to farmers as a result of USDA assistance is 74,036 MT out of a target of 62,500 MT (118% achievement). This result is predominantly attributed to Hill Animal Feeds & Agrovet Supplies Company Limited’s expansion into pelletized animal feeds production, which increased Hill’s feeds production from 18,908 MT at baseline to 87,938 MT at the time of the study. In addition, the daily output as a result of USDA assistance is 49 MT against a target of 106 MT (46% achievement). This increase in daily output is only for Hill (from 96 MT at baseline to 145 MT at Midterm) AKMG is in the process of completing the new production line for pellets, and once fully operational the feeds available to farmers and the daily output are expected to increase; further implying that the achievement of the performance indicators will increase. This is attributable the increase in the poultry feed production capacity of the mill and marketing the feeds through over 200 distributors/agent, thereby increasing the sales of the products, hence increasing the value of sales. For instance, the value of sales of pellets by Hill increased by 28% within one year Report – Midterm Evaluation for KASI Agriventures 11 | P a g e disbursement.18 This target value of loans provided as a result of USDA assistance may not be achieved with the remaining disbursement because of the reduction of the budget. Out of the disbursed amount to Victoria Finance, 81%19 has been loaned to 370 farmers (117 female and 253 male), . The repayment rate is also very commendable since out of the USD 404,348 loaned out to farmers, 85% has been repaid and is available to be loaned out to other farmers.20 The grace period and repayment periods are based on the season making it an appropriate agricultural finance product. The repayment period is 10 months with a grace period of 8 months so that the farmers (most of whom are paddy farmers) are able to harvest before repaying the loans. Since the investment in Victoria Finance was in form of a loan, there should be indicators measuring the amount invested in equipment leasing and working capital firm(s) and amount of principal and proceeds recovered from exiting investment in equipment leasing and working capital firm(s). From the results, it is evident that the targets set for most of the indicators are achievable and are appropriate. However, there is need to adjust the targets downwards for the value of loans disbursed as a result USDA assistance as illustrated in Annex 6. The targets for the following indicators have been overachieved by a large margin and could be adjusted upwards: • Number of individuals receiving financial services as a result of USDA assistance (female); • Number of individuals receiving financial services as a result of USDA assistance (male); • Number of loans disbursed as a result of USDA assistance. Interviews with the Victoria Finance customers revealed that majority of the farmers used the loans for crop production (86%) followed by agribusiness (trade and marketing) (8%) and poultry production (3%) as illustrated in Figure 3.1 below. The main use in crop production was purchase of inputs, hire and/or purchase of equipment and machinery and for other purposes such as labour. The disbursement of the loans coincided with the long rains hence the good uptake by paddy farmers in Mbeya region. 18 Prior to the pandemic, SEAF planned to disburse the final allocated amount toward the SME Lending Activity to Victoria Finance in Q3 of FY2020. However, given current circumstances, the timeline has been moved to Q4 FY2020. Requirements for disbursements include that VFP is current on its debt repayments, provide proof of disbursement in the agriculture sector of the initial disbursement, and achievement of technical assistance targets, including trainings for borrowers and credit officers. Report – Midterm Evaluation for KASI Agriventures 12 | P a g e Figure 3-1: : Uses of the Loan Source: Victoria Finance Borrowers Survey, 2019 The borrowers also reported that apart from the loans, Victoria Finance also increased the knowledge of the farmers through trainings in financial literacy and management, loan utilization and management, insurance, entrepreneurship, use of solar and other energy saving products, poultry production, business management, marketing of produce and diversification of agriculture. Farmers have been very excited about these trainings due to the knowledge and information they receive to be able to improve their production. About 240 farmers had been trained at the time of evaluation. 3.3.1.3 Results on Increased Knowledge by Farmers of Improved Technologies and Techniques KASI Agriventures program conducted trainings to farmers so as to improve their knowledge of improved technologies and techniques. The trainings were done by the poultry manufacturers through their distributors/agents. The numbers of individuals/farmers who have received short￾term agricultural sector productivity or food security training as a result of USDA assistance are 7,31221 out of the targeted 8,000 farmers (91% achievement). Poultry production (feeding, health), financial and risk management, marketing and negotiation skills, and record keeping are the main topics of training the farmers reported they were trained on (Figure 3.2). In addition to the above trainings, 8,000 farmers were to be trained on the use of a new type of animal feed. At the time of evaluation, only Hill Feeds was producing a new type of poultry feed (pellets) and they were able to train 159 farmers on the use of the new animal feeds. It is expected that once the new production line at AKMG is complete within the first quarter of the year 2020, the target of the number of individuals trained on the use of a new type of animal feed as a result of USDA assistance will increase and the target may be achieved by the end of the program. 21 159 Hill farmers and 7,153 AKMG farmers (This is a figure given by AKMG that is yet to be verified. It is reported to include 7,000 small scale farmers and 153 brooders.) 86% 8% 3% 3% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Agriculture/Kilimo (crop production) purposes Agri-Business Poultry production Other uses e.g school Uses of the Loan Report – Midterm Evaluation for KASI Agriventures 13 | P a g e Figure 3-2: Types of Training to Farmers Source: Poultry Farmers Survey, 2019 KASI Agriventures program also facilitated the training of the manufacturer’s agents/distributors to enable them to provide the required services to the farmers and to also enhance the businesses of the distributors. The types of training to distributors are illustrated in Figure 3.3 below. Figure 3-3: Types of Training to Poultry Feed Distributors Source: Poultry Feeds Distributors Survey, 2019 3.3.1.4 Results on Increased Use of Improved Agricultural Techniques and Technologies Report – Midterm Evaluation for KASI Agriventures 16 | P a g e and technologies used in processing raw inputs in order to ensure their product(s) meet international standards and thus increase both access to new markets and increase quantities traded. The program therefore invested in The Great Africa Food Company (GAFCo) . This was intended to increase the profitability of GAFCo as well as improving incomes and livelihoods of the fruits and vegetables suppliers (farmers). The intermediate results of expanded trade includes increased value added to post-production agricultural products by improving quality of post-production agricultural products and increasing efficiency of post-production processes; increased access to markets to sell agricultural products by improving linkages between buyers and sellers and improved market and trade infrastructure; and improved transaction efficiency by improving management of buyer/seller groups within trade sector, improving capacity of key groups in the agriculture production sector and increasing leverage of private-sector resources. It is important to note that despite achievements in the horticultural component of the program, GAFCo is in the process of winding up because of a myriad of challenges it has faced. Key among these challenges were: climate change (three seasons of successive climate perils with limited crop insurance and farmers with debts); value chain systems (not fully developed and scalable); partners capacity and markets.25 Therefore, it was not feasible to measure the indicators measuring outputs and outcomes of the investment into GAFCo at the mid-term evaluation. 3.3.2.1 Results on Increased Value Added to Post-Production Agricultural Products The achievement on the indicators used for measuring the value added to post production agricultural products is presented in Table 3.5 below. Discussions with GAFCo revealed that as a result of working with SEAF they were able to increase the number of producers supplying sunflower26 to them from 8 to 652 in 2018. This may be attributed to the additional distribution/collection nodes were established in Arusha, Manyara and Babati. However, it is noted that by mid-term only 2,337 farmers were supplying inputs to GAFCo out of the expected 10,000. However, this figure is lower than the farmers that were supplying inputs to GAFCo at baseline. The value of commodities purchased from farmers at mid-term had a shortfall of 0.8% of the targeted volumes. A notable achievement is that the installed storage capacity increased to 40, o95 M3 , most of this being dry storage from 20,224 M3 at baseline.28 This is an increase of 19,871 M3 against an expected increase of 10M3 . The volume of commodities processed increased by 4,020 MT against a target of 15,000 MT (27% achievement). The increase in volume of commodities processed may 25 GAFCO 2019: Lessons Learned Report 26 One of GAFCO’s major products 27 Source: Analysis from Tanzania FFP Reports- April-Sept 2019 28 It is important to note that as part of the liquidation process, the company has sold off most of its assets in order to pay off outstanding creditors. The storage units were sold to either independent third parties or former clients. Report – Midterm Evaluation for KASI Agriventures 20 | P a g e With the support from KASI Agriventures program, GAFCo was able to establish additional collection nodes in Arusha, Manyara and Babati.33 3.3.2.4 Results on Increased Leverage of Private Sector Resources (Agricultural Post-Harvest Transformation) There have been no in-person mentoring sessions between international companies and management of GAFCo. This activity was expected to be implemented in the last year of the program, but this may not happen because of the winding up of GAFCo. As at the time of this evaluation, GAFCo34 was able to establish five (5) public-private partnerships with five (5) organizations out of the targeted one (1)- 500% achievement. These included: John Deer/ Lonagro in the used tractor-ripper/implement lease program; UAP group for farmer hybrid multi-peril crop insurance; Acre Africa for farmer hybrid multi-peril crop insurance; Tanzania Ministry of Agriculture on agricultural law reforms; and Tanzania Official Seed Certification Institute (TOSCI) on registration and release of affordable, high oleic sunflower hybrid varieties. 3.3.3 Effectiveness of the Program Monitoring Monitoring of the KASI Agriventures program is being carried out through a number of activities including the following: i. Program reviews: This includes conducting weekly staff meetings, bi-weekly conference calls with SEAF headquarters, quarterly Board of Advisors meetings, quarterly technical assistance coordination meetings, and annual stakeholders’ meetings. ii. Regular reporting: This includes bi-weekly meetings by program technical and finance staff to SEAF headquarters, which are reflected in submission of semi-annual reports to USDA. iii. Monitoring visits: These includes verification/validation visits to program beneficiaries and sites as needed, as well as planned, routine data quality assessment (DQA) visits. To ensure that the program is on track to meet its overall goals and objectives, the monitoring indicators are measured against established baselines and targets derived from the baseline and program planning documents. Baselines and target levels for each indicator are defined in the Performance Monitoring Plan (PMP) of the M&E plan and are used to track and report results to USDA semi-annually. In addition, the Performance Tracking Table (PTT) is used to track performance on a quarterly basis. Other tools include the annual/semi-annual/quarterly reporting templates. The information being generated by the program monitoring unit has been very instrumental in assisting the decision-making structures to reorient the program into being more productive by focusing on areas that are better performing as well as enabling them to institute corrective 33 Based on the limitation of not being able to interview the GAFCo suppliers due to contractual issues it was not possible to establish the farmer groups applying the new technologies 34 It is assumed there is USDA assistance because SEAF has bought some equity in GAFCo Report – Midterm Evaluation for KASI Agriventures 21 | P a g e measures. For instance, information gathered on GAFCo not performing well, has led to the decision that remaining technical assistance funds GAFCo should be reallocated toward other Tanzanian horticulture companies. Equally the feedback reports from the training participants after the training sessions assists the organizations decision making structures to adjust their delivery mechanisms so as to be more effective and impactful. The information also assists the donor to track the performance of the program and to be able to ascertain if the program is on track on its targets by being able to review its performance indicators on a regular basis. The challenge has been accessing the related information from the investees on a timely basis. Program monitoring guided the implementation team in proposing adjustment of the program targets based on the delayed onset of the program activities and changes in budgets. However, these changes had not been approved by USDA at the time of evaluation. 3.4 Program Efficiency 3.4.1 Timeliness of Program Activities Disbursement of investment funds to the investees delayed because it took a lengthy time to vet, select and engage the investees.35 Investment in Hill Feeds was used to establish a new pelletized animal feeds production line as well as providing technical assistance to affiliated farmers and agents/distributors. SEAF investment in GAFCo was completed in July 2017. The funds supported capacity building of farmers and expansion of the suppliers and distribution nodes or collection centers. AKM Glitters Company received its loan in September 2018 and is in the process of a new production line despite delays as a result of regulatory issues on importation of manufacturing equipment in terms of taxation and clearance at the port. Victoria Finance received a loan in February 2019 for disbursement of agricultural loans to farmers in Mbeya and Dar es Salaam regions. Over 90% of the amount received has been disbursed to farmers. Most of the technical assistance and training activities of CEED have generally been executed on time. The trainings started late into the program implementation but there was concerted effort to try and attain the targeted population within the program lifecycle because it took some time to establish the CEED center due to delays in registration. To achieve these results, CEED has adopted contracting consultants to carry out the training exercises. The business and technical mentorship has not yet kicked off. A summary of the achievements of the activities (measured by the output indicators of the program investments in portfolio companies and technical assistance) is illustrated in Table 3.7 below while a detailed achievement of the activities is illustrated in Annex 6 of the report. 35 Took around 1 to 1.5 years for each investee Report – Midterm Evaluation for KASI Agriventures 28 | P a g e the key objectives of KASI Agriventures program’s investment on expanded trade of agricultural products may be affected. To ensure achievement of this objective, the technical assistance funding that was meant to go to GAFCo should be used to support other horticulture companies working through CEED to expand their trade. This is in addition to accelerating agribusiness management training and business and technical mentorship. 3.5.2 Impacts of Program on Participating Farmers Poultry farmers interviewed during the study reported that they received a number of benefits/impacts from the interventions (training, improved feeds, technical/extension services, other inputs) they received from the agents/distributors of poultry investees. Key among those benefits included: increased production, increased incomes, improved nutrition, acquisition of assets, improved access to education and increased skills and knowledge (Figure 3.4). The impacts were attributed to increased access to markets, increased access to finances, increased knowledge on poultry production, increased access to quality feeds49, increased knowledge of marketing, increased access to extension services and information and increased knowledge of financial management (Figure 3.5). This implies that capacity building is the main significant intervention in the program achieving its objective of increased agricultural production and impacting on the livelihoods of poultry farmers. Figure 3-4: Impacts to Poultry Farmers Source: Poultry Farmers Survey, 2019 49Mostly for Hill farmers who have access to improved feeds Report – Midterm Evaluation for KASI Agriventures 29 | P a g e Figure 3-5: Attribution of Impacts by Poultry Farmers Source: Poultry Farmers Survey, 2019 3.5.3 Impacts of Program on Borrowers Victoria Finance borrowers were predominantly individual and group based farmers. The major impacts of the program interventions to farmers were increased incomes, paying school fees, purchased new equipment, improved houses and adoption of solar equipment50 (Figure 3.6). This implies that access to loans and capacity building for farmers has led to increased productivity and sales thus the impacts accrued to the farmers. 50 A unique outcome encouraging the utilization of green energy Unintended Positive Outcome One notable effects of the program that was not envisaged during the program design is that the trainings on poultry production received from AKMG has improved nutrition because we have skill to produce more eggs thus improving the nutrition of our children. Source: FGD with Farmers in Mbeya and Morogoro Report – Midterm Evaluation for KASI Agriventures 30 | P a g e Figure 3-6: Impacts of Program to Borrowers of Victoria Finance Source: Victoria Finance Borrowers Survey, 2019 3.5.4 Impacts of Program on SMEs Program investees were providing the interventions through working other Micro and Small Medium Enterprises (MSMEs) in the form of agents/distributors (for Hill) and brooder/mother units (for AKMG). These agents supported the farmers by distribution of feed and technical assistance such as training, extension services, dissemination of information, market and financial linkages and provision of other inputs and equipment (such as drugs, vaccines, chicks, housing, feeders, drinkers). The distributors reported a myriad of benefits working with Hill and AKMG. These included increased sales and revenue and expansion of businesses as a result of increased knowledge, availability of inputs, exposure to markets, increased customers’ base, availability of good quality products, networking and experience sharing (Figure 3.7). Unintended Positive Outcome One notable effect of the program is that farmers are adopting use of solar energy equipment and purchasing them through loans by Victoria Finance. Victoria Finance has partnered with Greenlight Planet to offer solar equipment to their Clients. Victoria finance in partnership with Greenlight Planet sensitizes their customers/beneficiaries on the benefits of using solar products. Source: Interviews with Victoria Finance Borrowers Report – Midterm Evaluation for KASI Agriventures 31 | P a g e Figure 3-7: Impacts of Program to Poultry Feed Distributors Source: Poultry Feeds Distributors Survey, 2019 Capacity of the distributors/agents was enhanced through the interventions of the KASI Agriventures program to enable them to effectively provide services to the farmers. It is important to note that the new pelletized plant at Hill contributed to the increased sales and revenues because the daily production increased from 96MT at baseline to 145MT at the time of evaluation. In addition, the training (capacity building) increased the distributors’ capacity to sell and offer some technical assistance to farmers, hence, increasing sales and revenue. The importance of training in increasing sales and revenues is further corroborated by AKMG distributors who reported an increase in sales and revenues despite the new pelletized plant at AKMG not being operational. Working with distributors/agents has been a key success factor in achieving the objectives of the program because distributors are located closer to the farmers. Farmers are more familiar with the distributors and are therefore more willing to adopt the improved technology disseminated. 3.6 Program Sustainability Sustainability is the extent to which the benefits of the project will continue. This was evaluated by establishing the conduciveness of the political, economic and social environment to the continuation of program results and institutional capacities of the participating entities. Data for the sustainability was collected using Key Informant Interviews with the SEAF team and with the investees. Review of the program documentation and Country’s policy environment also provided some data on sustainability. KASI Agriventures’ investment in the agricultural sector is relevant to the Government of Tanzania’s goal of having an agricultural sector that is modernized, commercial, market-oriented, resilient and highly productive and profitable. The Government also prioritizes agricultural Report – Midterm Evaluation for KASI Agriventures 32 | P a g e initiatives that focus on utilizing natural resources in a sustainable manner, food security, expanding export of goods to regional and international markets and contributing to improved livelihood in rural and urban areas. The implication is that given these objectives, the program’s results could be sustained because the program objectives are in alignment with the country’s policy environment. There are program activities and services that are likely to be sustained by beneficiaries with internal or external funding. These include: • Tanzania has sustained relatively high economic growth over the last decade, averaging 6- 7% a year and with a population of over 60 million, there is domestic demand for poultry and poultry products. This implies that the poultry feed investees have an opportunity to sustain the production of poultry feed to meet the demand of poultry farmers. However, more funding may be needed to increase production and organizational efficiency; • Capacity building of the investees, distributors and farmers equips the trainees in knowledge and technical capacity that enables them to sustain their enterprises. These capacity building activities should continue in the remaining period of the program to ensure that the beneficiaries are well equipped to manage their enterprises. The capacity building/training activities are likely to be sustained by beneficiaries with internal or external funding. • Investment in an improved poultry feeds technology ensures that there is easy availability of quality feeds to farmers by working with distributors/agents who are near the farmers’ localities. This approach will increase farmers’ production levels, thereby increasing demand for improved feeds. Feed manufacturers and distributors will also achieve increase in sales, thus increasing their business sustainability even after USDA funding; • Victoria finance providing loans to farmers structured to coincide with the agricultural season, including a grace period up to harvesting time, ensures that farmers are able to repay their loans from their crop harvests. This enhances the repayment rate thus ensuring that Victoria Finance has funds to continue lending to agricultural producers. Discussions with farmers and Victoria Finance indicates that there is an unmet demand for agricultural loans and there may be need for additional capital injection to meet the demand. • The program working with Government stakeholders such as the Ministry of Industry and Trade in Tanzania and other stakeholders is important for the sustainability of program benefits. Transitioning CEED into a membership-based organization with members paying subscription fees will ensure that there is funding for capacity building for stakeholders at all levels of the agricultural value chains. Mentoring sessions with international players and forming public private partnerships will also be key in ensuring sustainability of the investees. • Discussions with KASI Agriventures team revealed that despite GAFCO winding up, they are in the process of engaging another processor to continue capacity building and offering technical assistance to farmers as well as market linkages to ensure that horticultural farmers continue accessing markets for their products. Enhancement of crop insurance would also go a long way in ensuring that farmers continue benefiting from increased sales. Report – Midterm Evaluation for KASI Agriventures 33 | P a g e Poultry feed distributors working with AKMG and Hill have been operating using a hub model, offering farmers other add-on services apart from feeds such as vet services, provision of inputs and other equipment, training, extension and technical services. The hub model has already been institutionalized in Hill and AKMG and may not need additional technical support to sustain this model. 3.7 Lessons Learnt The program design of impact investing to poultry feed, agricultural finance and horticultural companies is not a very common intervention in Tanzania. It is evident that the concept of impact investing has great potential of success as is evident with the success of Victoria Finance and Hill in reaping financial returns from KASI Agriventures investment while at the same time ensuring the operational environment of farmers to increase their production and enhance their incomes. It is expected that the same success will be experienced at AKMG once the new poultry feed production line is complete. However, this concept of impact investing was not very successful in the horticultural processing investment in GAFCo because of a myriad of challenges discussed in section 3.5.1 of this report. Deciphering from the lessons learned report by GAFCo and discussions with GAFCo management, it is important that farmers are trained on climate smart agricultural practices and taking up agricultural insurance. This is a strategy of ensuring that the supply of inputs to the horticultural companies is consistent and thus enhances incomes of farmers and the horticultural companies. Private public partnerships should be enhanced to ensure that there is expanded trade of agricultural products both to local and international markets. Continuous capacity building through training, exposure visits and provision of information as well as linking the beneficiaries with other stakeholders are key drivers in achieving the objectives of the program and should be enhanced. Conducting training through public private partnerships by utilizing consultants, distributors, and Government agencies should be enhanced to ensure success in trainings. Organizing farmers’ in groups so as to implement training of trainers’ programs is an important aspect to be considered in the remaining period of the program implementation. Engaging poultry farmers through poultry feed distributors/brooders has been identified a success factor in the impact investing model. This approach ensures that farmers are able to receive services and training more easily resulting in improved productivity, while distributors and investees improve their profitability. However, it is important for the investees to ensure that they are working with financially stable distributors/brooders. The program responding to market needs such as increasing availability of quality feeds, availability of agricultural finance and availability of markets for products has been identified as a critical success factor in the program by all levels of the stakeholders consulted during the study. Report – Midterm Evaluation for KASI Agriventures 34 | P a g e Linking farmers with financial institutions has been promoted by the program and should be enhanced. For example, Victoria Finance in partnership with SEAF has developed a poultry loan product, thus ensuring that farmers have access to quality feeds and technical assistance as well as financial support. The Three-in-One model of GAFCo farmers being linked with Vision Fund was meant to ensure that farmers have access to funds for agricultural production. However, proper use of the micro-loans and adherence to the contractual obligations of the farmers to the investees and input financing providers is critical to the success of a contract farming model, and ultimately the company. This is because GAFCo reported that misuse of loans and non-adherence to contractual agreements as key challenges faced in the Three-in-One model. Programming the loans to coincide with cropping season and repayment at harvesting for the rice farmers has been a success factor in high repayment rates for Victoria Finance loans. This is a practice that could be replicated in future programs. A best practice that has been observed by the poultry feed manufacturers is that they operate in a hub model where apart from supplying feeds and training, they also offer extension services, veterinary services, chicks51 as well as linkages to the markets for their poultry products. This model should be enhanced and replicated in future programs. The program had critical assumptions for success of the program. These include: i. There will be continued supply of raw materials. This assumption was found to be partially true during the program implementation. For the poultry feed production, most of the time maize, the main raw material was mostly available, except in few times when there was a shortage when the manufacturers were forced to import. In another isolated case, in 2018, there was a severe shortage of soybeans that resulted in reduced production whereby about 50% of the market was affected. ii. Political and economic conditions remain stable. Over the period of program implementation, the political and economic conditions have remained stable in the Country despite a myriad of reforms being implemented in the country. iii. Legal and regulatory framework affecting investing and lending remain the same as they were at the beginning of the program. This has remained true. 51 AKMG Report – Midterm Evaluation for KASI Agriventures 35 | P a g e iv. No natural disasters occur. Climate change effects in the form of drought and floods affected GAFCo farmers implying that natural disasters affected one component of the program. Report – Midterm Evaluation for KASI Agriventures 36 | P a g e 4 CONCLUSIONS AND RECOMMENDATIONS 4.1 Conclusions KASI Agriventures’ program design of impact investing in 4 portfolio companies52 to increase agricultural productivity and expand agricultural trade has been fairly successful. Investment in Hill is providing improved feeds and technical assistance to farmers and achieving financial returns. Investment in AKMG is providing technical assistance to farmers and is expected to provide improved feeds and accrue financial returns when the new pelletized feed production line is complete. Investment in Victoria Finance is benefitting farmers with increased availability of financial services while at the same time increasing financial returns through an increased loan portfolio. Investment in GAFCo benefitted farmers with a market for their products and with technical assistance, however the company did not make financial returns. Tremendous strides have been made in achieving the programme objectives and outcomes. Overall, 12,003 out of 18,040 individuals were benefiting directly through interventions such as trainings, financial services, access to markets for their products and employment. This in turn led to 60,016 members of their households benefiting indirectly from the program. On the objective of increasing agricultural productivity, the program has successfully invested in two poultry feed producing companies and in a finance firm. The new plant in Hill is in operation while the one at AKMG is expected to be complete by end of the first quarter of 2020. This is expected to increase agricultural productivity by providing farmers access to improved poultry feeds. The main results in the investment in poultry feed manufacturing firms includes: • An increase of 74,032 MT of new animal feed available to farmers against a target of 62,500 (118%); • • Daily output of feed producers increasing by 49 MT against a target of 106 MT; • Number of financially sustainable feed distributors linking feed producer with target area farmers increasing by 372 against a target of 7; • The volume of poultry feed sold by the companies increased by 58,117 MT against a target of 62,500 (93% achievement); • The value of poultry feed sold by the companies has also increased, achieving 98% of the target . The above results are predominantly as a result of the investment of the program in Hill and the training of poultry feed distributors. The targets are likely to be achieved once the new production line at AKMG is fully operational. Coupled with ensuring the availability of quality feeds to farmers, 159 of Hill farmers and 7,153 of AKMG farmers were trained on improved technologies and techniques such as poultry production (feeding, health), financial and risk management, marketing and negotiation skills, and record keeping. As a result of the interventions, 58% of the farmers trained were applying new techniques/technologies such as pest management, disease 52 Hill and AKMG in poultry feed production, GAFCo in horticulture processing and Victoria Finance in financial services Report – Midterm Evaluation for KASI Agriventures 37 | P a g e management, improved feeds and value addition. The annual average revenue of Hill farmers increased by 62% per farmer . Achievement of increased availability of financial services has been positive. Victoria Finance disbursed an extra 116 loans to farmers against a target of 40 loans, with 97% of the loans being for agricultural purposes. This increased the value of loans disbursed due to KASI Agriventures interventions by 95% . This is expected increase when the full investment is done to Victoria Finance and the loans disbursed are repaid. In addition to disbursement of loans, 28 Victoria Finance staff were trained on various aspects of loan management and 240 farmers/borrowers were trained on a number of new techniques. This ensured that farmers increased their incomes, were able to pay school fees, purchased new equipment, improved dwellings and adopted use of solar equipment. A lack of some raw materials and inputs and climate change were identified as the major challenges faced in achieving the objective of increasing agricultural production. On the objective of expanded trade of agricultural products, there were both positive and negative outcomes after the KASI Agriventures investment in GAFCo. The number of farmers having access to markets for their produce was 2,337 against a target of 10,000 farmers. Storage capacity was increased by 19,871 MT while volume of fruits, vegetables, and/or spices processed increasing threefold to 6,514 MT. This increase in volumes processed increased despite the processing capacity of fruit and vegetables not increasing and the daily output only increasing by 7 MT. The volume and value of sales of the firm also increased by over ten times to . Despite, the positive achievements, GAFCo was not profitable leading to winding up of the company. This unprofitability was due to a myriad of challenges that included: climate change; undeveloped value chain systems; weak partners capacity and unreliable markets. Technical assistance and market linkages that were expected to benefit farmers should be enhanced through the program working with other fruits, vegetables and spices processing companies. In terms of efficiency, most of the activities have been implemented in a timely manner. In activities on finance component, 2 activities out of 4 are at least 80% complete. On the poultry feed producer, 1 activity out of 7 activities have reached 80% level of achievement. This is expected to rise once new production line at AKMG is producing pelletized feed because the investment officer is expected to increase direct management support to poultry feed producers and the number of farmers educated on use of new type of animal feed is also expected to increase. For fruit, vegetable, and spices processor no activity is complete. The activities in the fruit, vegetable, and spices processor will only be achieved if the program engages other firms to support farmers in technical assistance and market linkages. Training activities under CEED began late but are on track with 3 out of 7 activities scoring achievement rates of above 80% mark. The business and technical mentorship activities were scheduled for the last year of the program implementation. Report – Midterm Evaluation for KASI Agriventures 38 | P a g e On funds utilization, 84% of the funds have been absorbed with 21 out of 58 indicators having achievement rates of over 80%. The likelihood of the program’s sustainability is high because of the following mechanisms. Training of the farmers, distributors partnering with poultry feed companies and staff of the portfolio companies was identified in the evaluation as an effective intervention of achieving the objectives of increasing agricultural production and expanding trade. This ensures that farmers continue to enjoy the benefits of the program. Poultry feed distributors working with AKMG and Hill who the farmers are familiar with and using a hub model increases sustainability of program benefits. Investment in improved poultry feeds technology ensures that there is easy availability of quality feeds over the long term and that investees will have an increased customer base thus business sustainability. Providing loans to farmers that coincide with the crop seasons and with a grace period up to harvesting time ensures that farmers are able to repay their loans from their agricultural produce and thus increases their returns. CEED’s technical assistance interventions and transition to a subscription-based organization53 will ensure technical assistance continues even after the end of the program. Mentoring sessions with international players and forming public private partnerships will also be key in ensuring sustainability of the investees. The key lessons learned is that continuous capacity building through training, exposure visits and provision of information as well as linking the beneficiaries with other stakeholders for partnerships are key drivers in achieving the objectives of the program and should be enhanced. Supporting program beneficiaries to understand the business regulatory framework is key to the success of the program. The program responding to community felt needs such as ensuring availability of quality feeds, availability of agricultural finance and availability of markets for products has been identified is a critical success factor in the program. Linking farmers with financial institutions has been promoted by the program and should be enhanced. Programming the loans to coincide with cropping season and repayment at harvesting is success factor in the lending component. KASI Agriventures program and/or the partnering horticultural firms should work with farmers to adopt good agricultural practices to ensure the success of agricultural programs. . 4.2 Recommendations The following recommendations are made from the mid-term evaluation: i. Impact investing by KASI Agriventures program has potential for success for the agricultural SMEs as well as for farmers. This is a concept that could be replicated for other programs while taking into account the lessons learnt. ii. To enhance the performance of the program in achieving its objectives, continuous training of the farmers, distributors partnering with poultry feed companies and staff of the portfolio companies should be emphasized. This will be important in building capacity 53 . Report – Midterm Evaluation for KASI Agriventures 39 | P a g e of the farmers to improve their production and in marketing of products. It will also help in changing the a of stakeholders to partner for mutual benefits to each of the stakeholders. iii. The program should fast track operationalization of the new pelletized poultry feed production line at AKMG because it will play a huge part in increasing availability of inputs for farmers and increasing productivity of the farmers. This will also increase the volume and value of products sold by AKMG, hence increasing the annual gross margin of the firm. iv. To ensure that the horticultural farmers that benefitted from the program’s interventions continue benefitting from the results of technical assistance and market linkages, KASI Agriventures should consider engaging other processing firms to support in technical assistance and market linkages of the farmers. v. Mentoring sessions with international players and forming public private partnerships should be emphasized in the remaining part of the program to ensure that the investees are able expand their source for inputs and market for their products as well as improve efficiency in their operations. This will also help with linking farmers with various service providers so as to improve their productivity and access markets for their products. vi. To ensure that poultry farmers benefitting from the program are able to adequately access agricultural inputs and equipment, they should be linked with Victoria Finance. This will mean expanding the funds available at Victoria Finance for lending to farmers. KASI Agriventures should therefore disburse the remaining funds to Victoria Finance for lending to farmers. vii. Supporting the investees and other stakeholders to have a clear understanding of the country’s customs and tax rules, regulations and procedure should be prioritized because it is a key challenge for the investees when importing inputs and equipment and when exporting their products. viii. Organizing farmers into groups should be encouraged so that training programs on new techniques and technologies are deployed more effectively through training-the-trainer approach. This would increase the number of community members benefitting for the program’s benefits. ix. The methodology adopted for this mid-term evaluation should be replicated for the end￾term evaluation. x. Recommendations for the revision of the program indicators are summarized in Annex 6 of this report. In addition, since the investment in Victoria Finance was in form of a loan, there should be indicators measuring the amount invested in equipment leasing and working capital firm(s) and amount of principal and proceeds recovered from exiting investment in equipment leasing and working capital firm(s). Report – Midterm Evaluation for KASI Agriventures 40 | P a g e 5 ANNEXES 5.1 Annex 1: Terms of Reference for the Evaluation Midterm-Evaluation -TOR.pdf Double click to open Report – Midterm Evaluation for KASI Agriventures 51 | P a g e Report – Midterm Evaluation for KASI Agriventures 52 | P a g e 5.5 Annex 5: List of Supporting Documentation Reviewed i. AKMG Baseline Report Tool- 2018 ii. Hill 2016 Baseline Survey iii. GAFCo Baseline Survey, 2016 iv. GAFCo, 2019: Three-in-One Lessons Learned Report v. KASI Agriventures Baseline Survey Report, 2015 vi. KASI Agriventures Expenditure Report, 2019 vii. KASI Agriventures M&E plan, 2015 viii. KASI Agriventures Mid-term Evaluation Terms of Reference, 2019 ix. Poultry Farmers Training Feedback Reports x. Tanzania ASDS-II: Agricultural Sector Development Strategy 2015/15-2025/26 xi. Tanzania FFP Semi-annual reports- April-Sept 2019 and Oct 2018-March 2019 xii. Tanzania Livestock Sector Development Strategy, 2010-2015 xiii. Tanzania National Agriculture Policy, 2013 xiv. Victoria Finance Agriculture Disbursements 2019 xv. Victoria Finance Baseline Survey Report, 2018 Report – Midterm Evaluation for KASI Agriventures 5.7 Annex 7: Short biographies of the evaluators Timothy Waweru- Project Director/M&E Expert Timothy has a Masters in Population Studies and Bachelor of Arts in Economics and Sociology from the University of Nairobi. In addition, he has a Higher Diploma in the Institute for the Management of Information Systems (I.M.I.S). He has also attended short courses training in the following areas: performance management and strategic planning; results-based management; community-based monitoring systems; project monitoring and evaluation; District (County) development planning; and Integration of Population, Health, Gender, HIV and AIDs, Youth and Environment into Development Planning. He has extensive training and work experience in development planning, policy analysis and development, projects/programmes management, monitoring and evaluation, results-based management, strategic planning, community project appraisals, proposal development, value chain analysis, financial and economic analysis, investment planning and in conducting baseline surveys and socio-economic research. He has worked for various research and consultancy firms for over ten years. He has also worked for the Government of Kenya as an Economist and Development Planner for 5 years. Timothy also has a wealth of experience in coordination of decentralized development planning and Monitoring and Evaluation of Projects/Programmes funded by the Government of Kenya and other donors such as World Bank, Government of Finland, Credit Suisse, Community Development Trust Fund (GOK, European Union and DANIDA), UNFPA, UNICEF, FAO-Kenya, USAID, USDA. In addition, Timothy has been involved in mobilizing communities to participate in development activities, assisting the communities in writing project proposals, project planning and management and in monitoring and evaluation for over 10 years. Dr. Basili Liheta- Team Leader Dr Liheta has experiences ranging from development of M&E plans for development programs, conducting monitoring and evaluation of development projects, conducting feasibility studies and baseline surveys, technical assistance for financial product development and development of an agricultural finance. His major areas of expertise are project evaluation and project monitoring, baseline surveys and feasibility studies, agricultural finance and microfinance, agribusiness value chain analysis, agricultural marketing, financial and economic analysis for projects, socio￾economic research amongst others. Joel Maina- Evaluation Expert/Agricultural Economist Joel holds a MSc. degree in Agricultural and Applied Economics from Egerton University under the Collaborative Masters for agriculture and Applied economics (CMAAE); where he specialized in agricultural policy and trade option at the University of Pretoria, South Africa. His major areas of expertise are value chains analysis, agricultural finance and microfinance, agricultural marketing, baseline surveys and feasibility studies, project monitoring and evaluation, trade and policy analysis, financial and economic analysis for projects, socio-economic research amongst others. He has particularly worked with rural communities, government development organizations, research organizations and other stakeholders in the East African region and in other countries in Sub-Saharan Africa. He currently works as a senior researcher and a director of African research and Economic Development Consultants Ltd (AFREDEC). Previously he worked as a researcher for 2 private research and consultancy firms for a cumulative period of 5 years and as an agribusiness training partner with the GIZ-PSDA programme under the Ministry of Agriculture in Kenya for a cumulative period of 1 year. He has experiences ranging from Report – Midterm Evaluation for KASI Agriventures conducting feasibility studies and baseline surveys for agricultural projects, technical assistance for financial product development, development of an agricultural finance and support forum in East Africa and undertaking financial and economic analyses for multi-sectoral (irrigation, water supply, hydropower, petroleum) infrastructural development projects, development of M&E plans for multicounty and national development programs and conducting monitoring and evaluation of development projects. Joel has been widely been involved in advisory and design of marketing strategies and models including contract farming, group marketing models, micro￾leasing, value addition and agro-processing for rural communities as well localized and effective models for service delivery in financing, extension services, markets access and information services for promotion and uplifting of agribusiness SMEs and farm households in Kenya and beyond. Dr. Ruth Chepchirchir- Statistician/Data Analyst Ruth has over 8 years of versatile experience in agricultural research with an outstanding experience in working effectively in multidisciplinary and multicultural environments involving different communities and organizations within and outside Kenya. Her areas of research include; impact assessment, food security and poverty dynamics, agribusiness development, supply and value chain analysis, monitoring and evaluation, and financial and economic project evaluation. She has worked with International Centre of Insect Physiology and Ecology (ICIPE), International Centre for Tropical Agriculture (CIAT) in Uganda, and Kenya Institute for Public Policy Research and Analysis (KIPPRA). Ruth has particularly worked with rural communities, government development organizations, research organizations and other stakeholders in the East African region and in other countries in Sub-Saharan Africa on consultancy basis. These include; African Agricultural Technology Foundation (AATF), International Crops Research Institute for the Semi￾Arid Tropics (ICRISAT), Kenya Commercial Bank (Rwanda), Fadhili Trust, Heifer International, Alliance for a Green Revolution in Africa (AGRA), Swisscontact East Africa, Japan International Cooperation Agency (JICA), World Vision International (Kenya), Ministry of Agriculture Livestock and Fisheries and the National Irrigation Board among others. Ruth is currently involved in various agricultural consultancy services at the African Research and Economic Development Consortium (AFREDEC). Ruth is also resulting focused and well-rounded in qualitative and quantitative data analysis techniques, advanced writing and presentation skills as demonstrated by her published articles in refereed journals, and several papers presented in local and international conferences. She has experience in use of professional data analysis and statistical packages such as SPSS, STATA, and CS pro including handling and management of large household and country datasets. Other experiences include conducting training needs assessments, training of rural groups on business development aspects, business planning and institutional development as well as conducting socio-economic and agro-economic research. Her areas of interest include: climate change and agriculture, technology development and adoption, agricultural market development, agricultural trade and policy analysis, sustainable agriculture and rural development. Report – Midterm Evaluation for KASI Agriventures Aneth Kayombo- Agricultural Economist Aneth has more than seven years of experience in agricultural policy analysis and advocacy having worked with IESC –to implement Feed the Future Tanzania Enabling Growth. Through Investment and Enterprise Program (ENGINE), USDA’s Economic Research Services and USAID Feed the Future SERA Policy Project. This experience extends across public, private and civil society organizations at National and International level in food security and nutrition, SMEs business enabling environment, Local Government Authority revenue enhancement, Decentralization by Devolution, policies and measures for environmental impact mitigations, Identification Impact Assessment and Prioritization of policies for reform, development and adoption of policy reform tools, Monitoring Evaluation and Learning, gender and youth integration, preparations of policy briefs, training, capacity building and coordination. She has extensive experience analyzing SMEs, food security and nutrition policies with special focus on gender and youth and engaged in a wide-ranging policy dialogue with the Government and private sector at Local Government, National and International Level. She has previously worked as a database management consultant with Innovative Agricultural Research Initiative (iAGRI), a USAID Feed the Future Project. Currently she is a member of Tanzania Food and Nutrition Security Livelihood based Information System and Agriculture Policy Analysis Group. Deo Seimu – Sociologist Deo is a sociologist whose core strengths are in mobilization, training Lobbying and advocacy. He is also a life skills coach with a passion for training University Students on Life skills, job preparedness, and interpersonal communication skills. He has worked with various organizations within Tanzania. He facilitated a training workshop on Lobbying and Advocacy for Tanzania Episcopal Conference (TEC Gender Advocacy Officers in 2014. Has facilitated Lobbying and Advocacy training workshop for Pestalozzi Children’s Foundation partners, participated in a training workshop on community and resource mobilization for Government Officials and NGO leadership in an assignment with PACT Tanzania. Has done a couple of research proposals writing for various NGOs, has taught life skills job readiness and interpersonal communication skills at the University of Dodoma. He has also worked for the USAID in facilitating trainings on advocacy for social change for NGO Leaders a project funded by the PACT Tanzania. Deo has also been involved in facilitating training to NGOs in workshops on Grants proposal writing and reporting skills.