Facilitando o Ambiente de Negócios para o Crescimento Económico

Strengthening the Enabling Environment for Food Security in Mozambique

Food security remains a pressing issue in Mozambique

Food security remains a pressing issue in Mozambique, where according to the World Food Program, a full 80% of the population cannot afford an adequate diet and stunting is present in 42% of children under five years old.

A key local institution who contributes to food security in the country is the Mozambique Institute of Cereals (ICM), an independent public entity tasked with i) promoting efficient trade in cereals to stimulate production and ensure broad-based economic growth in rural areas, and ii) ensuring domestic food security in times of crisis.

The USAID SPEED+ program recently supported ICM to develop its strategic plan, which aims to modernize its role as a market development actor. The ethos behind the plan suggests that the public and private sectors have a role to play in streamlining agriculture marketing and trade. The state is primarily responsible for providing functional public infrastructure (transportation and storage), effective legal and regulatory frameworks for contract enforcement and dispute resolution, efficient business regulation that does not unduly burden the private sector, and trustworthy product health and safety regimes. The private sector, on the other hand, should take the lead in value chain functions from input supply and production to processing and marketing.

The new ICM strategic plan states that the most impactful role for ICM will be to serve as the connective tissue between private-sector led market development and advocating for reforms that will enable stronger cereals value chains in Mozambique. As an actor focused on both market development and supporting a national social safety net, ICM must operate in a manner that minimizes market distortion caused by direct intervention. With this in mind, the SPEED+ team recommended that ICM operate through four strategic objectives (SOs):

SO1: Facilitate Market Development in Cereal Value Chains

SO2: Facilitate Private Sector Investments in Value Chains

SO3: Facilitate Maintenance of a Strategic Reserve for Cereals

SO4: Advocate for Reforms that Enable Cereals Market Development

The overarching strategy is for ICM to serve as a market development actor rather than a direct operator – the institute’s greatest value in the market today is its role acting as an “honest broker,” facilitating producer-trader-buyer contacts and assisting producers and traders from remote rural regions with market access. Under the new strategy, ICM will transition out of its role as a ‘direct operator’ by leasing out its storage assets and relying on private grain reserves. With proper coordination, the institute can help align cereals storage strategy to meet both private sector and food security objectives, at a much lower cost than a state-owned operation.

Once approved by USAID and the GRM, the SPEED+ team will support ICM to begin transitioning towards a more facilitative role in the cereals marketplace, one that both improves domestic competitiveness and supports food security in Mozambique.