Togo: Economic Inclusion of Youth and Women into High Potential Value Chains Guillaume Kroll November 2023 Social Protection & Jobs . © 2023 International Bank for Reconstruction and Development / The World Bank. 1818 H Street NW, Washington, DC 20433, USA. Telephone: 202-473-1000; Internet: www.worldbank.org. Some rights reserved This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. 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Regional Vice President: Ousmane Diagana Global Director: Iffath Sharif Regional Director: Daniel Dulitzky Country Director: Marie-Chantal Uwanyiligira Country Manager: Fily Sissoko Practice Manager: Christian Bodewig Task Team Leaders: Friederike Rother and Raphaela Karlen Translations – If you create a translation of this work, please add the following disclaimer along with the attribution: This translation was not created by The World Bank and should not be considered an official World Bank translation. The World Bank shall not be liable for any content or error in this translation. Adaptations – If you create an adaptation of this work, please add the following disclaimer along with the attribution: This is an adaptation of an original work by The World Bank. Views and opinions expressed in the adaptation are the sole responsibility of the author or authors of the adaptation and are not endorsed by The World Bank. 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All queries on rights and licenses should be addressed to World Bank Publications, The World Bank Group,1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: pubrights@worldbank.org. 2 Table of Contents LIST OF FIGURES................................................................................................................................ 5 LIST OF TABLES ................................................................................................................................. 6 LIST OF BOXES................................................................................................................................... 6 ACKNOWLEDGMENTS ....................................................................................................................... 7 ABBREVIATIONS................................................................................................................................ 8 KEY DEFINITIONS ............................................................................................................................ 10 EXECUTIVE SUMMARY .................................................................................................................... 12 1. INTRODUCTION .............................................................................................................. 17 1.1 THE JOB CHALLENGE IN TOGO .......................................................................................................... 17 1.2 JOBS AND VALUE CHAINS ................................................................................................................ 19 1.3 INTEGRATING A JOB LENS TO VALUE CHAIN ANALYSIS .......................................................................... 19 2. APPLICATION OF THE METHODOLOGY TO TOGO .............................................................. 22 2.1 HIGH-POTENTIAL VALUE CHAINS....................................................................................................... 22 2.2 CONSTRAINTS, OPPORTUNITIES, AND RECOMMENDATIONS ................................................................... 26 3. KEY FINDINGS ON THE SHEA VALUE CHAIN ...................................................................... 31 3.1 OVERVIEW OF THE SHEA VALUE CHAIN .............................................................................................. 31 3.2 SHEA PRODUCTION ........................................................................................................................ 35 3.3 SHEA PROCESSING .......................................................................................................................... 36 3.4 SHEA COMMERCIALIZATION ............................................................................................................. 40 3.5 FINANCING IN THE SHEA VALUE CHAIN .............................................................................................. 42 4. KEY FINDINGS ON THE GINGER VALUE CHAIN .................................................................. 44 4.1 OVERVIEW OF GINGER VALUE CHAIN ................................................................................................ 44 4.2 GINGER PRODUCTION ..................................................................................................................... 48 4.3 GINGER PROCESSING ...................................................................................................................... 49 4.4 GINGER COMMERCIALIZATION ......................................................................................................... 52 4.5 FINANCING IN THE GINGER VALUE CHAIN ........................................................................................... 54 5. KEY FINDINGS ON THE RED PEPPER VALUE CHAIN ............................................................ 56 5.1 OVERVIEW OF RED PEPPER VALUE CHAIN .......................................................................................... 56 5.2 RED PEPPER PRODUCTION ............................................................................................................... 61 5.3 RED PEPPER PROCESSING ................................................................................................................ 62 5.4 RED PEPPER COMMERCIALIZATION ................................................................................................... 64 5.5 FINANCING IN THE RED PEPPER VALUE CHAIN ..................................................................................... 66 6. ROLE OF ASSOCIATIONS AND COOPERATIVES .................................................................. 68 7. CONSTRAINTS AND OPPORTUNITIES ............................................................................... 70 7.1 CONSTRAINTS IN THE SELECTED VALUE CHAINS ................................................................................... 70 7.1.1 Main Constraints in the Shea Value Chain .......................................................................................... 70 3 7.1.2 Main Constraints in the Ginger Value Chain ....................................................................................... 71 7.1.3 Main Constraints in the Red Pepper Value Chain ............................................................................... 73 7.2 OPPORTUNITIES IN THE SELECTED VALUE CHAINS ................................................................................ 74 7.2.1 Main Opportunities in the Shea Value Chain ...................................................................................... 74 7.2.2 Main Opportunities in the Ginger Value Chain ................................................................................... 75 7.2.3 Main Opportunities in the Red Pepper Value Chain............................................................................ 76 8. CONCLUSIONS ................................................................................................................ 78 8.1 KEY CONSTRAINTS TO JOBS IN VALUE CHAINS IN TOGO ........................................................................ 78 8.2 KEY OPPORTUNITIES FOR JOBS IN VALUE CHAINS IN TOGO .................................................................... 82 9. RECOMMENDATIONS ...................................................................................................... 85 9.1 TO STRENGTHEN THE VALUE CHAINS OVERALL .................................................................................... 85 9.2 FOR BETTER JOB OUTCOMES FOR YOUTH AND WOMEN IN PARTICULAR .................................................. 94 ANNEX 1: IDENTIFICATION SHEET FOR HIGH-POTENTIAL VALUE CHAINS ........................................... 99 ANNEX 2: SURVEY QUESTIONNAIRE - SMALLHOLDER FARMERS....................................................... 102 ANNEX 3: SURVEY QUESTIONNAIRE - MSMES ................................................................................. 111 ANNEX 4: GUIDE FOR FOCUS GROUP DISCUSSIONS ......................................................................... 121 ANNEX 5: GUIDE FOR STAKEHOLDER INTERVIEWS........................................................................... 127 ANNEX 6: ADDITIONAL DETAILS ON PHASE 2 METHODOLOGY ......................................................... 132 4 List of Figures Figure 1: Conceptual framework for integrating a job lens into value chain analysis ................................ 20 Figure 2: Data collection methods for different types of value chain actors ............................................. 27 Figure 3: Distribution of shea trees across Africa’s shea belt ..................................................................... 31 Figure 4: Shea value chain mapping ........................................................................................................... 32 Figure 5: Collection period of shea for individual collectors (in kg) ........................................................... 33 Figure 6: Inputs for shea production that farmers spend the most money on .......................................... 35 Figure 7: Distribution of businesses involved in the shea value chain, by activity type ............................. 37 Figure 8: Samples of processed shea butter and soap provided by a respondent..................................... 37 Figure 9: Main challenges for shea MSMEs in supplying large businesses, by gender .............................. 38 Figure 10: Main barriers for shea MSMEs in sourcing from women and youth ......................................... 39 Figure 11: Factors that would induce shea MSMEs to incorporate more women and youth smallholders into the business ......................................................................................................................................... 39 Figure 12: Activities that shea MSMEs would like to participate in but are currently unable to ............... 40 Figure 13: Main reasons for not exporting cited by shea smallholders and MSMEs ................................. 42 Figure 14: Asset types owned by shea MSMEs ........................................................................................... 42 Figure 15: Ginger production calendar in Togo .......................................................................................... 45 Figure 16: Ginger import and export value in Togo (USD).......................................................................... 46 Figure 17: Top three inputs smallholder ginger farmers spend most money on (ranked from 1 to 3)...... 48 Figure 18: Processing methods used by ginger processors ........................................................................ 49 Figure 19: Main end products of ginger MSMEs ........................................................................................ 49 Figure 20: Examples of ginger end products............................................................................................... 50 Figure 21: Main barriers to sourcing from women and youth smallholder farmers perceived by ginger MSMEs ........................................................................................................................................................ 51 Figure 22: Factors that would induce ginger MSMEs to incorporate more women and youth smallholders into their operations ................................................................................................................................... 51 Figure 23: Activities ginger MSMEs would like to participate in but are currently unable to .................... 52 Figure 24: Main reasons for not exporting cited by smallholder ginger farmers and MSMEs ................... 54 Figure 25: Production of red pepper in Togo in tons and red pepper yields (in hg/ha) ............................. 57 Figure 26: Red pepper production calendar in Togo .................................................................................. 58 Figure 27: Togo's import and export quantities of red pepper, by year, in tons, 2000-2019 .................... 59 Figure 28: Top inputs smallholder red pepper farmers spend most money on (ranked from 1 to 3) ....... 61 Figure 29: Processing methods used by red pepper processors ................................................................ 62 Figure 30: Main end products of red pepper MSMEs................................................................................. 62 Figure 31: Main barriers to sourcing from women and young smallholder farmers perceived by red pepper MSMEs ........................................................................................................................................................ 63 Figure 32: Factors that could induce MSMEs to incorporate more women and youth smallholders into their operations .......................................................................................................................................... 63 Figure 33: Activities red pepper MSMEs would like to participant in, but are currently unable to ........... 64 Figure 34: Main reasons for not exporting cited by red pepper smallholder farmers and MSMEs ........... 66 Figure 35: Asset types owned by red pepper MSMEs ................................................................................ 66 Figure 36: Key information on associations and cooperatives across the three value chains ................... 69 Figure 37: Key constraints to jobs across the three value chains ............................................................... 78 Figure 38: Sample visualization of trade hub linkages................................................................................ 90 Figure 39: Sample visualization of training curriculum............................................................................... 98 5 List of Tables Table 1: Stocktaking of value chains ........................................................................................................... 23 Table 2: Summary of value chains assessment based on market and job potential .................................. 24 Table 3: Final distribution of survey sample ............................................................................................... 29 Table 4: Focus group discussions (FGD) ...................................................................................................... 30 Table 5: Average sales, costs, and profits among shea collectors .............................................................. 36 Table 6: Annual sales among MSMEs and smallholder farmers (in CFAF).................................................. 41 Table 7: Average smallholder shea kernel and butter prices (in CFAF), by business type ......................... 41 Table 8: Key data on potential future loan applications among shea value chain actors .......................... 43 Table 9: Average sales, costs, and profits among ginger producers........................................................... 48 Table 10: Annual sales and highest and lowest unit prices of top three ginger products (in CFAF) .......... 53 Table 11: Key data on potential future loan applications among ginger value chain actors ..................... 55 Table 12: Average sales, costs, and profits among red pepper producers ................................................. 61 Table 13: Annual sales, highest and lowest unit prices of top red pepper products (in CFAF) .................. 65 Table 14: Key data on potential future loan applications among red pepper value chain actors.............. 67 Table 15: What is the monetary value of a shea tree? ............................................................................... 86 List of Boxes Box 1: Profile of shea producers and collectors ......................................................................................... 35 Box 2: Key insights into shea processing .................................................................................................... 36 Box 3: Key insights into shea trading .......................................................................................................... 40 Box 4: Factsheet on ginger value chain actors............................................................................................ 47 Box 5: Overview of ginger production by smallholder farmers .................................................................. 48 Box 6: Key insights into ginger trading........................................................................................................ 52 Box 7: Definition of “red pepper� ............................................................................................................... 57 Box 8: Factsheet of red pepper value chain actors..................................................................................... 60 Box 9: Overview of red pepper production by smallholder farmers .......................................................... 61 Box 10: Key insights into red pepper trading.............................................................................................. 64 Box 11: Gaps in the ecosystem of associations and cooperatives in Togo ................................................ 68 Box 12: Case Study – Green Climate Fund Ghana Shea Landscape Emission Reduction Project ............... 87 Box 13: Case Study – FAO Certified Ginger Nursery Development in Jamaica........................................... 88 Box 14: Case Study – West Africa Trade and Investment Hub (WATIH) ..................................................... 91 Box 15: Financing to Agricultural MSMEs and Smallholders in Togo ......................................................... 93 Box 16: Example of Supply Chain Finance Platform ................................................................................... 94 Box 17: Case Study – African Development Bank (AfDB) Project to Support the Integrated Development of the Shea Sector in Burkina Faso.................................................................................................................. 95 6 Acknowledgments This technical report was authored by Guillaume Kroll (Strategy Officer, World Bank) as part of a joint World Bank-GIZ initiative to improve jobs outcomes in Togo led by Friederike Rother (Senior Social Protection Specialist, World Bank) and Raphaela Karlen (Senior Social Protection Specialist, World Bank), both of whom largely contributed to the report. It is based on preliminary research and consultations led by Douti Kolani Bessokoh (Agronomy Consultant, World Bank) and subsequent field research conducted by A2F Consulting, specifically Kate Ivey (Gender Economist), Vivian Lulei (Research Analyst), and their Togolese research partner Winiga Consulting. The support provided by Sharlen Vigan (Consultant, World Bank) is also gratefully acknowledged. The study would not have been possible without the technical and financial support of the GIZ office in Togo. The editors would like to thank Andre Rönne (Head of Programme, ProDED), Sika Ekouhoho (Coordinator for Business Development, ProDED), and Florent Dirk Thies (Head of Programme for the Agricultural Sector) for their support and strong collaboration throughout the preparation of the report. Comments and contributions were furthermore provided by Erick Abiassi (Senior Agricultural Economist, World Bank), Joachim Boko (Senior Social Protection Specialist, World Bank), and Julian Koschorke (Social Protection Specialist, World Bank). The team is grateful for strategic guidance received from Coralie Gevers (Country Director for Côte d’Ivoire, Benin, Guinea, and Togo), Fily Sissoko (Country Manager for Togo), Hawa Cissé Wagué (Former Resident Representative for Togo), and Christian Bodewig (Practice Manager, Social Protection & Jobs, West and Central Africa). The research drew on extensive consultations conducted with various stakeholders in Togo, including agricultural associations, the private sector, and a multisectoral committee led by the National Coalition for Youth Employment – CNEJ (specifically Eric Tamandja, Permanent Secretary, and Stephane Akaya, President). Consultations with different sector Ministries included the Ministry of Grassroots Development, Youth, and Youth Employment; the Ministry of Agriculture, Livestock, and Rural Development; and the Directorate General of Employment. The team would also like to thank those involved within the President’s office for their inputs during the consultation process. 7 Abbreviations AfDB African Development Bank AGOA American Growth and Opportunity Act ATN Togo Standardization Agency (Agence Togolaise de Normalisation) BPI Public Investment Bank (Banque Publique d’Investissement) CAADP Comprehensive Africa Agriculture Development Program CAGR Compound Annual Growth Rate CEO Chief Executive Officer CFAF CFA Franc CNEJ National Coalition for Youth Employment (Coalition Nationale pour l’Emploi des Jeunes) COO Chief Operating Officer CREMA Community Resource Management Area DFDTOPA Directorate of Technical Training and Dissemination and Professional Agricultural Organizations (Direction de la Formation de la Diffusion des Techniques et des Organisations Professionnelles Agricole) DPV Directorate of Vegetation Protection (Direction de la Protection des Végétaux) DSID Directorate of Agricultural Statistics, Information and Documentation DSP Public Service Agency (Délégation de Service Public) FAO Food and Agriculture Organization FGD Focus Group Discussion FIKATO Federation of the Shea Value Chain in Togo FNFI National Inclusive Research Fund (Fonds National de la Finance Inclusive) GDP Gross Domestic Product GII Gender Inequality Index GIZ German Cooperation Agency (Deutsche Gesellschaft für Internationale Zusammenarbeit) GSA Global Shea Alliance IBCF Incentive-Based Contract Farming ICAT Technical Counseling and Support Institute (Institut de Conseil et d’Appui Technique) IFAD International Fund for Agricultural Development ILO International Labour Organization INFA National Agricultural Training Institute (Institut National de Formation Agricole) INH National Sanitation Institute (Institut National d’Hygiène) INSEED National Institute of Statistics and Economic and Demographic Studies (Institut National de la Statistique et des Études Économiques et Démographiques) ITRA Togolese Agricultural Research Institute (Institut Togolais de Recherche Agronomique) KII Key Informant Interview MAEDR Ministry of Agriculture, Livestock, and Rural Development (Ministère de l'Agriculture, de l’Élevage, et du Développement Rural) 8 MDB Ministry of Grassroots Development (Ministère du Développement à la Base) MEHV Ministry of Water and Village Hydraulics (Ministère de l'Eau et de l’Hydraulique Villageoise) MERF Ministry of the Environment and Forestry Resources (Ministère de l’Environnement et des Ressources Forestières) MFI Microfinance Organization MIFA Incentivizing Agricultural Financing Mechanism (Mécanisme Incitatif de Financement Agricole) MSME Micro, Small, and Medium Enterprises NAFIN National Financing (Nacional Financiera) NGO Non-Governmental Organization NPK Nitrogen, Phosphorus, and Potassium PIA Adetikopé Industrial Platform (Plateforme Industrielle d’Adetikopé) PND National Development Plan PNIASAN Agricultural Investment, Food, and Nutrition Security National Program (Programme National d’Investissement Agricole, de Sécurité Alimentaire, et Nutritionnel) PPP Public-Private Partnership REDD Reducing Emissions from Deforestation and Forest Degradation SCF Supply Chain Finance UNDP United Nations Development Program USAID United States Agency for International Development USD United States Dollar UV Ultraviolet WATIH West Africa Trade and Investment Hub ZAAP Planned Agricultural Development Zone (Zone d'Aménagement Agricole Planifiée) 9 Key Definitions Some of these definitions may differ from international standards and have been applied after consultations with local stakeholders. Youth There are multiple definitions for “youth.� Based on consultations with local experts, in Togo “youth� refers to people aged 35 or younger. For consistency with other studies, this report refers to “youth� as working age individuals below the age of 35 (i.e., aged 15 to 34 years old). Employment Outcomes Because a job lens was applied to the value chains, three dimensions of employment outcomes were considered: more jobs (job creation), higher quality jobs (productivity, earnings, sustainability, and drudgery), and more inclusive jobs (accessible to youth and women). Under this framework, employment includes all individuals engaged in any activity intended to produce goods and services in exchange for remuneration or profit, even for just one hour over the preceding seven days, and those individuals having worked without remuneration for another member of the household during the preceding seven days. Wage Employment and Self Employment Wage-employed workers are individuals who have declared being employed by an employer outside the household and are paid (either with or without a contract, in cash or in-kind). Self- employed workers are people working on their own account, with one or more partners or in a cooperative without employees. Classification of Enterprises by Size The definitions in this study are aligned with Togo's Charter for Micro, Small, and Medium Enterprises (MSMEs), which defines an MSME as “any individual or legal entity producing marketable goods and/or services, autonomous, or registered in the Trade and Personal Property Credit Register or any other register conferring legal personality, and whose annual sales (excluding tax) do not exceed one billion CFA francs.�1 The Charter further divides MSMEs into four categories: • Nano-enterprises, with annual sales excluding taxes of less than five million CFA francs, and at least one permanent employee. • Micro-enterprises, with annual sales of between five and thirty million CFA francs excluding taxes, and fewer than 10 employees. • Small enterprises, with annual sales excluding taxes of between thirty and one hundred and fifty million CFA francs, and employing between 10 and 50 people. 1 https://commerce.gouv.tg/wp-content/uploads/2022/11/Charte-des-TPME-2.pdf 10 • Medium enterprises, with annual sales excluding taxes of between one hundred and fifty million and one billion CFA francs, and between 50 and 200 employees. When a company's annual pre-tax sales exceed one billion CFA francs, it is no longer considered an MSME, but a large enterprise. Women-owned Enterprise Per the methodology applied in this report, an enterprise qualifies as a women-owned enterprise if it meets the following criteria (World Bank Group definition): • ≥ 51% owned by woman/women; OR • ≥ 20% owned by woman/women; AND (i) has ≥ 1 woman as CEO/COO/President/Vice President; AND (ii) has ≥ 30% of the board of directors composed of women, where a board exists. Smallholder Farmers Smallholder farmers refer to agricultural producers who own or manage a small plot of land and engage in farming activities primarily for subsistence or local market purposes. Associations and Cooperatives In this report, an association is defined as a group of persons with common interest and purpose. Associations offer tangible benefits to their members such as products or services, as well as intangible benefits such as networks, a sense of community, etc. An agricultural cooperative is defined here as an association of farmers that pool their resources. By doing so, farmers can increase their revenues, reduce costs, and/or share risks - depending on the type of cooperative. 11 Executive Summary Good quality jobs are key to accelerating poverty reduction and strengthening social cohesion in Togo. While Togo has made significant progress in creating more good quality jobs, with robust growth performance in the past decade, several jobs-related challenges remain. Togo’s labor market is characterized by high levels of informality and underemployment, low productivity, and low-quality jobs. This difficult situation is compounded by the demographic trend of large cohorts of young people entering the labor market every year. As a result of this trend, it is estimated that, beginning in 2024, Togo will need to create 200,000 new jobs every year to absorb the influx of new entrants into the labor market. As described in the companion document to this report, Togo Jobs Diagnostic,2 a holistic approach to creating more and better jobs should be applied looking at the macro-, demand-, and supply side constraints. Solutions should focus on creating new jobs, improving job quality and productivity, and ensuring access to employment for vulnerable segments of the population. Agricultural value chains provide a good entry point to address employment challenges in Togo. Global evidence shows that value chain development can generate new job opportunities, increase productivity and working conditions, and facilitate access to employment, especially for low-skilled workers. Agriculture accounts for 40 percent of all jobs in Togo and has been identified as a priority sector in the 2020-2025 Government Roadmap. However, its potential contribution to the jobs agenda has not yet been fully realized. Current levels of agricultural productivity remain low, and agribusiness is not yet sufficiently developed to create substantial employment opportunities beyond the farm. In order to leverage the job potential of value chains, this study will conduct a value chain analysis with a specific focus on employment outcomes. This approach involves multiple phases. The first consists of identifying all value chains of strategic and economic importance and conducting a high-level assessment of their market and job potential. Once high-potential value chains have been identified, an in-depth analysis can be undertaken by mapping the links between the different actors of the chain and identifying job characteristics at each stage. The objective of this second phase is to identify economic and employment-related constraints along the chain as well as opportunities to address them. This analysis can then inform recommendations to improve job creation, job quality, and access to jobs, with a focus on vulnerable groups. The identification of value chains with high market and job potential in Togo (Phase 1) was initiated in 2019 and documented in a separate report. Consultations with government stakeholders and a review of key national policy documents were conducted to identify value chains of strategic and economic importance in the country. This process led to the identification of 22 value chains, which were subsequently subjected to a screening process to assess (i) their scale, sustainability, and competitiveness, (ii) their impact on employment dimensions, especially for youth and women, and (iii) their potential for change. This exercise allowed the study to 2 Raphaela Karlen and Friederike Rother (2023): Togo Jobs Diagnostic: Confronting Challenges and Creating Opportunities for More Good Quality Jobs for All. 12 prioritize nine value chains with high market and job potential, namely aquaculture, beekeeping, fonio, mushrooms, pineapple, sesame, shea, soybeans, and vegetables/spices (specifically ginger and red pepper). This report focuses on constraints and opportunities for better job outcomes (Phase 2) in three of these value chains – shea, ginger, and red pepper – selected as case studies. An initial mapping of these value chains was conducted in December 2021 based on desk research and consultations with key informants. This was followed by the collection of primary data in the field between February and July 2022, which entailed (i) a survey and focus group discussions (FGDs) with smallholder farmers, including youth and women, (ii) a survey and FGDs with Micro, Small, and Medium Enterprises (MSMEs) involved in the value chains, and (iii) key informant interviews with policy makers, institutional actors, and development partners. The process was overseen by the Technical Committee of the National Coalition for Youth Employment (CNEJ) which validated the methodology and monitored implementation. The analysis of collected data provided a better understanding of key economic and employment dynamics in the three chains while identifying opportunities to improve job outcomes, especially for youth and women. The first stage in the shea value chain is the collection of shea nuts, which constitutes a good income opportunity for the rural poor, particularly women. Shea grows in the northern regions of Togo, especially in the Savannah region as well as in the Kara and Centrale regions. Because the trees have a long gestation period, they are typically not planted but exploited in the wild. Since only 60 percent of Togo’s shea zones are currently exploited, there is potential to increase production. However, deforestation of shea trees for firewood could limit this potential. The number of Togolese households involved in the value chain is currently estimated at approximately 170,000, some of which are organized in cooperatives. Because shea nuts are found in the wild, production does not require collectors to own land. It is particularly suitable for low-skilled workers, as it does not demand specific qualifications. Among the sample of smallholders interviewed, the average collection volume was 598 kg per year and the total annual sales were CFAF 230,000. Transportation and storage were identified as the two largest cost drivers for smallholders. Shea nuts are processed into shea butter, which is the most valuable end product of the chain. In Togo, processing is shared among smallholders on the one hand and MSMEs on the other. The vast majority of smallholders use artisanal methods, which are physically demanding and relatively inefficient. MSMEs use a variety of processing techniques depending on their size and capacity, but artisanal methods are still widespread (50 percent in the study sample). Processors face challenges in sourcing nuts in sufficient quantity and quality. This creates a bottleneck in the value chain and consequently, many MSMEs reported constraints in securing contracts to supply larger companies. Two-thirds of MSMEs interviewed cited product packaging, which requires equipment and skills, as an operational constraint. Jobs in MSMEs are largely hold by women (81 percent of workers) with a limited involvement of youth (15 percent). Three quarters of these jobs are seasonal or temporary. 13 The commercialization of shea butter is driven by the growing global market for natural cosmetics and for cocoa butter substitutes. However, much of the shea butter produced in Togo remains in the national market. Less than one-third of the MSMEs surveyed export, citing high transportation costs and quality/certification issues as their main constraints. The average annual sales of the MSMEs in the sample were 17 million CFAF, which is significantly higher than in the ginger and red pepper value chains. Access to finance was identified as a challenge to business growth: 81 percent of MSMEs rely on personal savings to finance their operations. Ginger production does not require significant investment and can generate revenues relatively quickly. Ginger is grown primarily in the Plateaux region, but also in the three northern regions of Togo. Annual production is estimated at 60,000 metric tons, involving at least 6,000 smallholder farmers, some of which are organized in cooperatives. The production of ginger does not require important investments and constitutes a good income-generating opportunity for the rural poor. Ginger has a quick production cycle that allows farmers to generate revenues four to five months after planting, although the roots – which constitute the most valuable part of the plant – can be kept in the ground longer in order to spread income across the year. However, climatic factors can have significant impacts on quantities produced. Women are well involved in the production stage, but young people are not. Among the sample of smallholders interviewed, the average annual collection volume was 1,308 kg and the total annual sales CFAF 863,000. Access to cultivable land was identified as a bottleneck to increasing production. Unlike shea, roles in the ginger value chain are clearly defined. While production is handled almost exclusively by smallholder farmers, processing is done by MSMEs. There are several companies in Togo that transform ginger into juice or powder/spice, most of which still rely on manual processing methods. Jobs at this stage require minimal technical skills, but are mostly of a seasonal nature. Average annual sales among MSMEs surveyed were approximately CFAF 700,000 for ginger juice and CFAF 1.7 million for ginger powder. MSMEs expressed challenges in finding smallholders that can supply them in sufficient quantity throughout the year. Indeed, maintaining product quality during storage and transportation was identified as a major concern in the chain, as raw ginger is susceptible to fungus contamination. This situation forces producers to sell shortly after harvest and contributes to price volatility in the market. Ginger byproducts benefit from a strong domestic market and growing international market. National demand largely exceeds supply and as a result, ginger must be imported from neighboring countries. The potential for scaling up domestic production and boosting employment is significant. Export quantities are currently small, despite growing international demand. MSMEs interviewed identified meeting quality standards necessary for certification as the primary barrier to export. In addition, most face challenges in accessing finance and so rely on personal savings. Similar to ginger, red pepper has a short production cycle and provides valuable income opportunities for smallholders. Red pepper can be planted in almost all regions of Togo, but is most prevalent in the Plateaux region. The number of smallholders identified is approximately 1,000, with a total annual production of 3,000 metric tons. Cooperatives are less common than 14 in the shea and ginger value chains. With proper irrigation, production is possible year-round. Harvesting is done gradually in batches, so income can be spread over several months. Nevertheless, production quantities can be significantly affected by climatic factors. Both women and youth are involved to some degree at the production stage. Among the sample of smallholders interviewed, the average collection volume was approximately 2,000 kg per year and the total annual sales were CFAF 2.3 million. Limited access to land was identified as a significant constraint to increasing production volumes. Fresh red pepper can be dried and sold as such or processed into powder or spices, for which Togo has a strong domestic market. In Togo, most MSMEs involved in processing are small industrial units that use artisanal methods, while a few larger companies rely on more modern technology. Jobs in processing are accessible to women and youth, but are mostly manual and of a seasonal nature. The average annual sales of red pepper processors were approximately CFAF 1.9 million, which is lower than that of producers. This seems to be explained by two factors. First, most processors also transform other crops and do not rely exclusively on red pepper for their income. Second, processors seem to face competition from informal production by individuals who grow and dry red pepper as a side business. Similar to ginger, the price of red pepper is subject to seasonal variations, which constitutes an additional challenge for MSMEs. Most of Togo’s red pepper production is absorbed by a strong domestic market, although export opportunities exist. Several constraints and opportunities to better job outcomes are shared across the three value chains analyzed. Producers involved at the beginning of the chains, especially youth and women, face challenges in scaling up production and increasing income due to limited access to land (ginger and red pepper), deforestation (shea), and fungal diseases (ginger). Their work is complicated by the quality of rural infrastructure, especially access to water and storage facilities. Cooperatives offer opportunities to address some of these challenges, but are not currently available in all regions or sectors. Across the three value chains, product transformation largely relies on artisanal methods that hinder productivity and make the work physically demanding, affecting the quality of work. More efficient technologies exist, but require investments and technical skills. Although the end products of the three value chains benefit from high market demand, MSMEs involved in processing and commercialization face obstacles in obtaining financing as well as export certifications, which limits the potential for job creation. While some jobs are already available for youth and women, most are informal and seasonal jobs. Building on this analysis, this report offers 12 recommendations that could be undertaken to improve employment outcomes in the three value chains analyzed: Recommendations to strengthen the value chains overall: • Protect shea tree parklands through legislation and community awareness. • Promote the creation of certified ginger nurseries to foster the distribution of clean plantation material. 15 • Facilitate access to water by drilling borehole wells (for shea) and constructing irrigation systems (for ginger and red pepper). • Establish community storage centers near production areas that meet the quantity and quality criteria of aggregators. • Incentivize modernization of machinery and equipment. • Encourage the establishment of a physical or virtual trade hub for high-potential value chains. • Strengthen the capacities of Togo’s Standardization Agency (ATN). • Set up appropriate financing mechanisms to encourage investments in high-potential value chains. Recommendations for better job outcomes for youth and women in particular: • Facilitate access to land for agricultural production by youth and women through the network of Planned Agricultural Management Zones (ZAAP). • Encourage the creation of cooperatives focused on youth and women. • Provide or subsidize training in the adoption of good farming practices and in product transformation for youth and women producers in the three value chains. • Provide or subsidize training in business and management skills for youth and women entrepreneurs. 16 1. INTRODUCTION 1.1 The Job Challenge in Togo 1. Good quality jobs are key to accelerating poverty reduction and enhancing social cohesion in Togo.3 The country has made significant progress in reducing poverty over the last decade,4 but the COVID-19 pandemic and the war in Ukraine are likely to have reversed some of these gains. Labor is the most important asset of the poor, and leveraging this asset to generate a steady earnings stream is the most sustainable pathway out of poverty. The creation of more good quality jobs will be essential to recover from recent shocks and reinforce earlier gains in living standards. International research also points to lack of economic opportunities and insufficient social services as key drivers of radicalization of young people.5 Security threats in the northern parts of the country have been growing, and access to good quality jobs with a stable income for young Togolese will need to be part of the solution to security concerns. 2. While Togo’s economy has managed to create new jobs in recent years, job creation will need to be accelerated to absorb new entrants to the labor market. Thanks to robust economic growth over the last decade and a start of structural transformation towards the service sector, employment has improved somewhat. However, the working-age population is growing rapidly, at a time of weak and inadequate demand for labor.6 The service sector is largely dominated by the informal economy, which employs mainly the youth and the uneducated or poorly educated.7 In this context, it is estimated that Togo will need to create an additional one million jobs by 2030 to absorb the growing population while sustaining a GDP growth rate of at least 4.6 percent per year to ensure the status quo.8 3 As outlined in the Togo Jobs Diagnostic, to which this analysis is linked: Rother, Friederike and Raphaela Karlen. (2023). Togo Jobs Diagnostic - Confronting Challenges and Creating Opportunities for More Good Quality Jobs for All. World Bank, Washington, DC. 4 World Bank. Poverty and Inequality Platform. 5 Wietzke, F. B. (2015). Pathways from Jobs to Social Cohesion. The World Bank Research Observer, 30(1), 95-123. 6 Rother, Friederike and Raphaela Karlen. (2023). Togo Jobs Diagnostic - Confronting Challenges and Creating Opportunities for More Good Quality Jobs for All. World Bank, Washington, DC. 7 Informality is a multidimensional phenomenon affecting firms and workers. The ILO uses two approaches to define informality: the firm approach and the workforce approach. For the firm approach, the most common definition of informality is based on the criterion of legal and tax registration. In Togo, a firm not registered with the Centre de Formalité des Entreprises (CFE) and which does not pay taxes to the Office Togolais des Recettes (OTR) is defined as informal. For the workforce approach, informality implies that an employee is not registered with the Caisse Nationale de Sécurité Sociale (CNSS). Registering employees with the CNSS generally represents the last administrative step in the firm formalization process. In reality, informality is a continuum. The level of formality of many firms is between these two extremes. 8 Indeed, given the growing working-age population, a growth rate of 4.6 percent per year could absorb new entrants to the labor market, but not necessarily guarantee rapid progress in reducing the informal sector and poverty. Stronger improvements would require a significantly higher growth rate. Under the current baseline projections by the World Bank, growth would average 6 percent over the period 2023-2030, which would help create 1.4 million new jobs by 2030, while the more optimistic assumptions of the 2020-2025 Government Roadmap (7 percent average annual growth) would be consistent with the creation of 1.6 million new jobs. 17 3. While a large part of the working age population in Togo currently has at least one job, the quality of those jobs tends to be low. Indeed, although the official unemployment rate in Togo stands at only 1.7 percent of the working age population,9 the labor market is characterized by high levels of underemployment, precarious self-employment, and gender and location inequalities that indicate low levels of job quality.10 Underemployment constitutes a significant challenge in Togo: while 61 percent of those with a job were underemployed in terms of time spent performing work, a large part of workers also operate at low levels of productivity in the informal sector and are underemployed in terms of earnings, with limited or no access to social protection schemes. 4. Some groups, including youth and women, find it particularly difficult to secure good quality jobs. According to demographic data, Togo’s population includes a high proportion of youth – 73 percent are below the age of 35, 58.6 percent below 25, and 37.5 percent below 15.11 Low rates of unemployment among youth (5.6 percent for those aged 15 to 24 and 4.6 percent for those aged 25 to 34) mask the fact that while many are by definition employed, they often perform ad hoc work at shallow levels of productivity in order to earn a survival livelihood. Meanwhile, women represent three-quarters of Togo’s inactive population and are often confined to domestic work. In Togo, more than 90 percent of workers rely on the informal economy, and the rare opportunities for formal employment are generally not accessible to youth and women.12 5. Solutions to the job challenge in Togo will thus need to integrate the three dimensions of job creation, quality of jobs, and access to jobs. New jobs will need to be created, either within existing businesses or through the creation of new firms (this includes those who start a business on their own, without any paid employees). The number of jobs, however, says little about their quality. Addressing employment challenges must thus also address productivity and earnings levels, supported by social protection services to protect workers against income and job losses. Finally, the distribution of new high-quality jobs is often uneven across the population, with individuals who possess fewer skills or reside in rural areas frequently facing higher challenges in reaping the benefits of aggregate job creation. Working towards better jobs outcomes for the Togolese economy will thus also require a more thorough understanding of additional constraints faced by vulnerable groups, such as youth, women, and rural populations. 9 According to the broad definition of employment, which includes both direct and indirect remuneration, employment includes all persons engaged in any activity aimed at producing goods or services in exchange for remuneration or profit, for a least one hour in the last seven days, as well as people who worked without pay for another member of the household in the last seven days. 10 Rother, Friederike and Raphaela Karlen (2023). Togo Jobs Diagnostic - Confronting Challenges and Creating Opportunities for More Good Quality Jobs for All. World Bank, Washington, DC. 11 National Institute of Statistics and Economic, and Demographic Studies. (2015). Togo Demographic Outlook 2011- 2031. 12 World Bank (2021). “Social Protection for the Informal Economy: Operational Lessons for Developing Countries in Africa and Beyond.� 18 1.2 Jobs and Value Chains 6. Value chains have become an increasingly important channel through which development challenges and solutions are both analyzed and implemented. Value chains encompass the full range of activities required to bring a good or service from conception through the different stages of production and processing, up to delivery to final consumers.13 The term “value chain� describes the fact that as the product or service moves through each of these stages, value is added along the way. Strengthening value chains involves creating new or improving existing linkages among the different actors involved along the chain.14 Strong value chains offer market opportunities for local producers and build on the capacity of firms to transform locally, instead of exporting directly off the farm or production site. In such cases, multiple steps of the chain take place domestically and the added value being generated can then be shared among various actors within the country, facilitating a virtuous circle between productivity, profits, and investment in jobs and skills. Value chain development is thus an approach seeking to create the maximum value from the different activities of the chain and, with respect to jobs, facilitate the integration of labor supply and demand at each step. 7. Focusing on value chains is an ideal entry point to address employment challenges, as it offers opportunities to support each of the three dimensions of job outcomes. 15 Global evidence shows that value chains can lead to large-scale job creation when they catalyze structural transformation or generate new linkages in and around the chain. This typically happens when countries industrialize and an increasing number of stages of the value chain can be done locally, creating new job opportunities that can span from formal employment to new revenue streams for the self-employed and smallholders. Strong value chains can also offer opportunities to improve job quality by connecting firms and the self-employed to larger markets and higher value-added activities, thereby raising revenues. This can also often lead to better working conditions, as firms seek to upgrade their standards to align with norms on the new markets. Finally, value chains development can improve access to jobs by unlocking activities accessible to low-skilled workers. Evidence shows that women and youth can benefit disproportionately by taking on a larger share of jobs that are created in labor-intensive value chains. 1.3 Integrating a Job Lens to Value Chain Analysis 8. In order to leverage the potential of value chains to address employment challenges in Togo, this study proposes to integrate a job lens into value chain analysis. Value chain studies focus on understanding the nature of the different stages necessary to bring a good from production to consumption and the relationships among the different actors involved at each stage. Typically, the primary objective is to identify challenges and opportunities to improve the efficiency of the chain to make it more competitive. While a well-functioning value chain is a 13 Gereffi, G., Fernandez-Stark, K., and Psilos, P. (2011) “Workforce Development and Global Value Chains in Developing Countries�, Center for Globalization, Governance, and Competitiveness, Duke University. 14 World Bank (2018). “Jobs in Value Chains Survey Toolkit.� 15 This paragraph summarizes evidence from: Lopez-Acevedo, G., & Robertson, R. (Eds.). (2016). Stitches to riches?: Apparel employment, trade, and economic development in South Asia. World Bank Publications. 19 prerequisite for positive employment outcomes, this study proposes to shift the focus of the value chain analysis to the nature of jobs available at each stage of the value chain and opportunities to increase the number, quality, and inclusiveness of those jobs. The analysis will prioritize groups that face the highest barriers on the Togolese job market, namely youth and women. Considering the target group and the size of the informal sector in Togo, the study will adopt a broad definition of jobs that includes both wage employment and income through self- employment.16 The approach adopted for this study draws on a methodology developed by the Jobs Group at the World Bank, but has been adjusted to increase flexibility and circumvent data constraints.17 Figure 1: Conceptual framework for integrating a job lens into value chain analysis Phase 1: Identification of value chains with high market and job potential • 1.1 Stocktaking of all priority value chains in government strategic documents and macro- economic data sources. • 1.2 High-level assessment of market and employment potential of each chain. • 1.3 Prioritization of high-potential value chains. Phase 2: Analysis of constraints and opportunities for better job outcomes in high-potential value chains • 2.1 Mapping of key steps and actors in the selected value chains, outlining the location, nature, and quantity of jobs. • 2.2 Primary data collection with key value chain actors to understand the economic and employment-related challenges at each stage of the chain. • 2.3 Analysis of opportunities to improve the quantity, quality, and inclusiveness of jobs in the chain (with a focus on groups that face the highest barriers on the job market, such as youth and women). Phase 3: Recommendations for better job outcomes • 3.1 Recommendations to improve the value chain as a whole. • 3.2 Recommendations to ensure that value chain development leads to better job outcomes and economic inclusion specifically. 9. Conducting a value chain study with a job lens entails three main phases (See Figure 1). The first is to identify value chains that have both a high market potential and job potential. 16 See Definitions. 17 The Jobs in Value Chains toolkit developed by the Jobs Groups is available at https://www.jobsanddevelopment.org/jobs-in-value-chains-survey-toolkit/ 20 This analysis should start by reviewing all value chains that are economically (e.g., because of their contribution to GDP or their weight in the trade balance) or strategically (e.g., because of food security or alignment with poverty reduction objectives) important in a given country or context and putting them through a screening process. Specifically, for each of the chains, the analysis should seek to determine (i) whether the nature of the market for the end product offers opportunities for the value chain to grow, and (ii) whether this growth could translate into positive employment outcomes. This may entail answering questions such as whether there is sufficient demand domestically or internally for the product, whether local firms and producers are competitive on a regional or even global level, whether the target groups (e.g., youth and women) are already involved in the sector, or whether barriers to entry (e.g., in terms of skills, financing, or access to land) are not detrimental to job creation. Desk research should be sufficient to complete this exercise, but light data collection (e.g., consultation with sector experts or leading firms) may be useful in data-constrained environments. This assessment will help prioritize a number of value chains to focus on in Phase 2. 10. The second phase consists of identifying constraints to and opportunities for better job outcomes in the selected value chains. This in-depth analysis should start with a visual mapping of the links between the different actors of the chain, covering the stages of production, transformation, and commercialization as well as key supporting services (e.g., financing). Importantly, the mapping should try to highlight the location, nature, and quantity of jobs at each step. Once the different activities of the chain have been broken down and job characteristics identified, the core of the assessment consists in examining challenges preventing the creation of more quality and accessible jobs along the chain as well as opportunities to improve this situation. This exercise constitutes the bulk of the work in terms of data collection and entails (i) the identification of value chain actors to include in the study and a sampling strategy, (ii) the determination of appropriate data collection methods and key research questions for each type of actors, (iii) the development of data collection instruments, and (iv) the actual data collection in the field. This process can take different forms based on the nature and scope of the analysis. The data collection framework used for this study is presented in Section 2.2.2 below. 11. The third and final phase entails the preparation of actionable recommendations for better job outcomes in the selected chains. This involves analyzing the collected data and identifying pathways to address the constraints identified and leverage the different opportunities. The recommendations may include both actions to improve the value chain as a whole (e.g., by increasing efficiency or improving competitiveness) as well as specific propositions at the job level (i.e., to facilitate job creation at different stages, to increase workers productivity and revenues, or to facilitate access for vulnerable groups). 21 2. Application of the Methodology to Togo 2.1 High-potential Value Chains 12. The identification of value chains with high market and job potential in Togo (Phase 1) was initiated in 2019 and documented in a separate report.18 This section summarizes key steps taken to carry out this analysis as well as the main results, highlighting how the conceptual framework presented above was applied in the context of Togo. 13. This process focused specifically on agricultural value chains but the methodological framework is meant to be applicable to other sectors. The focus on agriculture was motivated by the fact that the sector represents 40 percent of all jobs in Togo and is identified in the 2020- 2025 Government Roadmap as having the potential to offer more employment opportunities and to decrease poverty.19 While agriculture remains the main source of employment and livelihood for most Togolese, its potential has not been fully realized. Important reforms have been launched, such as the creation of IFAD Agriculture, the soil fertility map,20 the establishment of Planned Agricultural Development Zone (Zones d’Aménagement Agricole Planifiées), and the installation of some boreholes and water reservoirs, which all constitute important investments for agricultural development in Togo. Efforts to extend the rural road network also reinforce the creation of a conducive ecosystem for the modernization of the sector. However, the current level of agricultural productivity remains low.21 Agribusiness is not yet sufficiently developed to provide the processing and domestic value addition that could make the sector a key driver of economic growth capable of creating employment beyond the farm. This study hopes to provide the foundations to address some of these challenges. 2.1.1 STOCKTAKING OF IMPORTANT VALUE CHAINS 14. Consultations with government stakeholders and a review of key national policy documents22 were conducted to identify value chains of strategic or economic importance in Togo. Key criteria included (i) weight in the trade balance (i.e., either export products or import products that could be produced in Togo), (ii) propensity to generate income for producers overall (i.e., crops for which a market is already established or is growing), and (iii) inclusion potential of the rural poor with limited access to arable land. A total of 22 value chains were identified through this process, as described below. 18 World Bank (2019). Evaluation of market and employment potential of high-potential value chains in Togo. 19 Examples include the Support Project for Youth Employability and Integration in Growth Sectors (PAEIJ-SP), which contributed to increasing employment and income opportunities by adopting a value chain approach. 20 See https://fertitogo.tg/ 21 For more information on the role of agriculture in Togo’s economy, please refer to Chapter 2 of the Country Economic Memorandum 2022 : Toward Sustainable and Inclusive Growth. 22 Including the National Development Plan (PND) and the Agricultural Investment, Food and Nutrition Security National Program (PNIASAN). 22 Table 1: Stocktaking of value chains Value chain Main reason(s) for selection Aquaculture Import product, Propensity to generate income for producers, Inclusion potential of the rural poor with limited access to arable land Beekeeping Inclusion potential of the rural poor with limited access to arable land Cashew nuts Export product, Propensity to generate income for producers Cassava Import product Cocoa Export product, Propensity to generate income for producers Coffee Export product, Propensity to generate income for producers Cotton Export product, Propensity to generate income for producers Fonio Propensity to generate income for producers Mango Propensity to generate income for producers Milk Import product Mushroom Inclusion potential of the rural poor with limited access to arable land Oil palm Export product Peanut Export product Pineapple Export product, Propensity to generate income for producers Poultry Import product, Propensity to generate income for producers Rice Import product, Propensity to generate income for producers Sesame Export product Shea Export product Small ruminants Import product, Propensity to generate income for producers Soybean Export product, Propensity to generate income for producers Special farming (e.g., Inclusion potential of the rural poor with limited access to arable land grasscutter, snail, rabbit) Vegetables and spices Inclusion potential of the rural poor with limited access to arable land (e.g., ginger, red pepper) 2.1.2 ASSESSMENT OF MARKET AND JOB POTENTIAL 15. Subsequently, the 22 value chains were put through a screening process to assess both their market and their employment potential. The analysis drew on available data and statistics from Togo’s National Statistical Institute (INSEED) and the Directorate of Agricultural Statistics, Information and Documentation (DSID) at the Ministry of Agriculture. Three key metrics were used to carry out this assessment:23 • Scale, sustainability, and competitiveness, based on: - Production volume; importance in the national economy; production growth rate; production quality. - Export share of production; export growth rate. - Existence of competitive companies; local capacities; investment needs. • Impact on employment dimensions: - Number of jobs; number of MSMEs in the sector; size of companies in the sector. - Time necessary to generate revenues. 23 See Annex 1 for the detailed list of questions. 23 - Share of jobs held by youth, women, and the rural poor. • Potential for change : - Number of sectoral associations; number of members in associations; level of activity of associations. Since data was not always easily available, this exercise also built on existing studies and analyses, as well as technical meetings with key players in the sectors. 16. This screening process allowed the researchers to categorize the value chains and identify nine with the highest market and job potential. Key factors behind the categorization are summarized in the table below, while full details are available in the original report.24 Results were presented and validated at a high-level workshop held in October 2019 in Lomé. The event was chaired by the Minister of Grassroots Development and attended by representatives of the private sector, farming associations, academics, civil society, and government officials. Table 2: Summary of value chains assessment based on market and job potential Value chains with both well-established and/or growing market and high job potential for youth and women Aquaculture ▪ Existence of a national market (demand currently covered by imports) ▪ Remunerative sector for young people (in both production and processing) ▪ Simple authorization process for farm installation Beekeeping ▪ Large internal and external market ▪ Can be cultivated alongside other crops to generate additional income ▪ Increases agricultural productivity of other crops Fonio ▪ Strong potential for organic niche markets in Europe and the United States ▪ Strong involvement of women in production and processing ▪ High nutritional value, interesting for other national priorities Mushroom ▪ Large global market for mushrooms and by-products ▪ Many young people and women involved in production ▪ Food, medical, and environmental importance Pineapple ▪ Strong international demand ▪ Significant potential for local processing and job creation ▪ Potential for high income through specialization in the organic market Sesame ▪ International market that can absorb all production ▪ Many young people and women producers active in the sector ▪ Little investment required to start production Shea ▪ Forty percent of areas with shea trees non-exploited, with a total annual production potential estimated at 250,000 metric tons ▪ High demand and opportunities for value addition ▪ Large number of women in the industry Soybeans ▪ Growing organic market ▪ Strong involvement of young people in all parts of the industry ▪ Contributes to land regeneration 24 World Bank (2019). Evaluation of market and employment potential of high-potential value chains in Togo. 24 Vegetables and ▪ Significant potential for off-season farming and year-round revenues spices (e.g., ▪ Potential for high value addition and access to organic niche markets ginger, red ▪ Growing involvement of women and youth pepper) Value chains with well-established and/or growing market but less job potential for youth and women Cashew ▪ Issues with price fluctuations on the international market ▪ Current production very low due to insufficient mature plantations ▪ Requires significant investment to get started Cassava ▪ Culture dominated by family farms, with low yields ▪ Artisanal and uncompetitive processing for the international market ▪ High pressure on natural resources with risk of monoculture Cocoa ▪ Produced in very few prefectures in Togo ▪ Need to replace old plants but long gestation period before being able to generate revenues ▪ Highly organized and structured industry players (limited opportunities for smallholder production) Coffee ▪ Produced in very few prefectures in Togo ▪ Need to replace old plants, which constitutes a major investment ▪ Highly organized and structured industry players (limited opportunities for smallholder production) Cotton ▪ Highly competitive in terms of quality ▪ Needs to be hand-picked to ensure high quality, which attracts very few young people ▪ Highly organized and structured industry players (limited opportunities for smallholder production) Mango ▪ Fruit fly poses a major problem for production ▪ Substantial investment needed to limit production losses ▪ Few young people in production; lack of skilled labor for processing Peanut ▪ High demand nationally, but not very competitive externally ▪ Uncontrolled aflatoxin problem (carcinogenic substance) ▪ Low yields due to lack of access to improved seeds Poultry ▪ Uncompetitive in terms of price against massive imports ▪ Expensive or unavailable inputs ▪ Processing level in the country undeveloped Rice ▪ Local production uncompetitive compared to imports from Asia ▪ Need for high levels of investment to increase yields ▪ Few young people interested in working in production Small ruminants ▪ High pressure on natural resources (overgrazing, land tenure challenges) ▪ Mostly low-productivity family farming ▪ High investment for low returns does not attract young people Value chains with less-established market and limited job potential for youth and women Special farming ▪ Potential market for young people, as little land is required (e.g., grasscutter, ▪ Production almost exclusively limited to the local market snail, rabbit) ▪ Limited market growth and uncertain potential Milk ▪ Embryonic sector in Togo, uncompetitive compared to imports ▪ Pressure on natural resources (overgrazing and land tenure insecurity) 25 ▪ Few opportunities for young people (little transformation and land tenure challenges) Oil palm ▪ Risk of reducing plant diversity ▪ Health risk due to high levels of saturated fatty acids in oil ▪ Little opportunity for quality control to ensure compliance with production standards 2.2 Constraints, Opportunities, and Recommendations 17. The analysis of constraints to and opportunities for better job outcomes in high- potential value chains in Togo (Phase 2) was initiated in late 2021 and is the focus of this report. This section summarizes the process taken to identify key actors in selected value chains, understand the links and dynamics among them, and examine the nature of jobs throughout the chain, following the conceptual framework described above. It also describes the approach adopted to collect data in the field and analyze it to identify barriers and opportunities to jobs, and develop policy recommendations. 18. This study focuses on three specific value chains – shea, ginger, and red pepper – selected as case studies among the nine identified above as having the highest job and market potential in Togo. None of these three value chains require large plots of land, huge capital investment, or advanced technical skills, making them particularly appealing choices for youth and women. As mentioned, shea benefits from untapped production potential considering the extent of non-exploited areas in Togo; at the same time, the value chain for shea traditionally involves a high number of women, and international demand is growing. Ginger and red pepper were chosen due to their strong income smoothing potential as off-season products, the existence of well-established local markets and growing international demand, and the limited amount of time necessary to generate revenues after planting. The selection of these three value chains as case studies does not imply that they necessarily offer more employment or market opportunities than the other high-potential value chains previously identified. On the contrary, one of the objectives of this report is to demonstrate how the conceptual framework described above can be applied to a select number of value chains, so that it can be replicated elsewhere. 2.2.1 VALUE CHAINS MAPPING 19. An initial mapping of the shea, ginger, and red pepper value chains was conducted in December 2021 based on desk research and consultations with a number of key informants. Key data sources included documents from the Ministry of Agriculture, Livestock, and Rural Development (MAEDR); the National Institute of Statistics, Economic, and Demographic Studies (INSEED); the World Bank; and GIZ. The objective of this preliminary exercise was to develop a basic understanding of key value addition activities in the selected chains in Togo and the roles of the different actors involved at each step. These initial mappings helped to determine the nature of the actors, their number and location, and the related types of jobs or income- generating activities, which were used to design the sampling strategy (outlined below). The mappings were later refined based on new insights that had emerged after field data collection. 26 The visual mappings of the shea, ginger, and red pepper value chains in Togo are presented at the beginning of Sections 3, 4, and 5, respectively. 2.2.2 PRIMARY DATA COLLECTION 20. Field research focused on four key actors of the chains and leveraged three main data collection methods (see Figure 2 below). Data collection instruments were developed based on existing tools from the World Bank’s Jobs in Value Chains Survey Toolkit,25 but were streamlined and simplified to reflect budgetary, time, and data availability constrains. The sampling strategy was developed by consulting firm A2F Consulting in partnership with the World Bank. The methodology described in this section incorporated feedback from the Togolese government (through the Technical Committee of the National Coalition for Youth Employment, CNEJ).26 The design of the methodology was validated by the different partners at the end of January 2022. Field data collection took place between February and July 2022. Multiple consultations were organized through the CNEJ to ensure the appropriate monitoring of the study by government counterparts during the data collection and analysis process.27 Figure 2: Data collection methods for different types of value chain actors Value chain actors Data collection methods Information collected Smallholders, Survey + - Work situation and resources available including youth and Focus group - Challenges, needs, and opportunities for inclusion women discussions in value chains Survey + - Business information (products, markets, supply MSMEs Focus group chain, workforce, business environment, etc.) discussions - Challenges for economic inclusion of youth and Institutional actors, women into value chains Key informant regulators, and policy - Regulatory environment interviews makers - Market trends and economic opportunities for youth and women - Challenges for economic inclusion of youth and Key informant Development partners women into value chains interviews - Existing initiatives/programs 25 https://www.jobsanddevelopment.org/jobs-in-value-chains-survey-toolkit/ 26 The Technical Committee includes representatives from the Ministry of Grassroots Development, Youth, and Youth Employment; the Ministry of Agriculture, Livestock, and Rural Development; and the Ministry of Public Service, Employment, and Social Dialogue; among others. 27 Specific meetings with the CNEJ technical committees were organized in November 2021, May 2022, and December 2022. 27 21. Interviews with key informants focused on institutional actors, regulators, policymakers, and development partners involved either in the selected value chains or in questions pertaining to women and youth employment. The objectives of these interviews were to obtain data and information at an institutional level regarding (i) general challenges in economic inclusion of women and youth in Togo, specifically in agriculture, (ii) regulatory and legal constraints, (iii) market trends and dynamics in the job market, and (iv) lessons learned from existing initiatives and programs. A snowball approach was used for the recruitment of participants, in which the team would identify an initial set of key individuals to interview and then other interviewees based on the information collected in the previous round of interviews. A discussion guide was used to ensure that all necessary topics were covered. A total of 29 stakeholders were interviewed.28 Key informant interviews took place in two waves. A first set of interviewees were consulted in February 2022 and a second in July 2022. 22. The sample size for the survey was set at 100 units per value chain, of which approximately 80 percent were smallholder farmers and 20 percent were MSMEs.29 Questions for smallholders focused on employment situation, available resources, and challenges in integrating agricultural value chains, while questions for MSMEs focused on collecting business information (e.g., products, markets, supply chain, workforce, business environment, etc.). 30 Data collection took place in different regions for each value chain. Given that shea production is concentrated in the northern part of the country, the smallholder survey was conducted in the Savannah Region. Since a number of companies involved in the commercialization of shea products are based in Lomé, the MSME survey was conducted there. The surveys for the ginger value chain focused on the Plateaux and Maritime regions, as ginger is primarily grown and commercialized in these regions. For red pepper, the surveys focused on Kara and Centrale as these regions account for about 45 percent of total production in Togo. MSMEs were sampled mainly in urban areas while smallholder farmers were mostly in rural areas. Quantitative data collection took place from February to March 2022 for shea and from June to July 2022 for ginger and red pepper. 23. The implementation of the survey followed a standardized process designed to protect study design and ensure data quality. First, a survey team comprised of a field manager, two supervisors, and five enumerators 31 28 See Annex 5 for the list of questions to stakeholders and Annex 6 for the list of participants. 29 The required sample size was calculated to ensure a 95 percent confidence interval and a margin of error of less than 7.5 percent, assuming a population of 800,000 based on the total number of households in Togo involved in agriculture. More details are available in Annex 6. 30 See Annex 2 for the smallholder’s questionnaire and Annex 3 for the MSME questionnaire. 31 Three women and two men. 28 were recruited through a Togolese research partner,32 based on their experience in the subject matters and familiarity with data collection areas and local languages. The recruited team was then trained over the course of three days on all methodological and logistical aspects of the study. 33 A test was organized at the end of the training period to ensure absorption of the material by the trainees. From there, the entire team was deployed to the field for a piloting stage, to get acquainted with the data collection process and to validate the data collection tools. A detailed examination of the pilot data was carried out and the tools were subsequently updated. The team was then deployed to the relevant regions for a first phase of data collection focusing on the shea value chain, which extended over eight days. A list of smallholder farmers and MSMEs provided by the World Bank and local experts allowed initial contact by the survey team before a snowballing sampling approach was used to enroll additional participants in the survey. The final distribution of survey samples for the three value chains is outlined in the table below. Data was collected through tablets, with on-site and off-site quality control measures put in place to reduce risks of frauds and errors. A refresher training was organized before the second phase of data collection (ginger and red pepper), which took place over 12 days. The data was cleaned and analyzed using statistical software (Stata). The de-identified data was shared with the World Bank for additional validation and quality control.34 Table 3: Final distribution of survey sample Smallholder Farmers MSMEs Gender Shea Ginger Red Pepper Shea Ginger Red Pepper Women 72 46 41 6 14 17 Men 7 40 38 15 6 7 Total 79 86 79 21 20 24 Age Shea Ginger Red Pepper Shea Ginger Red Pepper Youth (below 35) 12 18 30 8 7 14 Over 35 67 68 39 13 13 10 Total 79 86 79 21 20 24 24. In addition to surveys and interviews, 16 focus group discussions (FGD) were conducted with female and youth active at different stages of the selected value chains. FGDs were particularly useful to bring to light the perspectives of different stakeholders, which helped to triangulate the data but also to provide a more detailed picture of the reasons explaining some observations from the survey. 35 Each FGD targeted five to eight participants recruited simultaneously with the survey data collection phase.36 Two discussions were organized in March 2022 and 14 others in July 2022. One challenge experienced in the organization of the FGDs was in identifying a sufficiently large number of young people to join the groups, especially in the shea value chain where limited numbers of young males are involved. As such, two youth-focused 32 Winiga Consulting. 33 The initial training took place in February 2022 in preparation of the first wave of data collection (shea value chain). A two-day retraining was organized in June 2022 for the second wave (ginger and red pepper). 34 Please See Annex 6 for more detailed on the study methodology and quality control measures. 35 See Annex 4 for the list of questions asked during FGDs. 36 The total number of participants across all 16 FGDs amounted to 116. 29 FGDs (denoted with an asterisk in the table below) included a few participants beyond the 35- year-old threshold. The distribution of FGDs conducted for this study is outlined below. Table 4: Focus group discussions (FGD) Shea Ginger Red Pepper Youth Women Youth Women Youth Women Production 1* 1 1 1 1 1 Processing 1* 1 1 1 1 1 Trading 1 1 1 1 0 0 Total 3 3 3 3 2 2 2.2.3 PRESENTATION OF FINDINGS AND RECOMMENDATIONS 25. Findings from the data collection are outlined in the rest of this report. Sections 3, 4, and 5 describe the different stages of the shea, ginger, and red pepper value chains respectively, highlighting the nature and quality of jobs and income-generating activities. These sections are structured along the key stages of production, transformation, and commercialization, while also covering the question of financing. Section 6 then outlines the role of associations and cooperatives in the three value chains, as important actors to advance the jobs agenda. Sections 7 and 8 present constraints and opportunities identified for the value chains as a whole and for the economic inclusion of women and youth in particular, highlighting observations that are specific to one value chain (Section 7) from those that are cross-cutting (Section 8). Finally, Section 9 concludes with policy recommendations to improve the quantity, quality, and inclusiveness of jobs in the three value chains. 26. Some caution should be taken while extrapolating results of the study. The survey sample focused primarily on youth and women among smallholder farmers and MSMEs interviewed, rather than attempting to be representative. While the overall sample size was set so as to be representative of value chain actors at the national level, quotas were put in place for key demographics to ensure that their perspectives could be analyzed. Thus, women- and youth- owned businesses were oversampled as compared to the general population. Additionally, the sample size of 100 actors per value chain allowed for individual responses to have large effects on the outcomes of the study. Although their responses provide meaningful directional information, extrapolation of results to the wider population should be approached with caution. It should also be noted that most of the primary data collection focused on respondents already involved in the chains in some capacity, hence the view of those who were not involved (or had not been able to integrate) might be underrepresented. 30 3. Key Findings on the Shea Value Chain 3.1 Overview of the Shea Value Chain 27. Shea nuts grow in the shea belt, which stretches across sub-Saharan Africa. Production is concentrated in seven countries, of which Togo is the smallest producer. 37 Global shea production has fluctuated since 2000, reaching a peak of 777,433 metric tons in 2007. Most of these fluctuations have been due to changes in production by Nigeria and Mali, which are historically the largest shea producing nations. Burkina Faso has also grown to become a major player since 2015. These three countries dominate global production, together accounting for 88.1 percent of worldwide shea nut production in 2019. By comparison, Togo accounted for only 1.8 percent of global production in 2019.38 Total shea production in Togo has grown in absolute terms since 2000, although production growth has slowed since 2007. Togo’s area of harvested shea has remained between 2,900 and 3,500 hectares for the last two decades while shea yields have grown from 26,000 hectograms per hectare in 2000 to 43,500 hectograms per hectare in 2019. Figure 3: Distribution of shea trees across Africa’s shea belt Source: Sallé et al. 1991. Quoted in Rousseau et al. 2015. 28. The shea value chain in Togo is divided into several stages: collection and production, processing, and commercialization. 37 Netherlands Center for the Promotion of Imports. (2021). “The European Market Potential for Shea Butter.� Retrieved from: https://www.cbi.eu/market-information/natural-ingredients-cosmetics/shea-butter/market- potential 38 FAOStat Crop and Livestock Products Data: Production of Karite Nuts (Shea Nuts), 2000-2019. 31 Figure 4: Shea value chain mapping 29. The first stage in the shea value chain is the collection of shea kernels. This is due to the fact that the input supply stage of the shea value chain is largely a passive process. Shea trees do not reach maturity or produce fruits regularly until they are 15-20 years old, which hinders their commercial development. The trees take 40 to 50 years to reach maximum fruit production and live between 200-300 years. In Togo, most shea trees grow in the wild and are usually not planted but selected, saved, and protected by farmers in their fields. In principle, anyone can collect shea kernels in public and community forests since no permit is generally required as collection does not impact the ecosystem. 30. Togo is currently exploiting only 60 percent of the arable land where shea trees grow. Shea is present primarily in the northern regions of Togo, with the Savannah region being the main production zone followed by the regions of Kara and Centrale (see map on the right). The number of Togolese households exploiting shea is estimated at 170,094, 39 which includes more than 16,000 individual women collectors. While the shea sector produces 20,000 to 25,000 tons of shea kernels annually, according to the National Forest 39 Ministry of Environment and Forest Resource and FAO. (2018). Study of the shea sector in Togo. 32 Inventory, the country's shea production potential is approximately 80,413 tons.40 Difficulty of access and lack of awareness are the main reasons for limited use. 31. Nursery operators constitute increasingly important value chain actors in efforts to domesticate shea. Agronomists in Burkina Faso and Ghana have been trying to improve productivity through grafting and other methods. Based on research conducted by GIZ, breeding plants in nurseries could reduce the time needed for production from 15-20 years in the wild to 2-4 years in nurseries. 41 However, these experiments are still at an early stage. Shea tree nurseries and plantations remain uncommon and almost all shea production relies on wild trees. 32. The main harvesting period of shea kernels is between May and August. The trees have one harvest season each year and are cyclical, with two good harvests typically followed by one poor harvest. For the most part, the harvesting technique remains the collection of ripe almonds that have fallen under the tree. However, to maximize the harvest, the branches of the trees are often shaken to cause the fruit (which contains the nut) to drop. Unripe fruit collected in this way can also generate good yields when processed into butter, both in terms of quantity and quality.42 Figure 5: Collection period of shea for individual collectors (in kg) 700 525 Central Kara 350 Savannah 175 0 January February March April May June July August September October November December Source: Ministry of Agriculture (2019). “Rapport du Recensement des Acteurs des Filières Miel, Karité, et Néré.� 33. Processing of shea kernels is the second stage in the value chain.43 Shea kernels are mainly processed into shea butter, which is used in the food (oil and chocolate production), cosmetics (skin hydration, UV protection, etc.), and pharmaceutical (wound healing, etc.) industries.44 The three main processes involved in processing shea nuts into shea butter are (i) traditional artisanal processing, (ii) modern artisanal or semi-industrial processing, and (iii) industrial processing. Traditional artisanal processing is usually carried out in households for domestic needs, often by women. Shea is sometimes referred to as “women’s gold� because the 40 FAO (2020). “Shea Value Chain as a Key Pro-poor Carbon Fixing Engine in West Africa.� 41 World Bank (2021). “Togo: Economic Inclusion in Value Chains with High Market and Employment Potential. Mapping of Shea Sector.� Unpublished Document. 42 Ministère de l’Agriculture, de l’Élevage, et du Développement Rural (2019). “Rapport du Recensement des Acteurs des Filières Miel, Karité, et Néré.� 43 Bockel, L., Veyrier, M., Gopal, P., Adu, A. and Ouedraogo, A. (2020). “Shea Value Chain as a Key Pro-poor Carbon Fixing Engine in West Africa. Accra: FAO and Global Shea Alliance. 44 Kpegba et al. (2017). “Assessment of Production Techniques for Shea Butter in Togo.� 33 production is mostly controlled by women, providing them with non-negligeable income that helps support key expenses such as food and medical care.45 However, this traditional process requires large amounts of water and wood to be transported over long distances. In contrast, modern artisanal processing combines traditional know-how with the use of modern equipment and machines that facilitate the arduous work of converting almonds into shea butter, while industrial processing uses machines throughout the entire process.46,47 34. Global demand for shea butter has increased steadily in recent years due to high demand from the global north and is estimated to reach USD 2.4 billion by 2030, with a compound annual growth rate (CAGR) of 14.2 percent.48 However, much of the shea produced in Togo remains in the national market. It is estimated that only about 35 percent of total wild shea production in Africa is harvested for export in butter or nut form. The top seven shea- producing countries export roughly 54 percent of their total shea nut production and process the remaining 46 percent into crude (unrefined) shea butter, roughly half of which is also exported. It is expected that the share of shea butter and derivatives imported into Europe from Africa will further increase as a result of ongoing investments in the processing sector in West Africa. The most attractive countries for the exportation of shea butter are considered to be the Netherlands, France, Sweden, Germany, the United Kingdom, and Belgium. Growth in the market for shea butter is driven by increasing demand for natural cosmetics in the European market and the food sector (as a substitute for cocoa butter). 45 Ray, R. (2021). “Saving the Shea: Genome Sequencing to Support Breeding and Conservation Efforts.� Retrieved from: https://www.unh.edu/unhtoday/2021/09/saving-shea 46 World Bank (2021). “Togo: Economic Inclusion in Value Chains with High Market and Employment Potential. Mapping of Shea Sector.� Unpublished Document. 47 The company Nioto is one of the leaders in the industrial production of shea butter in Togo. 48 Allied Market Research. "Shea Butter Market by Type (Raw & Unrefined and Refined & Ultra-Refined) and Application (Food and Cosmetics): Global Opportunity Analysis and Industry Forecast, 2021–2030." 34 3.2 Shea Production Box 1: Profile of shea producers and collectors 94% The vast majority of smallholder farmers are involved in 49% production/collection of shea nuts 32% and nearly half are also active in processing Production Processing Trade Average Annual Production Volume per Smallholder 598 kg Farmer Average Production Costs per 71,100 CFAF Smallholder Farmer Average Costs per 1kg per 119 CFAF Smallholder Farmer Around 14 percent of the women farmers indicated not owning any land under cultivation 35. The input for shea production on Figure 6: Inputs for shea production that farmers which respondents spent the most during spend the most money on the last agricultural season was transportation services (40 percent). As 40% mentioned above, shea trees grow mostly 33% in the wild without being planted and cultivated, so few inputs are used. After 18% transportation, respondents mentioned 8% storage (33 percent) and “other� (18 3% percent) as the next most expensive inputs. 49 Under, “other� the largest Seedlings Plowing Storage Transport Others 49 Excluding spending on labor costs, machinery, equipment, or land. 35 elements mentioned were water and irrigation followed by collection equipment, including machinery and vehicles. The average value for the entire machinery, vehicles, and equipment on the farm of a producing farmers is CFAF 347,294. Of the entire sample, 22 percent stated that they had no machinery, most of them being shea collectors. Table 5: Average sales, costs, and profits among shea collectors Average Sales Average Production Costs Average Profit50 CFAF 230,000 CFAF 71,100 CFAF 158,900 (70% of sales) 36. No qualifications are needed at the shea collection stage, and the majority of seasonal and temporary workers hired are women and youth. In the production stage, most smallholder farmers rely on family members rather than hiring employees. All of the smallholder farmers surveyed hired family members,51 while 20 percent of producing farmers employed temporary or seasonal employees and only 3 percent hired permanent employees. A proportion of 22 percent and 15 percent of producers employed 5 and 6 family members respectively, while the highest number of family members employed was 15 (3 percent). All seasonal and temporary workers hired were women, 80 percent of them were under the age of 25. The production phase, and in particular the collection of shea kernels, is mainly dominated by women. One of the women who took part in the FGDs made the following comment: “[The shea sector] is desirable in terms of employment for women who have not learned a profession, who are unemployed, and who don’t own land to cultivate. The collection of shea kernels doesn’t require any professional qualification.� 3.3 Shea Processing Box 2: Key insights into shea processing • The most common end product of MSMEs is shea butter. • Most MSMEs source from smallholder farmers. • Most MSMEs would like to participate in packaging activities but are currently unable to do so. • Most MSMEs hire both permanent workers and seasonal or temporary workers. 37. The majority (67 percent) of MSMEs interviewed were engaged in processing activities along the shea value chain. The second most common type of activity conducted was distribution and trading (43 percent), followed by retail and selling (29 percent), exporting (10 percent), and 50 In this context, profit is considered the result of costs subtracted from sales. 51 Including any partner's family members working on the farm full-time, part-time, or even only a few hours per week. 36 production (10 percent).52 Packaging (5 percent) and transportation (5 percent) were the least represented. Figure 7: Distribution of businesses involved in the shea value chain, by activity type 67% Processing Trading 43% Retail/Selling Exporting 29% Production Packaging 10% 10% Transportation 5% 5% 38. Most MSMEs convert shea nuts Figure 8: Samples of processed shea butter and into shea butter as their end product. soap provided by a respondent Some of them further transform the butter into cosmetic products such as hair conditioner, deodorant, soap, and massage ointment or produce consumable shea oil. 53 Others simply produce shea butter and sell it directly to the consumers or to other companies for further processing. 39. Around half of MSMEs involved in processing use traditional artisanal methods to produce shea butter. All women-owned MSMEs interviewed used traditional manual methods. Equipment needed for this type of processing includes blenders, pots and basins, and mills. The process generally begins with ripe fruit being brought to the village, where the pulp is removed and the exposed nut is partially boiled and sun-dried. After drying, the nuts are crushed to remove the outer shell and expose the kernel. Once exposed, the kernels are beaten into a powder, mixed with water, and kneaded into a paste. The paste is rinsed repeatedly to separate oils from non-oil elements; the oils are then heated, filtered, and cooled into a thick butter. Women are heavily involved at each step of this process. Artisanal processing requires large amounts of water and wood to be transported over long distances, making the work physically demanding.54 40. The majority of MSMEs source raw materials from associations or cooperatives (90 percent) and smallholder farmers (71 percent). A significantly smaller share of MSMEs sources 52 Percentages of activity types in the shea value chain do not sum to 100 percent as respondents were able to select multiple options. 53 Examples of compagnies that transform in Togo include Dodo Cosmetics, Stefcos Togo, Transam P, and Dream Cosmetics. 54 World Bank (2021). “Togo: Economic Inclusion in Value Chains with High Market and Employment Potential. Mapping of Shea Sector.� Unpublished Document. 37 from traders (19 percent). On average, MSMEs source from around 56 smallholder farmers, of whom around 60 percent are women and 10 percent are young smallholders. 41. The main challenge facing MSMEs in supplying large businesses is the low quantity of products they are able to supply, followed by transportation and logistics, and lack of storage facilities. A larger share of women perceived low quantity produced (100 per cent of women interview compared to 67 per cent of men) and transportation and logistics (67 per cent for women compared to 47 percent for men) as the main challenges. Figure 9: Main challenges for shea MSMEs in supplying large businesses, by gender Low quantity produced Transportation / logistics Male 67% 47% 47% 33% 33% Lack of storage facilities Quality does not meet standards Lack of knowledge/information/training Lack of access to financial / non-financial Female 100% 67% 33% services Informality of business Lack of social networks and marketing opportunities 42. The most frequently mentioned barriers in sourcing from smallholder farmers are quality- and quantity-related. In general, MSMEs indicated that smallholders produce lower quality (52 percent) and quantities (48 percent) and charge higher prices (38 percent). The main barriers reported by MSMEs regarding female smallholder farmers are that women produce smaller quantities (57 percent) and that it is difficult to find women suppliers (33 percent). The main barriers to sourcing from young smallholders are that young farmers produce in smaller quantities (62 percent), lack interest in the sector (62 percent), or are not participants in the producer groups MSMEs source from (43 percent). 38 Figure 10: Main barriers for shea MSMEs in sourcing from women and youth Difficult to find women-/youth-led suppliers 33% 62% Lack of interest by female/youth smallholders 24% 62% Women/Youth produce in smaller quantities 57% 19% Women/Youth are not participants in the producer groups 24% we source from 43% Social/cultural barriers in the community 14% 38% Other 10% 0% Women/Youth do not meet our eligibility requirements 5% 0% Women Youth 43. Most MSMEs indicate that they would incorporate more women and young smallholders into their supply chains provided they were given additional access to finance to support integration strategies (86 percent). This is followed by transportation and logistics services that better integrate smallholders (67 percent) and a larger supply of smallholders willing to sign contracts (62 percent). Figure 11: Factors that would induce shea MSMEs to incorporate more women and youth smallholders into the business Access to finance to support smallholder integration 86% strategies Transportation and logistics services that better integrate 67% smallholders Larger supply of smallholders willing to sign contracts 62% Improving productivity and management practices 57% External provision of technical assistance and other support 29% for integrating smallholders Stronger motivation among smallholders to participate in 24% commercial agriculture Stronger measures to reduce side-selling or other obstacles 19% Smallholders improving crop quality 14% 44. MSMEs report that they would like to package their products themselves, but would need support to purchase equipment and receive training in packaging techniques. The second largest activity MSMEs would like to diversify into is additional processing (62 percent), which also requires machinery and training. MSMEs indicate that on average, their equipment is valued at around CFAF 4,436,364. 39 Figure 12: Activities that shea MSMEs would like to participate in but are currently unable to Transport 24% Retail 24% Packaging 67% Processing 62% Trading 48% Farming/producing 33% 45. Women are more strongly represented than youth among general workers hired by MSMEs in the shea industry. Almost all businesses involved in processing hire seasonal or temporary workers (93 percent) and some hire permanent workers (67 percent), many of which are women but very few are youth. On average, MSMEs surveyed hired around two permanent employees and six seasonal or temporary workers, of whom 81 percent were women, 15 percent youth, and 6 percent migrant workers. This weak representation of youth in the shea value chain may be due to a lack of interest and education, as one smallholder farmer who participated in an FGD commented: “In general, it’s not easy for young people to find a job because of the low education rate. In addition, young people (especially men) are not really interested in the shea value chain because it is considered women’s work.� 3.4 Shea Commercialization Box 3: Key insights into shea trading The main customers for Out of the sample, only one smallholder farmers are smallholder farmer exports Transportation costs is small or large traders and (shea kernels to Benin) the biggest constraint wholesalers to exporting for smallholder farmers Out of the sample, 29% of and MSMEs The main customers for MSMEs export (shea butter MSMEs are traders, to United States, France, and wholesalers, processors, Russia) and manufacturers 46. While smallholders typically sell only to traders and wholesalers, MSMEs sell to a wider variety of customers. Both report price and product quality as the key factors for being selected as a supplier. 81 percent of smallholders surveyed sell their products to small or large traders 40 and wholesalers. MSMEs sell to a more diverse client base. While 62 percent report traders and wholesalers as their main clients, processors and manufacturers are also well represented, with one MSME even selling its products to pharmacies. The largest share of businesses involved in processing report both small and large traders and wholesalers as their main clients, while among producing businesses, the largest shares are local and international processors and manufacturers. Price and product quality were overwhelmingly reported by all respondents as the most important factors in being selected as a supplier, with 92 percent of smallholders and 81 percent of MSMEs citing product quality and 64 percent of smallholders and 62 percent of MSMEs citing price. 47. As expected, smallholders reported much lower annual sales than MSMEs. Smallholders reported average annual sales of just under CFAF 230,000 and median annual sales of just under CFAF 130,000, indicating the presence of a few large producers. Among smallholder farmers, 22 percent do not know their annual sales from the previous year, which is likely due at least in part to the fact that 89 percent of smallholders do not keep financial records. Among smallholders, females had higher annual sales than men, while among MSMEs, men-owned businesses had higher annual sales. Table 6: Annual sales among MSMEs and smallholder farmers (in CFAF) Mean 17,200,000 CFA Annual Sales MSMEs Median 11,700,000 CFA Mean 230,000 CFA Annual Sales Smallholder Farmers Median 130,000 CFA Table 7: Average smallholder shea kernel and butter prices (in CFAF), by business type Price (per kg) Smallholder Farmers MSMEs Kernel (High) 180 254 Kernel (Low) 125 175 Butter (High) 2,176 3,044 Butter (Low) 1,555 2,109 48. There is limited participation in export markets as value chain actors remain constrained by high transportation costs. 55 Of the 79 smallholders interviewed, the only exporter was a single female farmer who exported shea kernels to Benin. Smallholders give a wide range of reasons for not exporting, with most citing transportation costs as the biggest obstacle followed by insufficient or inconsistent production. MSMEs are more likely to export, 55 One notable exception is the company Alaffia, which has developed a successful business line of shea products that are commercialized on the US market. 41 with 29 percent of all businesses exporting shea butter to countries such as the United States, France, and Russia. Among businesses who report not exporting their products, transportation costs was most often cited as the main challenge. MSMEs also reported issues with quality and lack of certification as additional constraints to exporting. Figure 13: Main reasons for not exporting cited by shea smallholders and MSMEs Unfavorable Policies 22% 13% Unpredictable Policies 5% Quality/Certification 8% 33% Unattractive Prices 9% 27% Transport Costs 42% 53% Insufficient/Inconsistent Production 23% 5% Lack of knowledge 18% Other 6% 14% Smallholders MSMEs 3.5 Financing in the Shea Value Chain 49. Among smallholder farmers, the majority own land or property, while among MSMEs, the largest share own financial assets. The largest share of smallholders who own assets own land or property (48 percent), followed by those who own financial assets (25 percent) and inventory (16 percent). While all male smallholders indicated owning land or property, a smaller share of women (43 percent) indicated owning such assets. Among MSMEs, the largest share owning financial assets (13 respondents; 62 percent) is followed by general equipment (12 respondents; 57 percent). Only around 10 percent (two respondents) of MSMEs own inventory. No women-owned MSME respondent owned any inventory, buildings, or vehicles. Figure 14: Asset types owned by shea MSMEs Inventory 10% Financial assets 62% Vehicles 29% Specialty equipment 33% General equipment 57% Building(s) 19% Land/property 29% 42 50. For both MSMEs (81 percent) and smallholder farmers (51 percent), the primary method for financing operations is personal savings. In general, the use of products or services from financial institutions by smallholder farmers seems low. For instance, only 15 percent of smallholder farmers indicated having a bank account (with no difference identified between genders and age groups). In contrast, 90 percent of MSMEs indicated having a bank account. Only 10 percent of smallholder farmers have ever received a loan or line of credit for their business from a bank or other financial institutions. The average loan amount received was CFAF 213,750, ranging between 30,000 and 700,000, with an average interest rate of 13 percent. In contrast, around half the MSMEs have already received a loan or line of credit, with interest rates varying between 8 and 18 percent. Most MSMEs (83 percent) used their loan to purchase inputs, inventory, or goods for sale, while the largest share among smallholder farmers used their loan for business expansion (50 percent). 51. The most common reason for being rejected for a loan is lack of collateral. Among MSMEs, 14 percent of the sample had previously applied for a loan or line of credit and been rejected. The top reasons for rejection were lack of collateral, insufficient income or asset documentation, and excessively high amounts requested from the financial institution. Lack of documentation is an even greater challenge for smallholder farmers, of whom only 11 percent maintain financial records. In comparison, 67 percent of MSMEs keep financial records. Both smallholder farmers and MSMEs interviewed expressed interest in securing future loans and credit lines (see table below). Table 8: Key data on potential future loan applications among shea value chain actors Smallholder Farmers MSMEs Share of businesses planning 43% 81% on applying for a future loan Average amount of CFAF 587,647 CFAF 73,100,000 preferred future loan Business expansion (76%); Purchasing Business expansion (88%); Purchasing Use of future loan fixed assets (35%); Purchasing inputs fixed assets (59%); Purchasing inputs and inventories (26%) and inventories (59%) I do not have the required collateral I do not have the required collateral Reasons for not wanting a (50%); I do not have the money to pay (49%); I do not have the money to future loan back (25%); I do not know what to use pay back (38%) it for (25%) 43 4. Key Findings on the Ginger Value Chain 4.1 Overview of Ginger Value Chain Value Chain Input Supply Production Processing Marketing Micro Enterprises (e.g. Smallholder farmers Smallholder farmers women producing juice to usually use roots from (in Wawa 4,000; in Central sell at local market) National Market Main Value Chain Actors previous harvest 2,000) Supermarkets, Local Markets, Restaurants, Shops, Boutiques Producer Cooperatives Small Enterprises (e.g. 11 established cooperatives with young entrepreneurs) 251 members Fertilizer Providers (e.g. NGO Agide) Medium Enterprises International (e.g. Agrocomplex, Large Producers Fankfood, Ets Rimouski) Market Export; Transformers that (around 250 in Togo) buy fresh ginger and process c abroad Large Enterprises (e.g. Julado, Junabio, Champiso) Supporting Actors International organizations / Support programs: Gesellschaft für Internationale Zusammenarbeit (GIZ), COLEACP, Inades-Formation. Public support structure: Ministère de l'Agriculture, de l'Elevage et du Développement Rural (MAEDR) – Institut de Conseil et d’Appui Technique (ICAT), Institut Togolais de Recherche Agronomique (ITRA), Direction de la Protection des Végétaux (DPV), Direction de la Formation de la Diffusion des Techniques et des Organisations Professionnelles Agricole (DFDTOPA), Fonds National de la Finance Inclusive (FNFI), Mécanisme Incitatif de Financement Agricole (MIFA), etc. Certification Schemes (Voluntary): Togolese Institute of Agronomic Research (ITRA), National Institute of Hygiene (INH). 44 52. The first stage in the ginger value chain involves input supply and production. In Togo, producers can be classified into three main groups: (i) large producers, (ii) producer cooperatives, and (iii) individual smallholders consisting largely of women. Individual producers usually use sprout roots from previous harvests as input as ginger is not grown from seeds but rather from a piece of the rhizome or tuber. Roots are sown directly on the ground or in small furrows, to avoid breakage during harvesting. A large amount of ginger is grown by women on small plots, often in the backyard of the home or within walking distance from the village. Few young people are involved at this stage of the value chain. 53. The peak harvest season, when most of the ginger is collected, is between May and July. Once the ginger roots are planted in the ground, it takes 4-5 months before they are ready for harvest, although they can stay in the ground up to eight months. This allows the processing period to be distributed across the agricultural year (see figure below). In Togo, ginger is grown primarily in the western part of the Plateaux region, specifically the prefectures of Wawa (the highest production area), Kloto, and Akebou. It is also planted in the Centrale, Kara, and Savannah regions in smaller quantities (northern Togo). 56 National production of ginger in Togo amounts to 60,000 tons. Figure 15: Ginger production calendar in Togo Activity Jan Feb Mar April May June July Aug Sept Oct Nov Dec Soil Preparation Planting Harvest Processing Main season Low season 54. There are several companies in Togo that transform ginger. Processing techniques vary depending on the final product but remain largely manual. Processing companies rely primarily on manual processing methods. Equipment includes mills, extractors, electric scales, and drying areas. 57 Sector experts note that with the incorporation of drying machines, processing time could be reduced from 4-10 days to 4-5 hours while also significantly increasing the quality of production. However, this would come with the burden of additional costs.58 Further, a 2013 study of fungal contamination in spices marketed in Benin and Togo found that dried ginger was by far the most contaminated of the products studied. Specifically, dried ginger was found to be 56 Africa Green Magazine. (2021). “Culture du gingembre: Pénible mais juteuse.� Retrieved from: http://www.africagreenmagazine.com/2020/04/culture-du-gingembre-penible-mais.html 57 World Bank (2021). “Togo: Economic Inclusion in Value Chains with High Market and Employment Potential. Mapping of Ginger Sector.� Unpublished Document. 58 CBI (2020). “Value Chain Analysis of Nigerian Dry Ginger.� 45 contaminated with 14 different genera of fungi and to carry 1,045 g/kg of aflatoxin, a type of mycotoxin that can carry human health risks. The authors suggested that contamination may have occurred during the drying phase or due to poor food handling during transportation and storage. Women are mainly involved in the buying, washing, and packaging process, while few young people are involved in processing, except for a few small enterprises. 55. National demand for ginger in Togo currently exceeds supply and ginger needs to be imported from neighboring countries such as Nigeria. Togo has a significant trade deficit when it comes to ginger, relying heavily on imports to meet local demand. In addition, demand for ginger on the international market is currently higher than supply. The global consumption of ginger has increased significantly over the past five years, with an estimated 5 percent compound annual growth rate (CAGR) between 2016 and 2020. However, the value of ginger exports from Togo currently represents less than 1 percent of the global market. In 2019, Togo officially exported only 424kg of ginger, with an export value of about USD 2,000. Meanwhile, Togo also imported ginger with a value of about USD 200,000, resulting in a trade deficit of USD 198,000.59 Figure 16: Ginger import and export values in Togo (USD) 250000 194929 192625 197681 200000 155243 150000 100000 50000 2329 2058 2341 2029 0 2016 2017 2018 2019 Export Value Import Value 59 FAOStat Crop and Livestock Products Data: Yield and Production of Ginger, 2019. 46 Box 4: Factsheet on ginger value chain actors Most smallholder farmers surveyed are engaged in the production stage, while most MSMEs are involved in the processing stage of the ginger value chain. 99% 85% 5% 5% 15% 10% 1% Production Aggregation Processing Distribution/Trading Exporting Smallholder Farmers MSME Growing ginger is not an exclusive activity. Most value chain actors are also involved in the production of other crops. Smallholder Farmers MSMEs Among both smallholder farmers and MSMEs, most are small businesses in a slow growth phase. MSMEs 15% 65% 5% 15% Smallholder Farmers 29% 67% 3% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Starting up Growing slowly Growing rapidly Stable or mature 47 4.2 Ginger Production Box 5: Overview of ginger production by smallholder farmers Average annual Average size of Average value production volume cultivated land of land 1,308 kg 2.4 ha CFAF 3,690,186 56. Seeds and plowing constitute the highest costs for ginger producers. On average, total production and operating costs for smallholder farmers in the last agricultural year were CFAF 618,727. The three inputs ginger producers spent the most money on are seeds/rhizomes (39 percent as the top input), plowing services (41 percent as the top input), and transportation services (39 percent in second place). Furthermore, the top three costs for the business in general are labor (92 percent), seeds/rhizomes (43 percent), and transportation (43 percent). Table 9: Average sales, costs, and profits among ginger producers Average Sales Average Production Costs Average Profit60 CFAF 863,982 CFAF 618,727 CFAF 245,255 (29% of sales) Figure 17: Top three inputs smallholder ginger farmers spend most money on (ranked from 1 to 3) 6% 24% 18% 11% 3rd rank 2nd rank 39% 41% 39% 1st rank Transport Plowing Seeds 57. Most smallholder farmers surveyed employ family members, but only 12 percent hire outside of the family circle. 76 percent of smallholder ginger farmers interviewed employ family members to work on the farm, with an average count of three to four members. However, only 35 percent pay family members for the work, and among those who pay, 97 percent pay them less compared to other employees. Meanwhile, only 12 percent of smallholder ginger farmers employ workers outside of the family circle, and those are typically temporary workers (91 60 In this context, profit is considered the result of costs subtracted from sales. 48 percent). 64 percent of smallholder farmers who hire temporary workers do hire female workers, 9 percent hire migrant workers, and 63 percent hire young workers below the age of 35. “It is not easy to find good workers; young people are no longer very interested in field work, and those who are interested are rare and expensive in terms of payment.� 4.3 Ginger Processing 58. Ginger is typically processed into ginger powder or juice, using a combination of traditional and modern processing methods. Most of the MSMEs surveyed (85 percent) are involved in the processing stage of the ginger value chain. Most convert fresh ginger into ginger powder 61 (65 percent), ginger juice (35 percent), or ginger croquettes (10 percent). MSMEs indicated that processing involves around six different steps, which takes an average of four days to complete. One promising end product with high margin potential is ginger essential oil, whose production in Togo was pioneered at the University of Kara. Figure 18: Processing methods used by Figure 19: Main end products of ginger MSMEs ginger processors 35% 41% 24% Traditional Modern Both 61 Ginger powder can be used as seasoning mixed with other spices for cooking. Some processors also make juice with the powder by mixing it with water. 49 Figure 20: Examples of ginger end products 59. The top two costs items among processing businesses are equipment (70 percent) and labor (65 percent). The most common equipment and machines used in the processing of ginger are basins, mills, knives, grinders, and dryers. With regards to labor, high costs may be the reason why more of the businesses interviewed choose to hire temporary rather than permanent workers. Around 60 percent of MSMEs surveyed hired permanent workers in the last agricultural year, while 90 percent hired temporary workers. On average, MSMEs hired four permanent and nine temporary workers. Of those businesses that hired seasonal workers, 70 percent hired at least one female worker and 40 percent at least one worker below the age of 35. Furthermore, 94 percent of MSMEs hired female workers among their permanent workers and 84 percent hired permanent workers below the age of 35. 60. Most of the MSMEs involved in processing source raw materials from traders or farmers (70 percent), including smallholder farmers (50 percent). The second and third largest shares source from associations and cooperatives (30 percent) and large suppliers (10 percent). On average, MSMEs interviewed sourced from 18 smallholder farmers, of which 46 percent are women and 60 percent are youth. 61. The main barriers mentioned to sourcing from women and youth smallholders are the low quantities produced and the difficulty involved in locating them. The three main barriers to sourcing from female smallholder farmers perceived by the MSMEs surveyed are low production quantity (55 percent), difficulty in finding women-led suppliers (40 percent), and lack of interest among female smallholder farmers (30 percent). The main barriers to sourcing from young smallholder farmers are difficulty in finding youth-led suppliers (60 percent), the smaller quantities produced by these suppliers (40 percent), and lack of interest shown by young smallholder farmers (30 percent). 50 Figure 21: Main barriers to sourcing from women and youth smallholder farmers perceived by ginger MSMEs Women produce in smaller quantities 40% 55% Difficulty finding women-led suppliers 60% 40% Lack of interest among female smallholders 30% 30% Social or cultural barriers in the community 0% 10% Women are not participants in the producer groups we 0% source from 10% Youth Women 62. In general, the largest share of MSMEs indicated that access to finance to support integration strategies would induce them to incorporate more women and youth into their operations (50 percent). This is followed by a larger supply of smallholders willing to sign contracts (35 percent) or transportation and logistics services that would help better integrate smallholders (30 percent). Figure 22: Factors that would induce ginger MSMEs to incorporate more women and youth smallholders into their operations Access to finance to support 50% smallholder integration strategies Larger supply of smallholders 35% willing to sign contracts Transportation and logistics 30% services that better integrate… Improving productivity and 25% management practices External provision of technical 20% assistance and other support to… Smallholders adopting crops 20% agricultural businesses operate Smallholders improving crop quality 15% Stronger motivation among 10% smallholders to participate in… 63. MSMEs involved in processing report that they would be interested to grow ginger themselves, but that this would require training and support for purchasing machinery. Among all MSMEs interviewed, the largest share (40%) would like to participate in producing activities 51 but are currently unable to do so. The second largest share (35 percent) would like to engage further in trading or packaging. To be able to participate in these activities, most MSMEs would need training on new techniques (45 percent) and support for purchasing machinery or access to new technology (55 percent). Figure 23: Activities ginger MSMEs would like to participate in but are currently unable to 40% 35% 35% 25% 25% Farming/producing Trading Processing Packaging Transportation 4.4 Ginger Commercialization Box 6: Key insights into ginger trading The main customers for No smallholder farmers in smallholder farmers are the sample export Difficulty meeting small or large traders and certification and quality wholesalers standards are the 25% of MSMEs in the sample biggest constraints to export (France, Belgium, The main customers for exporting for USA, Switzerland, and MSMEs are end consumers smallholders and MSMEs Canada) 64. Although ginger producers and MSMEs are often also involved in other crops, on average 60 percent of their sales come from ginger products. Among smallholder farmers surveyed, the total annual sales of all their products (including those other than ginger) were CFAF 1,150,101 (with a mean of CFAF 850,000),62 of which ginger products represented CFAF 863,982 (with a mean of CFAF 376,375). Smallholder respondents indicated that on average 57 percent of their total annual sales are derived from ginger products, which is similar to the 61 percent of the total annual sales for MSMEs derived from ginger products. For ginger MSMEs, on average, total annual sales of all products was CFAF 11,700,000 CFA (with a mean of CFAF 1,800,000). 62 Outliers above CFAF 10,000,000 in total annual sales have been removed. 52 65. The unit price of unprocessed ginger varies over the year depending on availability. According to smallholder farmers, the highest average unit price per kilogram of fresh, unprocessed ginger was CFAF 728, while the lowest average unit price was CFAF 354.63 Around 77 percent of all smallholder farmers indicated that the price of unprocessed ginger fluctuates over the year. The price is typically higher between December and January because the ground is harder and makes harvest more difficult, leading to a scarcity of fresh ginger. In contrast, the price is lowest between October and November. Processed products are also affected by price variability, with the average highest unit price for ginger juice being CFAF 1,443 per liter and the average lowest unit price being CFAF 1,376, according to MSMEs interviewed. Table 10: Annual sales and highest and lowest unit prices of top three ginger products (in CFAF) Product Annual Sales Annual Sales Average Highest Average Lowest Means Median Unit Price Unit Price Smallholder Farmers Unprocessed Ginger 863,982 376,375 728/kg 354/kg MSMEs Ginger Juice 702,143 520,000 1,443/l 1,376/l Ginger Powder 1,720,846 450,000 6,021/kg64 5,120/kg 66. Product quality, price, and production capacity are the key challenges for smallholder farmers who want to be selected as suppliers, while for MSMEs lack of skills and storage facilities pose the main challenges in supplying larger businesses. For most smallholder farmers (65 percent) the biggest group of clients is represented by small, individual traders and wholesalers, followed by large traders and wholesalers (33 percent). Among MSMEs, the biggest client group is represented by end consumers (90 percent). Most smallholder farmers find their clients in the local market (84 percent), while most businesses sell in their own store (72 percent). According to smallholder farmers interviewed, the most important factors in being selected as a supplier are adequate product quality, price, and production capacity. Quality in particular was most often reported by female smallholder farmers (22 percent) compared to men (5 percent). In addition, for MSMEs, lack of technical skills and of storage facilities pose the main challenges in being able to supply larger businesses. 67. The majority of smallholder farmers and MSMEs interviewed do not export because of challenges meeting certification and quality standards. Some MSMEs occasionally export products such as ginger powder and ginger juice. The most common export destinations are France, Belgium, the United States, Switzerland, and Canada. Most smallholder farmers do not 63 Price data covering the period from July 2021 to June 2022. 64 After fresh ginger is processed to dry ginger, it accounts for 40-60% of the initial weight. This depends on the level of maturity of the fresh ginger at harvest. 53 export for reasons that include difficulties in meeting certification or quality standards (33 percent), high road or air freight transportation costs (37 percent), and capacity to produce in sufficient quantities (30 percent). Similarly, MSMEs that do not export indicate reasons such as difficulties in meeting certification or quality standards (53 percent) or being restricted by the high road or air freight transportation costs (20 percent). As one FGD participant commented: “The lack of international certification is one of our main constraints for exporting ginger.� Figure 24: Main reasons for not exporting cited by smallholder ginger farmers and MSMEs Transportation costs 20% 37% Unattractive price 7% 13% Quality Standards/Certifcation 53% 33% Inconsistent/unpredictable domestic 0% policies 7% Unfavorable domestic policies 7% 21% MSMEs Smallholder Farmers 4.5 Financing in the Ginger Value Chain 68. Most smallholder farmers indicated that they own land or property (78 percent), while most MSMEs indicated that they own specialty equipment as assets (70 percent). Other assets owned by smallholder farmers are buildings (8 percent) and financial assets (19 percent). On average, the land or property owned by smallholder ginger farmers is valued at CFAF 1,867,664 and the average value of buildings is CFAF 411,429. The average total value of financial assets (including cash, accounts receivable, deposit accounts, checks, etc.) is CFAF 300,000. Interestingly, only 36 percent of smallholder farmers indicated that they have a bank account, while 80 percent of MSMEs have one. In addition to specialty equipment, MSMEs also indicated owning financial assets (40 percent) and land or property (25 percent). On average, their general equipment is valued at CFAF 10,000,000. The average value of the land or property owned by MSMEs is CFAF 17,000,000, and their financial assets are valued at CFAF 2,400,000 on average. 69. For both MSMEs (55 percent) and smallholder farmers (98 percent), the primary method for financing operations is personal savings. Use of formal financing instruments is low (5 percent among MSMEs and only 1 percent among smallholders). The most common reason for being rejected for a loan is lack of collateral. Among MSMEs, 10 percent of the sample previously applied for a loan or line of credit but were rejected. Top reasons for rejection were not enough evidence of cash flow or incomplete application. Lack of documentation is a greater challenge for smallholder farmers, among whom only 15 percent maintain financial records. In comparison, 55 percent of MSMEs keep financial records. However, both smallholder farmers 54 and MSMEs interviewed are interested in applying in the future for loans and credit lines (see table below). Table 11: Key data on potential future loan applications among ginger value chain actors Smallholder Farmers MSMEs Share of businesses planning on applying for 77% 75% a future loan Average amount of CFAF 756,742 CFAF 10,000,000 preferred future loan Business expansion (86%); Purchasing Business expansion (93%); Purchasing Use of future loan inputs and inventory (65%); fixed assets (47%); Purchasing inputs and Purchasing fixed assets (20%) inventory (40%) I do not have the money to pay it The cost would not be worth my expected Reasons for not wanting back (65%); I do not have the return (80%); I do not have the required a future loan required collateral (25%) collateral (20%) 55 5. Key Findings on the Red Pepper Value Chain 5.1 Overview of Red Pepper Value Chain Value Chain Supply Input Production Processing Marketing Smallholder farmers Smallholder farmers National Market usually use seeds from (so far, more than 1,000 Supermarkets, Local Main Value Chain Actors previous harvest producers have been Markets, Restaurants, identified at a national Small or Medium Shops, Boutiques level) Enterprises (e.g., Agrocomplex, Agro- Horeb Kara) Fertilizer Providers Large Enterprises Potential International (e.g., Ets Tata Choco, Market Medium / Large Ospra, Julado, Junabio, At the moment only Producers Champiso) very few enterprises Cooperatives cater to the international market Supporting Actors International organizations / Support programs: Gesellschaft für Internationale Zusammenarbeit (GIZ), COLEACP, Inades-Formation, Mécanisme Incitatif de Financement Agricole (MIFA) Public support structures: Ministère de l'Agriculture, de l'Elevage et du Développement Rural (MAEDR) – Institut de Conseil et d’Appui Technique (ICAT), Institut Togolais de Recherche Agronomique (ITRA), Direction de la Protection des Végétaux (DPV), Direction de la Formation de la Diffusion des Techniques et des Organisations Professionnelles Agricole (DFDTOPA), Fonds National de la Finance Inclusive (FNFI), etc. Certification Schemes (Voluntary): Experta Togo Agro, Morija Togo, Rez du Jardin 56 70. Togo is a small producer of red pepper on the world stage, with relatively stable yields and production over the past decade. Between 2000 and 2019, average production of red pepper in Togo was 3,073 tons per year. By comparison, this represents just 3.6 percent of the production of Ghana over the same period and 3.3 percent of the production of Côte d'Ivoire, making Togo a relatively small producer. Total production in Togo has remained relatively stable over the past two decades, as has the area cultivated. However, yields have been somewhat more unstable, improving fairly rapidly after the turn of the century, undergoing a period of instability between 2007 and 2013, then recovering and remaining stable up to today.65 Figure 25: Production of red pepper in Togo in tons and red pepper yields (in hg/ha) 4500 4400 3600 4200 Production (tons) Yield (hg/ha) 4000 2700 3800 1800 3600 900 3400 0 3200 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Production Yield Data Source: FAOStat. Box 7: Definition of “red pepper� Red pepper is a vegetable plant that belongs to the nightshade family. The scientific name for pepper is Capsicum. The most common varieties of peppers cultivated in Togo are Capsicum annuum and Gboyebesse, which belongs to the Capsicum chinense group. This study mostly focuses on red pepper varieties grown in Togo, including Bago, Sunny Hybrid, and ICRAD 1, among other varieties. Red pepper can also be referred to as hot pepper, chili pepper, or chili. Pepper Varieties Cultivated in Togo Capsicum Annuum Capsicum Chinense Anié Bago Sunny Hybrid ICRAD 1 Gboyebesse Source: Embrapa. Piments – Guide de Production au Togo 65 FAOStat Crop and Livestock Products Data: Production and Yields of Dried Chilis and Peppers, Togo, 2000-2019. 57 71. Supplies of red pepper seeds can be purchased from smallholder farmers, fertilizer providers, or cooperatives or used from past harvests as a base for a new production cycle. Red pepper can be planted in almost all regions of Togo and during most of the year (even in the dry season if appropriate land and equipment are available). However, swampy areas and areas with excessively high temperatures are not ideal for red pepper and can cause flowers and fruits to fall off, which affects yields. Red pepper grows best in soil that is rich in organic matter, light and deep, well drained, and slightly acidic. 66 NPK fertilizer is often used to help at the seeding/nurturing stage as young plants are often fragile. Smallholder farmers often use the seeds from past harvests to start a new production. Very few young people are currently involved in the input supply stage in Togo. 72. Red peppers represent 10 percent of Togo’s national vegetable production. In 2017, red pepper production reached 4,354 tons, of which most was produced in the Plateaux region, followed by Kara, Centrale, and Savannah. A census of red pepper producers conducted by GIZ identified 1,000 producers nationally. According to stakeholder interviews, four stages can be distinguished in the production of red pepper: (i) plowing and soil preparation, (ii) seeding and nurturing, (iii) transplanting, and (iv) harvesting. Women are mainly involved in the seeding/nurturing, transplanting, and harvesting stages, while young people are involved in harvesting, usually as temporary workers. The red pepper production cycle varies between five and eight months from the date of seeding, depending on the variety. Harvesting begins 3.5-4 months after sowing and is generally spread over several months, since the fruits are harvested gradually at two-week intervals. Figure 26: Red pepper production calendar in Togo Activity Jan Feb Mar April May June July Aug Sept Oct Nov Dec Soil Preparation Nursery Transplanting Harvest Main season Low season 73. Fresh red pepper is often dried or processed into powder, juice, or jam. In Togo, processing businesses include small industrial units as well as larger companies that are spread across the country. Togolese processing companies in the red pepper value chain mainly work manually. Smaller enterprises usually have less equipment available and require fewer 66 World Bank (2021). “Togo: Economic Inclusion in Value Chains with High Market and Employment Potential. Mapping of Red Pepper Sector.� Unpublished Document. 58 processing steps than larger processors.67 While few young people are involved in processing, a significant share of women are. 74. Togo typically consumes most of the red pepper it produces, being a net exporter in some years and a net importer in others, but never importing or exporting more than 70 tons a year.68 Red pepper serves both the national and the international markets. The national market for red pepper and its byproducts, such as ground or dried pepper as well as spices, is driven by semi-modern processing units, supermarkets, and national distributors. The international red pepper market is driven by small processing companies and individual exporters. Togo’s main red pepper exporting partner is France. There is a growing international demand for red pepper, with the total export value growing by a factor of five since 2000.69 However, large-scale export is conditioned on the certification of the product, and for this reason, some companies are restricted due to the high cost of the quality verification process necessary to secure the certification.70 Figure 27: Togo's import and export quantities of red pepper, by year, in tons, 2000-2019 70 53 Export 35 Quantity Import 18 Quantity 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Data Source: FAOStat 67 World Bank (2021). “Togo: Economic Inclusion in Value Chains with High Market and Employment Potential. Mapping of Red Pepper Sector.� Unpublished Document. 68 FAOStat Crop and Livestock Products Data: Exports and Imports of Dried Chilis and Peppers, Togo, 2000-2019. 69 FAOStat Crop and Livestock Products Data: Export Value of Dried Chilis and Peppers, 2000-2019. 70 World Bank (2021). “Togo: Economic Inclusion in Value Chains with High Market and Employment Potential. Mapping of Red Pepper Sector. Unpublished Document. 59 Box 8: Factsheet of red pepper value chain actors Most smallholder farmers are engaged in production, while most MSMEs are involved in processing and production. 97% 46% 50% 35% 33% 21% 4% 8% Input Supply Production Processing Packaging Distribution/Trading Retail/Selling Smallholder Farmers MSMEs Most value chain actors are also involved in the production of other crops. In particular, red pepper and ginger are often processed together. Smallholder Farmers MSMEs Among both MSMEs and smallholder farms, most are small businesses in a slow growth phase. MSMEs 25% 54% 4% 17% Smallholder Farmers 23% 47% 9% 15% 6% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Starting up Growing slowly Growing rapidly Stable or mature Downscaling 60 5.2 Red Pepper Production Box 9: Overview of red pepper production by smallholder farmers Average annual Average size of Proportion not owning production volume cultivated land any land 2,041 kg 3.6 ha 9% 75. Annual production costs per smallholder farmers were reported at CFAF 1,765,257 on average, which seems to be mostly driven by the costs of labor and seeds.71 Less than a third of smallholder farmers keep financial records of expenses. The top three inputs smallholder farmers spend the most money on are seeds, plowing services, and fertilizers. Other costs mentioned by smallholder farmers are agrochemicals, labor, and water. The average cost of producing 1 kg of red pepper is CFA 729. Table 12: Average sales, costs, and profits among red pepper producers Average Sales Average Production Costs Average Profit72 CFAF 2,313,054 CFAF 1,765,257 CFAF 547,797 (24% of sales) Figure 28: Top inputs smallholder red pepper farmers spend the most money on (ranked from 1 to 3) 15% 11% 6% 3rd rank 34% 18% 2nd rank 1st rank 29% 50% 29% 10% Fertilizer/Pesticide Plowing Seeds 76. Most smallholder farmers employ family members (70 percent) and temporary workers (76 percent), but only a few hire permanent workers (13 percent). Among smallholder farmers that employ family members, the average number of workers was seven; however, only around 16 percent receive a salary. Among smallholder farmers who hired seasonal workers outside the family circle, the average number of temporary workers was also seven. 71 Min: CFAF 1,500; Max: CFAF 21,000,000. 72 In this context, profit is considered the result of costs subtracted from sales. 61 “Demand for jobs is strong because of underemployment in Togo. But red pepper production is considered difficult by the actors because it stings and it makes workers cough. As a result, employment in red pepper companies is often unstable.� 5.3 Red Pepper Processing 77. The largest share of MSMEs surveyed use traditional processing methods to process red pepper (42 percent). This is followed by a mix of traditional and modern processing methods (33 percent) and modern methods (25 percent). On average, MSMEs need around five days for the entire processing procedure. The most common machines and equipment used in this process are mills, truck drivers, scales, and bagging machines. Among MSMEs, most transform the red pepper into red pepper powder (83 percent), followed by red pepper spices (58 percent) and dry red pepper (25 percent). One other promising end product is red pepper essential oil, which is not yet marketed at scale in Togo. Figure 29: Processing methods used by red Figure 30: Main end products of red pepper MSMEs pepper processors 33% 42% 25% Traditional Modern Both 78. Most MSMEs surveyed source their raw material from smallholders (75 percent), followed by large suppliers (25 percent) and associations or cooperatives (20 percent). Around 43 percent of MSMEs source from female smallholder farmers, while 35 percent source from youth. The biggest challenges for both smallholder farmers (68 percent) and MSMEs (75 percent) in supplying larger businesses are the low quantities they are able to produce, with the second largest reported challenge being a lack of knowledge and skills (51 percent for smallholder farmers, 46 percent for MSMEs). 79. The most frequent barriers to sourcing from women and youth smallholder farmers are the small quantities produced and challenges in finding women and youth producers. According to MSMEs interviewed, the three main barriers to sourcing from women smallholder farmers are the fact that women produce smaller quantities (79 percent), difficulty finding women-led 62 suppliers (54 percent), and lack of interest among female smallholders (29 percent). The three main barriers to sourcing from young smallholder farmers are difficulty finding youth-led suppliers (71 percent), the fact that youth produce smaller quantities (63 percent), and lack of interest among youth smallholders (54 percent). Figure 31: Main barriers to sourcing from women and young smallholder farmers perceived by red pepper MSMEs Difficult finding women-led suppliers 54% 71% Women produce smaller quantities 79% 63% Lack of interest among female smallholders 29% 54% Women are not participants in producer groups sourced 13% from 21% Social or cultural barriers in the community 17% 0% Women Smallholder Farmers Youth Smallholder Farmers 80. The largest share of MSMEs indicated that they would be more likely to incorporate women and youth smallholders into their operations if they had access to finance to support integration strategies (83 percent). This is followed by a larger supply of smallholders willing to sign contracts (50 percent) and external (government or donor) provision of technical assistance and other support for integrating smallholders (50 percent). Figure 32: Factors that could induce MSMEs to incorporate more women and youth smallholders into their operations Access to finance to support smallholder integration strategies 83% Larger supply of smallholders willing to sign contracts 50% External provision of technical assistance and other support for 50% integrating smallholders Transportation and logistics services that better integrate smallholders 38% Improving productivity and management practices 29% Smallholders adopting crops in which agricultural business operates 29% Stronger motivation among smallholders to participate in commercial 29% agriculture Stronger measures for reducing side-selling or other obstacles 19% 81. MSMEs report that they would like to engage in the end trading of their products (instead of selling them to intermediaries) but would require training and equipment. Of all 63 MSMEs surveyed, the largest share would like to participate in trading activities but are currently unable to do so. The second largest share (42 percent) would like to engage in processing. However, to be able to participate in the activities, most businesses would need training in new techniques (75 percent) and support for purchasing machinery or access to new technology (63 percent). Figure 33: Activities red pepper MSMEs would like to participant in, but are currently unable to 46% 42% 33% 29% 21% 8% Farming/producing Trading Processing Packaging Retail Transportation 82. Most MSMEs active in processing employ temporary or seasonal workers (83 percent), and many also employ permanent workers (71 percent). On average, MSMEs hire six temporary workers. Of those that hire temporary or seasonal workers, 90 percent hire at least one female worker and 95 percent at least one worker below the age of 35. MSMEs that employed permanent workers in the last agricultural year employ on average three permanent workers. Furthermore, 67 percent of businesses hire female workers among their permanent workers and 58 percent hire permanent workers below the age of 35. 5.4 Red Pepper Commercialization Box 10: Key insights into red pepper trading The main customers for Of the sample, 3% of smallholder farmers are smallholder farmers export Transportation costs small or large traders and (Benin) are the biggest wholesalers constraint to export for Of the sample, 11% of smallholders and The main customers for MSMEs export (Canada, MSMEs MSMEs are end consumers France, Burkina Faso, USA, Belgium) 83. For both smallholder farmers and MSMEs, product quality is the key factor to be selected as a supplier by larger businesses. For most smallholder farmers (71 percent) the biggest group of clients is represented by small individual traders and wholesalers, followed by large traders and wholesalers (21 percent). Among MSMEs, the biggest client group is represented by end consumers (63 percent). Most smallholder farmers find their clients in the 64 local market (86 percent), while most MSMEs sell in their own store (67 percent). Both smallholder farmers and MSMEs interviewed reported product quality as the most important factor for being selected as supplier by a larger business, followed by price and production capacity. 84. Almost all smallholder farmers indicated that the price of red pepper varies depending on the season. MSMEs working with red pepper powder and paste as end products appear to have the highest annual sales, while businesses working with fresh red pepper and red pepper spices have lower average annual sales (see table below). According to smallholder farmers, the highest price for 1 kg of fresh red pepper can be up to CFAF 1,543, while the lowest price can be as low as CFAF 739 per kg. According to MSMEs interviewed, the average unit price for fresh red pepper varies between CFAF 550 and 592. Prices are influenced by various factors, including the rainy season, harvest period, and festivals (e.g., Ramadan), which may vary across regions of Togo. For instance, the price is lower in November to January and higher during April to July in the Kara region. In contrast, in Maritime the price is lower during the rainy season in June and higher during the dry season from October to February. Table 13: Annual sales, highest and lowest unit prices of top red pepper products (in CFAF) Product Annual Sales Annual Sales Average Highest Average Lowest Means Median Unit Price Unit Price Smallholder Farmers Fresh Red Pepper 5,223,111 CFA 1,200,000 CFA 1,543 CFA / kg 739 CFA / kg Dry Red Pepper 971,250 CFA 650,000 CFA 2,187 CFA / bowl 250 CFA / bowl MSMEs Fresh Red Pepper 194,016 CFA 22,500 CFA 592 CFA / kg 550 CFA / kg Dry Red Pepper 461,032 CFA 150,000 CFA 825 CFA / kg 600 CFA / kg Red Pepper Powder 960,001 CFA 350,000 CFA 965 CFA / 100g 820 CFA / 100g Red Pepper Spices 323,000 CFA 200,000 CFA 1,214 CFA / 100g 814 CFA / 100g 85. The majority of smallholder farmers and MSMEs interviewed do not export because of high road and air freight transportation costs. Only around 3 percent of smallholder farmers interviewed export their products (to Benin). The main reasons for not exporting are high road or air freight transportation costs (45 percent), challenges in meeting certification or quality standards in other countries (35 percent), or lack of client networks abroad (27 percent). Among the MSMEs surveyed, 13 percent export their products, including red pepper powder and red pepper paste. The countries to which they export are Canada, France, Burkina Faso, the US, and Belgium. Among the businesses that do not engage in export activities, the most common reason for not doing so are high road or air freight transportation costs (52 percent), difficulty meeting certification or quality standards in other countries (43 percent), and the fact that the price of goods to export is not regionally or internationally competitive (33 percent). 65 Figure 34: Main reasons for not exporting cited by red pepper smallholder farmers and MSMEs Transportation costs 52% 45% Unattractive price 33% 23% Quality Standards/Certifcation 43% 35% Inconsistent/unpredictable domestic 14% policies 10% Unfavorable domestic policies 19% 18% MSMEs Smallholder Farmers 5.5 Financing in the Red Pepper Value Chain 86. The largest shares of smallholder farmers (72 percent) and MSMEs (54 percent) own land or property assets. Some smallholders indicated that they also owned specialty equipment (32 percent, mostly among men) and financial assets (16 percent). Among MSMEs, the largest share of land or property ownership is followed by specialty equipment (37 percent) and financial assets (37 percent). The average value of land or property among MSMEs is CFAF 27,000,000. For financial assets, the average value is CFAF 3,333,333. Despite this high number, only 63 percent of MSMEs and 38 percent of smallholder farmers have a bank account for their business. Figure 35: Asset types owned by red pepper MSMEs Land/property 54% Financial assets 37% Specialty equipment 37% Building(s) 21% Vehicles 13% General equipment 13% Inventory 8% 87. For most smallholder farmers (77 percent) and MSMEs (88 percent), personal savings is the primary method for financing operations. For smallholder farmers, this is followed by loans from financial institutions (10 percent), cooperative or community savings (5 percent), or the family’s financial assets (4 percent). For most MSMEs, only 4 percent indicated loans from a financial institution as the primary way of financing business. 88. The most common reason for being rejected for a loan is insufficient income or asset documentation. Among smallholder farmers, 3 percent of the sample had previously applied for 66 a loan or line of credit and been rejected, while among MSMEs, this share is 8 percent. The top reasons for rejection are insufficient income or asset documentation and the fact that the amount requested was too high for the financial institution. Lack of documentation is a greater challenge for smallholder farmers, among whom only 6 percent keep financial records. In comparison, 46 percent of MSMEs keep such records. Both smallholder farmers and MSMEs are interested in applying for future loans and credit lines (see table below). Table 14: Key data on potential future loan applications among red pepper value chain actors Smallholder Farmers MSMEs Share of businesses planning on applying for 76% 83% future loan Average amount of CFAF 1,330,833 CFAF 4,415,000 preferred future loan Business expansion (97%); Purchasing Business expansion (95%); Purchasing Use of future loan inputs and inventory (58%); Purchasing inputs and inventory (70%) fixed assets (35%) I do not have the required collateral I do not have the required collateral Reasons for not wanting (42%); I do not have the money to pay (50%); The cost would not be worth my future loan back (42%) expected return (50%) 67 6. Role of Associations and Cooperatives 89. Among the smallholders interviewed in the shea and ginger value chains, the majority are part of an association or a cooperative, which is less often the case among red pepper producers. Interviews with stakeholders revealed that some national agricultural or work support programs do not always reach smallholders. For this reason, many farmers decide to join associations or cooperatives, pooling their harvest and benefiting from easier access to equipment and financing. Generally, farmers who are not in an association are those who are capable of producing large quantities by themselves, a process that attracts large businesses. Companies that buy from cooperatives inform them of quantities of produce needed. Cooperatives communicate that information to their members, who then produce and harvest accordingly. The smaller proportion of red pepper producers who are part of an association or cooperative could be explained by the high proportion of such farmers who also raise other crops (78 percent). Smallholder farmers who take part in an association do not necessarily make higher profits than those working alone, but they benefit from easier access to markets. As a female ginger producer commented during an FGD: “The cooperative makes it easier to share information, promote products, develop common interests, and ensure the visibility of ginger products through trade fairs.� Box 11: Gaps in the ecosystem of 90. Although cooperatives play an important associations and cooperatives in Togo role in the three chain values under study, there is scope for improvement. Some participants in group • Limited availability of associations and discussions complained about the absence of cooperatives in some regions, associations and cooperatives in their area, the closest particularly for some crops being too far for them to participate. 73 Another • Restrictions in securing financial support challenge concerns access to information and skills. from cooperatives For example, several shea collectors explained that • Non-compliance with rules and laws they had to go to Burkina Faso to take part in trainings. Other participants mentioned that while there are associations in their area, none were specific to a value chain that responds to their needs. As one participant pointed out in an FGD: “We would find it very useful if a ginger-specific association was set up for women entrepreneurs who work exclusively in the ginger value chain.� 91. Some participants in FGDs also reported challenges in securing financial support from cooperatives because of the difficult conditions imposed. Some participants indicated that non- compliance with rules and laws within cooperatives was one of the main obstacles to increasing revenues in the value chain. However, most participants saw major potential in forming a cooperative to strengthen links among producers, such as encouraging the development and 73 This was mentioned specifically by red pepper producers in the Plateaux region. 68 implementation of purchasing contracts. Key data on cooperatives and associations active in the three selected value chains are presented below. Figure 36: Key information on associations and cooperatives across the three value chains Shea Ginger Red Pepper Smallholder Farmers 92% of smallholder farmers are 76% of smallholder farmers are 47% of smallholder farmers are part of an association or part of an association or part of an association or cooperative cooperative cooperative (more male than female) Commonly mentioned associations and cooperatives smallholder farmers are part of • Tountolieb • GAET • Agape • Talgue N’guibound • Tchècrè • Nousindodo Reasons for membership at an association or cooperative • Training offered • Training offered • Training offered • Financial support provided • Financial support provided • Financial support provided • Joint selling of products • Joint selling of products • Representation to authorities • Joint selling of products Monthly membership fee n/a • Range: 1,000 to 5,000 CFA • Range: 1,000 to 5,000 CFA MSMEs 33% of the MSMEs are part of an 50% of the MSMEs are part of an 50% of MSMEs are part of an association or cooperative association or cooperative association or cooperative Commonly mentioned associations and cooperatives MSMEs are part of • l’ATFK-TG • AWEP Togo • FESANA • Tin Yal T Kua • FEPCLO • AWEP Togo Reasons for membership at an association or cooperative • Training offered • Training offered • Training offered • Financial support provided • Joint selling of products • Representation ag. Authorities • Access to equipment Monthly membership fee n/a • Average: 9,550 CFA • Average: 3,250 CFA • Range: 500 to 5,000 CFA 69 7. Constraints and Opportunities 92. Building on the analysis of the three value chains examined, this section details the various constraints and opportunities identified both at the level of the value chain as a whole, and at the level of economic inclusion of youth and women in particular. 7.1 Constraints in the Selected Value Chains 7.1.1 MAIN CONSTRAINTS IN THE SHEA VALUE CHAIN For the value chain overall For economic inclusion of youth and women in particular • Costly or inaccessible options for • Hardship and inefficiency of transport and storage widespread artisanal processing • Deforestation and use of shea trees methods as firewood • Sense of uncertainty about economic prospects among youth 93. Smallholder farmers in the shea value chain perceive expensive and unavailable transportation as a major constraint to doing business. In fact, transportation was cited among the top three highest costs for both MSMEs and smallholder farmers. Among smallholder farmers, 63 percent reported transportation being one of their highest costs. Furthermore, there seems to be low involvement by MSMEs in transport activities, with only 5 percent of the respondents being involved in transportation. In addition, high transportation costs seem to hinder smallholder farmers (42 percent) and MSMEs (53 percent) from engaging in export activities. Transportation and logistics were also one of the main challenges perceived by women- owned MSMEs (52 percent) in supplying larger businesses. Half of the MSMEs interviewed reported that better transportation and logistics services would induce them to incorporate more female and young smallholders in their operations. As one FGD participant commented: “Transporting the collected shea kernels from the field to the house and after drying gives us sore muscles and pain and makes us more and more tired.� 94. Deforestation poses a major challenge in the shea sector. Many areas of Togo are affected by deforestation for the use of firewood. This directly affects the shea value chain since shea trees grow in the wild in impacted areas. Paradoxically, shea processors who rely on traditional processing methods indirectly support deforestation as the method requires a lot of firewood. However, the Ministry of Environment has announced the launch of a reforestation campaign with the aim to plant a billion trees over the next decade.74 It would be strategically important for the value chain if some of these trees were to be shea trees. 74 "Le Togo Veut Planter Un Milliard d’Arbres au Cours des 10 Prochaines Années.� République Togolaise, 2022. Retrieved from: https://www.republiquetogolaise.com/agro/1205-5516-le-togo-veut-planter-un-milliard-d-arbres- au-cours-des-10-prochaines-annees 70 95. The cost and availability of water and firewood necessary for artisanal shea processing constitute major obstacles for smallholder farmers, most of whom are women. In fact, access to water was ranked as one of the main challenges faced by shea processors. Additionally, water was among the three main processing costs mentioned by smallholders. This is largely explained by the fact that many processors in Togo still use traditional processing methods, which require large amounts of water and wood to be transported over long distances, often in hot weather conditions, making the work inefficient and physically demanding. 96. One of the main challenges to engaging youth in the shea sector is the perceived uncertainty of economic prospects. When questioned, young smallholder farmers see the uncertainty of the supply chain as a restrictive barrier. In particular, young farmers consider market risks and low buyer reliability as major challenges in the shea value chain as a whole. In addition, 50 percent of young entrepreneurs consider shea market risks an important obstacle, and 75 percent of them also mentioned competition from the informal sector.75 This uncertainty among young people may be due to the fact that the majority of actors in the shea value chain (76 percent for MSMEs and 85 percent for smallholder farmers) do not actively involve youth in their operations. 7.1.2 MAIN CONSTRAINTS IN THE GINGER VALUE CHAIN For the value chain overall For economic inclusion of youth and women in particular • Production uncertainty due to • Limited access to cultivable land, only climatic and meteorological factors allowing small-scale production • Risks of contamination during storage • Little effort to integrate women and or transport youth into the sector • Volatility of prices on the market 97. Smallholder farmers ranked uncertainty due to climate change or weather factors (44 percent) as the primary obstacle for their business. One key informant ascribed the biggest challenge in ginger production in Togo to climate uncertainty, including the limited and unreliable availability of water due to drought. He advocated for the cultivation of ginger varieties and species that are adapted to climate change. One stakeholder also explained that many farmers resort to mulching76 during drought periods in order to keep the soil moist. He added that climate and environmental concerns often worsened plant diseases (mainly through mealybug) and limited the possibility to produce during the off-season. As one participant in an FGD commented: 75 This includes individuals who produce shea as a side business. 76 Mulching is a long-established agricultural practice that involves spreading a layer of material on the ground around plants to protect their roots from heat, cold, or drought or to keep the crop clean. 71 “When the soils are poor, the yield is not high. Also, climate change causes challenges with the early end of the rains and the long duration of the drought, which causes low production.� 98. Contamination due to inadequate storage and transportation poses a significant challenge in the ginger value chain. A 2013 study of fungal contamination in spices marketed in Benin and Togo found that dried ginger was by far the most contaminated of the products studied. Dried ginger was found to be contaminated with 14 different genera of fungi and to carry high quantity of aflatoxin, a type of mycotoxin that can carry human health risks. The authors suggested that this contamination may have occurred during the drying portion or due to poor food handling during transport and storage, which was confirmed during FGDs. 99. Another challenge faced by ginger value chain actors is market volatility. During the group discussions, many participants noted the significant uncertainty caused by COVID-19. During the pandemic, displaying and selling goods was complicated and many contracts were interrupted. In addition, the price of ginger per kg tripled, disrupting customer relationships and increasing competitiveness in the market. Many of the MSMEs surveyed also perceived competition from the informal sector (including production by individuals as a side business) as an important challenge. 100. Among women producers, access to land was cited as the main challenge to increasing production. Around 24 percent of female smallholder farmers indicated that they do not own any land that can be cultivated. During the FGD discussions, access to land was mentioned as one of the main challenges for women ginger producers. This was also confirmed by one stakeholder, who stated that the value chain is more accessible to men than to women because of the inaccessibility of land for women to produce. 101. Few smallholder farmers are actively integrating women and youth in their operations, but some MSMEs are. Two-thirds of smallholder farmers interviewed are not actively trying to include women in their supply chain. Of those that do, some are using gender-sensitive outreach and information strategies (12 percent), gender-sensitive extension services (12 percent), or gender targets in contracts with cooperatives and producer associations (9 percent). Among MSMEs, 40 percent are not actively trying to integrate more youth and women. Of those that actively engage women, most use gender-sensitive outreach and information strategies (35 percent) or contractual incentives for women’s participation (15 percent). Youth engagement mainly takes place by recruiting students directly from school (25 percent) or providing technical training to youth (20 percent). 72 7.1.3 MAIN CONSTRAINTS IN THE RED PEPPER VALUE CHAIN For the value chain overall For economic inclusion of youth and women in particular • Competition from informal • Limited access to cultivable land, only production by individuals as a side allowing small-scale production business • Production uncertainty due to climatic and meteorological factors 102. Competition from the informal sector is an important challenge for MSMEs in the red pepper value chain. Women-owned MSMEs perceive the competition from the informal sector (including red pepper production by individuals as a side business, which increased during the COVID-19 pandemic) as a significant challenge to their business. Similarly, youth-owned MSMEs find that competition from the informal sector restricts their ability to develop and grow their business. 103. Red pepper producers are affected by uncertainty due to climate change and weather factors, which affect yields. FGDs and stakeholder interviews showed that red pepper value chain actors experience the effect of climate change through decreasing yields. This is because climate change affects the production cycle by making the water supply less predictable and encouraging the emergence of new pests. One stakeholder highlighted the need to adopt plant species and seeds that are most resistant to climate change. Another stakeholder mentioned that some of the motor pumps that are used in the red pepper value chain are polluting and highlighted the importance of finding environment-friendly alternatives, such as solar energy. 104. Among women producers, access to land was mentioned as a significant challenge to increasing production. Around 10 percent of female smallholder farmers indicated that they did not own any land. During the FGDs, insufficient land was mentioned as one of the key challenges; in addition, it was also mentioned in the survey as one of the main barriers for women to participate and succeed in the red pepper value chain. One FGD participant explained: “I am satisfied with the current size and profitability of my business, even though I do not have enough land to extend the cultivation.� 73 7.2 Opportunities in the Selected Value Chains 7.2.1 MAIN OPPORTUNITIES IN THE SHEA VALUE CHAIN For the value chain overall For economic inclusion of youth and women in particular • Fast-growing demand for shea • Minimal needs for technical training, products globally land ownership, or start-up capital to • Existence of processing equipment start collecting nuts that could improve productivity and • Interest in acquiring processing and reduce drudgery marketing skills • Existing cooperative model that can be replicated 105. The growing demand for shea products worldwide offers interesting economic prospects for the value chain. Indeed, the size of the global shea market continues to climb, and is estimated to reach $2.4 billion by 2030, with an annual growth rate of over 14 percent. This significant rise is driven by strong demand from the cosmetics and food sectors (as a substitute for cocoa butter). In addition, there are high value-added opportunities available in the niche markets of organic and fair-trade products. The fact that Togo currently exploits only 60 per cent of the country's shea tree areas shows that the potential for increasing national production is large, and with it economic and employment spillovers. 106. There are opportunities to modernize processing tools to enhance the productivity of the value chain. While collecting shea nuts does not require much equipment, transforming them into butter entails a more elaborate process, with the use of tools such as mixers, pots/stoves, and grinding mills. In Togo, shea butter is still largely processed in an artisanal way. Around half of the processors interviewed for the study indicated that they mainly use manual processing methods, which generally require large quantities of water and firewood, and do not always yield high-quality butter. More efficient tools are available on the market, even for small and medium- scale processing by cooperatives or MSMEs (e.g. fuel-efficient cookstoves). These would increase the productivity of the transformation process, while reducing its arduousness. The construction of boreholes to facilitate access to water would also contribute to this objective. 107. Collecting shea nuts requires no technical training, land ownership, or capital investment, which means that this economic activity provides real income-generating opportunities for the rural poor. Shea production is largely a passive process, since the trees reproduce naturally in the wild and efforts to domesticate the species in plantations have not yet been fully successful. Data collected for the study confirmed that, in Togo, anyone can theoretically collect shea nuts in public and community forests, as no authorization is generally required. This represents a major opportunity for vulnerable groups such as the rural poor and women in particular. Given the current limited exploitation of shea trees in some parts of Togo, and the competition from its use as firewood, raising awareness about the potential of 74 sustainable exploitation of shea trees to produce butter would help generate additional income for smallholders and facilitate the economic emancipation of women. 108. Women and youth interviewed expressed a strong interest in acquiring skills in shea processing and marketing. While collecting shea does not require significant skills, processing it into butter or oil – which offers greater added value and income – does require a certain technical know-how. In addition, the study showed that marketing skills could provide additional opportunities to add value to the products and gain access to high-end markets, such as that for organic shea butter. Shea collectors would therefore benefit from technical assistance to engage into processing, packaging, and marketing. Togo already has high-quality agricultural training institutions that could provide training for youth and women in the above-mentioned areas. 109. Finally, the cooperative model, which is already well established in Togo's shea industry, could be strengthened and extended with a focus on youth and women. More than nine out of ten smallholders interviewed in the shea value chain already belong to an association or cooperative. The model is valued for the access it offers to skills and training by other members, the financial support it facilitates, and the higher wholesale prices it fosters. Key institutional players such as the Federation of the Shea Value Chain in Togo (FIKATO) could be involved to support this effort. 7.2.2 MAIN OPPORTUNITIES IN THE GINGER VALUE CHAIN For the value chain overall For economic inclusion of youth and women in particular • Growing demand globally while • Interest in acquiring skills in domestic demand is not even met marketing and commercialization of • Opportunities to reduce input costs ginger products • Use of drying machines could improve • Existing cooperative model that can processing quality and efficiency be replicated 110. The global demand for ginger and its byproducts continues to grow rapidly. However, Togo currently has a significant trade deficit in ginger, with domestic demand far exceeding the quantity produced in the country. As a result, ginger has to be imported from other countries in the sub-region. Yet worldwide consumption continues to grow by more than five percent a year, and the size of the global market is estimated to reach $4.3 billion by 2027. Export opportunities are therefore very significant, especially for high value-added products such as ginger essential oil. These prospects offer long-term economic opportunities for all value chain actors. 111. Facilitating the acquisition of quality inputs would reduce production costs for the value chain. The study shows that the highest costs for ginger producers in Togo are linked to “seeds� (ginger rhizomes). These either have to be purchased from input suppliers or can be recovered from previous harvests. However, the reutilization of rhizomes requires special handling and appropriate storage to avoid contamination by fungal diseases, as explained above. Agricultural 75 nurseries already exist for other crops in Togo, but not for ginger. Nurseries could be encouraged to produce ginger in optimal condition in order to supply quality rhizomes to small-scale growers and thus reduce their production costs. Increasing production quality would also facilitate export opportunities. 112. The use of more efficient processing equipment would also increase productivity. Drying machines are available on the market and are already in use in other countries. These machines drastically reduce ginger processing time (from several days to just a few hours). They also improve product quality. The machines could be shared within existing associations and cooperatives, or constitute a business opportunity for entrepreneurs to rent out their use to ginger producers. It would also be important to organize training courses on the use and maintenance of the machines. 113. Women and youth interviewed for the study expressed interest in learning marketing techniques to sell ginger. Packaging skills appear to be particularly important for adding value to the products while preserving their quality, leading to higher prices and facilitating access to high- end markets (e.g., ginger essential oil). In addition, women and youth entrepreneurs currently self-employed in the value chain have expressed a need for technical assistance in various aspects of marketing, such as business planning, logistics, exports, and quality certification. 114. Finally, the expansion of the cooperative model, which is already somewhat present in the ginger value chain, could be strengthened and extended with a focus on youth and women. Over three-quarters of smallholders interviewed said they were already part of an association or cooperative. The model is valued for its access to processing skills and equipment, for the financial support available, and for allowing sales at the wholesale level at more stable prices – and is therefore well suited to the target population. Replication of the model across the ginger value chain could follow the experience from other relatively well-organized sectors, such as shea. The spread of cooperatives could help reduce major cost factors for producers, such as seed acquisition and transport of goods. 7.2.3 MAIN OPPORTUNITIES IN THE RED PEPPER VALUE CHAIN For the value chain overall For economic inclusion of youth and women in particular • Increasing demand for red pepper • Interest in acquiring processing and nationally and globally marketing skills • Existing cooperative model that can be replicated from other value chains 115. There is a large market for red pepper, both domestically and internationally. International demand is rising steadily, and the export price has increased fivefold since 2000. In addition, Togo benefits from a dynamic domestic market, with the vast majority of households consuming red pepper. However, Togo remains a small producer on the world scene (its 76 production represents only between 3 and 4 percent of that of countries such as Ghana or Cote d'Ivoire). Yet opportunities for increasing production are significant. Red pepper can be planted in almost all regions of Togo and grown during most of the year. These factors offer interesting prospects for all actors of the value chains in Togo. 116. As in the other two value chains, women and youth have expressed a desire to acquire new skills to process and market red pepper and its byproducts. The study revealed that most of Togo's red pepper production is currently carried out using traditional processing methods. Training in new production and processing techniques, coupled with support for the purchase of more efficient machinery, would boost the incomes of smallholders and MSMEs. In addition, women and youth already involved in the sector have expressed an interest in learning both technical and management skills to develop their business. This could also involve training in quality standards and certification schemes to increase export activities (currently, the proportion of smallholder farmers and MSMEs in the value chain that export is low). Training courses could be extended to commercial practices in order to broaden customer networks. 117. Finally, the cooperative model that is already well developed in other value chains could be encouraged among red pepper producers. Indeed, the study revealed that the main obstacle to sales for Togolese red pepper producers is the small quantity produced, which does not attract enough buyers. The formation of cooperatives, particularly for young people and women, would enable producers to pool harvests and sell wholesale to aggregators. Cooperatives would also offer the possibility of sharing storage facilities (lack of storage having been identified as one of the main problems for producers). Of the smallholders interviewed in the sector, less than half currently belong to a cooperative, as the model is currently not very widespread in certain regions of the country. 77 8. Conclusions 8.1 Key Constraints to Jobs in Value Chains in Togo 118. What can be extrapolated from the above analysis? What did we learn about constraints and opportunities to jobs in value chains in Togo? This section seeks to summarize key lessons learned in improving the different dimensions of employment outcomes, namely job creation, quality of jobs, and access to jobs. Figure 37: Key constraints to jobs across the three value chains 8.1.1. JOB CREATION Climatic and Limited access to Lack of financing environmental markets challenges 119. A significant challenge faced in all three value chains is the limited access to finance, which prevents MSMEs from expanding their activities and hiring additional workers. In fact, limited access to finance was regularly ranked as the main obstacle to businesses activities in the shea, ginger, and red pepper sectors. While businesses would like to develop to meet strong demand, financial institutions generally consider the risk too high in these sectors, especially when the entrepreneurs are young or are women. The majority of respondents explained that while they would like to access loans to expand their activities or buy more inputs, they do not often have sufficient collateral to receive a loan, or they fear not having enough money to repay. 78 These obstacles force many producers and processors to operate in the informal sectors. As one active entrepreneur in the shea sector explains: “There is no financial support for the shea sector in our area because it’s a sector where uncertainty is high. But we benefit from loans linked to other agricultural activities such as peanut farming. Unfortunately, this is not available for shea.� 120. Although the final products of the three value chains studied benefit from high demand, access to the most lucrative markets often remains limited. In regard to shea, for example, worldwide demand has continually risen over the last few years and should reach USD 2.4 billion by 2030.77 However, only 35 percent of total wild shea production in West Africa is harvested for export. This also applies to ginger. Togo’s national demand currently exceeds the national supply, and as a consequence, ginger must be imported from neighboring countries. Togolese actors report being troubled by the complexity and the high cost of the quality verification process, preventing them from certifying their products, which is necessary to export or access lucrative niche markets.78 121. Various climatic and environmental challenges complicate the expansion of activities in all three sectors. As previously explained, a major challenge in the shea sector is deforestation. Shea wood is highly sought after as firewood, notably for cooking, due to its combustible nature. Given that it takes 15 to 20 years for shea trees to yield fruit and up to 40 to 50 years to reach maximum production, cutting down trees directly affects the productive capacity of the sector. With regards to ginger and red pepper, numerous smallholder farmers are worried about climate change, notably the effects of prolonged periods of drought on production, which also fosters infestations. Overall, environmental and climatic challenges make activities and investments in these sectors increasingly risky. 77 Allied Market Research. “Shea Butter Market by Type (raw and unrefined and refined and ultra-refined) and by Application (food and cosmetic): Global Opportunity Analysis and Industry Forecast, 2021-2030.� 78 World Bank (2021). “Togo: Economic Inclusion in Value Chains with High Market and Employment Potential: Overview of the Ginger Sector.� Unpublished document. 79 8.1.2. JOB QUALITY Informal and Artisanal processing Lack of basic temporary jobs methods infrastructures 122. The prevalent use of artisanal processing methods across the three value chains contributes to low yields and makes the work physically demanding. Close to half of the MSMEs questioned in the shea sector still use traditional methods to produce butter. These methods, which are almost exclusively manual, tend to be tedious, labor-intensive, and inefficient. In addition, they require large quantities of water and create a significant drain on the rare resources of these semi-arid zones. Processing one kilogram of raw shea nuts can require up to 3.6 liters of water. Even the processing techniques for ginger and red pepper, which require fewer steps than for shea, are still mostly manual in Togo, where there is little use of machinery. These inefficient approaches negatively impact product quality and the standardization of products, which are identified as two key elements by wholesale buyers. 123. The lack of basic infrastructures, particularly for access to water and for storage facilities, hinders productivity and makes wholesale trading at favorable rates more challenging. In all three sectors, the availability and high cost of water and irrigation systems are perceived as obstacles to growth. In terms of water management, Togo's national irrigation share in 1995 indicated that only 0.1 percent of total cropland was irrigated. In 2015, this rate had remained almost static at 0.17 percent. Over the period 2010-2015, the average annual development rate for irrigated surfaces was very low (0.2 percent).79 With regards to storage, the difficulties involved in combining harvests have a negative impact on product quality and sometimes favor the onset of diseases, as is the case for ginger. In addition, given that large quantities of produce cannot be stored, producers generally put their harvest for sale at the exact same time, leading to price fluctuations, as was reported for red pepper and ginger. 124. Most employment opportunities in production and processing are restricted to the family level and tend to be informal and seasonal. Producers and processors have a tendency to first involve family members, who are not always paid, or when they are, are often underpaid. The percentage of businesses questioned hiring workers outside the family was 20 percent for shea and only 13 percent for red pepper and 12 percent for ginger. Of the businesses questioned that do hire workers, on average, they only hired two permanent workers for six temporary employees in the shea sector, four permanent for nine seasonal workers in the ginger sector, and five permanent for seven seasonal workers in the red pepper sector. 79 PNIASAN (2018). “National Investment Program for Agriculture, Food Safety, and Nutrition.� 80 8.1.3. MORE INCLUSIVE JOBS Limited access to Limited access to Limited financial land and trees training inclusion 125. Limited access to cultivable land remains a major challenge to achieving greater economic inclusion for youth and women. Red pepper and ginger do not require large plots, which makes them appropriate choices for women and youth, who have more limited access to property. As a result, they are generally produced on small plots behind the house or along roads or tracks. However, this prevents more large-scale farming as well as the development of activities geared to commercialization. 76 percent of pepper producers and 97 percent of ginger producers questioned described their farm as being either in a start-up phase or a slow or negative growth phase. This creates a bottleneck for the value chain as processing businesses often face great difficulties in receiving sufficient quantities. Although shea production does not require cultivable land, deforestation for firewood, on which a large majority of women depend for their incomes, remains a challenge to greater economic inclusion. 126. Another challenge affecting all three value chains analyzed is the level of technical skills. Many women producers see their lack of education as a hindrance to the growth of their business. The study confirmed lower levels of education among women producers as compared to men, across the three value chains. The most common reasons mentioned were lack of financial resources, lack of information (not knowing where to benefit from training), and uncertainty over the type of training required. More broadly, this situation is also linked to restrictive social norms faced by women in Togolese society.80 Unfortunately, the stereotype according to which a woman’s place is in the home or in the husband’s field persists in Togo. Even if the rate of schooling for girls has greatly improved, men are generally better educated and more likely to have a job.81 As the results of this study show, approximately 60 percent of women questioned in the red pepper and shea value chains received no schooling, which has implications not only for their capacity to manage a small enterprise but also to be hired by a larger business. As a participant in a FGD commented: 80 In 2021, Togo was ranked 149th in the United Nations’ Gender Inequality Index (GII). See: United Nations. “Reports on Human Development: Togo Profile.� Retrieved from: https://hdr.undp.org/data-center/specific- country-data#/countries/TGO 81 GIZ (2018). CAADP Support Program Gender Evaluation in Togo. 81 “Sometimes, we hear women say that they can’t assume certain roles because of their unavailability linked to maternity. The result is that some business managers don’t like to hire women.� 127. Finally, financial inclusion remains limited in rural areas, especially for women, making it difficult for them to access credit and engage in higher-value activities. Among the smallholder farmers interviewed, only 38 percent of those active in the red pepper sector and 36 percent of those in the ginger sector indicated that they had a bank account. In the shea sector, where production is almost exclusively carried out by women, only 15 percent have a bank account. Although 35 percent of shea collectors indicated having benefited from community savings through a “tontine� or cooperative, this proportion was very small for ginger and red pepper producers. In this context, personal savings remain the sole means of financing in more than 80 percent of cases across the three sectors. Meanwhile, small businesses are forced to auto-finance, mainly from the owner's personal savings (51 percent in the shea sector, 55 percent in the ginger sector, and up to 77 percent in the red pepper sector). 8.2 Key Opportunities for Jobs in Value Chains in Togo 8.2.1. JOB CREATION 128. The end products of the three value chains benefit from expanding markets and long-term economic opportunities. The shea butter market is driven by high demand from Europe and North America, notably from the food and cosmetic markets. Ginger-based Expanding products are experiencing growing demand worldwide, while red markets pepper benefits from a dynamic local and regional market due to its consumption in most households. Growth perspectives for these three markets offer attractive economic opportunities for businesses and investors and positive expectations in terms of employment, including for youth and women. However, Togo has been in part unable to fully take advantage of export opportunities in the most lucrative markets. Meanwhile, quality standardization and product certification remain major challenges. 8.2.2. JOB QUALITY 129. The producer cooperative model, already used in some value chains, offers multiple advantages to smallholders and could be expanded to other sectors. As explained in several More efficient FGDs with female shea and ginger Forming machinery and producers, cooperative associations cooperatives tools allow producers to pool their resources to achieve economies of scale in transportation, logistics, and storage. In addition, they can facilitate access to loans in order to invest in more efficient processing tools. 82 These improvements make it possible to reduce production costs, improve quality, and combine harvests in sufficient quantities for wholesale at more attractive and stable prices. For example, the Shea Global Alliance estimates that female producers organized in cooperatives can earn 30 to 50 percent more by storing and combining their harvests compared to prices offered on village markets.82 Although cooperatives can offer many advantages, they require a certain amount of set-up (recruitment of members, creation of a charter, regular membership fees, etc.) and are not currently available in all the regions and sectors analyzed. 130. More efficient processing tools exist in the three value chains, with potential to reduce the burden of the work and lower production costs. Although half of the small businesses involved in shea processing in Togo still use artisanal processing methods, the use of improved cookstoves makes it possible to greatly reduce the necessary quantities of water and wood. Additionally, the introduction of drying machines for ginger makes it possible to reduce production time from 4-10 days to 4-5 hours while considerably increasing product quality. However, adopting these tools requires significant financial investment and training. 8.2.3. MORE INCLUSIVE JOBS 131. There is considerable interest among women and young smallholder farmers, as well as MSMEs, to receive training for new skills in processing and marketing. This shows their willingness to invest time and effort in the acquisition of new skills and knowledge in order to develop their existing business or to broaden their employment activities in other fields. Most actors in the value chains analyzed are interested in receiving training in the fields of business ownership, marketing, and export Interest in Public support for (particularly how to comply with agricultural and sustainable quality standards and obtain commercial training development certification in order to export) in addition to farming skills. Smallholder farmers also showed a need in the area of financial capacity, given the limited use of records and rudimentary accounting. Although trainings could take different forms, in general, they should seek to help youth and women to engage in the steps of the value chain with the highest revenue potential. 132. Lastly, it should be noted that various initiatives from the Togolese government could be leveraged in order to increase economic inclusion in value chains. For example, sustainable agricultural production for ginger and red pepper could be encouraged by making available spaces for youth and women through the Planned Agricultural Development Zones (ZAAP),83 thus 82 Bockel, L., Veyrier, M., Gopal, P., Adu, A. and Ouedraogo, A. 2020. “The Shea Value Chain as a Key Pro-poor Motor for Carbon Fixation in Western Africa. Accra: FAO and Shea Global Alliance. 83 Planned agricultural development zones (ZAAP) are plots of land with a minimum surface area of 100 developed hectares on which small-scale producers can settle. The ZAAP objective is to facilitate access of key factors of 83 making it possible to mitigate the lack of access to land among these vulnerable groups and reinforce their means of subsistence. Further, the initiative by the Ministry of the Environment and Forest Resources (MERF) to plant one billion trees over the next decade could be used to replant shea trees and ensure the viability of the species on Togo’s territory. production for vulnerable small-scale producers – including land, inputs, mechanization services, water and financing – in order to improve their incomes and living conditions. The targeted proportion of women on each farm site is set at 40%. The Government of Togo plans to deploy a total of 400 ZAAP over the country (one per canton). 84 9. Recommendations 133. Building on this analysis of constraints and opportunities, this section outlines a total of 12 actions that could be undertaken to improve employment outcomes in high-potential value chains in Togo. Because a well-functioning value chain is a prerequisite for a job-conducive environment, the first set of recommendations focus on improving the different levels of the chains and strengthening the links among key actors. These initiatives seek to create an enabling environment that can facilitate access for local producers and reinforce local processing capacities, thereby creating added value in the forms of jobs and revenues that can be shared among the different stakeholders. While improving the functioning of a value chain would generally have a positive impact on job creation, more needs to be done to ensure that vulnerable groups can take advantage of these opportunities and access good quality jobs. Thus, the second set of recommendations focuses on alleviating constraints faced by youth and women in terms of access to land, financing, and skills. For each of the 12 recommendations, the section references existing initiatives in Togo that contribute to similar objectives and notes where potential synergies and complementarities could be built. 9.1 To Strengthen the Value Chains Overall Recommendation 1: Protect shea tree parklands through legislation and community awareness 134. The priority in ensuring the sustainability of a value chain should be to protect its production base to make sure that the various activities that depend on it can continue to operate in the future and deliver their economic and employment benefits. The West African savannah region, which includes the northern regions of Togo, is a fragile ecosystem sensitive to the effects of climate change. Over the last decades, it has suffered from rapid deforestation and forest degradation, including of precious shea trees. Deforestation and the cutting down of trees make farming landscapes increasingly subject to desertification and contribute to soil degradation. As stated above, shea trees are particularly affected as they are prized as fuelwood for cooking. Shea trees are difficult to grow and have a long gestation period, making deforestation a major challenge for the future of the shea value chain. 135. The first step in solving this problem would be to ensure greater legal protection for the existing shea tree parklands in Togo, specifically by introducing a law or regulation banning the cutting down of trees and setting up corresponding monitoring methods. In addition, community awareness will be necessary to turn youth and women into key actors of environmental protection and restoration, for instance by explaining how shea trees contribute to the local economy when they are farmed for the production of shea butter rather than firewood (see table below). Together, these efforts would help protect the future of the shea value chain in Togo and maintain long-term access to the parklands and forests that collectors, most of which are women, depend on. 85 Table 15: What is the monetary value of a shea tree? Tree cut down to produce charcoal Tree protected and used for harvesting shea nuts Average quantity of charcoal 178 kg Average market price of 1 kg of 125 CFAF produced by one tree1 nuts3 Market price for 1 kg of 245 CFAF Average quantity of nuts 48.65 kg charcoal2 produced by one tree per season4 Gross yearly income 43,610 CFAF Gross yearly income 6,081 CFAF 5 Number of uses 1 Number of production years 200 Total gross income 43,610 CFAF Total gross income 1,216,500 CFAF (27.9x more) 1 For an average shea tree of 715 kg, the estimated quantity of charcoal that can be produced is between 8 percent and 25 percent of the tree’s weight depending on the carbonization method. 2 Price in Lomé. In rural areas, the price is usually less. 3 Price for the sale of nuts only. In practice additional income can be generated locally by processing the crop (e.g., into shea butter). 4 Average quantity according to the scientific literature. 5 The average lifespan of a shea tree is 300 years, with optimal production only after 50 years, starting to fall after 250 years. Source: Authors’ calculations. 136. Different initiatives in this direction already exist and deserve continuing support. First, as mentioned, a project of the Ministry of Environment and Forestry Resources (MERF) aims to plant a billion trees over the next decade. Second, the National REDD+ Committee of Togo has approved an ambitious strategy designed to reverse and mitigate forest degradation by choosing more sustainable management and increasing forest cover. The overall Togo REDD+ strategy is to reach a 30 percent forest cover rate by 2050 and subsequently contribute to increasing carbon sinks and sequestration. These two initiatives are examples of opportunities to support the sustainable development of the shea value chain in Togo by making sure that shea trees are included in replanted and protected areas. These efforts also align with Togo's forestry policy for the period 2011-2035, which seeks to empower stakeholders at grassroots level, integrate forestry into rural development, and adopt an approach that preserves the balance of ecosystems while respecting the ecological, social, and economic functions of forests. 86 Box 12: Case Study – Green Climate Fund Ghana Shea Landscape Emission Reduction Project The Ghana Shea Landscape Emission Reductions Project, implemented by the Forestry Commission with technical support from the United Nations Development Program (UNDP) in partnership with multiple national and local institutions, seeks to enhance forest carbon stocks across the landscape by: 1) restoring 200,000 hectares of off-reserve savannah forests and woodlands and placing them under self-financing community management in Community Resource Management Areas (CREMA); 2) restoring 100,000 hectares of degraded shea parklands; 3) creating 25,500 hectares of modified taungya system and forest plantation in severely degraded forest reserves; and 4) implementing an integrated monitoring system and completing the national REDD+ architecture for safeguards, forest monitoring, and reporting systems. Total Project Funding Expected Project Outcomes Recommendation 2: Promote the creation of certified ginger nurseries to foster the distribution of clean plantation material 137. Ginger producers struggle with disease management, which hinders their ability to maintain quality standards and obtain export certifications. Studies on fungal contamination in Togo show that dried ginger tends to rot easily during storage and transportation. Therefore, increasing the sustainability and resilience of the ginger value chain in Togo should concentrate on promoting climate-smart agriculture and addressing contamination risks. This could include elements such as using certified plantation material, promoting the safe use and handling of pesticides, preserving soil fertility, and limiting erosion and rhizome rot. 138. The Ministry of Agriculture could support this initiative by promoting or providing resources to establish certified ginger nurseries, starting in the Plateaux region. The nurseries would use clean and residue-free techniques to ensure the production and availability of disease- free ginger plantlets. They could play a key role in distributing rhizomes to smallholders, thereby increasing production incomes and supporting quality improvement of ginger produced in Togo. The establishment of ginger nurseries could follow the model of recent initiatives, such as the establishment of a 10,000-plant nursery of fast-growing species in the Goubi community forest, or the GIZ PROCIV project, which supported producer groups in the rapid multiplication of pineapple shoots. 87 Box 13: Case Study – FAO Certified Ginger Nursery Development in Jamaica The United Nations Food and Agriculture Organization (FAO) supported the Government of Jamaica in working to rid the island of diseased ginger by nurturing the planting of clean ginger. The Upgrading a Ginger Value Chain Strategy and Action Plan trained 30 Jamaican agriculturists and farmers in the management of a certified ginger nursery. The FAO in collaboration with the Ministry of Industry, Commerce, Agriculture and Fisheries provided this training to increase the production and availability of disease-free ginger plantlets. The training encompassed a review of various technical guidelines, knowledge, and hands-on experience to establish standards for clean production, quality control measures, and protocols for establishing certification systems, specifically for: • Production of disease-free rhizomes using tissue culture technique, and • Multiplication of disease-free quality planting materials using an innovative mass propagation technique known as single bud nursery technology. Recommendation 3: Facilitate access to water by drilling borehole wells (for shea) and constructing irrigation systems (for ginger and red pepper) 139. Access to water is a significant challenge in all three value chains analyzed, specifically for processing shea nuts into butter and for growing ginger and red pepper. Construction of borehole wells near shea processing centers would reduce the arduousness of the artisanal production process of shea butter – a job that is mostly done by women, who would no longer have to carry water over long distances. The time saved would increase productivity and revenues. Setting up irrigation systems in ginger- and red pepper-producing areas would allow for continuous production independently of weather conditions, especially in the dry season. 140. Better access to water would reduce production and processing costs and improve the competitiveness of value chains. These efforts could build on existing initiatives already supported by the government and development partners. For instance, the use of irrigated land could be facilitated by making the existing planned agricultural production areas (ZAAP) available to smallholders in these sectors (Recommendation 9). The use of irrigation systems could also be promoted through dedicated training (Recommendation 11). 141. Initially, these measures could focus on main production areas, specifically the Savannah region for shea and the Plateaux region for ginger and red pepper. They could be implemented by the Ministry of Water and Village Hydraulics (MEHV). Recommendation 4: Establish community storage centers near production areas that meet the quantity and quality criteria of aggregators 88 142. Logistical obstacles linked to the storage and transportation of goods have been identified as key challenges in the three value chains examined. For shea, these relate mainly to high logistical costs. For ginger, the main challenge is about preserving the product from disease. This situation is detrimental to small producers, who are forced to sell their harvest quickly and in small quantities, at prices that are not always advantageous. Meanwhile, processing businesses across the three chains reported problems in securing supply in sufficient quantity and quality. 143. Construction or rehabilitation of storage centers in agricultural production areas would mitigate some of these challenges. This would help small producers, ideally organized into cooperatives (Recommendation 10), to store their agricultural or processed products throughout the year and in appropriate conditions. This would allow wholesaling and improve the bargaining power of smallholders and cooperatives. It would also benefit businesses, which could then source raw materials year-round at more stable prices. Finally, wholesale commercialization would reduce the number of journeys needed to transport goods, thereby reducing transportation costs. Ideally, construction of storage centers would be accompanied by trainings to ensure that smallholders are able to meet quality criteria from buyers and aggregators (Recommendation 11). 144. As a first step, the construction of storage centers could be concentrated in the main shea production areas in the Savannah region and the main ginger production area in the Plateaux region. This initiative could be led by the Ministry of Agriculture. A number of efforts are already underway in this area, including the World Bank-funded West African Food System Resilience Program, one component of which focuses on storage facilities.84 Recommendation 5: Incentivize the modernization of machinery and equipment 145. Many companies in the three value chains analyzed still rely on artisanal production and processing methods. However, more efficient technologies exist across the board, such as fuel-efficient cookstoves for shea butter production and drying machines for ginger. Given that MSMEs are not always encouraged to invest in new equipment, which is often very costly, the government could offer grants or interest-free loans to companies to encourage the acquisition of more modern machinery. 146. Introducing more efficient equipment would make jobs less physically arduous, reduce product processing time and costs, and increase yields. Such machinery would also enable small businesses to develop and professionalize towards the formal sector. The use of these new tools and equipment could be promoted through technical training in modern processing methods (Recommendation 11). 84 https://projects.worldbank.org/en/projects-operations/project-detail/P172769 89 147. This initiative could be led by the Ministry of Agriculture or the Ministry of the Economy and Finance, potentially through a public-private partnership (PPP). It would be important to build on past or existing initiatives, such as the Togo Agriculture Sector Support Project.85 Recommendation 6: Encourage the establishment of a physical or virtual trade hub for high- potential value chains 148. Developing a dedicated trade hub for value chains with high job and market potential would seek to provide a central trading platform for actors involved in the value chain. The hub could include various components designed to tackle job constraints identified within the value chains. Logistically, the hub could provide warehouses in which to store goods under optimal conditions for large-scale commercialization and export, one of the key challenges identified for MSMEs to supply larger businesses. It could also provide transportation services for aggregating agricultural production from community storage centers (Recommendation 4). These activities would be conducted within a strict quality control framework, ideally with the support of the Togo Standardization Agency (ATN) (Recommendation 7), in order to meet international standards and facilitate product certification and export. Quality Figure 38: Sample visualization of trade hub linkages control would start during collection from community centers to ensure product compliance based on a list of internationally accepted quality criteria. The list would serve as a reference for farmers to identify improvements needed to reach required standards, for which a training program could be particularly useful (Recommendation 11). Finally, the trade hub could include a digital component, such as an e-market platform aimed at bringing buyers and sellers together. 149. Such a trade hub could help attract foreign investors and stimulate the export market, thereby creating local value in Togo and boosting employment. Given these goals, the hub should ideally be located in the Maritime region. It could be implemented through a partnership between the Ministry of Agriculture and the Ministry of Trade, potentially involving the private sector. The Adetikopé Industrial Platform (PIA) provides an interesting model of a public-private partnership (PPP), which could be replicated or even used directly to stimulate trade and create 85 https://www.gafspfund.org/projects/togo-agriculture-sector-support-project-pasa 90 jobs in high-potential value chains. In addition, existing initiatives such as the development of “Agropoles�86 or the Agri-PME project87 could also be leveraged. Box 14: Case Study – West Africa Trade and Investment Hub (WATIH) USAID: 2019 - 2024 Overview The West Africa Trade and Investment Hub (WATIH) is designed to address issues such as limited access to affordable financing, limited access to international markets, and poor competitiveness of regional products in the global marketplace coupled with a limited adequately skilled labor force, inequalities in employment opportunities, and low productivity. WATIH seeks to catalyze sustainable economic growth and improve food security in the region by increasing competitiveness through building strategic partnerships with the private sector using a market-based approach. Objectives • Generate new private investments in key growth sectors in West Africa through a co-investment fund and a virtual deal Key Performance Targets room connecting entrepreneurs with investors. • Create new sustainable private sector jobs with at least 50 • 306 million USD in new percent dedicated to women. investments • Increase the value of regional and international exports, • 40,000 new jobs particularly to the United States through the American • 240 million USD in exports Growth and Opportunity Act (AGOA). WATIH Offices Example: Nigeria The Trade Hub works with the private sector, research institutions, and other partners to develop and introduce new technology in agriculture, including shea, to improve the quality of products and increase overall production, notably thanks to a Research and Development fund targeting innovation and modernization. 86 An « agropole » is an area of activity dedicated to agriculture and agro-industry, which brings together several players of varying size and technical and technological level, evolving around one or more targeted agricultural value chains. For more details, see : Agence de promotion et de développement des Agropoles (APRODAT) and https://togoinvest.tg/en/agropoles-an-important-investment-link-for-economic-operators/ 87 https://numerique.gouv.tg/projet/agri-pme/ 91 Recommendation 7: Strengthen the capacities of Togo’s Standardization Agency (ATN) to cover high-potential value chains 150. Togo’s Standardization Agency (ATN) could play a role in supporting the development of value chains with high job and market potential. As previously explained, these value chains, and particularly ginger and red pepper, are currently minimally organized, including with regards to standards and regulations for production and commercialization. This makes access to large- scale and export markets much more challenging, as they require strict quality standards. To this end, the ATN could help develop and promote quality standards in the production and processing of shea, ginger, and red pepper products. This could be achieved through a new product classification system, special labeling, or quality controls in producing companies. Verification measures would rely on a list of clear criteria that would be made available to producers and processors and integrated into future trainings (Recommendations 11 and 12). 151. Efforts to standardize value chains would help support food security (specifically in view of the problem of ginger contamination) and facilitate access to export markets. Support could be led by the Ministry of Trade. Some initiatives already exist in this area, such as the support soon to be provided by the West African Food System Resilience Program. Recommendation 8: Set up appropriate financing mechanisms to encourage investments in high-potential value chains 152. Lack of financing is a major obstacle to the development of agricultural value chains in Togo. Interviews conducted with key stakeholders and MSMEs as part of this study confirmed that this situation hinders business development, economic growth, and the creation of quality jobs in the three value chains analyzed. While there is no clear-cut solution to this challenge, a number of initiatives could be taken to strengthen the financial ecosystem in support of high- potential value chains in Togo. 92 Box 15: Financing to Agricultural MSMEs and Smallholders in Togo Togo has made significant progress in promoting access to formal financial services in recent years. While the financial inclusion rate was at 18% in 2014, it rose sharply to 45% in 2017. According to the Making Finance Work for Africa Partnership initiative, this recent improvement in financial inclusion can be explained by the dynamism of the local microfinance sector and the rapid penetration of mobile money services. Moreover, the Government has also introduced initiatives to promote access to financial services, including the establishment of a National Fund for Inclusive Finance (FNFI) in 2014 and a Directorate for Inclusive Finance Promotion (DPFI) in 2015. However, although microfinance institutions (MFI) have expanded and become more professional, the volume of financing directed to agriculture remains very low. An analysis of Togolese MFI portfolios found that on average less than seven percent of outstanding loans were supporting agricultural activities, even within institutions that were originally established with an agricultural mandate. To explain this situation, studies point to limited knowledge of the agricultural sector among MFI staff, financial instruments that are not aligned with farmer needs (especially the agricultural calendar), and lending conditions that are prohibitive for smallholders. In addition, Togolese MFIs face their own challenges that include partial supervision of the sector, a high number of competing informal financial networks, and rudimentary information and management systems. Sources: Agboklou, K. E. & Özkan, B. (2022). The Agricultural Sector and Microfinance in Togo. J. Corp. Gov. Insur. Risk Manag., 9(S1), 13-24. https://doi.org/10.51410/jcgirm.9.1.2; and Making Finance Work for Africa Partnership. (2023). Togo Financial Sector Overview. https://www.mfw4a.org/country/togo 153. One initiative to boost access to agricultural finance could be to reduce investment risks for financial institutions and other key investors, such as aggregators. The study shows that many banks and institutions consider the risks of financing agricultural businesses to be too high, particularly when they are run by young people or women, especially in the three selected value chains that do not currently benefit from high visibility in Togo. In this respect, the Government could seek to support the establishment of a guarantee fund to provide partial guarantees for loans to companies active in high-potential value chains. The fund would cover parts of any losses incurred by financial institutions, thereby encouraging them to take greater risks and facilitating increased investment in agricultural value chains with high job potential. Interesting examples exist in neighboring countries such as Burkina Faso.88 154. Another important endeavor in supporting the agricultural finance ecosystem could be to focus on strengthening the supply chain. This would involve encouraging the creation of a financing platform where smallholders and MSMEs who supply large companies could refinance their customer accounts and meet their working capital requirements. This approach would bypass the documentation requirements necessary to be granted a loan, in particular the financial statements that few smallholders and MSMEs possess. Through this system, the credit 88 https://www.worldbank.org/en/results/2022/05/16/afw-unlocking-access-to-credit-for-underserved-borrowers- in-burkina-faso 93 decision would no longer depend solely on the company's financial situation, but also on the credibility and financial health of the larger corporate buyer on which the invoice is based. The use of such a platform could be integrated into entrepreneurship training (Recommendation 12). These various initiatives could be led by the Ministry of Agriculture and/or the Ministry of Economy and Finance, possibly in association with private investors. Box 16: Example of Supply Chain Finance Platform An electronic marketplace similar to the proposed intervention is operated by NAFIN, a state-owned bank in Mexico, under the name “Nafinet�. The marketplace is also accessible via mobile using a specialized app. In 2017, Nafinet supported over 9,400 transactions between small companies and 67 participating financial institutions. Each buyer’s historical records of previous invoice payment rates are readily available online to all potential financial institutions. 9.2 For Better Job Outcomes for Youth and Women in Particular Recommendation 9: Facilitate access to land for agricultural production by youth and women through the network of Planned Agricultural Management Zones (ZAAP) 155. As access to land is a major challenge for youth and women in the ginger and red pepper value chains, sustainable agricultural production of these crops could be promoted by allocating specific production areas to these groups. While access to land can be a contentious issue, this initiative could easily be adopted by the Ministry of Agriculture by building on the existing ZAAP network.89 This way, the farming of ginger and red pepper by youth and women could be prioritized or at least encouraged within ZAAPs in the Plateaux, Centrale, Kara, and Savannah regions. 156. This effort would boost local production and stimulate the value chains, while offering processors larger quantities and better quality of raw material. It would also help meet domestic market demand, while making Togo more independent of ginger and red pepper imports. Overall, promoting these promising cash crops in ZAAPs would generate additional income for smallholders, especially young people and women, and help reduce poverty and vulnerability in rural communities. 89 See definition in paragraph 132. 94 Box 17: Case Study – African Development Bank (AfDB) Project to Support the Integrated Development of the Shea Sector in Burkina Faso 2016-2019 Component I: Strengthening Component II: Improved Component III: Improving of skills and organization of access to credit for the quality in the value chain actors according to the links collection and processing of and market access of the value chain and their shea • Training sessions on networking • Awareness sessions on national standards • Workshops on business- importance of business (butter and almond) by-link approach plans • Regulations on • Standard procedure • Support for developing appropriate packaging manual business plans • Information sessions on • Interprofessional • Information sessions for good packaging and agreement system financial institutions labeling practices • Management training • Partnerships between • Training on use of sessions banks, microfinance equipment and • Annual self-assessment institutions, and shea maintenance workshops organizations • Support for traceability • Session of public-private • Public finance funds systems consultation committee information workshop • Networking with • Partnerships between international buyers public funds and shea • Develop marketing organizations communication plan around shea products for national, regional, and international markets • Training on marketing techniques Number of Jobs created: • Produce papers and 300,000 (90% women) communication materials • Produce and broadcast advertising spots on Number of Members in Structured national and regional Organizations: media 150,000 (90% women) • Train trainers so that training sessions will be Rate of increase in the volume of continued financing granted by financial institutions to the sector: 10% Financing Fund: 857,751 USD Financing Government: 1,075,126 USD Financing Fund: 857,751 USD Financing Government: 1,075,126 USD Recommendation 10: Encourage the creation of cooperatives focused on youth and women 157. Women and youth individual smallholders in the selected value chains could benefit from organizing into cooperatives or associations to pool their harvests and resources. If properly supervised, organizing into a cooperative can generally lead to economies of scale (e.g., transportation, logistics), facilitate access to loans by reducing risk for financial institutions, help farmers purchase inputs more easily, and promote more effective processing tools that can be shared among members. 158. In addition, the majority of smallholders interviewed for the study stated that they did not have contracts with buyers and were therefore exposed to significant price volatility (mainly for ginger and red pepper). Creating cooperatives would facilitate the establishment of contract farming systems with aggregators and wholesale buyers, and thus bring stability to the market. These contracts could be combined with incentives designed to mitigate compliance problems and encourage adequate production quality and quantity. Incentive-based contract farming (IBCF) depends on farmers being structurally encouraged to comply with contracts by being offered a growing set of inputs and incentives over future seasons if they provide the expected quality and quantity. Various types of incentives can be put in place, including a mix of bonuses, penalties, and profit sharing, to be selected in close coordination with farmers. 159. Initially, the creation of cooperatives for youth and women could focus on the ginger and especially the red pepper value chains, which are less structured in Togo. Creating cooperatives could be delegated to local NGOs with relevant experience and be financed by the Ministry of Grassroots Development (MDB), the Ministry of Agriculture, or various development partners. This could also be supported as part of trainings in good agricultural practices and modern processing methods (Recommendation 11). Recommendation 11: Provide or subsidize training in the adoption of good farming practices and in product transformation for youth and women producers 160. Based on the collected data, it appears that youth and women in Togo lack certain skills to be able to launch, develop, or expand their activities. Skills gaps can be classified into two main categories: those linked to agriculture and those linked to business management. 161. In terms of agricultural practices, the Government could provide or subsidize training for smallholders working in the selected value chains, focusing on youth and women. Training could be developed by Togo’s Consulting and Technical Support Institute (ICAT) and delivered through the network of existing training institutions, such as the National Agricultural Training 96 Institute (INFA) or the Togolese Agricultural Research Institute (ITRA). Monitoring would thus be ensured by the Ministry of Agriculture and funding provided by the Ministry itself or by development partners. 162. Agricultural training should have two key objectives. First, it should aim to facilitate the adoption of more efficient and resilient farming methods by youth and women smallholders, specifically through modules on climate-smart practices, use and maintenance of farming equipment, proper storage measures so that quality is not affected, and essential requirements for meeting quality standards from national and international markets. 163. Second, training should help women and youth move up the value chain towards higher value-added activities. This could be encouraged through training on raw material processing (e.g., into shea butter, ginger juice, and chili powder), use and maintenance of transformation equipment, and techniques needed to meet quality standards and certifications from national and international buyers.90 To facilitate dissemination, some of the training could be conducted within the communities themselves following a “training of trainers� approach, where farmers who already have some of the required expertise are trained to deliver training directly themselves. Generally, the acquisition of new skills could also help youth and women to find work more easily in the formal sector. Recommendation 12: Provide or subsidize training in business and management skills for youth and women entrepreneurs 164. The training curriculum for business practices could include a number key modules, such as (i) financial management (e.g., budgeting and planning, saving practices, advantages of purchasing products and services from regulated suppliers, disadvantages of using informal moneylenders, use of banking services, protection against financial risks and use of insurance products, etc.), (ii) product commercialization (e.g., market analysis, developing a communication plan, using different channels, attracting new clients, labeling techniques for greater visibility and sale prices, optimization of logistics, relevant standards and regulations for exporting, etc.), and (iii) entrepreneurial skills (e.g., leadership, team management, time management, efficient planning of resources, etc.). 165. Business and management training would have two key objectives, (i) strengthening the capacity of MSMEs working in the selected value chains, specifically those managed by youth and women, and (ii) formalizing trading processes. In addition to the entities mentioned above in connection with agricultural training, the training of entrepreneurs could also involve the Ministry of Grassroots Development and the newly created Agricultural Entrepreneurship Directorate within the Ministry of Agriculture. A partnership with the Fonds d'Appui aux Initiatives Économiques des Jeunes (FAEIJ) could also be envisaged. 90 One success story in exportation is the company Alaffia, which is now well implemented on the US cosmetic and soap markets. 97 Figure 39: Sample visualization of training curriculum 98 Annex 1: Identification sheet for high-potential value chains Name of value chain: _____________________ Why is this value chain attractive from an employment point of view? Which national policy document identified it? Which are the regions where this value chain is most important? Other important information not reflected in the table Category Criteria Variables Data sources Information National production level Share of national GDP Scale, Share of national employment Existing scale sustainability and and scope Number of companies competitiveness Production growth rate Location quotient 99 Export share of production Share of national export basket Export growth rate Import volumes and rates Market mix Competitiveness Export quality Global value chain participation (forward value added; indirect value added) Overall growth of relevant GVC(s) Employment intensity in the GVC(s) Productivity compared to Scale-up and industry standards downstream Competitive companies value-added potential Local capabilities Value chain structure Average investment costs (per Investment ha, per m2) requirements Return on investment (period) Number of jobs Impact on Job employment Share of national jobs scale/intensity dimensions Jobs per US$M 100 Employment Employment multiplier multiplier Indirect job creation MSMEs share of production Relevance for Share of MSMEs in total smallholders companies Average company size Short- and long- Time to generate revenue term jobs after planting Number/portion of jobs: young people, women, informal workers, micro/small businesses, other specifically Reaching target targeted groups groups Number and share of poor households dependent on income from the value chain Job location quotient Number of representative organizations Organization Number of members Preparation and representation Activity level of organizations Participation and leadership of all parties in the value chain Number and nature of relevant Ongoing value chain initiatives by Complementarity projects donors, government, and other players 101 Annex 2: Survey questionnaire - Smallholder farmers (Example for the shea value chain) 1.0 Selection information 1.1 Name 1.2 Position in the business 1.3 Phone number 1.4 Email 1.5 GPS 1.6 Address 1.7 Village / Town / District 1.8 Province / State / Region 1.9 Interview date 1.10 Survey reference number 1.11 Is your farm/establishment involved in the production, distribution or supply chain of shea? Yes No (The establishment is not in the scope of the study. Thank you very much for your time) 1.12 What role does your farm/establishment play in the production, distribution or supply chain of shea? Input supply Production/ Transformation Trade Other (specify) Agriculture 2.0 Background 2.1 What gender (sex) do you identify with? Male Female Other 2.2 How old are you? 15-25 26-35 36-45 46-55 56-65 66-75 76 or older 2.3 What is your highest level of education? Did not Elementary High School Technical University Graduate/ attend school school school post-graduate 2.4 What is your marital status Single Married Divorced Widow Other (specify) 2.5 Please choose the legal structure that best describes the farm or establishment. Family Partner Private Limited A state- Communal Other I farm/sole ship limited company owned property don't proprietorship company company know 2.6 Does this farm or business have female owners? Yes No 2.7a What percentage of this farm/establishment is actually owned by women (where beneficial ownership means having the power to make decisions about the overall management of the establishment)? ________% 102 2.7b What percentage of this farm/establishment is actually owned by young people (where beneficial ownership means having the power to make decisions about the overall management of the establishment)? ________% 2.8 Is this farm part of an association or cooperative? Yes No 2.9 How many years has this farm or establishment been operating in Togo? 3.0 Household 3.1 How many family members, including yourself and any partner's family member(s), worked on this farm, full-time or part-time, even if only a few hours a week, at any time during the most recent farming year? 4.0 Workforce 4.1 Did this establishment have any permanent non-family employees at the end of the last crop year? Yes (How many? __________) No 4.2 Of the [INSERT NUMBER OF PERMANENT WORKERS IN Q4.1] permanent workers the farm employed at the end of the last crop year, how many were managers, agricultural specialists, marketers, accountants, or other similar positions requiring formal training or a high level of experience? 4.3 Of the [INSERT NUMBER OF PERMANENT WORKERS FROM Q4.1] permanent workers, how many were general workers such as farm laborers, office workers, drivers, packers, etc.? 4.4 Of the total number of full-time employees, how many were... Women Foreigners Refugees / Internally displaced persons Migrant workers Under 25 4.5 How many people did the farm employ as seasonal or temporary workers during the last completed agricultural year? 4.6 Of the total number of temporary employees, how many were... Women Foreigners Refugees / Internally displaced persons Migrant workers Under 25 4.7 Thinking about labor issues on this farm or facility, please rank up to two labor issues that are major obstacles to the growth of this farm or facility. 103 Emplo Hard to Salary Minim Social Worker Worker Worker High Other yment find costs um securit s lack s lack s are worker (specify protec worker wage y skills experie unrelia turnov ) tion s/few (if any) contrib nce ble er legislat candid utions/ ion / ates pensio labor ns code and laws 4.8 Approximately how many new full-time employees has this farm hired over the past three years? 4.9 In the past three years, has this farm hired or attempted to hire new managers, agricultural specialists, marketing agents, accountants, or other formally trained or highly experienced workers? Yes No 4.10 Have you encountered any of the following problems when hiring or attempting to hire managers, agricultural specialists, marketing specialists, accountants, or other formally trained or highly experienced professions in the past three years? (Select all that apply.) There Candidat Candidates Candidat Candidates Remote Cultural or Other were few es lacked lacked the es didn't like area or religious (speci or no the required expected working difficult restriction fy) candidate required experience higher conditions access s s skills salaries 5.0 Production 5.1 How many years has this farm been producing shea? 5.2 What was the total area of land available to this farm (in hectares), whether owned, rented, leased, or available free of charge, in [enter last complete agricultural year], whether cultivated or not? 5.3 What was your total cultivated area (in hectares) for all crops in [enter last complete agricultural year]? 5.4 Hypothetically, if this farm or facility were to purchase all the machinery, vehicles, and equipment it currently uses, in their current condition and whether owned, leased, or rented, how much would it cost (in local currency)? 5.5 In theory, if this farm or establishment were to buy all the land and buildings it currently uses, whether owned, rented, or leased, how much would it cost? 5.6 What are this farm's total production and operating costs in [enter last full year]? 5.7 How much would you estimate the cost of producing one unit of shea in the last completed agricultural year? [g] 104 5.8 What are the three shea inputs on which your farm spent the most money, during the last agricultural season (such as a specific seed, seedlings, a type of feed, a type of fertilizer or pesticide, plowing services, technical services, transportation services, or other)? DO NOT INCLUDE EXPENSES FOR LABOR, MACHINERY, EQUIPMENT, OR LAND COSTS. 5.9 What was the total volume of shea produced during the last crop year? 5.10 What are the major obstacles your facility faces in the current shea production operation? Please list up to two, starting with the biggest obstacle. Access to or cost of financing Electricity (cost or quality) Water (cost or availability)/ Irrigation Worker availability Worker skills Access to land Access to inputs (feed, seeds, cuttings, fertilizers, etc.) Transport and logistics Trade and customs Licenses and permits Inspections (health and safety, labor, etc.) Other regulations Crime and safety Animal pests and diseases Market access Lack of information on market conditions/prices Exchange rate fluctuations Other (specify) Nothing 5.11 Are you planning to hire new employees in the coming year? 5.12 How many employees do you intend to hire next year? 5.13 For which specific role/job do you need new employees? 6.0 Marketing 6.1a In [insert last complete crop year], what were this farm's or establishment's total annual sales of ALL products and services? 6.1 Over the past three years, what have been this farm's or establishment's total annual sales of ALL b products and services? 6.2 Approximately what proportion of these total annual sales came from shea? Please answer as a percentage of total sales. 6.3 During the last crop year, what was the highest and lowest unit price of the shea butter you sold? 6.4 Not counting individual consumers, how many customers (i.e. traders, wholesalers, processors, etc.) for shea has this farm or establishment had in [indicate last complete crop year]? 105 6.5 Which category of customer (i.e. buyer or client) purchased the most shea in the most recent agricultural year? Small sole trader or wholesaler Large retailer or wholesaler Transformer or local manufacturer International transformer or manufacturer NGO or INGO Government Other (specify) 6.6 What are the most important factors in being selected as a supplier? Please indicate up to two, starting with the most important. Price Adequate product quality Production capacity Access to quality inputs On-time delivery Appropriate technology Standard requirements such as health, safety, and environmental standards Management practices Other (specify) 6.7 Do you export any of your goods? Yes No 6.8 Where do you mainly export your products? 6.9 Why don't you export? Unfavorabl Inconsistent/unpredictabl Difficult to The price of goods to High Other e national e national policies meet be exported is not road (specify policies certificatio competitive at and ) (lack of n or quality regional/internationa air incentives, standards l level freigh export in other t costs bans, countries complicate d export laws, etc.) 7.0 Inclusion of gender and age 7.1 What are you currently doing to include women in your supply chains? Gender-sensitive awareness-raising and information strategies Gender-sensitive extension services Contractual incentives for women's participation Gender targets in contracts with cooperatives/producer associations Local buyer networks to overcome the challenges of women's mobility Do nothing in particular Other (specify_______) 7.2 What are you currently doing to include young people in your supply chains? Recruitment of school students 106 Offer technical training Do nothing in particular Other (specify_______) 8.0 Access to resources 8.1 Have you ever had formal training for your company? Yes No (skip to 8.5) 8.2 In what areas have you received formal training? Developing a business Starting a business Organizational management Accounting and finance Laws and regulations IT Marketing Agricultural skills, methods Other (please specify) 8.3 Did you find the training helped you and your company? Yes (go to 8.4) No 8.4 How has this training helped you and your company (skip to next section after completing)? Increased Increased Increased Increased Expanded Extended Other productivit revenues profits customer to new to other (specify) y/yield base markets links in the value chain 8.5 Why have you never had any formal training for your company? It wouldn't I don't have I don't know I don't know Training too Other help me grow the money to where to train what I'd like far away (specify) my business pay for to train for training 8.6 Are you interested in training for your company? Yes No 8.7 In what areas would you like to receive training? 9.0 Commercial performance, banking, and financing 9.1 Do you keep financial records for this company? Yes No 9.2 What types of assets do you own as part of your business/household, and what is the total value? Assets: Value: Land/property Buildings General equipment (office equipment, furniture, household appliances, etc.) Specialized equipment (processing/packaging machinery, etc.) Vehicles (cars, trucks, tractors, forklifts, motorcycles, etc.) Financial assets (cash, accounts receivable, deposit accounts, cheques, shares, investments, debts to you, etc.) Inventory 107 Other (specify) 9.3 How would you describe your company's current state/life stage? Starting Growing slowly Growing fast Stable or mature Downscalin g 9.4 What are the three main costs for your company? Rental Seeds/ Agroc Fertiliz Suppli Equip The Water Taxes Trans Other of plants hemic ers es ment workf port (specif land als orce y) or buildi ngs 9.5 Do you have a bank account that you use for your business? Yes No 9.6 What's the main way you finance your business? Personal Family Friends Cooperative/ Loans from Other (specify) savings community financial savings institutions 9.7 Have you ever received a loan or line of credit for your business from a bank or other financial institution? Yes No (Go to 9.14) 9.8 How many loans or lines of credit have you received? 9.9 What was the last loan or line of credit you received? 9.10 What was the interest rate on the most recent loan? 9.11 Which bank or financial institution granted you the most recent loan? 9.12 What did you use the most recent loan for? Buy Purchase fixed Business Personal/hous Repay other Other (specify) inputs/inve assets (e.g., developme ehold debts ntories/goo land, nt expenses/scho ds for sale machinery, ol fees equipment) 9.13 Have you ever applied for a formal loan but been turned down? Yes No 9.14 Why were you rejected? No Busines Unable Not Amoun Amoun Insuffic Compa Incomp Other credit s to enough t t ient ny not lete (specify history conside provid eviden request request income recogni applica ) red e the ce of ed too ed too /asset zed by tion risky require solid high low docum financi d cash entatio ng guaran flow n institut tee ion 9.15 Do you plan to apply for a loan or line of credit from a bank or financial institution in the future? Yes No (go to next section) 108 9.16 How soon do you plan to apply for this loan? In the next six months In the coming year In the next two years More than two years from now 9.17 How much will you borrow? 9.18 What is the highest interest rate you would be prepared to accept for this amount? 9.19 What would you use the loan for? Buy Purchase fixed Business Personal/hous Repay other Other inputs/invent assets (e.g., development ehold debts (specify) ories/goods land, expenses/sch for sale machinery, ool fees equipment) 9.20 Why don't you want to get a loan or line of credit next year? I don't know I don't have I don't have I don't have The cost Other what to use it the money to the required time for the would not be (specify) for pay it back guarantees application worth my process expected return 10.0 Key challenges 10.1 What are the three main challenges you face in your business? Competiti Financial Uncertainty Supply Uncertainty Political Other on from uncertainty due to chain due to instability (specify) the COVID-19 uncertainty climate informal change/wea sector ther factors 10.2 In your opinion, what are the three main challenges facing the shea value chain? Lack of Lack of Expensive or Lack of Expensive Lack of Other funding market/reliabl unavailable skilled raw knowledge (specify) e buyers transport labor materials / to grow inputs cash crops 10.3 In your opinion, what are the three main challenges facing women in the shea value chain? (men only)? Lack of Lack of financial Restrictive social Political or legal Other (specify) technical sources norms restrictions training 10.4 What are the three main challenges you face as a woman in the shea value chain (women only)? Lack of Lack of financial Restrictive social Political or legal Other (specify) technical sources norms restrictions training 10.5 In your opinion, what percentage of small farmers in the shea value chain are women-owned businesses? 10.6 Does being a guardian affect your ability to manage your business? 109 Yes No 10.7 What are the three main challenges facing young people in the shea value chain? Lack of Lack of financial Restrictive social Political or legal Other (specify) technical sources norms restrictions training END: Closing message: Thank you for completing the survey. The World Bank Group greatly appreciates your time and support. [STOP] INTERVIEWER'S COMMENTS AFTER THE INTERVIEW : Problems have arisen / extraordinary circumstances that could influence the results 110 Annex 3: Survey questionnaire - MSMEs (Example for the shea value chain) 1.A Selection information A.1 Do you officially own or manage the company? Yes No A.2 If not, what is your role? A.3 Is your company involved in the shea by-products industry in some capacity (supplier, producer, processor, trader, retailer/wholesaler, or other)? Yes No A.4 What kind of activities does this company carry out? Supply of Product- Aggregation Treatment Packaging Distribution/trade Transport Retail/sales Export Other inputs ion (please specify) 1.B Service information B.1 Date of interview B.2 Language of interview B.3 First name of interviewer B.4 Investigator's surname B.5 GPS coordinates: B.6 Is maintenance located on the Yes No company's main site? B.7 Survey reference number 1.C Profile C.1 Name of sponsor C.2 Position in the business C.3 Phone number C.4 Email C.5 GPS C.6 Address C.7 Village / Town / District C.8 Province / State / Region 2.0 Background 2.1 What gender do you identify with? Male Female Other 2.2 How old are you? 18-25 26-35 36-45 46-55 56-65 66-75 76 and over 2.3 What is your highest level of education? Did not attend Elementary High School Technical University Graduate/ school school school post-graduate 2.4 What is your marital status? Single Married Divorced Widow Other (specify) 2.5 Please choose the legal structure that best describes the farm or establishment. 111 Family Partner Private Limited A state- Communal Other I farm/sole ship limited company owned property don't proprietorship company company know 2.6 Does this farm or business have female owners? Yes No 2.7 What percentage of this farm/establishment is actually owned by women (where beneficial ownership means having the power to make decisions about the overall management of the establishment)? ________% 2.8 Is this farm or establishment part of an association or cooperative? Yes No 2.9 How many years has this farm or establishment been operating in Togo? 3.0 Workforce 3.1 At the end of the last crop year, how many permanent workers were on the farm? 3.2 Of the [INSERT NUMBER OF PERMANENT WORKERS IN Q3.1] permanent workers the farm employed at the end of the last crop year, how many were managers, agricultural specialists, marketing agents, accountants, or other similar positions requiring formal training or a high level of experience? 3.3 Of the [INSERT NUMBER OF PERMANENT WORKERS FROM Q3.1] permanent workers, how many were general workers such as farm laborers, office workers, drivers, packers, etc.? 3.4 Of the total number of full-time employees, how many were... Women Foreigners Refugees / Internally displaced persons Migrant workers Under 25 3.5 How many people did the farm employ as seasonal or temporary workers during the last completed agricultural year? 3.6 Of the total number of temporary employees, how many were... Women Foreigners Refugees / Internally displaced persons Migrant workers Under 25 3.7 Thinking about labor issues on this farm or facility, please rank up to two labor issues that are major obstacles to the growth of this farm or facility 112 Emplo Hard to Salary Minim Social Worker Worker Worker High Other yment find costs um securit s lack s lack s are worker (specify protec worker wage y skills experie unrelia turnov ) tion s/few (if any) contrib nce ble er legislat candid utions/ ion / ates pensio labor ns code and laws 3.8 Approximately how many new full-time employees has this farm hired over the past three years? 3.9 In the past three years, has this farm hired or attempted to hire new managers, agricultural specialists, marketing agents, accountants, or other formally trained or highly experienced workers? Yes No 3.10 Have you encountered any of the following problems when hiring or attempting to hire managers, agricultural specialists, marketing specialists, accountants, or other formally trained or highly experienced professions in the past three years? (Select all that apply.) There Candidat Candidates Candidat Candidates Remote Cultural or Other were few es lacked lacked the es didn't like the area or religious (speci or no the required expected working difficult restriction fy) candidate required experience higher conditions access s s skills salaries 4.0 Marketing 4.1 Who do you sell your product to directly? Another player in the value chain (go to 4.3) Consumers (go to 4.2) 4.2 Where do you sell to consumers? My own store Place of production Local market Other (specify) 4.3 What type of player in the value chain do you sell to? Producer Retailer Transformer Retail store Exporter 4.4 In [insert last complete crop year], what were this farm's or establishment's total annual sales of ALL products and services? 4.5 Approximately how much of these total annual sales came from shea? Please answer as a percentage of total sales. 4.6 During the last crop year, what were the highest and lowest unit prices you sold? 4.7 Not counting individual consumers, how many customers (i.e. traders, wholesalers, processors, etc.) for [PRODUCT] did this farm or establishment have in [indicate last complete crop year]? 4.8 Which category of customer (i.e. buyer or client) purchased the most shea in the most recent agricultural year? 113 Small sole trader or wholesaler Large retailer or wholesaler Transformer or local manufacturer International transformer or manufacturer NGO or INGO Government Other (specify) 4.9 What are the most important factors in being selected as a supplier? Please list up to two, starting with the most important. Price Adequate product quality Production capacity Access to quality inputs On-time delivery Appropriate technology Standard requirements such as health, safety, and environmental standards Management practices Other (specify) 4.10 Do you engage in any type of marketing? Yes No (Why not? ____________) 4.11 What types of marketing do you engage in? TV Radio Web Paper Other (specify) 4.12 Do you think these marketing techniques help sell your product? Yes No 4.13 Would you like to expand your marketing? Yes No 4.14 Do you export any of your goods? Yes (go to 4.15) No (go to 4.16) 4.15 Where do you mainly export your products? 4.16 Why don't you export? Unfavorable Inconsistent/u Difficult to The price of High road and Other national npredictable meet goods to be air transport (specify) policies (lack national certification exported is costs of incentives, policies or quality not export bans, standards in competitive at complicated other regional/inter export laws, countries national level etc.) 5.0 Inclusion of gender and age 5.1 What are you currently doing to include women in your supply chains? Gender-sensitive awareness-raising and information strategies Gender-sensitive extension services Contractual incentives for women's participation Gender targets in contracts with cooperatives/producer associations Local buyer networks to overcome the challenges of women's mobility Do nothing in particular 114 Other (specify_______) 5.2 What are you currently doing to include young people in your supply chains? Recruitment of school students Offer technical training Do nothing in particular Other (specify_______) 6.0 Access to resources 6.1 Have you ever taken a formal training course for your company? Yes No (go to 6.5) 6.2 In what areas have you received formal training? Developing a business Starting a business Organizational management Accounting and finance Laws and regulations IT Marketing Agricultural skills, methods Other (specify) 6.3 Did you find the training helped you and your company? Yes (go to 6.4) No (go to 6.6) 6.4 How has this training helped you and your company? Increased Increased Increased Expanding Extension Other (specify) revenues profits customer into new to other base markets links in the value chain 6.5 Why have you never had any formal training for your company? It wouldn't I don't have the I don't know I don't know Training too far away help me grow money to pay for where to get why my business training the training 6.6 Are you interested in training for your company? Yes No 6.7 In what areas would you like to receive training? 7.0 Supply chain relations 7.1 From whom does your company source/purchase raw materials? Major suppliers Retailers Farmers Associations or Other ( specify) cooperatives 7.2 Do you source from smallholders? Yes No 7.2a If you source from smallholders, how much? 7.2b If you buy from smallholders, how many (in %) are owned by women? 7.2c If you buy from smallholders, how many of them (in %) are aged between 18 and 24? 115 7.3 Which of these factors will encourage you to integrate more smallholders into the company as a whole? Access to financing to support smallholder integration strategies External (government or donor) provision of technical assistance and other support that integrate smallholders Transport and logistics services that better integrate smallholders A larger supply of smallholders ready to sign contracts Greater motivation for smallholders to participate in commercial farming Improve productivity and management practices (e.g., on-time delivery) Smallholders adopt the crops in which my farm operates Smallholders improve crop quality Stricter measures to reduce parallel sales or other obstacles (such as the enactment of contract farming laws) Other (specify ___________________) 7.4 What are the three main perceived obstacles or risks to sourcing from smallholders? Hard to find smallholders Small operators charge higher prices Smallholders produce smaller quantities Smallholders produce inferior or irregular quality Smallholders don't deliver on time Smallholders less able to evolve Smallholders engage in parallel sales or do not respect contracts Excessive effort required to coordinate/aggregate supply to smallholders Other (specify ____________________) 7.5 What factors would encourage you to integrate more women farmers or small farmers into the company? (Select all that apply.) Access to funding to support women's integration strategies External provision (government or donor) of technical assistance and other support that integrate women Transport and logistics services that better integrate women More women farmers ready to sign contracts Strengthening community support for women's participation in commercial farming Women farmers improve productivity and management practices Women farmers adopt the crops in which my farm operates Women farmers improve crop quality Other (specify _____) 7.6 What factors would encourage you to integrate more young farmers or smallholders into the company? (Select all that apply.) Access to funding to support youth integration strategies External provision (government or donor) of technical assistance and other support that integrate young people Transport and logistics services that better integrate young people More young farmers ready to sign contracts Increased community support for youth participation in commercial farming Young farmers improve productivity and management practices Other (specify _____) 7.7 What are the main obstacles to sourcing from women? 116 Hard to find female-led suppliers Lack of interest from small producers Women produce smaller quantities Women do not participate in the producer groups from which we source our products. Women do not meet our eligibility criteria (specify_____) Social/cultural barriers in the community Other (specify _____) 7.8 What are the main obstacles to sourcing from young people? Hard to find suppliers run by young people Lack of interest from young smallholders Young people produce smaller quantities Young people are not part of the producer groups from which we source our products. Young people do not meet our eligibility criteria (specify_____) Social/cultural barriers in the community Other (specify _____) 7.9 Who does your company sell to? Manufacturer/processor Direct exporter Aggregator Small retailer Other (specify______) 7.10 Do you have a contract with your customers? Yes No 7.11 What challenges does your company face in supplying large companies? Low output Quality does not meet standards Lack of knowledge/information/training Business informality Lack of social networking and marketing opportunities Lack of storage facilities Shortage of time/lack of mobility Lack of access to financial/non-financial services Transport/logistics Other (specify________) 7.12 Are there any of the following activities that you would like to take part in, but are currently unable to do? Agriculture/production Trade Transformation Packaging Retail sales Transport Other (specify________) 7.13 If so, what would you need to do it? Support for the purchase of machinery/access to new technologies Training in new techniques Access to infrastructure (roads, transport, etc.) 117 Access to cold storage facilities Access to different or better quality inputs Introduction to new markets Other (specify_______) 8.0 Commercial performance, banking, and financing 8.1 Do you keep financial records for this company? Yes No 8.2 What types of assets do you own as part of your business, and what is their total value? Assets : Value : Land/property Buildings General equipment (office equipment, furniture, household appliances, etc.) Specialized equipment (processing/packaging machinery, etc.) Vehicles (cars, trucks, tractors, forklifts, motorcycles, etc.) Financial assets (cash, accounts receivable, deposit accounts, cheques, shares, investments, debts to you, etc.) Inventory Other (specify_______) 8.3 How would you describe your company's current state/life stage? Starting Slow growth Rapid growth Stable or mature Downscaling 8.4 What are the three main costs for your company? Rent on See Agroche Fertili Suppli Equipm Work Water Taxes Trans Oth land or ds/ micals zers es ent force port er ( buildings pla spec nts ify) 8.5 Do you have a bank account that you use for your business? Yes No 8.6 What's the main way you finance your business? Personal Family Friends Cooperative/co Loans from Other ( savings mmunity financial specify) savings institutions Other (specify) 8.7 Have you ever received a loan or line of credit for your business from a bank or other financial institution? Yes No 8.9 How many loans or lines of credit have you received? 8.10 How much was the last loan or line of credit you received? 8.11 What was the interest rate on the most recent loan? 8.12 Which bank or financial institution granted you the most recent loan? 8.13 What did you use the most recent loan for? Buy Purchase fixed Company Personal/hous Repay other Other (specify) inputs assets (e.g., land, expansion ehold debts 118 /inve machinery, expenses/tuiti ntorie equipment) on fees s/goo ds for sale 8.14 Have you ever applied for a formal loan but been turned down? Yes (go to 8.15) No 8.15 Why were you rejected? No Busines Unable Insuffici Amount Amo Insufficie Company Incom Othe cred s to ent requeste unt nt not plete r it conside provide evidenc d too requ income/ trusted applic (spec hist red the e of high ested asset by ation ify) ory risky required strong too docume financing guarante cash low ntation institutio es flow n 8.16 Do you plan to apply for a loan or line of credit from a bank or financial institution in the future? Yes No (skip to 8.21) 8.17 How soon do you plan to apply for this loan? In the next six In the coming year In the next two years Other (specify) months 8.18 How much will you be asking for? 8.19 What is the highest interest rate you would be prepared to accept for this amount? 8.20 Why do you want a loan or line of credit next year? Buy Purchase fixed Company Personal/househ Repay other Other inputs/inv assets (e.g., land, expansion old debts (specify) entories/g machinery, expenses/tuition oods for equipment) fees sale 8.21 Why don't you want to get a loan or line of credit next year? I don't I don't have the I don't have I don't have time The cost would Other know money to pay it the required for the not be worth (specify) what to back warranty application the expected use it for process return 9.0 Main challenges 9.1 What are the three main challenges you face in your business? Competitio Financial Uncertainty Supply Uncertainty Other n from the uncertainty due to chain due to (specify) informal COVID-19 uncertainty climate sector change/met eorological factors 9.2 In your opinion, what are the three main challenges facing the shea value chain? 119 Lack of Lack of Expensive Lack of Expensive Lack of Other funding reliable or skilled labor raw knowledge (specify) buyers/mar unavailable materials/in to grow kets transport puts cash crops 9.3 In your opinion, what are the three main challenges facing women in the shea value chain(men only)? Lack of technical Lack of financial Restrictive social Political or legal Other (specify) education sources norms restrictions 9.4 What are the three main challenges you face as a woman in the shea value chain (women only)? Lack of technical Lack of financial Restrictive social Political or legal Other (specify) education sources norms restrictions 9.5 In your opinion, what percentage of small farmers in the shea value chain are women-owned businesses? 9.6 Does being a guardian affect your ability to manage your business? Yes No 9.7 In your opinion, what are the three main challenges facing young people in the shea value chain? Lack of technical Lack of financial Restrictive social Political or legal Other ( specify) education sources norms restrictions END: Closing message: Thank you for completing the survey. The World Bank Group greatly appreciates your time and support. [STOP] INTERVIEWER'S COMMENTS AFTER THE INTERVIEW: Problems have arisen / extraordinary circumstances that could influence the results 120 Annex 4: Guide for focus group discussions (Example for the shea value chain) Informed consent: To the respondent: "Hello, my name is [NAME OF MODERATOR] from [NAME OF INSTITUTION]. I am moderating this panel discussion on behalf of the World Bank Group to identify employment opportunities for women and youth in the shea value chain in Togo. You have been randomly selected to be included in this panel discussion. We will ask you questions about your experience in the shea industry. This will include questions about your needs, operations, constraints, financial aspects, and the impact of COVID-19. Any information you provide that may identify you will be kept strictly confidential by the parties carrying out this study, including World Bank employees, survey company employees, and researchers. Your participation is voluntary, and you can choose to leave at any time or speak very little. In other words, you have the option of not participating, and there will be no consequences for non-participation. We plan to record the discussion to ensure accuracy, and you are free to request that the recording be stopped at any time. Furthermore, there are no direct risks or benefits, although your participation may benefit other community members like yourself. Please note that while we will take every precaution to maintain data confidentiality, the nature of group discussion prevents us from guaranteeing confidentiality. We would like to remind participants to respect the privacy of other participants and not to repeat what is said in the discussion group to others. The discussion will take no longer than two hours. You can contact [NAME OF SURVEY COORDINATOR] at [PHONE NUMBER] if you have any questions, concerns, or complaints about the study or your rights as a participant. Would you be willing to participate? If so, please complete the participant information form. By completing the form, you agree to maintain the confidentiality of information discussed by all participants and researchers during the focus group session. We will collect the following information from each participant before starting the discussion: • Name • Gender • Age (approximate) • Area in which they live • Employment (role, company) • The highest level of education 121 Youth-focused FGD Main question Sub-question Answer Are job demand and supply in balance? What are considered good jobs in the value chain? Does this differ from other regions? Do you think the shea industry is desirable in terms of jobs? What is the employment Can you tell me about successful people working in the shea value chain in situation in the shea Togo? Explain why you think they have succeeded. industry in Togo? Why did you decide to work in the shea industry? Do you think there are enough educational establishments available for training in the shea trades? How easy is it to find a job as a young person? Is it easy for young people to find a job in the shea value chain? Are you satisfied with the current size and profitability of your company/farm? What other factors contribute to your satisfaction with the What are your aspirations company? for your company? Do you intend to expand your business in the next five years? What is your long-term goal for your company - what do you see ten years from now? What challenges do you face in your day-to-day work/business? What are the main risks affecting the activities/revenues of your business/farm/enterprise? What strategies have you implemented to overcome these risks? What are the effects of such strategies? What are some of your What are the main obstacles to income generation in the shea value chain? main constraints when Are there any laws or regulations preventing you from starting or expanding doing business? your business? Do you feel that you or a certain social group are socially restricted, e.g., by social norms in the running of your business? If so, what are these restrictions and how are they expressed? What challenges do you face because of your age? 122 Was there any financial support available, e.g., financial institutions, in case you needed it to start your business? What monetary and other Where did you find the money to start your business? resources did you need to get your business off the Do you have bank loans?/Have you had bank loans? ground? What were the main difficulties you encountered in obtaining the loan? Apart from financial resources, what other resources did you need to get your business off the ground? What are the three main inputs this company/farm needs to provide its main service/product? Who are your main suppliers? How easy is it for you to access the key inputs you need to run your business? What resources do you What are the biggest challenges in accessing inputs? need to run your business? In the past year, have you had any problems with your suppliers? Please explain. Do you have anything to add about other resources such as water, land, and labor in the case of production? Is your company/farm part What organizations do you belong to? of any trade/industry Is there a specific organization for young entrepreneurs? association, cooperative, or Have these organizations had a positive impact on your company's savings group? performance? How have they helped? How many? Under what conditions are they hired (e.g., paid, unpaid, part- time, etc.)? Do you think you need more workers to run your business? Do you have employees for Do you have trouble finding good/competent people? If so, what skills are your company? you lacking? What is the highest level of education or technical training your workers have achieved? Do you know of any How successful have these programs been? Why or why not? projects or programs to Do you have experience with public/social employment programs and support businesses like schemes? Tell us about your experience. yours (training, What training or skills do you need to enable you to participate in higher apprenticeships, financing, value-added activities in the selected value chains? 123 job creation, mentoring, Are there any government initiatives and services that could help you meet market access facilitation, your needs? Please explain. etc.)? Women-focused FGD Main question Sub-question Answer Are job demand and supply in balance? What are the good jobs in the value chain? Is it different from other regions? Do you think the shea industry is desirable in terms of jobs? Can you tell me about successful people working in the shea value chain in What is the employment Togo? Explain why you think they have succeeded. situation in the shea Why did you decide to work in the shea industry? industry in Togo? Do you think there are enough educational establishments available for training in the shea trades? Is it easy for women to find work in general? Is it easy for a woman to find a job in the shea value chain? Are you satisfied with the current size and profitability of your business/farm? What are your aspirations Do you intend to expand your business in the next five years? for your company? What is your long-term goal for your company - what do you see ten years from now? What are the day-to-day challenges you face in your business? What are the main risks affecting the activities/revenues of your business/farm/enterprise? What support would you What strategies have you implemented to overcome these risks? What are need to run or develop your the effects of such strategies? business?What are some of What are the main obstacles to income generation in the shea value chain? your main constraints when Are there any laws or regulations preventing you from starting or expanding doing business? your business? Do you have the impression that you or a certain social group are socially restricted, e.g., by social norms in the conduct of your business? If so, what are these restrictions and how are they expressed? 124 What age-related challenges do you face? Was there any financial support available, e.g., financial institutions, in case What monetary and other you needed it to start your business? resources did you need to Where did you get the money to start your business? get your business off the Do you have any bank loans?/Did you have any bank loans? ground? What were the main difficulties you encountered in obtaining the loan? What are the three main inputs required by this company/farm/corporation to provide its main service/product? Who are your main suppliers? How easy is it for you to access the key inputs you need to run your What resources do you business? need to run your business? What are the biggest challenges in accessing inputs? In the past year, have you had any problems with your suppliers? Please explain. Does your What organizations do you belong to? company/farm/corporation Is there a specific organization for women entrepreneurs in the shea value belong to any chain? trade/industry association, Have these organizations had a positive impact on your company's cooperative, or savings performance? How have they done so? group? How many? Under what conditions are they hired (e.g., paid, unpaid, part- time, etc.)? Do you think you need more workers to run your business? Do you have employees for Do you have trouble finding good/competent people? If so, what skills are your company? you lacking? What is the highest level of education or technical training your workers have achieved? Do you know of any projects How successful have these programs been? Why or why not? or programs to support Do you have experience with public/social employment programs and businesses like yours schemes? Tell us about your experience. (training, apprenticeships, What training or skills do you need to enable you to participate in higher financing, job creation, value-added activities in the selected value chains? 125 mentoring, market access Are there any government initiatives and services that could help you meet facilitation, etc.)? your needs? Please explain. 126 Annex 5: Guide for stakeholder interviews (Example for the shea value chain) Interview guide for conducting interviews with key stakeholders. Background information Name of interviewer Recorder name Date Name of sponsor Organization Role Preliminary questions: Do you know what challenges women and young people face in Togo's agricultural sectors? Do you know the shea value chain in Togo? GENERAL QUESTIONS Main question Sub-question Answer In what sectors or industries do people work? Which sectors do you think have the most successful companies? Do you think the shea value chain is seen as desirable in terms of What is the employment situation in jobs in this region? this region? Within the shea value chain, what types of jobs are seen as the most desirable? Why or why not? In this community/region, are there activities or jobs within the shea value chain that are restricted or accessible only to certain people? What kind of jobs do women do in this region? What is the employment situation for What do you see as the main obstacles/constraints for women to women in this region? participate and succeed in the shea value chain? 127 What is the employment situation for What kind of jobs do young people do in this region? young people in this region? What types of jobs do women hold in What do you see as the main obstacles/constraints for women to the shea value chain? participate and succeed in the shea value chain? What kind of jobs do young people What do you see as the main obstacles/constraints to young people have in the shea value chain? participating and succeeding in the shea value chain? ISSUES SPECIFIC TO LOCAL GOVERNMENT Main question Sub-question Answer Do you see the shea value chain following the same trend? How do you see Togo's agricultural sector How do you see opportunities in the shea value chain today and in developing over time? the future? Given your particular status as a What should [local government] be doing to improve the people government worker and leader in certain doing business in this area? areas, what do you see as [local government's] role in improving the socio-economic situation of people in the community/region? Is there a bank and/or savings bank close Please describe the experience of accessing financing in your to your commune? community. What types of organizations, networks, To your knowledge, are any of these organizations currently or cooperatives exist in the focusing on promoting the shea value chain? community/region? What kind of support do they offer? Can you tell me to whom and where Domestic or international? people in this community/region usually sell their products or services? Are there any specific programs or projects aimed at women to Do you know of a project or program that increase inclusion and employment? helps people get better jobs, incomes, or Elaborate (institution, type of assistance provided, number of assistance with business development in beneficiaries, etc.). this community/region? What kind of Are there any specific programs or projects aimed at young people programs or projects are we talking to increase inclusion and employment? about? Do you think/did you hear whether these were successful? Why or why not? 128 Can you think of any programs or projects, perhaps not in this community but elsewhere, that have been effective? Explain the type of program/project you would like to see for (i) women and (ii) young people. Are there any regulations preventing women and young people Are there any policy initiatives, from participating in the shea value chain? regulations, or government programs What government policies or regulations can improve the planned or underway to encourage the participation of women and young people in value chains? participation of women and young What laws or formal regulations are needed to promote the people in the shea value chain? creation of sustainable jobs for the target population? What do you think are the biggest challenges facing women and young people in the shea value chain? What are the main constraints preventing What do you see as the biggest challenges facing the shea value greater value chain integration for chain as a whole? women and young people and better In your opinion, what are the best opportunities for integrating quality employment opportunities? women into the shea value chain? In your opinion, what are the best opportunities for integrating young people into the shea value chain? QUESTIONS SPECIFIC TO NGOS Main question Sub-question Answer What is the NGO's mission in this community/region? What kind of support does this NGO provide in this community/region? Are there other similar NGOs in this Please describe the NGO's involvement in this community/region? region. How many years have you worked in this community/region? Are there interventions and support from the NGO that seem more useful or with better results? Why or why not? 129 Can you describe the profile of your beneficiaries? (Individuals: age, profession, gender; small business: activity, etc.) What are the main challenges, particularly in terms of employment and livelihoods? What are the main challenges facing women? What are the main challenges for the population What are the main challenges facing young and for the NGO? people? What are the main challenges facing the NGO working in this community/region? What are the main challenges facing the NGO working in the shea value chain? What do you think are the biggest challenges facing women and young people in the shea value chain? What are the main constraints preventing greater What do you see as the biggest challenges facing value chain integration for women and young the shea value chain as a whole? people and better quality employment In your opinion, what are the best opportunities opportunities? for integrating women into the shea value chain? In your opinion, what are the best opportunities for integrating young people into the shea value chain? Do you know of a project or program [provided What types of programs or projects are involved? by the state or other partners] helping people get better jobs, incomes, or assistance with business development in this community/region? In your opinion, what are the best opportunities Do you know of any policy initiatives, regulations, for promoting women and young people in the or government programs planned or underway shea value chain? that encourage the participation of women and What government policies or regulations can young people in the shea value chain? improve the participation of women and young people in value chains? 130 What laws or formal regulations are needed to promote the creation of sustainable jobs for the target population? QUESTIONS SPECIFIC TO TRADE/INDUSTRY ASSOCIATIONS, CHAMBERS OF COMMERCE, COOPERATIVES, ETC. Main question Sub-question Answer Please describe your organization What is the organization's mission in this community/region? (trade/industry association, chamber of How many years have you worked in this community/region? commerce, cooperative, etc.). What is the organization's long-term goal (ten years)? How long have you been supporting this region/community? Please provide examples of support provided by the organization. What kind of support does this Which of your interventions and support have you found most organization offer? useful or most successful in promoting the shea value chain? Why? Does the organization provide specific support for women? For young people? What does this support involve? What are the requirements for joining Are any of your activities restricted or accessible only to certain your organization? people/companies/farms? Why or why not? What are the main challenges facing the What are the main challenges facing organizations working in the organization working in this shea value chain? community/region? Do you know of a project or program What types of programs or projects are involved? [provided by the state or other What kinds of policies or regulations could be implemented to help partners] helping people get better jobs, people doing business in this community/region - particularly in the incomes, or assistance with business shea value chain? development in this community/region? In your opinion, what are the best opportunities for integrating women into the shea value chain? In your opinion, what are the best opportunities for integrating young people into the shea value chain? 131 Annex 6: Additional Details on Phase 2 Methodology (i) Survey The quantitative data collection approach involved data collection via a survey of smallholder farmers and MSMEs. The survey served as a tool to collect standard information from a broad range of value chain actors to understand the different activities performed along the value chain and the extent to which youth and women are involved. In addition, the quantitative data collection sought to capture data regarding the nature of farming practices, the use of inputs and productivity-enhancing technologies, and access to extension services as well as post-handling and storage facilities. Linkages with other value chain actors were also explored. The objective was to capture data on the involvement of youth and women in the production, processing, and distribution of shea, red pepper, and ginger, along with the barriers that hinder their participation. The required sample size for the survey was calculated using the following equation: 𝐷𝑒𝑓𝑓∗൫𝑧2 ൯∗�ሺ1−�ሻ/𝑒2 𝑛𝑠 = �ሺ1−�ሻ , where 1+ቀ𝑧2 ∗ 2 � 𝑒 � Parameters Remarks Sample size z =1.96 Statistic corresponding to the level of confidence (1.96 for 95 percent confidence interval) Def Design effect will only be present in cluster sampling method which is not anticipated in this assignment P=50 Estimate for selected key outcome indicators to be measured in the survey; we assumed the percent conservative measure of 50 percent e Margin of error (2 percent, 2.5 percent, 3 percent, 5 percent) N Estimated total number of HHs involved in agriculture The sample for the survey was split between smallholder farmers and MSMEs. MSMEs include producers, aggregators, traders, processors, logistics companies, and distributors/retailors along the selected value chains. Given the importance of smallholder farmers to the economy and the role they play within the shea value chains, the distribution of smallholders to MSMEs was approximately 80/20. A stratified sampling technique was used for sampling smallholders, where stratification was based on region and demographic characteristics. For MSMEs, a snowballing sampling approach was used to select participants for the survey. The final sample of the smallholders and MSMEs surveyed was distributed as following by age and gender: 132 Smallholder Farmers MSMEs Gender Shea Ginger Red Pepper Shea Ginger Red Pepper Women 72 46 41 6 14 17 Men 7 40 38 15 6 7 Total 79 86 79 21 20 24 Age Shea Ginger Red Pepper Shea Ginger Red Pepper Youth (below 35) 12 18 30 8 7 14 Over 35 67 68 39 13 13 10 Total 79 86 79 21 20 24 (ii) Key Stakeholder Interviews Key information interviews were conducted with relevant institutional actors, regulators, policy makers, and development partners that are involved in the value chains and women and youth employment. This followed a snowball approach, in which the team identified an initial set of key interviewees and subsequently other individuals to interview during their discussions with the initial set of individuals. This is a comprehensive strategy compared to fixing the sample of individuals for the KIIs, which may limit the number of people approached due to the pre- finalized list of individuals. This way, information from a more complete sample of people who have been involved in the field was available to the team. A discussion guide was used to ensure that all necessary topics were covered. Semi-structured interviews encourage two-way communication and help understand reasons for the answers and collect detailed information of specific topics to be investigated. The guide was flexible enough to encourage discussion to expand organically during the interviews. This ensures that the most accurate and useful knowledge is obtained. The following stakeholders participated in the key informant interviews: Type of Stakeholder Stakeholder DFV : Direction des Filières Végétales DPV : Direction de la Protection des Végétaux ITRA : Institut Togolais de Recherche Agronomique ICAT : Institut de Conseil et d’Appui Agricole ANPE : Agence Nationale pour l’emploi ANADEB : Agence Nationale d'Appui au Développement à la Base ANPGF : Agence Nationale de Promotion et de Garantie de Financement Ministère de l’agriculture, de l’élevage et du développement rural Government Agency DSID : Direction des Statistiques, de l’Informatique et de la Documentation INSEED : Institut National de la Statistique et des Études Économiques et Démographiques DEFDTOPA : Direction de la Formation, de la Diffusion des Techniques et des Organisations Professionnelles Agricoles DSID : Direction des Statistiques, de l’Informatique et de la Documentation CPCAT : Conseil Permanent des Chambres d’Agriculture du Togo DPPSE : Division chargée des politiques, études et prospectives 133 FENOMAT : Fédération Nationale des Organisations Maraichères du Togo FAO : Organisation des Nations-Unies pour l’Alimentation et l‘Agriculture International Development GIZ : Gesellschaft für Internationale Zusammenartbeit Organization PNUD : Programme des Nations-Unies pour le Développement PRODAK : Projet de Durabilité et de renforcement des capacités commerciales de l'Anacarde et du Karité FAIEJ : Fonds d’Appui aux Initiatives Économiques des Jeunes CIFKAT : Conseil interprofessionnel de la filière karité du Togo FIKATO-COOP CA : la Fédération inclusive de la filière karité du Togo ANALK : l’Association nationale des acheteurs locaux de karité ANEKTO : l’Association nationale des exportateurs de karité du Togo Support Projects / Programs PAEIJ-SP : Projet d’Appui à l’Employabilité et à l’insertion des jeunes dans les secteurs porteurs MIFA SA : Mécanisme Incitatif de Financement Agricole Fondé sur le Partage de Risques REJEPPAT : Réseau des jeunes producteurs professionnels agricoles du Togo CTOP : Coordination Togolaise des Organizations Paysannes et de Producteurs Agricoles CAIGA : Centrale D'approvisionnement Et De Gestion Des Intrants Agricoles (iii) Focus Group Discussions Focus group discussions (FGDs) were conducted with women and youth smallholders, MSMEs, and other key value chain actors to collect qualitative information from the relevant actors in the selected value chains. It is important to understand the challenges women and youth are currently facing in the value chain integration in a more granular way to help identify the critical points that need to be addressed at the farm/firm level for better integration into the value chains. This also helped to enrich the quality of analysis by providing insight into the unique constraints that the target women may face and providing the stakeholders’ perspective on potential pilot interventions. The A2F Team collected qualitative data from young and female value chain actors with the objective to understand: • major challenges, needs, and opportunities in accessing income-generating activities within the value chains; • key resources available to them and current levels of participation in the value chains, including their access to different stages of value chains, and criteria for employment in different stages of the value chains; • stereotypes that hinder their inclusion, including challenges on individual, household, and community levels for women; • perceived opportunities for jobs and involvement in the value chains; • perception of existing institutional and structural frameworks; • experience with any government or non-governmental employment generation initiative. The breakdown of FGDs organized is shown below: 134 Shea Ginger Red Pepper Youth Women Youth Women Youth Women Production 1 1 1 1 1 1 Processing 1 1 1 1 1 1 Trading 1 1 1 1 0 0 Total 3 3 3 3 2 2 (iv) Quality Control Management The data was collected and stored using secured HTTP. A diagram of the architecture used is shown below. Once collected, the data was stored instantly on the web-based application’s secured database. Access to the database was only possible using a secured connection via an XML/API interface. The team ensured that all data access points were password protected. Access to the data was granted only to those in charge of quality assurance and management to limit the risk of losing data or A2F Business disclosing sensitive Intelligence Servers M L information. The process of TP S/A P I/ X HTTPS/API/XML HTTPS/API/XML HT securely transmitting this Laptop, Tablet, etc. HTTPS Database HT electronic data to A2F's TP S/A PI/ XM systems was emphasized Data collected is directly L Clients’ Servers during trainings. uploaded to the secure database Throughout the fieldwork process, on-site and off-site quality checks were conducted. Initial interviews were organized under the monitoring of supervisors. Quality checks were then conducted at several levels. First, skip patterns and logic validation were built into the CAPI system to ensure that out-of-range responses were prohibited and that appropriate coding was implemented. Second, as completed interviews were submitted by the interviewers, a supervisor from the local survey company (Winiga Consulting) reviewed the interviews to ensure the accuracy of each completed questionnaire and to check responses for accuracy, as well as missing and incorrect information. A supervisor also reviewed the GPS coordinates entered to ensure that the information collected was accurate and complete. Once approved by the local survey company, the interview was reviewed by an A2F supervisor. Any apparent inconsistencies or errors were flagged in the CAPI system and sent back to the supervisor for reminders and corrections. Ongoing and random quality checks were performed to ensure that data quality was not compromised in any way. Back-checks were performed on 10% of the sample. A2F Consulting randomly selected a number of respondents in all regions and verified by telephone that the interviews had taken place. On site, the field supervisors made random unannounced visits to the companies where they accompanied the interviewers while conducting the interviews. The 135 purpose was to document whether the interviewers were engaging respondents appropriately and recording data accurately. Quality Control Checklist for Monitoring Visits Yes/ Situation No Was the survey conducted with the correct respondent? Did the enumerator introduce him/herself and the project correctly? Did they correctly record firm and respondent information? Did the enumerator interview the correct person from the firm? Did the enumerator practice appropriate interview technique during the interview? Was the enumerator patient in responding to respondent questions? Did the enumerator use culturally appropriate body language? Did the enumerator ask leading questions that might have influenced the respondent’s answers? Did the enumerator read the questions exactly as they were written (and rephrase afterwards, if needed)? Did the enumerator thank the respondent(s) at the completion of the survey? In addition, the A2F team also conducted off-site quality checks. The strategy involved a two- pronged approach, consisting of ex ante and ex post procedures. The ex-ante strategy included logic chains and conditional clauses built into the programmed software that ensured that appropriate responses were entered by the field interviewers. Thus, the software rejected responses that were not appropriate in specific contexts and prompted interviewers to enter new acceptable data. The ex-post strategy included electronic data quality checks. This involved checks to validate survey logic and interviewer performance as shown in the following table. Ex- post data quality was performed on an ongoing, daily basis. Any specific patterns or problems that occurred were immediately reported to supervisors and interviewers so that similar errors could be avoided in future surveys. Ex-Post Data Quality Procedures Survey Logic Checks Enumerators Checks Check that all interviews are completed Check the percentage of “don’t know� and “refusal� Check that there are no duplicate Check the percentage of missing values observations Check that all surveys have informed Check the percentage of survey refusals consent Check that certain variables have no Check the numbers of surveys per day missing values Check for survey logic Check average interview duration violations/inconsistencies Check for outliers, patterns Check for systemic differences in responses Check that the survey falls within the Check the time duration of key questions survey scope (i.e., sampling quotas are being fulfilled) 136 Finally, in addition to performing frequent analyses (e.g., summary statistics, outliers, visualizations, anomaly detection) to flag any errors or outliers, the team developed a STATA cleaning “do file� to perform automated daily error checking and quality control of the collected data. All data collected on tablets was uploaded daily to a server allowing for remote review and monitoring by A2F. The A2F team provided weekly progress reports to the World Bank on the progress of the survey, problems encountered, and mitigation plans, as well as schedule implications. 137