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GOM/EU Improved Forest Management for Sustainable Livelihoods PROGRAMME: 9 ACP MAI 016 REPORT OF 2ND VISIT OF SHORT-TERM TA ENTERPRISE DEVELOPMENT SPECIALIST JACQUES LECUP 4 February - 4 March 2008 LTS International and Cardno Agrisystems Ltd Pentlands Science Park Edinburgh EH26 0PH, UK Programme financed with support from the European Union Jacques Lecup; March „08 Introduction The Enterprise Development Specialist carried out a mission in Malawi from 4 February to 4 March 2008. During the first week, a set of meetings with Ms Karen Edwards, Mr Titus Zulu, Mr Hans Jarlind and Mr Chris Buss were organized, and mission outputs were agreed as follows: 1. Twenty-four selected villagers, four frontline staff (FLS) and the regional project coordinator from northern region to be trained in Enterprise Development Plan (EDP) formulation. Four FLS (two each from southern and central regions), plus a trainer from the forestry college training centre, to receive additional training during this northern training session. 2. Selected enterprises that communities set up after the first mission training would receive additional support to set up and manage their small businesses. 3. Staff who received training during the first mission would be trained in supporting villagers to establish and manage businesses 4. Recommendations on the enterprise development component of the Programme to be provided. At the end-of-mission meeting (with Ms Karen Edwards, Mr Titus Zulu, and Mr Chris Buss), it was agreed that the consultant would provide the following documents: o Guidelines for district Forest-Based Enterprise (FBE) planning o Guidelines for FLS supporting villagers to establish FBE o A concept note on developing FBE funds o Draft structure and monitoring mechanism for the FBE component of the Programme. To fulfil these outputs the following activities were implemented: In northern region EDP formulation training to: Twenty-eight villagers Four northern region FLS One trainer from the forestry college training centre. During the same training session, six FLS (two each from southern, central and northern regions) who had been trained during the August / September 2007 mission received additional training to improve their capacity to train villagers and other FLS. Trainer training in EDP formulation to the Regional Programme Coordinator (South) Meeting with the six FLS mentioned above, to review the progress of their FBE support since September. In central and southern region Three workshops: (two in the centre, one in the south) with some of the villagers who had received EDP training during the August / September 2007 Jacques Lecup; March „08 1 mission and some who started their FBEs without having attended the August / September EDP training but with support from FLS trained in EDP formulation. Interviews with six DFOs who had started supporting FBEs in their districts Note: We apologize to the DFOs who could not interviewed as they were involved in the block 5 training. Additional meeting with FLS from south who had received EDP training in August / September Final outputs EDP formulation training course in northern region Twenty-eight villagers were trained and are now competent in EDP formulation for timber and firewood FBE. Four FLS from northern region were trained and are now competent to support villagers in EDP formulation. Six FLS (two each from southern, central and northern regions) received additional training in supporting EDP formulation. They can now be considered as resource staff for their respective regions and should support other FLS. Titus Zulu (southern RPC) and Boyd Zulu (forestry college) were able (with support from the consultant) to organize and give this EDP formulation training. Titus Zulu has mastered the formulation process and was able to train both FLS and villagers. Unfortunately the Northern RPC and TA could not attend the whole training course. (For more details refer to annex 1) Three workshops in central and southern region Villagers learnt to present the progress of their FBE and prepare the work plans needed to apply for support from the forestry department. They were also given advice and are now ready to continue setting up and running their FBEs with support from FLS. (For more details refer to annex 2) DFO interviews The six interviewed DFOs who had started supporting FBE in their districts were able to: Present their achievements Analyze the reasons for success or failure Present the problems they faced and get advice to support existing and new villagers setting up FBEs. (For more details refer to annex 3) During meetings The six FLS: Were able to present the problems they faced when supporting villagers. Received advice on how to improve their work. Jacques Lecup; March „08 2 Unfortunately, due to lack of time and the block 5 training it was not possible to meet all the previously trained FLS or visit the newly established FBE to provide practical training. It was therefore agreed that the consultant would develop guidelines to help FLS to support villagers setting up FBEs after EDP formulation. (For more details refer to annex 4) Main findings 1. Many villagers have received support from the Programme and have begun to set up FBEs. Considering that most of the support only started in mid-2007 (intensifying from September 2007), the overall picture is encouraging. 2. Some FBE are successful while others are not. The main reasons for failure are: Lack of experience. Most DFOs and FLS said that small business support is completely new to them, so they are confronted daily with problems that they do not know how to solve. Lack of coordination and consultation between the different actors of the Programme (DFO, FLS, RPC). Complex issues are not discussed, and help from others is not requested. In some cases inappropriate decisions have been taken. Lack of a proper mechanism to plan the FBE activities in each district, which has led to inappropriate FBEs being selected in some locations. And although preference should be given to the poorest, some rich villagers were selected for assistance. Lack of clarity as to whether real livelihood improvements have occurred. The DFOs do not yet realise that the main evaluation criteria will not be the number of FBE / villagers supported or the amount spent, but the number of successful FBEs set-up by the villagers that provide additional income to the villagers and promote better forest management. 3. Since the previous visit by the consultant, the Programme is in a better position to support FBE for the following reasons: Some FLS have received two or three training sessions (i.e. 20-30 days of training). The RPC (South) has now worked with the TA small business specialist for more than two months (around 70 days), and has gained real experience in small business development. He was able to act as main trainer during the northern EDP training. Some of the easiest to start and more profitable FBE have been identified. Their markets, investment needs, profitability, running costs, up-front capital requirements and type of support are known. The less profitable FBE (for the villagers, as well as in terms of time and funds required from the Programme) are also known. Some forest management plans have been finalized and the raw material availability for potential FBEs is known. Jacques Lecup; March „08 3 4. With such information and improvement in staff capacity, it is now possible for all the Programme actors (DFO, FLS and RPC) to develop close links as well as setting up a proper planning and monitoring mechanism to increase the overall capacity of the Programme and start a new successful phase. Overall recommendations The Programme should set up: 1. District FBE planning up to the end of 2008. In central and southern regions, apart from providing additional support to the successful FBEs that have already finalized EDP and started business, none of the funds budgeted to support FBE investment should be used before planning is done and approved by all parties: FLS, DFO, RPC. In northern region, part of the funds should be used to support the villagers who finalized their EDP during this training session as well as the „mats‟ and „wine‟ FBEs that have already received support from the ADFO (Karonga). (For more details about planning refer to annex 5) 2. A monitoring and support mechanism so that: All the actors (DFO, FLS, RPC) can refer their problem to trained colleagues and get proper support quickly. Unexpected problems are discovered and solved quickly. Successful experiences are disseminated. Overall capacity of the Programme is reinforced. (For more details refer to annex 6) List of annexes Annex 1: Northern Region FBE Training Course Annex 2: Central and Southern Region FBE Workshops Annex 3: Analysis of the Central and Southern Region DFO Interviews Annex 4: Guidelines for FLS supporting villagers to establish FBE Annex 5: Guidelines for District FBE Planning Annex 6: Proposed Monitoring and Follow-up Mechanism Annex 7: Concept Note for Setting Up an FBE Fund Annex 8: Recommendations and Suggestion for Next Input Annex 9: Table of Recommendations Jacques Lecup; March „08 4 Annex 1 Northern Region FBE Training Course Date: 10 to 18 February Location: Karonga Participants: See list at end of annex Introduction The course was generally successful. Villagers, FLS as well as other staff - Karonga DFO, Southern and Northern Regional Project Coordinator (RPC) and the trainer from the forestry training college - were very supportive and worked very hard (even late at night, or early morning) to finish the work properly and on time. The training management and premises were also very satisfactory and everyone enjoyed excellent working conditions. Objectives of the training: 1. To train villagers to develop an Enterprise Development Plan (EDP) for the Forest-Based Enterprise (FBE) they want to set up, and to help them formulate a work plan to set up their FBE for a trial period. 2. To train Front Line Staff (FLS) from the northern region to support villagers during this process. 3. To provide additional training to selected FLS of central, southern and northern regions, together with the RPC of southern region. The aim is that, with the benefit of this extra experience, they will become active supporters of FBE at regional and national levels. Main results For objective 1: Training was given to villagers and FLS from the northern region. The selected products were firewood and timber (planks). The selected villagers formulated the EDPs for their proposed businesses. This included: o studying and finding a market for their product o selecting the type and quality of product they will be processing o finding mechanisms that do not destroy the forest o calculating profitability and cash needs for setting up their businesses o formulating their EDP. The selected villagers developed a detailed work plan of a trial phase with information about: o The activities they must carry out to set up their business o The type of support they will need from FLS and the Programme. (Copies of these trial phase work plans and EDP were given to the DFO and FLS so that they could provide prompt follow-up to the villagers.) Jacques Lecup; March „08 5 Firewood and timber small businesses are profitable. If the Programme provides suitable support, these small businesses may provide substantial income for the selected villagers. High transport costs reduce the profitability. Because there is no market in the forest or the surroundings, products must be transported to the nearest city. Very rough estimates shows that high transport costs can represent up to 20- 30% of the selling price. For objective 2: Northern FLS were able to help villagers during the whole process and should now be able to support other villagers to set up businesses. For objective 3: The selected FLS of central, southern and northern regions received additional training in supporting villagers in EDP formulation. Each of them was given the responsibility of following a group of villagers throughout the training. All of them proved that they are competent, and should be considered as FBE resource persons for their region. It was the third time that John Magnany of southern region had received such training. Again, he proved that he understood the EDP process and was competent to support villagers as well as other FLS. Therefore the Programme should consider him as a national field resource person to support other FLS, and to review EDP support DFO and RPC. It was also the third time that Titus Zulu RPC of southern region was participating. During the previous two sessions in August / September 2007 he acted mostly as assistant to the consultant, but in this third session he provided the whole training, with the consultant merely guiding the process. Titus thus proved that he has mastered the whole process, and he should be considered the most experienced resource person in the Malawi forest department in the field of FBE / EDP. It is important to note that Boyd Zulu from the forestry college worked very closely with Titus Zulu during this third training course. He also proved that he is now able to train FLS and villagers all along the EDP process. Titus and Boyd made an excellent team. Recommendations for the northern region Short term: 1. Remember that the villagers still need close support from the FLS / DFO / other staff to successfully set up their businesses. Therefore the region, the district and FLS: 1) Have to provide: o Close follow-up by FLS - without such support some villagers may fail. o Appropriate, timely financial support to villagers. o Appropriate administrative support so that villager will win tendering process to sell their products (mostly firewood but also timber) to government institutions such as jails, schools, etc. Jacques Lecup; March „08 6 2) Have to organize regular monitoring to ensure that technical as well as financial support to villagers will be provided on time. 2. Take into consideration that the newly trained FLS (as well as those who were trained twice) still need: Moral and financial support from the DFO and RPC so that they can work in good conditions. Support and guidance from more experienced staff (such as Titus Zulu). FLS, DFO and RPC should not hesitate to request help from Titus Zulu. 3. Continue to provide close support to mats and wine communities who started small businesses previously. This support should include: o Training in formulating their EDP o Formulating pilot trial work plans o Close follow-up in setting up their businesses. 4. Stop providing support to new mushroom and honey groups until it becomes clear that these small businesses are profitable and that long-term and sustainable markets are available. Longer term: 1) At the end of the course, a debriefing session was organized to present the findings to the northern RPC and the four DFOs. During the discussion that followed this debriefing the RPC and the DFOs expressed their need for assistance in planning FBE support in their district and region. An overall planning process to determine the type, number of businesses, their distribution and the funds allocated in each district should be set up so that: o Competition between the villagers making the same product is avoided. o There is homogenous distribution of the small businesses in the region. In other words, in one village or group of villages there will be different types of small businesses. o It will be possible to find what type of support the villagers need in the longer run to capture new markets. For example, a drying oven / kiln to dry timber and sell at a higher price. Or to capture the timber market in other areas of the country (e.g. Lilongwe / Blantyre). Or training carpenters to help them to shift from hardwood to softwood (pine and other softwood species). o Programme funds are distributed homogeneously and according to the needs of the villagers. o FLS work can be planned on a long-term and efficient basis. 2) Establish a mechanism so that Programme funds can be used to support other villagers even after the end of the EU support. For long-term financial sustainability, it is important to create a mechanism by which the funds used to support villagers (in terms of investment or start-up capital) can be recycled to support other villagers in turn. For example, the Programme could support the setting up of small-business development funds. Jacques Lecup; March „08 7 The initial funds would come from the villagers who received support from the Programme and who then slowly repay all or part of the financial support they received. It is important to note that such funds should be distributed throughout the Programme area and not in only some villages. Such issues should be taken into consideration during overall regional planning. 3) Establish a mechanism for providing timely monitoring, financial and technical support to the villagers, and to DFO, RPC and FLS. 4) Find ways of reducing transport costs. High transport costs reduce profitability and discourage villagers from setting up new businesses. Villagers are under the control of few transporters who fix high prices, and they do not have the capacity to bargain or find other transport facilities. Therefore the Programme should help them to: o Buy ox carts for short-distance transportation o Select cheaper transporters o Organize a cooperative / club to buy a small second-hand truck to carry villagers‟ goods to market. Concerning resource persons Following this third training course there are now: o Two FLS in each region who can be considered as regional FBE resource persons. o One RPC who can be considered as national FBE resource person. DFO, RPC and FLS should be informed about the existence of such expertise and should not hesitate to contact them for support. The Forestry Department should set up a mechanism so that these trained people can: o Provide support to their colleagues in supporting FBE. o Regularly monitor / evaluate the progress of this part of the Programme and provide information and recommendations to Programme management. Jacques Lecup; March „08 8 Northern region FBE support draft work plan until the end of 2008 Description of the Activity m a m j j a s o n d j Support to the villagers that received the latest training FLS help villagers to review the market they selected x x x and find the exact timing and quantities villagers will have to carry to the market. FLS support the villagers for the first harvest / x x x processing / marketing of the product Monitoring of the work done by the FLS and the support x x x x x x x (financial and moral) provided by DFO / RPC. Maybe organize a monthly meeting at DFO office. During the first months, the RPC should be present at this meeting. Information will be sent to Titus Zulu. Continue to support communities in the field of mats x x x x x x x x x x x and wine Start supporting new communities to set up small x x x x x x x businesses in timber, firewood, mats Setting up a mechanism for long-term funding of x new small businesses / village fund. Work plan for the whole region Prepare information necessary to set up the work plan x x x Organize a one-week / 15-day workshop to formulate a x work plan for one district of northern region. This workshop will gather district FLS, the 4 DFO of the Northern region, RPC, other participants to be selected The exercise is duplicated in the other districts x x Implementation of the work-plan in the districts x x x x x Jacques Lecup; March „08 9 PARTICIPANTS LIST FOR FBE TRAINING FEBRUARY, 2008 No Zina Muzi/Boma Ntchito, Bizinesi Telephone 1. S.M. Msowoya Mzimba Mlangizi O8 653 195 2. Fryton Chibanda Rumphi Business – F/wood 3. A.M. Kasanga Chitipa Mulangizi 08 139 487 4. T. Chilenga Chitipa Timber 5. A. Mulenga Chitipa Timber 6. L. Kayange Chitipa Timber 7. M. Nyasulu Karonga Chairman Timber 09 791 597 8. M.G. Msiska Karonga Secretary 9. J.B. Mamangwe Karonga C/member 10. M. Lukhere Mzimba Secretary timber 11. P. Lukhere Mzimba Timber 12. M. Mwamondwe Karonga C/member 13. T. Lukhere Mzimba Nkhuni 09 325 617 14. M.J.A. Njala Dedza Forest Assistant 08 622 356 15. A. M. Zimba Rumphi Forestry Assistant 09 118 029 16. D. gola Nsanje Forestry Assistant 08 634 880 17. D.N. Banda KAsungu SFA 09 532 284 18. JNTK Munyani Machinga SFA 09 454 493 19. K. Kabango Ngindekimo VFA treasurer 20. F. Nyirongo Mzimba Nkhuni member 21. C. Msuku Karonga Forestry 04 120 316 22. C. Zimba Mzimba Mathabwa 23. S. Chakwira Mzimba Nkhuni 05 481 883 24. N. Msukwa Misuku Makokwe 25. L.J. Chilima Misuku Makokwe 26. L. Kapira Kapira VFA Chairperson 27. K. Ng’oma Rumphi LFO Chairperson 28. T. Mzumara Rumphi Firewood 29. R. Msowoya Rumphi 30. M. Msiska Rumphi 31. T. Manda Rumphi 32. E.J. Mbale Chitipa Timber 33. T.S. Zulu RFO (N) 09 388 202 34. B.Z. Zulu MCFW 08 895 584 35. M.E.L Msomba Karonga Forestry Assistant 09 468 821 36. C.A. Khondowe Karonga District Forestry Officer 08 316 606 Jacques Lecup; March „08 10 Programme of the training session Day 1 Saturday Session 8 to 8.45 1 introducing each other 8.50 to 9.30 2 training presentation 9.30 to 10 break 10 to 12 3 Presentation - market chain 1.30 to 5 with a Presentation - how to follow a market chain, informants, checklist, brake 3 interview, analysis of information Day 2 Sunday 8 to 12 with a break 4 preparation of the field market chain survey each group present its work-plan for the survey / discussion 1.30 to 4 5 visit to the market 4.30 to 5.30 5 each group presents its findings / discussion Day 3 and day 4 5 continuation of the market survey 5 Evening - each group presents its findings / discussion Day 5 Figuring out the size of your enterprise Calculating what income you are expecting per year from this new enterprise Figuring out your enterprise / calculation of your cost price for one unit of product. Calculation of minimum quantity to produce, selling price / finding 8 to 10 6 your market. Break 10 to 10.30 Trainees calculate income they are expecting, they figure out their enterprise / calculate cost price for one unit of product. Calculate minimum quantity to produce, the selling price, find 10 to 12 7 you’re their market. 1.30 to 3 8 Groups present their findings to the others. 3 to 3.30 Break Presentation - Calculating fixed assets, fixed costs, variable costs, cash needs / flow, loan needs, loan repayment 3.30 to 4 9 4 to 5.30 10 Each groups starts calculation Day 6 8 to 9.30 10 Groups continue calculation 9.30 to 10 Break Why doing an EDP and trial period, What are the components of 10 to 12 11 an EDP, and trial period 2 to 5 with a break 12 Groups start writing their EDP and trial period Day 7 8 to 5 12 Groups continue writing EDP and trial period 10 to 10.30 break Final evaluation of training Presentation of EDP and trial period, Discussion with DFO. Day 8 12 Planning of the follow up. Jacques Lecup; March „08 11 Annex 2 Central and Southern Region FBE Workshops Dates: 22 and 23 February for central region, 25 February for southern region Location: Mtakataka (Dedza District) and Ntcheu for central region, Zomba for southern region Participants for central region: In Mtakataka 1. Two representatives from each of the following FBEs: Curios Mats Cane Bamboo 2. Titus Zulu (RPC southern region) and T S Ketulo (RPC central region) 3. FLS, forestry department staff 4. Mr Chris Buss 5. Three representatives from the forestry college 6. Mr Jacques Lecup, consultant In Ntcheu 1. Three representatives from the pottery FBE 2. Titus Zulu (RPC southern region) and T S Ketulo (RPC central region) 3. ADFO of Ntcheu 4. August-trained FLS 5. Mr Jacques Lecup, consultant Participants for southern region: o Representatives from each of the following FBE: Firewood - 2 groups Mushrooms Honey - 2 groups Seedling production Hoe handles - 2 groups o Titus Zulu (RPC southern region) o Forestry department staff o Ms Karen Edwards o Mr Jacques Lecup, consultant Objective of the workshops: Jacques Lecup; March „08 13 To review with the villagers who were trained in August / September 2007 the achievements of the small businesses for which they developed an EDP during that training course. To review with the villagers of the bamboo group (who were not trained in August / September 2007) the achievements of their small businesses. FBE representatives will prepare a draft work plan for 2008, including the support they will need from the forest department. Workshop activities Step 1 Presentation of the objectives and completion of questionnaire by the villagers. Step 2 The FBE representative, with the support of Central and Southern RPC, forestry college and the consultant, work in groups to complete the questionnaire. Step 3 The FBE representatives present their findings. Step 4 Each FBE representative prepares a work plan for 2008, including the support they will need from the Programme. Results The presentation and the workplan made by the participants for each FBE of central and southern region are in annex 1. Analysis of the results A. Products new to the villagers Mushroom, cane furniture, honey, pottery (all new to the villagers in terms of production) are less successful either in terms of market, profitability, production and require relatively significant financial and technical support to start. 1. Profitability of these products Rough calculations show that after 3-4 months the average profits for each type of FBE are as follows: Pottery: MK200-300 per month per group member Cane furniture: MK300-400 per month per group member Honey: MK0 per month and per group member (because there is not harvest for the first year) Mushrooms: the first batch of producers supported in Zomba district sold their crop easily, as market demand was good. However, producers who were supported later were then in competition with those who had been trained earlier and therefore could not sell their product. Note: these are approximate calculations. But even if we double the pottery and cane production and increase the profit margin by 50%, pottery and cane FBEs profit will be MK400-700 per group member per month, and MK600-900 per group member per month, respectively. For mushrooms in the Zomba area, the profit will certainly Jacques Lecup; March „08 14 decrease as the production is still expected to increase, not only from the project but also from other development projects in the region. 2. Processing / production: Representatives from honey, mushroom and cane furniture enterprises explained that they faced the following production problems: For honey the main concern is lack of appropriate training in beekeeping. A honey group mentioned that they are waiting for practical training to “harvest” honey from their first beehive. All mentioned that beehive colonization was very slow. (Note: Similar training problems were mentioned by DFO of northern region.). A group mentioned that due to lack of “pasture” (flowers) during the winter they will have to feed the bees with sugar and cassava flour. For mushrooms: the representative said that they had been waiting since November for new spawns to be provided by the Programme. For cane furniture, the main concern is lack of knowhow and equipment to produce better quality products. At present they have to sell their product at a low price to attract customers. Due to close training support from the project, the pottery group faced no problems in term of processing. But discussion revealed that pottery processing was time consuming leading to a slow production capacity. These are the main issues mentioned by the participants. It is important to bear in mind that they may not be the only ones, and that other technical issues will certainly appear in future. 3. Marketing Honey: It is too early to draw conclusions because producers have not yet started to harvest. Mushrooms: In Zomba district the market is beginning to be saturated, and producers face problems selling their product. Cane furniture: The group is facing problems finding profitable markets. Pottery: With support from the Programme, the group opened a shop in Ntcheu, where members can sell their products. Other markets were found in Lilongwe, Blantyre and Salima, but these are far away and the group may have to reduce their profit due to transport costs. B. Products already familiar to villagers Curios, mats, firewood, hoe handles, bamboo Analysis of the villager presentation 1. Profitability These FBE show higher profitability than new products Each curio group member made a profit averaging MK15,000 per month. Each member of one bamboo group made an average profit of MK7,000 per month. Each member of firewood made an average profit of MK10,000 per month. Each member of one of the hoe handle group made an average profit of MK1,500 per month. Jacques Lecup; March „08 15 Altogether, members of the mats group made a profit of MK92,000. 2. Processing None of the groups had to stop production due to serious processing problems that they could not solve by themselves. Two groups from Zomba (firewood and hoe handle) could not start production because they did not receive proper support. The hoe handle group was expecting (as decided at the end of the August / September EDP training) support from the Programme to review the market in order to select buyers from among the ones approached during the EDP market survey. The firewood group was wrongly advised that they had to open a bank account and have an ID card before they could be supported by the Programme. 3. Marketing All groups found markets for their products. C. Support from the project Technical support In Ntcheu: The pottery group received appropriate support and follow-up from the forest department. In Dedza: All the groups received appropriate support in term of forest management and sustainable use of the natural resources. For example the curio groups were allowed and guided to collect dead wood. The bamboo groups received training in cutting bamboo so that it will regenerate. In Zomba: The hoe handle group was given incorrect advice concerning the royalties to pay for collecting branches from the forest, but they did receive support in collecting raw material from plantation trees such as mango and bamboo. One firewood group was given wrong advice concerning the obligation to have a bank account and an ID card to receive technical and financial support from the Programme. They said that this was the main reason why they could not start their business until now. The honey group did not receive proper technical support in honey harvesting. Also many of the beehives are not yet colonized. This may be due to wrong advice given by the honey expert who gave training. Market support In Ntcheu: The pottery group received appropriate support and follow-up from the forest department. In Dedza: Jacques Lecup; March „08 16 The curio and mats groups received proper support from the Programme to find new markets. The bamboo group did not receive any support in marketing. In Zomba: One hoe handle group did not receive market support, as agreed at the end of the EDP training in August. Therefore they could not start their business until now. The first mushroom groups received appropriate support for marketing their product, but later (due to over-production) new and old producers faced difficulties marketing their products, and the forestry department could not help them. Financial support In Dedza: The curio and mats group could have done better if the project had provided financial support to purchase equipment, as was mentioned in the work plan prepared during the EDP training in August September. In Ntcheu: The pottery group received appropriate support and follow-up from the forest department. In Zomba: Mushroom, honey and seedlings groups received appropriate financial support even if they had not done an EDP. The hoe handle and firewood groups that received EDP training in August/ September did not receive financial support, but the firewood group that did not receive EDP training got financial support. Comments on the technical, financial and market support Except for Ntcheu, who concentrate support to one FBE only and could provide close financial, technical and market support, the other districts could not provide all the required support to the villagers who received EDP training in August /September. In general, forest management support was properly done. Interviews of the DFOs revealed that the main reason is lack of funds from October /November 2007 until recently. Villagers should have been informed and alternatives (such as seeking a bank loan, mostly for highly profitable FBE such as firewood, curios and even hoe handles) should have been explored with them. This brings the issue of the repartition of the funds available. The Forest Department should decide to give financial support first to FBEs with low profitability and help FBEs that will be profitable quickly to obtain bank loans. For example, the main issue for firewood enterprises is the upfront cost of renting a truck to carry firewood from village to market. The duration of such costs varies from one day to three weeks. Loan interest for a one-month short-term loan for transporting average 20 cubic meters is MK300-500, which is nothing compared to a potential profit of more than MK10,000. Jacques Lecup; March „08 17 Jacques Lecup; March „08 18 Questionnaire used during the workshop 1. Name of the small business. 2. Location 3. If the business is organized as a group, name, address and role of each member 4. If the business is legally registered, description of the type of structure 5. Date the small business was started 6. Detailed description of the production process 7. Quantity produced until now 8. Quantity sold until now and to whom 9. Means of selling? To traders, to final buyers, to others? 10. Means and costs of transportation 11. Raw material needed to produce the above quantity 12. From where the raw material was collected? 13. Have you requested yourself support from the department of forestry? 14. If not, why not? 15. If yes, have you received an answer to your request? 16. Was it helpful or not? 17. Explain why 18. If you have not requested support yourself, did the forestry department provide any technical or financial support? 19. If yes, please give detailed description of the support including: Dates Type technical of support Type of financial support Duration Was this support helpful? Why yes? Why not? Translation of the presentations made by the workshop participants on their work plans and the support they would like to have from the Programme Jacques Lecup; March „08 19 CHISOMO POTTERY CLUB 1. Chisomo Pottery Club 2. Kachimanga Village T/A Kwataine 3. Chisomo Pottery club C/o Gumbu L.E.A School P.O. Box 2 Ntcheu ROLES OF EACH MEMBER Chairperson: Eledesi Dagarasi o Leading the group o Opening and closing the meeting o Helping resolve conflicts Vice Chairperson: Aliet Tsakalaka -As above Secretary: Grace Kumphika o Calls meetings o Reading the agenda o Taking minutes Vice secretary: Daliya Kachepa - As above Treasure: Queen Nyirongo o Book-keeping and accounts o Informing the group about its financial status COMMITTEE MEMBERS: o Mercy Dafu o Eliza Steven o Violet Likhome o Kafeleni Chimala o Patricia Gedion. ROLES: o Attending meetings o Helps in conflict resolutions or clearing of misunderstandings within the group. 4. Not registered 5. Starting on 7/08/07 6. Produce cups, kitchen pots, flower pots and energy-saving stoves (Chitetezo mbaula) 7. MK each Total - Energy savings stoves 231 450 K104, 000 Jacques Lecup; March „08 20 - Ordinary pots 500 200 100, 000 - Cups 150 100 15, 000 - Flower pots 200 70 14, 000 - Kitchen pots 180 31, 000 Big 200 Small 150 MK 264, 000 8 (a) Energy saving stoves 211 -Sold to traders and consumers (b) Ordinary pots 500 - Sold to traders and consumers (c) Tea cups 150 - Sold to consumers (d) Flower pots 200 - Sold to traders and consumers (e) Kitchen pots 180 - Sold to consumers 9. Sold to traders and final consumers 10. Transported usually as head loads of 25 ordinary pots each - Also piece-workers carry them as head loads at a price of K100 per 25 ordinary pots 11. Raw materials needed for each product are as follows: PRODUCTS Energy-saving Ordinary pots Flower potS Tea cups Kitchen pots stoves Firewood Firewood Firewood Firewood Firewood Ruler Grass Grass Grass Grass Minor moulders Finishing knife Clay (Chipale) Varnish Varnish Sacks Smearing Smearing Finishing knife Fishing knife Plastic papers (nkhulungo) Black clay soil Smearing Black clay soil Ashes Clay Dye (from root Black clay soil Grass Dye (from root tubers) Smearing tubers) Finishing knife Clay Moulder 12. Clay, firewood and grass are collected from the mountains; moulder, ruler and minor moulders were collected from forestry office. 13. No 15. Yes 16 It was helpful 17. Because they were given a place for conducting their business. 18. They were given technical support 19. (a) Were taught how to produce energy-saving stoves, resources to start up their business From 25-29 June, 2007, they moulded the stoves From 3-5 July, 2007; constructed the kilns Jacques Lecup; March „08 21 From 4-5 August, 2007, heating the constructed moulded stoves (b) Technique of how to mould energy saving stoves (c) They received 10 moulders and 6 minor moulders (d) 11 days (e) Yes (f) They are receiving enough (huge) profit as compared to small ordinary pots Book keeping issues (types of records). They have: - records for the resources they have - a visitors‟ book - a book for recording the proceedings of every meeting - a book for keeping financial records - Money sharing * Every member gets according to his/her quantity sold but submits K50 to the group for one energy-saving stove, but if it more than one (not specified) the members submit K250. Jacques Lecup; March „08 22 CHISOMO POTTERY WORK PLAN 23 – 02 – 08 NO ACTIVITIES REQUIREMENTS ASSISTANCE WHO TIME 1 Preparation of Moulding bricks None Achisomo Pottery Jan-May 08 materials for shed Sand collection construction. Preparation of the site Stone collection 2 Building house and - Iron sheets D.F.O Jan- Aug shed - Cement 08 -Nails -Planks 3 Moulding pots and Soil, grass and None Chisomo Pottery Sept-Nov fuel-saving stove firewood 08 4 Sending for Transport D.F.O October marketing in Salima 2008 MTAKATAKA CURIO GROUP 1. Making curios Jacques Lecup; March „08 23 2. Monkey Bay turnoff 3. Nkhalango 1, Box 115, Mtakataka (i) Chairman; Jack Mtengula (ii) Vice - (iii) Secretary; Hary Choka-choka (iv) Treasure; Nazalio Sineno 4. Not yet registered 5. 1 November 2007 6. Wall planks, statues, dragon masks, wooden bowls, giraffe, fishermen, walking sticks and tripods. Questions 7 – 12 Refer to separate sheet. 13. (i) Yes we got permission to get raw materials from the forest reserve (ii) Not yet received financial support 15 Yes it was helpful because we were supposed to spend money for buying raw materials 18 We received technical support through training in business and market survey 19 From 1-9 September 2007 * Business and market survey * No financial support * 8 day * Yes (i) Because now we manage to compete with our competitors (ii) How to make more profit through jumping from producer to shops and consumers (iii) How we can strengthen the value of an item. 20. RECORDS i. Experience we spend for our products ii. Records sales of our products iii. Records how we share our products (we share using percentages) iv. Not yet opened a bank account, but shall soon do so v. Records minutes of our meetings Questions 7 to 12 Type of Wall Wooden Status Dragon Giraffe Walking Fishermen Tripod Safari produce planks bowls masks sticks Chairs Quantity 20 100 4 15 5 big 100 75 7 big 200 50 produced small 20 small Quantity 15 95 3 12 4 big 70 5 big 195 45 Jacques Lecup; March „08 24 sold 100 small 18 small To whom Shops - - - - - - - - sold Traders consumers Means of Whole selling selling retail Means of Hacking K10,000 Hiring K600 transport piece-work K8,000 K4,000 K1,500 truck K4,5000 Raw 10 from 1m Two trees 1 tree materials log Where Forest collected reserve customary land GOLOMOTI CURIO GROUP 1. Nkhalango II curio group 2. Golomoti, Monkey Bay turnoff C/o Box 30, Golomoti 3. Chairman : B. Chokotho Duties : Organizing meeting Vice Chairman : H. Magombo Duties : As above Secretary : D. Godino Duties: Taking minutes during meetings, and keeping records Vice Secretary : L. Lumpwa Jacques Lecup; March „08 25 Duties: As above Treasure : E. Kaposeya Duties : Keeping financial records We work with all the members in the days we agreed to be reporting for our work 3. Not yet registered 4. 1 November 2007 5. Tables, chairs, heads, statues, masks For Questions 7 – 12 refer to table 13 .We asked forest field workers to direct us where dead wood is available 14. No information given 15. Yes the request was granted 16. Yes it was helpful 17. We got the raw materials that we were looking for 18. Forest Department assisted us with technical information through training 19. 1-9 September 2007 (i). Business and market survey training (ii) 8 days (iii) Yes (v) This training assisted us in the following areas (a) Identification of markets (b) How we can complete with other producers of similar products (c) How we can add value to our products (d) How to follow the market chain from the producer to the last consumer, but make maximum profit. TOTAL SALES (FOR BOTH CURIO GROUPS) DECEMBER (MK) JANUARY (MK) TOTAL (MK) 136, 300 80,700 217, 000 Average profit - 15,000 per person per month FIXED ASSETS (Relevant for all curio groups) EQUIPMENT COST (MK) 1.Cross cut saw 3, 700 2.Transport costs 24, 000 3. Axe 250 4. Chisel 3, 700 Jacques Lecup; March „08 26 5. Adze 100 6. Shaping stone 150 7. File 250 8. Hand saw 750 9. Rough raspier file 300 10. Vice clump 1, 400 11. Leith machine 35, 000 Total for one group 82, 200 Total for 2 groups 164, 400 VARIABLE COSTS (Relevant for all curio groups) 1. Packing space 9, 600 (Hiring) 2. Temporary staff 12, 000 3. Raw materials 12, 000 4. Taxes 12, 000 5. Food 6, 000 Total for 1 group 51, 600 Total for 2 groups 103, 200 Small equipment 164, 400 GRAND TOTALS (for both groups) 267, 600 Jacques Lecup; March „08 27 TYPE TABLES CHAIRS STATUES MASKS HEADS DRUMS Quantity 500 big 25 big 5 big 10 big 5 pairs 40 big produced 200 small 40 small 30 small 10 small Quantity sold 400 big 25 big 4 big 10 big 5 pairs 20 big 190 small 40 small 30 small Means of 380 traders Traders Traders 8 Traders Traders Final selling 20 consumers 2 buyer 200 traders consumers 30 traders Means and Traders come to buy from our production point cost of transport Raw material 10 pieces of Tree 5 pieces 1.5m 5 45cm 10 1 drum required to 75cm -500 branches 1m long pieces for pieces 1 piece produce the tables 10 mask, 1m above 15 pieces of 15 pieces 24cm -200 30 cm for small tables 30 small mask From where From the - - - - - the materials forest reserve were collected SANGA BAMBOO GROUP 1. Sanga Bamboo Group 2. Maiwaza, Box 154 Mtakataka 3. Group members 1. John F. Masina 2. Adamusoni Chiwunika 3. Kalikanje Denja 4. Kaliyekha Luwusi 5. Roketi Galetano 6. Jack Gama 7. Issa Makwinja 8. Paulo Suluma 9. James Gondwe 10. Masamba Tandisiyani -We know each and everyone sells bamboos but we did not elect our leaders 4. Our group is not registered 5. Started on 10/11/07 6. 1 bundle of 15 bamboos each is collected by 1 person a day 7. So far 7,200 bamboos were collected and sold to people from the lakeshore 9. Bamboos are sold to people for construction of houses. 10. Bamboo are collected and carried as head loads and no transport money needed 11. They only cut bamboos Jacques Lecup; March „08 28 12. Bamboos are cut and collected from Mua-Livulezi forest reserve. 13. No support requested from forestry department 14. Because they were just starting the business. 15, 16 and 17 no information 18. They received technical support on how to cut bamboos sustainable and no monetary support given 19. The received it on 25-29 October, 2007 They learnt how they can go about taking care of forest resources They took four days 8 continued A person sells 12 bundles of bamboos per months at a price of MK100 each and thus receives MK1,200 / month KALOMWE BAMBOO GROUP 1. Kalomwe Bamboo Group 2. Mganja (chepezi) 3. Box 30, Golomoti Names of members as follows: 1. I. Zamachecha - Chairman 2. O. Ngwenya - Vice 3. G. Chatuluka - Secretary 4. P. Chauluka - Vice 5. F. Gerad - Treasure 6. M. Ngwenya - Member 7. R. Mkweza 8. L. Kadondo 9. S. Ngwenya 10. G. Kadyampakeni 4. Not registered 5. Started in May 2007 6. 10 bundles of Bamboos are cut and collected by 1 person a day 7. 12,800 bundles of bamboos were collected to this day 8. 8,800 bundles sold to people with estates from Lilongwe 9. They sell in cash at K35/bundle to traders and consumers 10. During the rainy season piece workers are employed and are paid them K15/bundle 11. Piece-workers collect 32 bundles/ week/person. 12. Bamboos are collected from Mua-Livulezi forest reserves 13. No support requested from forest department 14. GR is given to buyers 15. 15,16,17 no information given 18. They receive assistance from FAS through technical advice on how to cut bamboos sustainable 19. Sustainable cutting of bamboos in May 2007 - One day Jacques Lecup; March „08 29 -It was helpful since bamboos will be given chance to produce shoots again and grow - Each member collects bamboos and sell for him/herself - No work plan is put in place for the group and no account also * A person sells 200 bundles/month and gets MK7,000 * They work 3 day/week LICHENGA CANE FURNITURE 1. Lichenga Cane Furniture 2. Golomoti 3. Golomoti EPA C/o Malambalala School P.O. Box 48, Dedza Chairlady: Aurelia Tsoka * Calls meetings Vice Ireen Bizmark *(Helping the chairlady) Secretary: Ellen John *(Taking minutes) Vice Eleneo Enock *Helping the secretary Treasure: Oliga Sitolo *Book keeping and accounts and also other items Committee Members 1. Deliya Chalond 2. Gladys Kachigulu 3. Fransis Medi 4. Evalista Masula 5. Gladys Gresham - Analyse what happens with the group - Participating in group activities 4. Not registered 5. Started the business on 5 December 2007 6. They manufacture/produce /sell - Baskets (string baskets) -Bamboos chairs (small in size0 Bamboos String TYPE OF PRODUCT QUANTITY Baskets 12 Coffee tables 5 Chairs 15 Bamboos (bundles) 40 String 150 rolls Jacques Lecup; March „08 30 Type of product Quantity sold To whom Baskets 8 C.B.O. Office Coffee tables 5 Bars Chairs 15 Households Bamboos 40 bundles Tobacco farmers String 100 rolls TYPE OF GOODS QUANTITY INCOME (MK) 1. Baskets 8 x K100 800 2. Coffee tables 5 x K200 1,000 3. Chairs 15 x K150 2, 250 4. Bamboo head-loads 40 x K200 8, 000 5.String 100 x K300 300 TOTALS 12, 000 Expenditure 3, 440 Profit 8, 910 For 3 months for 10 people 1 person gets 297 kwacha per month. 14. We have been waiting for assistance because we submitted to the forest department 15. No response 16. No response 17. No response 18. We received training in business and market survey 19. 1-9 September 2007 - Training in business and market survey -No -8 days - We have learnt how to conduct profitable business (i) We take our products to the market and we sell to consumers (ii) We use our bicycles (iii) We have used strings, bamboos, nails and wood glue (iv) Bamboos and strings are collected from the Forest Reserve (strings are usually collected from customary land while nails and wood glue are purchased from the shop. (v) We have requested for training in AIDS/HIV and skills training in production of good quality bamboo furniture MATOWE MAT MAKING GROUP 1. Matowe Mat Making Group 2. Matowe 3. Matowe Mat Making Club C/o Matowe F.P. School Jacques Lecup; March „08 31 P.O. Box 65 Mtakataka Dedza Chairperson – Leads the group Vice - Helps the chairman Secretary- Taking minutes during meetings Treasurer- Bookkeeping and other items Committee members- Helps executive team by giving advice when they go wrong Ordinary members- Making sure that laws made are being followed Selling mats in turns 4. Not registered 5. Started on 6 December 2007 6. Mats are of different types (4 types) depending on size and whether dyed or not 7. That is –Rounded Small Medium Large 8. Only small and Medium sized but dyed sell more - 2,400 mats produced up until now 8. From December to January 237 small sized mats were sold and 116 medium sized mats. -In the month of January a total of 248 mats were sold - Mats were sold to ordinary consumers 9. They carry the products and sell them at one place near the roads 10. They carry the products themselves RAW MATERIALS WHERE THEY ARE OBTAINED Knives Home Sewing needles Home Finisher Home Malaza ( ) Chagunda Dye Shops Water Home Firewood Forest Fire Home 13. No support requested 14. Because it was not yet time 15, 16, 17, no information given Jacques Lecup; March „08 32 18. They received technical support 19. Received support on 3 December 2007 - They were reminded how to develop business plans - No monetary support received - It was helpful since they added the wearing skill and learnt also how to manage several businesses - The records kept include; types of mats, time of selling, prices of products and amount of each type of mat sold. - After the sales, every person gets the amount of money equivalent to the quantity of his/her products. 8 continued In December. Small mats; 237 x 150 = K35,550 Large mats; 116 x 180 = K20,880 In January; 248 x 150 =K37,200 Total Revenue = K93,630 Total cost = K1,400 Profit = K92,230 CENTRAL REGION SMALL BUSINESS PARTICIPANTS DZINA (NAME) FBE NAME GULU KOMWE PHONE (DZINA) ACHOKERA /TELEPHONE (address) NUMBER 1 T.S. Ketulo PCU support Box 65, Lilongwe 09383276 2 Julius Ng‟oma Attending Students Box 65, Lilongwe 08795957 (MZUNI) 3 Clifford Mkanthama Observer MCFW, P/Bag 6, 09215722 Dedza 4 B. Chekani F/A Dedza D.F.O 5 Felix Somanje Observer MCFW P/Bag 6, 09305952 Dedza 6 Alfeo Chirwa S.F.A Golomondi E.P.A 081662080 7 Boyd Zulu Observer MCFW,P/Bag 6, 08895584 Dedza 8 TC Sekanimalunje Observer MCFW, P/Bag 6, 08868988 Dedza 9 C.Buss Observer with MCFW. Box 65, Lilongwe 09420677 TA 10 D. Hkofia Mat making Box 65, Mtakataka Jacques Lecup; March „08 33 11 R. Brown Mat making Box 65, Mtakataka 12 E. John Cane furniture Malambalala, Box 48 13 A. Tsoka Cane furniture Malambalala, Box 48 14 M.J.A. Njala Forestry Assistant. Dedza Box 48 08622356 15 A.K. Chimutu F/A Box 84 09407500 16 John F Maziwa Bamboo no EDP training Box 154 08641599 in Aug 2007 17 T.S Zulu CO- facilitator 09388202 RFO(S) 18 I. Zamacheka Kalomwe Bamboo Group Box 30, Golomoti no EDP training in Aug 2007 19 J. Lecup Facilitator STTA 09929169 Jacques Lecup; March „08 34 Annex 3 Analysis of the central and southern region DFO interviews Introduction In August / September 2007 a small business development training course was given by the consultant to selected villagers and Front Line Staff from central and southern region. In February 2008 the consultant came back to Malawi. One of the objectives of his mission was to collect information from villagers, FLS and DFO to evaluate the progresses and propose recommendations. The mission was organized as follows: three workshops were organized with representatives of the villagers who received small business training in August / September 2007 and with representatives of villagers who set up businesses without receiving training. six DFOs were interviewed informal meetings were organized with some of the FLS who received training in August September 2007 Hereunder is the analysis of the interviews with the DFO. The format of the questionnaire and the DFO answers are in annex of this document. Analysis of the interviews Generalities Considering the relative novelty (most of the DFO only started this activity middle of 2007 and intensified from September 2007) the overall picture is encouraging. All the DFO are concerned by small business activity and have tried their best to help villagers. In the six districts, hundreds of villagers received support and some have been able to set up profitable small businesses. The main problems faced by the DFO are in the selection of the products, providing appropriate funding and follow-up. Detailed analysis Timing / history We can divide the support provided by the DFO into two parts: Before the small business training in August / September After the training. Before the training Before the training the criteria for the selection of the FBE were: Choice of the communities. Information collected during the trade fair. Information and propaganda in the radio, newspapers, and television. Results of the SLA. Jacques Lecup; March „08 35 Impact on the forest - was either direct or indirect by reducing the pressure on the forest. Detailed profitability calculations, market availability, fixed assets amounts compared with other potential FBE, evaluation of training needs and cost comparisons with other FBE were almost absent in the selection criteria. It is very important to note that: In their selection, villagers proceed with the same approach. Even if the SLA screening revealed that some of the selected FBE got the lowest score, villagers as well as some of the DFO were mostly influenced by media propaganda and rumours when selecting FBE. This is a mistake made by farmers and extension workers in many developed and developing countries. In conclusion, before the EDP formulation training in August / September the criteria for the selection of the FBE were mostly rumours and non-business based. This is why the most popular FBEs were mushroom farming, beekeeping, seedling production. After the training From September 2007, DFOs were given the following additional information: Recommendations from the consultant first mission. Results showing that some of the first FBE they supported may be not profitable or easy to support technically. Problems faced by the villagers Information from their colleagues from other districts showing that some FBE were more profitable and easy to support Direct support from the project TA Most of the DFOs then changed their minds and started (or are willing to start) to include profitability and market criteria in the selection of FBE to support – they began to support more profitable and easy enterprises such as firewood, mats and curios. Unfortunately, most of the funds of this budget line were exhausted and it was not possible to provide appropriate support to the villagers. Recommendation Some DFO are still willing to support new mushroom and honey FBE. They are also tempted by fancy FBE such as Jatropha for oil production, or ecotourism. They should receive proper support to check if these FBE are the best for their district and to compare with other more appropriate FBE. In general DFO should be wary when starting FBE that are new for both villagers and the market. Financial support The interviews reveal that: DFO were able to give the approximate amount they had spent to support FBE, and were following the project recommendation to provide support in kind instead of in cash. Jacques Lecup; March „08 36 Funds dried up around August September, so they had to stop providing financial support. Technical support Concerning the sustainable use of forest resources, appropriate technical support was provided. This fits with the information collected from the villagers. For non-forest-related training (such as mushroom farming, bee keeping, pottery making), DFO managed to find expertise from different service providers. But in some cases the technical support was not appropriate and villagers had production problems. This was confirmed by villagers. Specific attention should be given in the selection of the external service providers. Some of them don‟t provide “real” training, hoping to be called again and benefit from additional allowances. Jacques Lecup; March „08 37 Annex 3: Analysis of the Central and Southern Region DFO Interviews Format of the Questionnaire Name of the DFO Region District Small business 1 Type and location of small business supported Reasons for selection Description of support provided Reasons of success or failure / problems encountered Timing of the support Name of FLS in charge of providing support Financial support in term of cash or kind, and terms and conditions Small business 2 As above Small business 3 As above Small business n As above Other activities implemented in relation of small business support. For example training in…. Reasons for the implementation of these activities Description of these activities. Duration: Starting / ending date. Cost. Who was in charge of the following of these activities? Please give the name and the position as well as the reasons why this (these) person(s) was / were selected Description of the achievements Small business development plan for 2008 Have you prepared a work plan form the year 2008 to support small business in your district? If yes How much money have you allocated? What are the products you have selected? What are the reasons for this selection? Number and location of the communities targeted. Who are the FLS that will be in charge of this activity? Reason for their selection. Who participated in the preparation of this work-plan? Result of the interviews Jacques Lecup; March „08 38 CHIKWAWA Date: 24/02/08 Name: DFO: Jofrey Kanyerere Region: South District: Chikwawa (1) Beekeeping - Community‟s choice and also because have VFA. It‟s easy to handle after investment - Training to communities done – technical - Procured top bars for beehives: 2 to 10 villages total 126 hives to 10 villages in all zones of the impact area. - Training on EDP development for beekeeping - Failure in colonising by bees - Successful because communities procured own resources - Too early to judge real success because started in October, 2007 and no production or sales yet. Extension workers responsible: - Zone 1. D.C. Mtcheka – FA - Zone 2. Joseph Phiri – FA - Zone 3. Stanford Chikwenga – FA - Financial support in kind – 126 x MK4,000 (2) Mushroom production – cultivated - Communities heard on the radio – rumour from other communities - Trained 4 communities – specialist training from an oyster mushroom/spawn producer. - Procured materials for 2 communities. - Provided materials for mushroom huts, spawn and poly bags drum Total = 4 - One community complete failure – mushroom did not grow – due to technical problems. - One community sold some mushrooms but had no reliable market. - Started October – D.C. Mtcheka - Provided financial support in kind * About MK 125,000 per community (3) Jatropha – tree seed oils - Just started - Training on TOT – district and PMU paid for training - This came from FBE fair and some influence from PCU/PMU. - Just started - Financial support theory training (4) Seedling production - Provided * Training Jacques Lecup; March „08 39 * Hand tools Big challenge with market - Selection of the product by community - All the 3 FAs are involved in the three zones. Other comments Trained 9 communities to make EDPs - Looks complicated and difficult to cultivate mushroom and beekeeping Not made any plan for the lump sum budget for FBEs in fiscal year 2008. DFD – Nsanje – Fanny Ngwangwa Region – Southern District – Nsanje (1) Beekeeping - Selected by community - Screened with Market Analysis and Development (MAD) process. - Training (basic) training on beekeeping only theory. Agreed for practical later in 2008 as well as procurement of other equipment. - Production not started - According to the trainer the VFAs in Nsanje are very good for beekeeping. - Started in October / November 2007. - FLS in charge – Davie Guta and other FGs. - No financial support (2) Firewood selling - Selected by community - Technical support on selecting the firewood trees. - Linked group to market: private schools, hospital and other schools - Assisted group to bid at district Assembly for hospital. - Good news is that there is a lot raw materials from VFA with a developed management plan. - Started January 2008 - Staff – Davie Guta and Mwafumu No financial support (3) (Jatropha – plots 17 small) – Environmental Africa. By community -Conducted training on woodlot establishment and potential uses and markets for tree seed oils. (4) Tree seedlings - Community choice - Provided with poly pots and seed procured by PMU. - Technical support on nursery establishment and seed pre-treatment. - Assisted in identifying market – afforestation funds from DA - Market are neither certain nor sustainable. Jacques Lecup; March „08 40 - Started November 2008 - Davie Guta in charge (4) Hoe handles - Just started – selected by community No support from DFO – but community started - Planning to provide support 2008. M. Mwafumu in charge. Other comments There are no yet planned activities for small business to be done in 2008. However, support will continue for the products already started. Expansion will require a proper plan. Selected products: firewood, honey, hoe handle and seedlings - Selection based on village choice -Number of village for each product to be determined in the plan. Budgeting for FBEs is done jointly by DFO and FLS. ZOMBA DFO DFO – Alick Mitawa Region – Southern District – Zomba (1) Mushroom cultivation - Oyster mushroom - 27 mushroom groups - about 500 people currently involved.. - Selection based on villagers‟ choice - Availability of raw materials for construction of huts. - Asset support all in kind - Training was done in the respective villages by mushroom expert. - Success in terms of production. The outcome is like those who started earlier made more money than those who started late. There was increasing competition and limited market - Supported for a period of about 3 months August to October, 2008 - Provided with spawn for start up. - 5 FLs provided support and each had average of 5 villages - About K800,000 was spent on mushroom assets and training of communities - May be too much production – probably 5 communities would have been enough. (2) Honey production 3 places – Howe (Chingale); Ibu (Malosa); Chisupuli (Malosa) - Choice from villages and well managed VFAs - Provided beehives and beekeeping training. - Spent K200, 000 on asset support especially buying beehives. - The challenge is on low colonisation rate – half of hires not colonised. - Started August 2007 - FLS – 2 – Levi Dzozi and B. Chekani (Now posted out). (3) Firewood selling Jacques Lecup; March „08 41 - Request from villages - Priority given to villages with woodlots - Training in woodlot establishment and management - Financial support – paid transport for their first lot to market as part of start-up. One trip to Blantyre K25,000 - Success – markets are always there and there is a better profit margin. - Training – started – September / October 2007 then funds dried out. - Name of FLS – Patrick Makupete. (4) Commercial seedling production 5 places - Communities selected - Provided fixed assets like hand tools - On the job training done by extension workers - Centrally procured tools by PMU - Success in production; some good sales others not known - Started on August 2007 - All 5 FLS involved (5) Hoe handle making 2 places – Chingale and Malosa - Villages asked for it - No support on assets - Mobilization and training - Not known if successful or failure - Started in September – then there was no money - FLS in charge: Patrick Makupete - No financial support PLAN FOR 2008 - Type of product to support - Which villages - Need support for proper planning in small business. Interview DFO Dedza Name of the DFO: Huston Magagula Region: Central region District: Dedza Small business 1 1. Type and location of small business supported: Curio, Location - Mua and Monkey Bay 2. Reasons for the selection: Raw material available, skill is there. Market available. Came out of the rating process. 3. Description of the support provided. Jacques Lecup; March „08 42 Follow up in marketing, finding new markets. Support in collection of dead wood. 4. Reasons of success or failure / Problems encountered Not sure about the progress. Problems concerning prices of products. Feel that curio group still afraid of working with forestry department concerning the raw material. 5. Timing of the support / starting ending date of the support Beginning of November DFO went. Mike Njala gave support a week after the training. 6. Name of the Front Line Staff in charge of providing support Mike Njala 7. Financial support in term of cash or kind and terms and conditions Lack of fund from November until last week Additional comment from the DFO: He thinks that curio producers need support to improve the quality of their product. So, he plans to support other curio producers to improve the quality. He will call for one trainer so that all curio producers have the same quality. Appropriate tools / polishing. But it is very important to think twice before providing such support. Why support all the other curio producers? What about the market if all of them produce the same quality? Actually some of curio producers specialize in producing unfinished curios and others finish them. Is it the role of the DFO / Programme to interfere in such issues? Small business 2 1. Type and location of small business supported: Mats. After training it was realized that it is out of impact area. But producers of mats come to collect raw material in the impact area. (Chikomba). 2. Reasons for the selection of this small businesses Resources and skill available. Small businesses exist already. 3. Description of the support provided Link to market (Salima) Shade along the road to sell the mats could not be done because people were too busy and the project lacked of funds. 4. Reasons of success or failure / problem encountered. Don‟t know really if success or failure Mainly lack of fund for providing appropriate support Jacques Lecup; March „08 43 5. Timing of the support / starting ending date of the support Following advice from Chris Buss, within the same trip for curio the market survey, Mike made also market survey for mats. 6. Name of the Front Line Staff in charge of providing support Mike Njala 7. Financial support in term of cash or kind and terms and conditions Lack of funds so could not provide a close support. Small business 3 1. Type and location of small business supported: Cane furniture Golomoti 2. Reasons for the selection of this small businesses Resources and skills available. Small businesses exist already. 3. Description of the Support provided No support for cane processing. But support for selling raw material. 4. Reasons of success or failure / problem encountered. This FBE needs lot of investment that the Programme cannot support. People who were trained were not involved in the business before. So cane furniture idea was stopped. Real success for bamboo and cane string. It seems that trucks are coming every day to buy bamboo. 5. Timing of the support / starting ending date of the support Same as curio group. 6. Name of the Front Line Staff in charge of providing support Njala and Chirwa. Mike Njala provided additional training to Mr Chirwa. 7. Financial support in term of cash or kind and terms and conditions Lack of funds so could not support. Comments: During a workshop we had later with the cane furniture group, we understood that: Even though it is more profitable to produce furniture from bamboo and rattan strings, the group had stopped making this in favour of producing the less profitable cane furniture. Jacques Lecup; March „08 44 Concerning bamboo selling the DFO was mixing the cane furniture group with another group that had not received EDP training in September and was cutting and selling bamboo. Small business No other small business Other activities implemented in relation with small business support. No other activity. Small business development plan for 2008 Have you prepared a work-plan for the year 2008 to support small business in your district? YES If yes How much money have you allocated? o MK2.4 million for investments and capacity building, o for FLS 6-700,000 for allowances and fuel. What are the products you have selected? o Bamboo o Rattan string o Firewood o Curios o Mats What are the reasons for this selection? o Starting point: Request from the communities Number and location of the communities targeted. o 11 groups x 9 people per group = around 100 people. o Criteria for selection is demand-driven Who are the FLS that will be in charge of this activity? Reason for their selection. o Mike Njala o Others to be trained by Mr Njala. Who participated in the preparation of this work-plan? o FLS went to visit communities to know what they wanted, and then they gathered all the information in a work plan. Any other suggestion / information you would like to add. Issue of charcoal. The DFO asked if it was appropriate to support charcoal production? We answered yes, but only if you have a good forest management plan and if you can issue licences. Jacques Lecup; March „08 45 The issue of producing bamboo charcoal was discussed. A document explaining how to produce bamboo charcoal was given. Comments: Financial support investment. Discussion showed that the type of financial support, the issue of setting up a village fund was not clear for the DFO May be good to share the mats shed for selling other products such as curios, charcoal (later) firewood, etc… To be discussed with villagers and tried at a small level at the beginning. Of course the first product will be mats. During a workshop we had later with the curio group, we understood that: The quality of their product was good and they could easily sell their product. Producing the required quality, however, was a problem because of the lack of appropriate equipment and auxiliaries such as sandpaper. Concerning the 2008 plan Special care should be taken not to flood the market by supporting too many similar FBEs (e.g. curios). The market seems to be small. Just because one curio FBE makes good money, it may not be true that others will do the same. The plan should be based on villager aspirations, but the Programme should integrate issues such as forest management, funds available, wealth ranking, etc… in the planning. A detailed study should be done on bamboo production because discussion with bamboo producers showed that in reality they are employed as piece- workers by traders. The project should see if it is possible to sell the production directly to final buyers Concerning bamboo charcoal, the Programme should do a trial production with different bamboo types and distribute the charcoal to consumers without informing them that it comes from bamboo. A study about bamboo farming / raw material production should be done including impact on the environment. If all is positive then the project can support few FBE leaders as a pilot trial before supporting many communities. Interview DFO Ntcheu Name of the DFO: Amos Mnelemba Name of the Assistant DFO: Region: Central District: Ntcheu Small business 1 Type and location of small business supported: Pottery Reasons for the selection of this small business: Because people were already involved in this small business. Because it is an alternative income compared with cutting wood in the reserve. Jacques Lecup; March „08 46 Because of the production of fuelwood-saving stoves, the amount of fuelwood will be reduced Selection together with the staff. In relation with SLA Description of the support provided: Negotiation with the district assembly so that the pottery group can have a place in the market to sell their products. Support in market research: meals and transport, accommodation. (3 Villagers and 1 FLS went to Blantyre, Salima, Lilongwe. They found new markets in Salima and Lilongwe, in Salima mostly for energy-saving stoves). 5-day training course in making business plans in mid-February. Training provided by the committee development office. It was not clear for the trained staff the difference between business plan and EDP. Meeting twice a week because the villagers are close to the road and it is easy to contact them. Linking with GTZ for technical support in making the energy saving stoves. For sales linking with VSO, AfriCare for better marketing Provided fixed assets for energy saving stoves in kind: MK4,800. Technical support for the untrained members of the group how to formulate and implement an EDP. Reasons of success or failure / Problems encountered Success: o Feel that it a real success. Reduced pressure on the forest, increased income. o Club of 85 members. Problems: o At the beginning villagers were waiting help from the department to sell their product. o Other group members were jealous because they did not receive training and allowances. o The decision of the district assembly for giving a space in the market took too long. Timing of the support / starting ending date of the support First support started before the training in Takataka, Second support started a week after the EDP training. Since that time there is a close support twice a week. Name of the Front Line Staff in charge of providing support Huxley Chakwamba (got EDP training in September). Joyce Banda, Chris Maliro. Informally / on the job Huxley gave EDP training to the other FLS, but not sufficient. Other FLS need training. Huxley alone will not be able to provide support to many new communities to set up small businesses Jacques Lecup; March „08 47 Financial support in term of cash or kind and terms and conditions Small support in kind was provided to the pottery group. Small business 2 Type and location of small business supported. In 3 EPA 10 Beekeeping clubs. Reasons for the selection of this small business As a substitution to charcoal burning. With the hope that charcoal producer will stop making charcoal if they earn more money with honey. Selected villagers are already doing beekeeping in a traditional way. Linked with forest management. There is a company buying honey in LL and another one close to the selected area Description of the Support provided Training in beekeeping Financial support not yet provided. But the main idea of this support is that the Programme will provide the tools to build the hives and villagers will provide the wood. Beehives are for individuals and not for a group. Producer will remain independent and may market together as a group. Reasons of success or failure / problem encountered Just started no yet results No other small business started Other activities implemented in relation of small business support In the pipeline - ecotourism. Support was provided to do a business plan. The idea came from the traditional authorities from the villages. Mat production is also identified as a potential IGA. But producers are dispersed and it may be difficult to follow up and to organize them into a group. Small business development plan for 2008 No plans for FBE have so far been prepared. Need assistance to prepare this plan, because it is difficult to select the appropriate FBE to support, the quantity, location, etc. The management plan for the forest is not yet finalized Other questions rose during the meeting Is it possible to provide support for non-forest-based enterprises? How / is it possible to work with other projects? Remarks Jacques Lecup; March „08 48 DFO and ADFO are more or less lost because they don‟t have a business background. They don‟t know how to support villagers, what type of FBE they should support. Nevertheless, they have provided good and appropriate support to the pottery group. The idea of supporting pottery was selected before the EDP training after the trade fair. The EDP of this pottery group should be reviewed because later discussion with representative of the group showed that the profit made by each member was very small. It seems that the process to select the FBE that should receive support is not clear for the DFO and ADFO. Rumour / copying from other projects that appear successful seem to be the major reasons for choosing honey production or eco-tourism. Jacques Lecup; March „08 49 Annex 4 Guidelines for FLS supporting villagers to set up FBE Introduction These guidelines are to help FLS to support villagers who have already gone through the whole process of EDP formulation to set up and manage their FBE: they are not intended to replace the EDP formulation process. The guidelines are divided into four steps. The first two steps are very important and should be followed in order. They should not be skipped. Even if you feel that you have all the information and knowledge, you should revise the first step every time you plan to support a villager to set up a business after EDP formulation. Step 1: Review the EDP prepared by the villagers and gather information This is vital background work that gathers important information (technical, market, raw material availability, profitability etc.) about the business. It also defines the cash needed to set up the business, and the funds available. 1. If the district forest office or other development organization has supported a similar type of enterprise, you must find out where they are, how many there are and (if possible) the target markets, and the amounts and origin of raw materials. With this information, you can: Avoid competition between villagers for markets and raw materials Develop cooperation between similar FBE. 2. Review the villagers‟ EDPs and if possible the EDPs of similar businesses: Gather important background information on markets, technical processing, raw material availability, and financial requirements. Check that villagers have looked at all the main issues during the EDP formulation process. If there are gaps, prepare a checklist of them, and of other issues you will have to focus on to support the villagers. 3. Visit similar businesses and analyze the reasons for success or failure. This will bring to light the main pitfalls and show you how to avoid them. It will also give ideas on how to make such a business successful. Note: Your support should not be to help villagers to simply copy a successful business. You will have to analyze the reasons for success and failure and apply them to the particular villagers’ business context. 4. Review the potential buyers. You may have to revisit some of these if you were not present during the EDP market research, or if you feel there is an issue that needs to be clarified. This review will also allow you to avoid competition with other similar FBEs supported by the project. Selling goods such as firewood or hoe handles to government institutions (e.g. schools, hospitals, jails, etc.) may require the seller to follow a bidding process. Jacques Lecup; March „08 51 In that case you should inform your DFO so that s/he can support the villager to contact the institutions directly. At the end of this review you should know the potential buyers, the prices, quantities and quality required, and you will be able to advise the villagers on these issues. Note: You should remember that your role is not to select buyers and market for the villager but to guide her / him in this selection process. 5. Collect information on the availability of raw materials: Refer to the local forest management plan. This will tell you how much raw material can be harvested sustainably, and gives technical details of natural resource conservation. Find out the type and quantities of raw material that villagers will be allowed to collect from the forest. And inform villagers about the conditions / formalities / prices attached to raw material harvesting permission. Find out if other villagers are collecting similar raw materials and the quantity they collect, and thus avoid competition. Explore any technical issues related to sustainable harvesting of the raw material. Note: Do not forget to add all the information gathered to your checklist. 6. Collect enough technical information about the manufacturing process so that: You can evaluate what the villager knows about the manufacturing process and if s/he needs extra support or training. You can guide villagers when they buy equipment and other fixed assets (refer to the following point 7). The easiest way to collect such information is to visit a similar FBE, where you may get information from experts and technical trainers. Note: Remember that you don’t need to become an expert yourself. You just should be aware of the most important technical steps. 7. Get information about reliable equipment / processing auxiliaries / packing providers and the cost. (Processing auxiliaries are goods that have to be included in the process, e.g. spawn for mushroom cultivation, firewood for a pottery kiln, dyes for mat processing, etc.) Once you know the technical process and the equipment needed (point 6 above) you should find out where such equipment is available and its cost. If the equipment is not available locally, you need to locate reliable equipment providers. Note: availability of the equipment processing auxiliaries / packing is often a limiting factor for an FBE. So it is very important to find reliable equipment processing auxiliaries / packing providers at the outset.. 8. As transport costs are high in Malawi, you should try to: Find reliable and cheap transporters. Find if the mean of transport mentioned in the EDP is the best and most cost- effective. If not, try to find an alternative (cheaper) one. For example for a group of villagers willing to set up a firewood FBE, buying an ox cart proved Jacques Lecup; March „08 52 to be more reliable and in the long run cheaper than hiring pushbikes and trucks. Remember that other villagers in the area may be willing to transport their product to the same place, in which case transport costs could be reduced by sharing. 9. Collect information about the formalities and conditions (interest rate, repayment conditions, duration) that apply to a short- or medium-term loan. Ask the DFO or Regional Project Coordinator to help you choose the appropriate bank and develop a good relationship there. Finding start-up capital and the funds needed to run an FBE until it is profitable is one of the main issues for villagers. The Programme may support a few FBEs with procuring fixed assets in kind, but is not able to provide cash running costs. Remember that, in general, FBEs with few investments and a rapid set-up time (such as hoe handle manufacture, firewood, timber processing, mat weaving and curio making) have only short-term cash needs. For instance a firewood FBE will need cash for transport, but this can be repaid within a short period: 2-3 days up to a month. Borrowing MK 20,000 for transport on a short-term (1 week to 1 month) loan from a bank will cost around MK400 in interest. In other words, if a villager gets a loan of MK 20,000 for one month, s/he will have to pay back MK 20,400. The FLS should have this information about bank loans so that s/he can inform the villager and if necessary go with her/him to the bank. At the end of this first step the FLS will have reviewed the EDP of the villager, found the main gaps and will be able to guide the villager in: Reviewing her / his EDP and the pilot trial work plan. Setting up the pilot trial. Duration: It may take some time (up to two weeks) for the first FBE, but once the FLS has gained experience 3-4 days will be sufficient. Step 2: Guide the villager to review her/his EDP and take decisions about the first months of operation, until the business is financially viable. This involves using the information collected during step 1 to help the villager make important decisions about the proposed business. Various calculations must be done at this stage, and a source of funding identified. If necessary, you will go with the villager to collect extra information, meet informants and negotiate with service providers (including banks). With your help, the villager will make informed decisions that will give the enterprise a firm base for starting up. 1. Pre-start-up decisions and activities Support the villager to do the following: Identify who will buy the first products, the quality and quantity required by the buyer, and the exact dates when transport will be needed. If necessary (e.g. when selling firewood to a government institution), deal with all the formalities and timing for bidding. The villager needs to contact the Jacques Lecup; March „08 53 buyer (either directly or with help from you or the DFO) to reassure them that the product is not stolen from forest reserves and is coming from sustainable managed forest. The aim is to convince the buyer to give preference to these products. Set the selling price. Decide where to buy or collect the raw material and the cost. List the equipment needed and obtain quotations for this. Identify all steps of the manufacturing process. List the exact cost and name of the place to buy each item of equipment. Decide how much to produce during the first months of operation. Calculate all the costs (including transport) to produce the above quantities. Decide on the transporter and the exact price. (The villager will already have met the transporter and negotiated prices in advance.) Deal with all the formalities and authorizations needed to start the business, to transport the product to the buyer, to collect the raw material etc… (S/he will have already have met the relevant authorities and collected the documents.) 2. Calculations to be done (after taking the above decisions) Cost of the fixed assets Fixed costs Variable costs Profit at full capacity Cash flow for the first months and year of operation The exact cash needs (including start-up capital) until the business is profitable 3. Finding a source of start-up funds Calculating the cash needs will give the exact amount needed to set up and run the business until it becomes profitable. Once the villager knows how much cash is required, you can help him or her to locate people /organizations (such as bank / DFO office / other projects) that may provide financial support, and to conduct detailed negotiations. Note: it is important to finalize this issue to be sure that the funds will be available, both at start-up and later if necessary. At the end of step 2, the villager should be ready to start her/his business - no unclear question should remain. The time required to get to this stage depends on the number and significance of gaps detected in the EDP. It will take longer to support the first villagers, but later 2-4 days should be sufficient. Step 3: Pilot trial This trial produces samples and sells them in the market to ensure that they meet quality requirements. If the initial quantity is too small to sell in the market, the product will have to be shown to the final buyer to be sure that it meets requirements. So the pilot trail is a review of the whole production process. It should be taken seriously as it will help villagers make final adjustment before setting up the business. Jacques Lecup; March „08 54 . How to proceed: 1. Review the detailed work plan of the trial phase made at the end of the EDP formulation. At the end of the EDP formulation, villagers develop a detailed work plan for a trial phase. If this was not done, you must help the villager to formulate one. If a work plan was formulated, you must review each step in detail with the villager. The outcome of this review is a timetable listing the activities of the work plan. It also shows when you are expected to make support visits. These should be frequent, so that you can intervene and help if necessary. In the early days, villagers are often stuck with small details or are afraid to take risk; they need simple support to continue. 2. Implement the work-plan. You will not need to stay with the villager, but you must check the progress of the pilot trial regularly (as indicated in the timetable) and support the villager in case of problems. The FLS should follow the villager until the end of the pilot trial. 3. Prepare the implementation phase. Help the villager to assess the pilot trial and if necessary adjust technical and market issues. Step 4: Setting-up and running the business – reviewing progress Every time you make a follow-up visit, you should review each of the following: The market Any processing issues Economic / financial / book keeping matters Environmental / sustainable use of the natural resources Market You must ensure that the villager remembers the market needs - mainly delivery time, quality, and quantity. Villagers often lose a market because they fail to respect market needs. After few successful consignments, the villager may be tempted to: Offer goods of inferior quality Ignore agreed delivery times (e.g. delivering firewood to a hospital a week late) Bring the client smaller or bigger quantity than agreed. On the buyer‟s side, the client may also be tempted to look for other cheaper or better- quality providers. Jacques Lecup; March „08 55 How to proceed: Record the market terms and conditions for each villager, and visit the villager at the time of delivery (especially for the first consignment but also after the first 3-5 consignments) to check and give advice. If quantity or quality are not as agreed with the buyer, you should persuade the villager to delay sending the consignment (if possible) and review the product. Visit the buyer from time to time to find out whether the villager adhered to agreed terms and conditions. You also need to develop good relationships with the buyers. Processing Find out whether the villager faces any problem during processing. How to proceed: The easiest way is to follow villager during each processing step, perhaps by staying one full day or more with the villager and comparing with other similar enterprises you visited earlier. (This is why it is important during the step 1 for you to visit similar successful FBEs and acquire technical information on the processing.) Note: As mentioned above the FLS should not and cannot become technical expert in all the different FBEs they have to follow, but in general FBEs are simple and don’t need sophisticated equipment. When visiting a villager, the key issue is to obtain an overview of the whole manufacturing process and find if it is logically done and where are the bottlenecks. Then evaluate together with the villager how to solve them. Do not behave as if you are an expert and try to solve all the problems faced by all the villagers. Simply help the villager to solve a specific technical issue and guide her/him to a reliable expert. Economic / finance / bookkeeping Check the financial health of the enterprise. Villagers often forget about cash needs, running costs, fixed and variable costs when they receive payment for the first sales – instead they spend all the money. Such temptation is “normal” and a continuing problem in such businesses. A lack of funds for short- and medium-term running costs is the main reason for business failure. Bear in mind that it is often more difficult to obtain a short-term loan from a bank for running costs than a long-term loan for buying equipment. How to proceed: During the first sales and for as long as necessary, try to be present when the villager receives money from the buyer. Advise the villager to set aside the funds necessary to run the business and to repay the business debts (such as loan / advance from bank or friends). If necessary, go with the villager on the day the payment is received, to make sure these debts are repaid. Looking at the villager account book should reveal whether running costs are available or not, but a cash book may show a positive balance even if funds are not Jacques Lecup; March „08 56 available, as the villager may have spent them without recording this in the book. So the best way is to check the balance in the bank account from time to time. Environmental component Examine the impact of the FBE on the environment (in our case mainly the forest). Decide whether action should be taken to help the villager to reduce impact on the forest. How to proceed: Ask questions about the quantity, provenance and type of raw materials collected from the forest (or other ecosystem). If necessary, go to the collection place and surroundings to evaluate the impact and be sure that no illegal or environmentally harmful activity was carried out by the villager. Some of the ways to check are: By informally visiting the business storeroom or processing place. This will show the type of raw material collected from the forest. By reviewing the sales book and bank account, which will give an idea of the quantities sold. By visiting the forest areas where the raw material comes from. This will show the situation in the forest. Conclusion These are guidelines only, and not a checklist. You should develop your own checklist for each type of enterprise and villager you support. It is vital to make regular follow-up visits to the villagers, buyers and banks. You can then note and, wherever possible, prevent or solve problems villagers may encounter, as well as developing friendly relations with all the stakeholders. You should not be seen to act as “police”, but should instead gain the confidence of all the main stakeholders. Be careful not to give wrong advice. If you are not sure about any technicalities, seek support from experts or contact other FLS, your DFO or RPC for advice. Jacques Lecup; March „08 57 Annex 5 Guidelines for District FBE Planning Introduction This second mission revealed that one of the main wishes of FLS, DFOs and RPC was to set up a detailed work plan covering FBE action for the year 2008. The plan should includes choosing the type and number of FBE to support in a particular area, how much funding should be allocated to each, choosing the type of villager they should support, and identifying the villages and forest where support should be concentrated. These guidelines will develop the main points to cover in a yearly work plan. This should be a participatory exercise, bringing together FLS, DFO and RPC: the work plan should be approved by each participant so that everyone will feel ownership. This work plan will also form the basis of the monitoring and evaluation of progress. 1. Step 1: Gathering documents and information The Programme has documents, information and know-how that will be useful for this annual planning. This first step collects this information at district level. Relevant documents include: 1. List of FBEs selected during sustainable livelihoods analysis (SLA). 2. Management plans for the different types of forests in each district. 3. Lists and location of FBEs supported to date in each district. 4. Calculations of the profitability of each FBE per month and per unit of production. The amount of raw material needed to produce such unit (quantity and quality). Costs of supporting each type of FBE. 5. Potential market demand in the district for each FBE, which should include an estimate of regular potential demand from government and non-government institutions. 6. Maps of the district (and if necessary the region), showing forests, target villages, government and non-government institutions that may buy FBE production, village markets. 7. Lists of reliable transporters and transport costs. 8. Name of the FLS trained in EDP. Estimate of how many EDPs (formulation and follow up) each FLS can provide. 9. Funds available for supporting FLS and villagers. 10. Lists and location of banks that may be willing to provide loans to villagers. 2. Step 2: Finding the main limiting factors a. Availability and location of the market For each of the selected FBE, establish during the SLA whether there is an easily accessible and long-term market - select only those with a potential market. For example, it makes no sense to support mushroom cultivation if there is no demand for mushrooms. Jacques Lecup; March „08 59 b. Availability of raw material and impact on the forest For each of selected FBE, evaluate how much raw material is available on a sustainable basis. (This should take into consideration the forest management plan.) Lack of suitable raw materials may eliminate some types of FBE at the outset. c. Number of villagers to support The Programme indicator framework sets targets for the percentages of villagers that should set up successful FBE within a certain period. For example, if the framework specifies that 20% of the villagers of the impact area should have started an FBE in 2008 (or any year of operation), and if the total number of villagers in the impact area is Y, then your plan for 2008 will be to support Y/100 x 20 villagers. Note: you may also have constraints about the type of villager (such as poor villagers or villagers with income below a certain minimum amount). If so you will have to consider this issue in your calculation. You may have collected such information during the SLA. Note: It is important to remember that the Programme objective is not the number of villagers that receive support, but the number who succeed in setting up and managing a successful business. This is based on the amount of profit they will and the consequent improvement in their living conditions. d. Funds available to support villager training, fixed assets purchase, FLS work (transport, allowances, etc.) The total budget for supporting fixed assets purchasing, training and FLS work has been finalized for 2008. The cost of supporting each type of FBE are now (almost) finalized and will give you an approximate figure of the costs for fixed assets to be purchased (see step 1 point 5). Calculate the maximum number of one type of FBE you can support in 2008 with your budget, and repeat the calculation for each type of FBE. For example, if your budget is MK 2,000,000 and the cost of supporting one mushroom hut is MK 100,000 the maximum number of mushroom huts you will be able to support is 20. If the average cost of supporting hoe handle production is MK 10,000 the maximum number of hoe handle enterprises you will able to support is 200. These are not definitive figures, but when you compare them to the number of villagers to support (as per the calculation above), you will see that for 2008 mushroom enterprises are too expensive to fulfil your target in terms of number of villagers to support. Note: If you have developed a relationship with the banks and are sure they are ready to support some of the enterprises, you may add this potential support to the total amount available. But to be on the safe side, draw up two scenarios, one with bank involvement and one without. There may also be funds coming from other sources such as projects. e. FLS capacity Jacques Lecup; March „08 60 The main limiting factor on the number of enterprises that can be supported is the number of FLS, as these are the staff who do the real work in the field. In each district, an average of one FLS received training in August / September, and others were trained in February. Few of them have gained real experience yet in providing follow-up support to the villagers implementing the EDP. Therefore good quality support to the work plan will be in sort supply during the first months of 2008. A constraint for FLS is that some enterprises need more follow-up time. For example, EDP formulation for firewood FBE may be less time-consuming than for honey. And follow-up for firewood is less time-consuming than for mushroom farming. For each type of enterprise, try to calculate an average period needed by FLS to support villagers when formulating EDP and setting up their businesses. During the first six months FLS should not be expected to follow up more than three or four FBE per month. Once they will have gained more experience the number can increase. If FLS are given too high a target, the number of successful FBEs will decrease and they will have to spend more time later providing extra support to failed enterprises. 3. Step 3: Mapping The aim of this activity is to select the potential type of FBE and villages to support. How to proceed: Use a map of the district to show the following (in different colours): o The potential market for each selected FBE. For example: o For firewood: school, jails, hospitals, township markets. o For hoe handles: jails, tobacco farms, tea plantations, township markets. o For timber: carpenters, traders. o For curios: shops, hotels, traders. o For honey: shops, hotels, township markets o Raw material availability for each selected FBE. o Villages where the Programme works, and show the number of people in each village (and the number of rich / poor) o Write on the map for each village the type of FBE selected by the villagers during the SLA. Analyzing the map will show a first choice of FBE to be supported and the villages where you will provide support. 4. Step 4: Programming and formulation of the work plan Jacques Lecup; March „08 61 Build up your work plan by comparing and analyzing the information from the mapping done during step 3 together with the limiting factors from steps 1 and 2. This should be a participatory exercise and bring together FLS, DFO and RPC. The work plan should be approved by each participant. How to proceed: Compare the information on the map with the limiting factors: number of villagers you should support, number of FBE the FLS can support during 2008, availability of raw materials, market and budget constraints. Work through approximation and with the consensus of all participants. Jacques Lecup; March „08 62 Annex 6 Proposed Monitoring and Follow-up Mechanism 1. Introduction Most of the DFO and FLS said that small business support is completely new for them. They are confronted almost daily with problems that they have no experience in solving. And DFO, FLS and Regional Project Coordinator (RPC) revealed that there is a lack of coordination and consultation between the different Programme actors (DFO, FLS, RPC). Complex issues are not discussed; help from others is not requested, and this leads in some cases to inappropriate decisions being taken. For example, one FLS (trained in August / September) did not properly understand that an Enterprise Development Plan is simply a business plan that includes additional information to protect the environment. He advised giving extra business plan formulation training to the villagers that were drawing up an EDP during the August / September training course. A phone call to his peers and the RPC would have clarified this issue immediately. In Malawi, there is a real scarcity of small business experts. DFO, FLS, RPC have to rely on the EDP training they received, coupled with their personal knowledge and capacity. It is important to remember that the knowledge / capacity of the group is much higher than the knowledge / capacity of one individual. In other word, consultation and sharing information with colleagues will increase the capacity of the group and reduce the risk of taking wrong decisions. There is an urgent need for all the Programme actors (DFO, FLS and RPC) to develop close links as well as a proper planning and monitoring mechanism to increase the overall capacity of the Programme. 2. Objective of this document This is to propose a mechanism to improve collaboration between the different actors (mainly FLS, RPC, DFO) and set up a monitoring scheme. 3. Main activities to be included in the mechanism are: Yearly planning at district / regional level to support FBE implementation. Monitoring that the work plans are being followed. Reporting mechanisms between the different actors. 4. The actors: Forest-Based Enterprise Coordinator (FBEC) Regional Programme Coordinator (RPC) Jacques Lecup; March „08 63 District Forest Officer (DFO) Front Line Staff (FLS) 5. Role for each actor: A. Forest-Based Enterprise Coordinator (FBEC) Note: This new responsibility should be given to Titus Zulu, who worked closely with the foreign small business adviser during his two missions and proved his ability. There is no need for Titus Zulu to be transferred to Lilongwe. This should not be considered at present as a new official position or job. Experience will show if such a position should be created later. To perform the work described, the FBEC should be supported by the FLS who have the most experience in FBE support. The main role of these staff will be to assist other FLS as they visit and assist FBEs, and review EDPs. John Magnany, who has attended three EDP training courses, proved that he should be able to assist Titus Zulu. Roles of the FBEC: Organizes and supports DFO, RPC, FLS in formulating yearly work plan. Provides technical support such as reviewing the villagers‟ EDP, supporting tendering process, etc. Provides links with (local / international) small business development projects, technical institutions and banks. Supports RPC/ DFO in selecting trainers. Links FLS / DFO / RPC with experience in one type of small business with FLS / DFO / RPC supporting similar businesses in other parts of the country. Makes sure that villagers are not competing at local, regional or national level for the same market. If so informs RPC, DFO and FLS and help them to review work plans accordingly. Analyzes the DFO, FLS, RPC monthly reports. Reports the progress of the project to the Programme director every month. . B. Regional Programme Coordinator (RPC) Prepares the small business yearly / monthly work-plans with DFO, FBEC, FLS. Monitors the work of DFO and FLS; visits villagers. Reports monthly to the FBEC on progress and problems faced. Makes sure that villagers of the region are not competing for the same market. C. District Forest Officer (DFO) Prepares the small-business yearly work plans with RPC, FBEC, FLS. Supports / coordinates FLS. In collaboration with FLS (and when necessary with the support of RPC and FBEC) reviews the EDP developed by villagers with the support of FLS. Jacques Lecup; March „08 64 Supports FBE in terms of: o tendering for government institutions o applying for loans from local banks o getting necessary permits for FBE product transport so that they are not stopped by the police and asked to pay bribes along the road o providing timely (in kind) financial support. Reports monthly to the FBEC and RPC on progress and problems faced. Makes sure that villagers are not competing for the same market. D. Frontline Staff (FLS) Support villagers in EDP formulation and implementing their FBEs. Participate in the district small-business annual planning. Make sure that communities are not competing for the same market. If so inform FBEC, DFO and RPC. Report monthly to the RPC, DFO and FBEC on progress and problems faced by villagers. When necessary, provide technical support to newly trained FLS as well as to FLS supporting small businesses that they have already dealt with. Jacques Lecup; March „08 65 Annex 7 Concept Note on Developing an FBE Fund Introduction The Programme has only limited funds to support villagers setting up FBE. The Programme is also finite, so support will end when the Programme ends. At present, financial support in kind is sometimes given without conditions attached, but this approach has the following repercussions: It creates jealousy among villagers. Those who have not received “free money” complain and some may turn against the Programme. Giving “free money”, even in kind, reduces the commitment of the receiver: if the FBE fails, it is not viewed ass seriously as if the investment had been made with her/ his money. Villagers see DFOs, FLS and other project staff differently, because they act as benefactors dispensing the support. Richer villagers are quick to take new opportunities, whereas the poorer in society take longer to respond and may miss the benefits on offer. If the villagers are no more given “free money” but are required to pay back the in kind support they receive from the project into an FBE fund that will support other villagers to set up other FBE, the above problems will be solved automatically. During the different training sessions and workshop that we gave in September and February, all villagers, FLS, DFO, RPC and TA agreed the need for such a fund. This concept note suggests how such a fund might be set up and run. Objective To provide small short- and medium-term low-interest loans to villagers living in the Programme area to set up or improve eco-friendly forest-based enterprises. Beneficiaries Villagers of the Programme area who are either: Willing to set up FBE to improve their livelihoods and reduce their impact on the forest / other fragile ecosystems; or Already involved in sustainable FBE and looking for financial support to run / improve their business. Location of the FBE fund The location criteria for setting FBE funds will be: To be in / close to a forest / ecosystem to be protected and under the jurisdiction of the forestry department. To cover a maximum of xxx villagers. Some of the villagers of the selected area have already received support from the forestry department and set up successful eco-friendly FBE. Conditions to apply for a loan from a FBE fund A villager must: Be living in the FBE fund coverage area; and Jacques Lecup; March „08 67 Have formulated a profitable EDP that is approved by a FLS, or have set up with support from FLS a successful eco-friendly FBE; or Have set up an eco-friendly FBE in the area and be looking for additional short-term loan. Decision-making board 75 %: Local villagers who have successfully set-up an eco-friendly FBE in the area. 25 %: Representatives from the local forest management organisation (FMO). Veto power from FLS (trained in EDP and in supporting FBE) to ensure that the proposed enterprise is profitable and don‟t have negative impact on the forest / other fragile ecosystem in the area. Type of loan provided by the FBE fund Preference will be given to small, short-term loans. The fund will thus revolve quickly and will profit the maximum number of beneficiaries. The FBE fund will request collateral to provide funding. If a villager cannot provide collateral, he will have to present a guarantee from at least xxx other successful FBEs. Medium-term (6-8 month) loans may be provided to poor villagers without collateral if they were unable to get a medium-term loan from the bank. The FBE fund may provide loans to poor villagers who cannot afford to pay the costs: o For formulating the EDP of their new business (mostly the transport costs for the market survey) o For the pilot trial. The interest rate will be just enough to cover the costs of running the FBE fund. Trial phase In a trial phase one FBE fund will be set up as a trial in each region. Location will be decided jointly by representatives of villagers who have already formulated an EDP and started different types of successful FBEs in the area, FLS, RPC and DFO. The exact rules and regulations will be drawn up jointly by FLS (RPC / DFO) and representatives of villagers who formulated an EDP and started successful FBEs in the area. Jacques Lecup; March „08 68 Annex 8 Recommendations and Suggestions for Next Input Recommendations Immediate actions within the next 3 months For the whole country: 1. Review, finalize and distribute the FLS guideline so FLS can support villagers setting up and running their FBEs once they have completed their EDP formulation. 2. Review, finalize and distribute the district planning for support to FBE guidelines, and support districts to set up their work plan until end 2008. 3. Follow and support the FLS closely. 4. Meet banks to discuss short-term loans to FBE. Get all information about the conditions: interest rates, documents to provide and timing of the formalities, the need to be registered and type of registration, collateral issues. 5. Set up monitoring and evaluation mechanism for the FBE component. 6. Calculate the profitability of each FBE per month and per unit of production. Assess the amount of raw material needed to produce such units, in term of quantity and quality. Calculate the cost of supporting each type of FBE. 7. Share the results of the workshop with the villagers (from this document) with relevant FLS and DFO. For the Northern region: 1. Follow closely: Villagers that received EDP training: firewood and timber and help them to set up their FBE. The mat group that received support from Catherine (ADFO) to prepare an EDP and help them to start their FBE. 2. Help the wine group to do the EDP and then set up their business. 3. Do not start any other FBE until those mentioned above are successfully established: there is enough work for at least 3 months. 4. Study the market chain for timber in Tanzania. For the Central region: A. For Dedza district: 1. Continue supporting curio and mats FBE Provide equipment to curio group as mentioned in their work plan. The work plan is with the mat group as well as with Titus Zulu. Provide material to mats group to build a shed along the road. Choose a shady place carefully together with the mat group. As they plan to employ someone to sell their mats, they may also sell production of other groups such as pottery, curios and cane. This issue should be reviewed in a joint meeting with the different groups and may help to select the best place for the shade. The RPC and the TA of central region should attend this meeting. Jacques Lecup; March „08 69 Provide mats groups with training to improve quality and cheaper dye liquid. Maybe ask Catherine ADFO of Karonga Northern region where dye is cheaper. 2. Help the bamboo group to do an EDP for their business and help them to implement it. 3. Help the cane furniture group to find new markets and improve quality. This FBE is not really profitable, so FLS should support them to include rattan string gathering and selling (or any more profitable other activity. If they don‟t agree, the Programme may stop supporting them. 4. Organize a planning as per the guideline for district planning for selection and support to FBE. B. For Kasungu district; Review the EDPs supported by Daniel. Then help villagers to start their FBE according to the EDP and pilot trial work plan. (Be careful of the cane furniture). Organize a planning as per the guideline for district planning for selection and support to FBE Help the villagers selected during the district planning process to go through the EDP process and set up their business. C. For Ntcheu district Help the pottery group to find buyers in Lilongwe and Salima for their energy-saving stove and to transport their product to these selected buyers. Every time a car goes from Ntcheu to Lilongwe it can bring few energy-saving stoves to the buyers. Before starting to support any new FBE, such as ecotourism or honey, set up an FBE district planning as per the guideline for district planning for selection and support to FBE. Help the villagers selected during the district planning process to go through the EDP process and set up their business For the southern region: A. For Chikwawa and Machinga district: Continue supporting the FBE that were already started. Provide proper technical training to mushroom, honey, jatropha. But don‟t increase support to other communities for honey, mushroom, jatropha or seedlings. Set up an FBE district planning as per the guideline for district planning for selection and support to FBE Help the villagers selected during the district planning process to go through the EDP process and set up their business. B. For Nsanje and Zomba district: Continue supporting the FBE that were started earlier. Provide proper technical training to mushroom, honey, jatropha. But don‟t increase support to other communities for honey, mushroom, jatropha or seedlings. Jacques Lecup; March „08 70 Intensify support to firewood and hoe handle FBE. Help villagers to implement an EDP for these products, and then to implement their EDP. There is no need to do other activities until these FBEs are on track and running well. Note: don‟t decide to support too many firewood / hoe handle FBE. You may flood the market and create competition between the villager that you support. Set up FBE district planning as per the guideline for district planning for selection and support to FBE. Medium-term action until end of 2008 For the whole country: Evaluate the progress of the FBE that received support. Draw conclusions on profitability for the villagers and for the Programme for each type of FBE supported. Review the progress made by the district which made the 2008 FBE district planning. Adjust the planning guidelines. Review with the FLS the guidelines to support villager to set up and run their FBE after EDP formulation. Set up FBE development funds in an area where successful FBE are set up. Develop guidelines for setting-up such fund. Review the monitoring and evaluation mechanism for the FBE component. For the Northern region: Evaluate the progress of the FBE that received support. Evaluate the progress of the FLS who were trained in February and provide them additional training if necessary Set up and implement the district FBE planning until the end of the year 2008 For the Central region: Review and adjust the district FBE planning until the end of the year 2008. Evaluate the progress of the FBE that received support For the southern region: Review and adjust the district FBE planning until the end of the year 2008. Evaluate the progress of the FBE that received support Suggestions for the next input FBE district planning: Review district planning. Review guidelines for district planning. Support the Northern region districts to do their FBE planning for 2008. FBE follow-up and support: Workshop in each region for the FBE to present their progress and problems. Visit some successful and unsuccessful FBE with the FLS ( refer FLS follow up and support) Jacques Lecup; March „08 71 Investigate potential new FBEs (tree seed oil soaps, toothpicks, bamboo charcoal, etc…) FLS follow up and support: Workshop for the FLS to present their progress and problems while supporting FBE in EDP formulation and setting up. Review the FLS guidelines to support FBE. FBE development fund: Set up FBE development funds in an area where successful FBE are established. Develop guidelines for setting up such a fund. Jacques Lecup; March „08 72 Annex 9: Table of Recommendations Location Activity March to June to May December Review, finalize and distribute the FLS guideline so FLS can support villagers setting up and running their FBEs once they have completed their EDP formulation. Review, finalize and distribute the district planning for support to FBE guidelines, and support districts to set up their work plan until end 2008. X Follow and support the FLS closely. Meet banks to discuss short-term loans to FBE. Get all information about the conditions: interest rates, documents to provide and timing of the formalities, the need to be registered and type of registration, collateral issues. Set up monitoring and evaluation mechanism for the FBE component. For the whole Calculate the profitability of each FBE per month and per unit of production. Assess country the amount of raw material needed to produce such units, in term of quantity and quality. Calculate the cost of supporting each type of FBE. Share the results of the workshop with the villagers (from this document) with relevant FLS and DFO. Evaluate the progress of the FBE that received support. Draw conclusions on profitability for the villagers and for the Programme for each type of FBE supported. Review the progress made by the district which made the 2008 FBE district planning. Adjust the planning guidelines. Review with the FLS the guidelines to support villager to set up and run their FBE after EDP formulation. X Set up FBE development funds in an area where successful FBEs have been set up. Develop guidelines for setting-up such fund. Review the monitoring and evaluation mechanism for the FBE component. Jacques Lecup; March „08 73 Location Activity March to June to May December o Follow closely: Villagers that received EDP training: firewood and timber and help them to set up their FBE. The mat group that received support from Catherine (ADFO) to prepare an EDP and help them to start their FBE. X For Northern o Help the wine group to do the EDP and then set up their business. region: o Do not start any other FBE until those mentioned above are successfully established: there is enough work for at least 3 months. o Study the market chain for timber in Tanzania. Evaluate the progress of the FBE that received support. Evaluate the progress of the FLS who were trained in February and provide them additional training if necessary X Set up and implement district FBE planning until the end of the year 2008 Jacques Lecup; March „08 74 Location Activity March to June to May December For Dedza district: Continue supporting curio and mats FBE Help the bamboo group to do an EDP for their business and then implement it. Help the cane furniture group to find new markets and improve quality. This FBE is not really profitable, so FLS should support them to include rattan string gathering and selling (or any more profitable other activity). If they don‟t agree, Programme may stop supporting them. Organize district FBE planning, as per the guidelines. For Kasungu district; Review the EDPs supported by Daniel. Then help villagers to start their FBE according to the EDP and pilot trial work-plan. (Be careful of the cane furniture). For Central Organize district FBE planning as per the guidelines for district planning for region: selection and support to FBE X Help the villager selected during the district planning process to go through the EDP process and set up their businesses. For Ntcheu district Help the pottery group to find buyers in Lilongwe and Salima Before starting to support any new FBE such as ecotourism or honey, set up district FBE planning as per the guidelines for district planning for selection and support to FBE. Help the villagers selected during the district planning process to go through the EDP process and set up their businesses Jacques Lecup; March „08 75 Review and adjust district FBE planning until the end of 2008 X Evaluate the progress of the FBE that received suppor Location Activity March to June to May December For Chikwawa and Machinga districts: Continue supporting the FBEs that have already started. Provide proper technical training to mushroom, honey, jatropha, but don‟t increase support to other communities for this type of enterprise. Organize district FBE planning, as per the guidelines. Help the villager selected during the district planning process to go through the EDP process and set up their businesses. For southern For Nsanje and Zomba districts: X region: Continue supporting the FBE that have already started. Provide proper technical training to mushroom, honey, jatropha, but don‟t increase support to other communities for this type of enterprise. Intensify support to firewood and hoe handle FBEs. Help villagers to implement an EDP for these products, and then to implement their EDP. There is no need to do other activities until these FBE are on track and running well. Note: don‟t support too many firewood / hoe handle FBEs. You may flood the market and create competition between the villagers that you support. Organize district FBE planning as per the guidelines. To review and adjust the district FBE planning until the end of the year 2008. Evaluate the progress of FBEs that received support X Jacques Lecup; March „08 76