MDF interventions
benefitted
people
generated
in additional
income
stimulated
in Private Sector
Investment
and positively
impacted
women
Did you know?
of MDFs interventions included at least one climate change relevant activity
MDF interventions
benefitted
people
stimulated
in Private Sector
Investment
generated
in additional
income
and positively
impacted
women
At least
of MDFs interventions included at least one climate change relevant activity
Annual Report 2022
Scroll down for highlights and features from the MDF Annual Report 2022
Business Focus Stories
Fiji
Papua New Guinea
Sri Lanka
Timor Leste
Pro Poor Growth Stories
Fiji
Papua New Guinea
Sri Lanka
Timor Leste
Climate Change Focus
Fiji
Papua New Guinea
Sri Lanka
Timor Leste
Samoa
Systemic Change
Fiji
Papua New Guinea
Sri Lanka
Timor Leste
Access to quality seeds reaps results for highland farmers
Fiji’s agriculture industry contributes FJD820million (8.6 per cent of GDP) to the country’s economy and provides work for over 83 per cent of the country’s rural population. However, the long-term resilience and competitiveness of the agricultural sector are hindered by limited access to quality agricultural inputs, including seeds. To address this constraint, MDF partnered with the local company KK’s Hardware to support improved access to quality and resilient seed varieties that yield better harvests and higher incomes for farmers.
New financing model improves smallholder market connectivity
Access to basic financial services, such as banking, plays an important role in efficient market supply chains. In PNG, where a large proportion of the population is unbanked, this binding constraint prevents farmers and businesses from growing. MDF’s partnership with Kosem Coffee supports a value chain finance model that helps businesses overcome some of these infrastructure roadblocks and unlocks opportunities—and income—for smallholder farmers.
Local agricultural innovation in a time of major food instability
Ellawala Horticulture (EH) is Sri Lanka’s first agribusiness to venture into commercial cultivation of the TJC mango variety using new technology and methods. It is also a leading exporter of processed foods, including a line of preserved organic produce sold under the brand Ella’s Organic. In the face of increasing demand from its existing customer base, EH required a sustainable sourcing model for certified organic produce. Thebusiness devised a model to promote a mix of short-, medium- and long- term crops while also sharing information on organic farming with farmers.
Timor-Leste’s resilient pig farmers
Pigs are considered a store of wealth and serve important social and economic needs in Timor Leste. A 2019 census shows that an estimated 81 per cent of farming households in Timor-Leste, or 54 per cent of all households, reared a total of more than 450,000 pigs. Despite the importance of pigs, the sector faces several challenges, including limited productive pig breeds and piglets, lack of commercial feed, and the need for more information on good rearing practices and animal health. In 2019, African Swine Fever, a highly contagious pig disease with no vaccine or treatment, wreaked havoc in the country. It is estimated that the diseases wiped out half of Timor-Leste’s pig population.
Supporting industry strategies with big data
In late 2020, Fiji established a National Tourism Statistics Taskforce (TST) to coordinate its reopening and recovery strategy post-COVID-19. The TST comprises representatives from the Ministry of Commerce, Trade, Tourism and Transport (MCTTT), Tourism Fiji, and the Fiji Hotel and Tourism Association (FHTA). As part of MDF’s broader support to Fiji’s tourism sector, the program worked with the TST to set up a live tourism dashboard that accessed relevant and credible market research, data trends and insights relating to Fiji’s key tourism markets.
New skills lead to labour mobility opportunities for PNG youth
Madang Butchery is a medium-scale butchery operation based in Madang. MDF started working with the butchery in December 2021 to support and build skills within the meat sector that would enable employment in PNG and Australia. With MDF support, the partner initiated a butchery training program that covers meat production, boning skills, hygiene and retail basics. Two cohorts of trainees have graduated from the program; to date, 18 have received jobs in Australia through the Pacific Australia Labour Mobility (PALM) scheme.
Better bean, better coffee: The uphill journey of Upcountry Brothers coffee
Upcountry Brothers (UCB) is Sri Lanka’s largest specialty coffee processor in terms of coffee processing capacity. The company sources 100 per cent of its coffee through smallholder farming networks and has created job opportunities for over 100 women as coffee sorters. In conversation with Asanka B. Kangana, Director of Sourcing and Production for UCB, MDF discussed business performance, weathering an economic crisis, and changes to the business since signing a partnership with MDF.
Touchdown Timor
As an island nation, improving air connectivity is crucial to develop Timor-Leste’s small but growing tourism sector. Only 74,000 total visitors arrived per year pre-COVID-19. Timor-Leste needs more regular flights, especially to Australia, which is the source country of 40 per cent of its leisure travellers. In January 2022, the Governments of Timor-Leste and Australia signed an air service agreement, opening the possibility of more commercial flights.
Farmer turns to local innovation to help build soil health
Deteriorating soil health is an issue that increasingly impacts farmers of all scales. As food-crop demand increases, so does the amount of chemical fertiliser required to scale up production. Continuous application of fertiliser can sap the soil of its natural minerals and nutrients, requiring more fertiliser—a vicious cycle. Using organic and sustainable soil conditioners is an important farming practice that can mitigate this. In addition, with the currently limited supply and rising costs of imported agri-inputs due to the long-tail impact of COVID-19 and the ongoing war in Ukraine, the availability of locally produced solutions is vital to the long-term sustainability of Fiji’s agriculture sector.
Mapping and mitigating coffee’s carbon footprint
Climate change is an increasingly important consideration for leading coffee roasters and retailers around the world who are keen to purchase sustainably produced coffee with a lower carbon footprint. These growing requirements in global coffee markets create new incentives for exporters and suppliers to invest in mapping and mitigating the crop’s carbon footprint, as coffee that is sustainably produced can be sold at higher premiums that flow through the supply chain and down to the smallholder farmers that grow it. In an intervention that is the first of its kind in PNG, MDF is supporting its partner Sucafina to measure its value chain emissions so that it can invest accordingly in offsetting or reducing them.
Climate-smart tech solutions emerging in agriculture
Sri Lanka is home to a diverse, long- established agricultural ecosystem that has been fed by a unique water system for centuries. However, this rainfed water system is currently under threat due to changes in seasonal monsoon weather patterns resulting from climate change. Sri Lanka is expected to experience severe shifts in temperature and precipitation, directly threatening water availability. For a nation that relies heavily on traditional methods of seasonal farm management, unpredictable rainfall can often mean lower crop yields, with knock-on effects on farmers and food availability.
Atauro’s ocean farmers
On Timor-Leste’s Atauro Island, seaweed—a source of carbon-capture that protects marine ecosystems—is being increasingly affected by shifting climate patterns. Atauro has a population of 10,302 inhabitants who rely on an ocean- based economy for survival. Income generation opportunities are limited on the island, and over 1,200 ocean farmers engage in seaweed farming. The activity supports the island’s communities to generate export income and is a more lucrative option than moving to the capital, Dili, on the mainland.
Climate risk in Samoa’s kava sector
Samoa’s climate projections point to a future of increased temperatures, more frequent extreme rainfall days and more intense cyclones. These changed climactic conditions are likely to impact Samoa’s kava sector.
Destination Fiji – Developing an outsourcing services brand
The Fijian outsourcing services industry was a slow-progress economic segment for nearly a decade. Despite several winning factors—including a well-educated labour pool, good internet connectivity, appropriate infrastructure, a convenient time zone, and geographical proximity to nearshore clients such as Australia and New Zealand—operators struggled to capitalise on the industry’s potential to be a growth engine. Most businesses catered to small client bases, with limited investment in marketing and little technical expertise in attracting bigger clients. At the national level, despite generating significant employment, the industry struggled to be recognised for its potential. Outsourcing services were grouped with the information, communications and technology (ICT) sector, and international branding of Fiji as an outsourcing services destination was virtually non-existent.
Mapping the shift from commodity to high grade coffee in PNG
MDF has been working in the PNG coffee sector since 2018, collaborating with multiple market actors – government, large-scale coffee exporters, industry associations, aggregators and smallholder farmers— on a range of market functions to support the industry to shift from commodity-grade coffee to high-grade coffee. PNG was not competitive in commodity coffee due to the high costs of production and the decline of the plantation sector. Additionally, due to low margins, exporters did not have the incentives to make the necessary investments in their supply chains to improve both the quality and quantity of coffee production from the disparate networks of smallholder coffee farmers in PNG.
Establishing quality sourcing targeting the export arena – Coffee through the crisis
The resurgence of specialty coffee in Sri Lanka has been a few years in the making. The growing global consumption of specialty coffee and increasing global prices have made this high-value crop a sought- after produce. Until recently, imports dominated the Sri Lankan roasted coffee market, while locally grown coffee was largely commodity grade. Only two local roasters had established direct sourcing relationships with coffee farmers or invested in central processing of green beans. Farmgate prices (the price that a farmer receives at the point of selling) for both red cherries and green beans operated on a flat structure—so farmers had no incentive to improve harvesting practices or invest in quality. Moreover, it was a fragmented sector, with no formal coordination to facilitate investment or promote Sri Lankan specialty coffee for export.
Supporting Timor-Leste’s transition towards high- value coffee
The coffee industry is a central part of Timor-Leste’s economy, society and history. Coffee is the most important agricultural cash crop and top non-oil export in Timor-Leste, providing income for almost 20 per cent of all households. It also provides business opportunities for processors, traders and retail coffee shop owners. However, the sector is currently operating far below its potential. Yields are among the lowest in the world and may decrease further because of climate change. Timor- Leste coffee has excellent quality potential, but poor processing practices mean that most Timorese coffee is sold as commodity-grade at low prices. Low yields, inconsistent quality and missed opportunities for value- adding all contribute to the relatively high incidence of poverty among coffee-producing households. Investments in the coffee sector could have a transformative impact on reducing poverty among these households.