Moving on up (even with the man still keeping you down)

Yesterday my boss Malgosia, her USAID counterpart Maria, and I field-tripped it down to Comrat, a town two hours south of Chisinau. Both of Moldova’s major wool purchasers are based there, so we got to check in with both of them in one day. The Growing Sustainable Business Initiative (the UNDP program I’m working for) has been working closely with both men and their main customer, a local yarn/carpet producer, to build a local wool supply chain. (See my previous post for more info.)

The good news:

• The project’s efforts at educating farmer on producing good wool and educating purchasers at collecting good wool has created a significant increase in the quality of wool brought to the yarn producer – leading to increased purchase volumes, more local farmers (~4000) making an income from their wool (rather than just using it at home or disposing of it) and higher prices for both the purchasers and the farmers
• With the yarn producer guaranteeing to purchase a certain increased amount of wool, there’s a lot more transparency across the supply chain. This means the collectors have been able to hire more people to collect and sort wool, and provide these employees with guaranteed year-round work (between wool-related jobs and off-season nut-related jobs)
• The project’s work to secure working capital for farmers was a success, and both were able to take out loans with reasonable terms from a local bank. This is important because many farmers refuse to sell if they’re not paid on the spot – perhaps a lack of trust carried over from Soviet times?

The not-so-good news:

• Though the purchasers have held up their end of the deals they made with yarn producer, the company hasn’t completely fulfilled its promises to them. It hasn’t actually been buying the agreed-upon amount of much wool from the purchasers, and it’s pretty late in paying for what it has bought – even after promising to pay on delivery. This means the purchasers don’t have cash-on-hand to pay back their loans.
• We’ve heard that the yarn producer has been approaching some farmers itself, promising higher wool prices than the purchasers pay, and then never closing the deals. This has lead to farmers refusing to sell to the purchasers and then being left without customers – not good for anyone.
• There are no other good customers to sell the extra wool to, as it’s not washed yet and most local companies (and basically all foreign companies) will only buy washed wool

What we’re about to do about it:

• I’m going to work drafting new Memorandums of Understanding we can sign with all stakeholders to make sure everyone’s on the same page here. Additionally, I’ll help the purchasers draft new contracts to sign with the yarn producer – it wanted us to stay out of that process before, which led to the signing of a contract that didn’t sufficiently protect the purchasers and farmers. No more relying on verbal agreements for these things – let’s get a contract in place that protects all the involved parties here and really makes this supply chain work!
• Also: we’ll see if we can find a way for these purchasers to get some wool-washing equipment. This would provide them (and thus the whole local sheep-farming community) with a much expanded customer base and create the potential for a huge increase in the amount of local wool being sold – even abroad. Good stuff! :)

Here are some pix from the trip to Comrat (and to the "biggest village in Europe" that we visited right next to it. I couldn't really get anyone to explain what a village technically consists of, though, so not quite sure how well that claim will hold up under scrutiny....) Check me out in a wool sorting facility -- the contraption to my left packs the wool into big bales, and the skeptical-looking people behind me are the employees whose work I'm disrupting. The sweet house in the next photo is being built by one of the purchasers to serve as a family home and a workplace.






Here you can see some men filling up water bottles at some sort of special natural spring that just happens to be coming out of a metal pipe in a man-made wall under a bunch of religious imagry. I politely declined a drink, as I'm not sure whether my system's ready for water that special.


Below, you can see a typical view out the car window on the ride down – endless sunflower fields. I think you might have to be here to really appreciate how beautiful they are, though.