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A network approach to analysis of the performance of milk traders, producers and BDS providers in Tanzania and Uganda

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Presented by Derek Baker, Amos Omore, David Guillemois and Nadhem Mtimet at the 23rd annual academic symposium of the International Food and Agribusiness Management Association (IFAMA) held at …

Presented by Derek Baker, Amos Omore, David Guillemois and Nadhem Mtimet at the 23rd annual academic symposium of the International Food and Agribusiness Management Association (IFAMA) held at Atlanta, Georgia, 17-18 June 2013.

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  • 1. A network approach to analysis of the performance of milk traders, producers and BDS providers in Tanzania and Uganda Derek Baker, Amos Omore, David Guillemois and Nadhem Mtimet 23rd annual International Food and Agribusiness Management Association (IFAMA) forum and symposium 17-19 June 2013, Atlanta, GA
  • 2. Outline 1. Business Development Services (BDS) as a development mechanism 2. Networks in development, and introduction to networks as an approach to value chain analysis 3. Approach taken, preliminary results 4. Next steps: • formulation of broader conceptual frameworks for networks • symposium on networks as value chain configurations, at African Association of Agricultural Economists’ Conference, September 23-25, 2013, Hammamet, Tunisia
  • 3. Business Development Services (BDS) in pro-poor dairy development in East Africa Milk Trader Training Hygienic guides cans Regulatory Authority Accreditation & monitoring Reporting (Trialled in Tanzania and Uganda – now being evaluated) Training Service Providers (BDS)
  • 4. BDS in pro-poor dairy development in EA: Linkages via marketing, inputs and services Milk Producer Milk Market Hub (Emphasis on traditional milk market hubs to grow them) Milk Traders $$ Payment agreement Inputs & Service Providers (BDS)
  • 5. Background to research Representations of the Value Chain in pro-poor development: • have a poor theoretical basis upon which to base research hypotheses • lack quantitative intuition • fail to capture inter-agent interactions • cannot adequately address analysis of interventions The research for which this is a preliminary presentation has goals: 1. Evaluate BDS programme for dairy in Uganda and Tanzania 2. Advance knowledge of trader-producer-service linkages and development orientation 3. Test new empirical methods The story so far Theories of networks, applied to value chain analysis, used to formulate hypotheses Measures of performance of BDS interventions formulated Measures of VC-related network characteristics formulated Data collected Data processed using network-dedicated software (Pajek) Preliminary analysis done
  • 6. Sampling 1. Start with BDS providers: i. select ALL “programme” BDS providers (11 in Mwanza) ii. mirror with an equal number (11) of “non-programme” BDS providers iii. Ask each BDS provider for a COMPLETE list of clients (traders and producers) 2. Randomly select 5 “programme” BDS providers, and 5 “non-programme” BDS providers from above i. Randomly select 4 TRADERS from client list of each (i.e. 2*20 = 40) ii. mirror with an equal number (20) of TRADERS not linked to the programme iii. Ask ALL actors for contact lists 3. Randomly select 2 “programme-linked” TRADERS and 5 “programme” BDS providers i. Randomly select 2 PRODUCERS from each contact list (2*5 + 2*4 = 18) ii. Mirror with an equal number (18) of PRODUCERS not linked to the programme iii. Ask ALL actors for contact lists
  • 7. Sample Mwanza Arusha BDS Providers Programme Non-programme 11 11 9 9 Traders-linked to programme Traders-non-linked 20 20 16 16 Producers-linked to programme Producers-non-linked 18 18 15 15 BDS providers Traders Producers Total interviews 22 40 36 98 18 33 29 80 Totals 40 73 65 178
  • 8. Milk supply in Uganda Blue triangle : Trader Red cirle: Producer Thickness line: Quantity of milk traded between producers and traders. Number: Quantity of milk traded per connection.
  • 9. Results - Uganda Milk sales, BDS Blue triangle : Trader Red circle: Producer Yellow box: BDS Dot line: Milk traded Blue line: BDS service
  • 10. Results - Uganda Milk sales, BDS (detail) Blue triangle : Trader Red circle: Producer Yellow box: BDS Dot line: Milk traded Blue line: BDS service
  • 11. Results - Uganda milk sales and all BDS Blue triangle : Trader Red circle: Producer Yellow box: BDS Thickness of the line: Number of exhanges/services
  • 12. Results - Uganda milk sales and all BDS (detail) Blue triangle : Trader Red circle: Producer Yellow box: BDS Thickness of the line: Number of exhanges/services
  • 13. Results - Degree centrality for producers Number of connections for producers in Uganda on Milk Number of producers 160 140 producers have just 1 buyer 38 producers have 2 buyers 10 producers have 3 buyers 8 producers have 4 buyers …. … right hand tail 140 120 100 80 60 40 20 0 1 2 3 4 5 6 7 8 9 10 11 12 Number of connections between producers and traders
  • 14. Results - Degree centrality for traders Number of traders Milk. Number of connections for Traders in Uganda 40 36 traders buy from just 1 producer 18 traders buy from 2 producers …. 35 30 25 20 Note small peak (10 traders) buying from 5 producers 15 10 5 0 1 2 3 4 5 6 Number of connections between producers and traders Number of connections for Traders in Mwanza on Milk Number of connections for Traders in Arusha on Milk 25 16 14 20 12 15 10 8 10 6 4 5 2 0 0 1 2 3 4 5 1 2 3 4 Note different configuration between Arusha and Mwanza 5 6
  • 15. Results - Network characteristics for BDS provision - 1 Connection of BDS. Producers. Uganda One service received by one BDS is counted as "one" TRADERS Connection of BDS. Traders. Uganda One service received by one BDS is counted as "one" 12 10 20 8 15 6 10 4 5 0 10 3 4 5 6 7 8 9 10 11 1 4 7 10 13 16 19 22 25 28 31 34 37 40 No. of connections from BDS providers 6 5 4 3 No. of traders Connection of BDS. Traders. Arusha One service received by one BDS is counted as "one" 7 No. of producers 4.5 2 No. of connections trader to BDS ` 0.5 0 20 0 1 Connection of BDS. Producers. Arusha One service received by one BDS is counted as "one" 2.5 2 1.5 1 30 0 No. of connections producer to BDS Number connections per BDS. Uganda One service to one entity is counted as "one 40 2 1 2 3 4 5 6 7 8 9 10 11 12 4 3.5 3 BDS No. of traders No. of producers PRODUCERS Number connections per BDS. Arusha One service received by one BDS is counted as "one" 40 35 30 25 20 15 2 10 1 5 No.1 of 3connections producer to BDS 0 5 7 9 11 13 15 17 19 1 No. of connections trader 19 BDS to 21 3 5 7 9 11 13 15 17 0 1 2 3 4 5 6 7 8 9 10 11 No. of connections from BDS providers
  • 16. Results - overview Characterisation of networks: Variation in network degree intensities: i. Numbers of connections to trading partners • Monopsony • Monopoly • Vertical integration ii. Numbers of actors’ connections to BDS providers i. Cost-based economics of service delivery: scale and scope effects ii. Mixes of types of service: bundling Analysis of networks:
  • 17. A shift in data interpretation ....Agents… ....network connections … ... Observations.... ... Variables.... A B C ... A to B A&B C to D ... Incl. A to B, A & B, C to D etc Sub-network specific variables
  • 18. Future analysis – a logical progression of hypotheses Conventional view: H01: Actors’ characteristics/performance = f(exogenous data collected) Progression… (nested models?) H02: Actors’ characteristics/performance = f(exogenous data collected, number and form of network links) H03: Number and form of links = f(exogenous data collected, factors affecting linkages) H04: Actors’ value chain behaviour = f(exogenous data collected, factors affecting linkages) H05: Value chain performance = f(exogenous data collected, actors’ value chain choices) H06: Development outcomes = f(exogenous data collected, factors affecting network structure)
  • 19. Symposium: September 2013 Network analysis applied to livestock value chains: relationships beyond demand and supply and their contribution to the impact of upgrading interventions African Association of Agricultural Economists’ Conference September 23-25, 2013, Hammamet, Tunisia Sponsored by PIM
  • 20. Contact: Derek Baker d.baker@cgiar.org Nadhem Mtimet n.mtimet@cgiar.org International Livestock Research Institute www.ilri.org

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