Extension and the Value Chain


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Author: Brent Simpson, MSU, March 2011

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Extension and the Value Chain

  1. 1. Extension and Value Chain Development: What does it take to makeextension more market oriented? Brent M. Simpson Michigan State University MEAS Deputy Project Director
  2. 2. Why? What is gained?o Economic growth/Poverty reduction • The focus is on profit enhancement – greater productivity, increased efficiency, loss reduction, new product development, enhanced business environment, stronger sub-sector specific and cross- cutting support services; • Value-chain develop is a higher order target than SME development (sub-sector vs. individual firm) – SME are essential, but not sufficient in value-chain developmento Organizing framework • Who are the target groups • Where to focus efforts • What skills/knowledge sets are needed • How to carryout interventions
  3. 3. Basmati Rice-40 FIGs Dairy – 125 FIGs (25)Example of how the NATP Project was Implemente Major Urban Centres Oilseeds - 10 FIGs Vegetables - 46 FIGs (20) Poultry/Fisheries - 35 FIGs Mushrooms – 152 FIGs (120)In one Project District in India Pulses - 25 FIGs HMACs – 140 FIGs Potato/Onion - 35 FIGs Vermi-compost – 52 FIGs (28) Diara = Ganges Beekeeping – 13 FIGs Floriculture 19 FIGs river-basin Silt builds-up inPost-harvest/VA-26 FIGs (17) the diara, which is good for post-monsoon = 45 (39) Micro-credit SHGs horticultural crops FIGs = 763 (249) TOTAL Tal = wetlands good for post- monsoon (rabi) pulse crops Number and type of Farmer Interest Groups (FIGs) in different blocks in Patna District, Bihar
  4. 4. What does it take?o Vision/Understanding Global Retailers • Structure of the market Domestic Retailers system Exporterso Knowledge/Skills Wholesalers • To deliver what the market(s) wants Processors/Traderso Intervention Strategy • Who, where, what, how Producers Input Suppliers
  5. 5. What Product(s), which market(s)?o Food Crop/Product – non-Food Crop/Product • Malibiocarburant (Mali)o Staple commodity – Niche product(s)? • INSORMIL/ROCARS (Senegal)o Domestic – Export? • Specialty Coffee (Rwanda)  Private sector initiative  Government development objectives  Donor investment priorities  Opportunity analysis (bottom-up; top-down)
  6. 6. Vision – reality is complicated Value Chain Development
  7. 7. Knowledge – what market the wants Producing for the market ≠ Just selling what you produce ≠≠ Value Chain DevelopmentSelling what you have left over, or don’t want To be market-driven extension must evolve from an undifferentiated supply-push mindset to an informed, demand-targeted orientation
  8. 8. Knowledge – what market the wantsMarket preferences (domestic markets) e.g., parboiled rice (Nigeria), broken rice (Senegal), imported ‘butter rice’ (Liberia), indigenous African rice (sub-regional)Buyer determined specifications (contracts) Value Chain Development e.g., appearance, cleanliness, varietal purity, traceabilityInternational standards (international markets) e.g., industry specific (cotton, coffee), production type (organic, fair trade), product based (acidity of olive oil), market destination (APHIS, EU)
  9. 9. Intervention Strategy -- Who Value Chain Development Who are the target groups? Where are they located? What skills to they need?
  10. 10. Intervention Strategy -- WhoModels of Intervention • Producer groups, ‘clusters,’ professional associations • Contract farming, distributorships, franchises • Open-access resource provisioning of information/technologiesPrinciple of Best Practice: Find a model thatworks (become effective); refine it (becomeefficient); replicate (scale-up)(a la Korten).
  11. 11. Intervention Strategy -- WhatSkills Technical/production, managerial, organiz ational/leadership, negotiationKnowledge Market demands/requirements, legal/ regulatory requirements, market system functioningAccess credit, inputs, market information, other actors in the value-chain
  12. 12. Intervention Strategy -- WhatThings the ‘market won’t provide,’ or havenot provided: Non-proprietary, or public goods e.g., recommendations on natural resource management, adaptation to climate change, objective comparative product information, product safety information Organizational development assistance, business development support, basic educational skills
  13. 13. Intervention Strategy -- HowQuestions of sustainability:Financial – are those offering EAS, as well asthose being targeted, capable of continuingunder their own financial resources?Organizational – do those organized throughEAS assistance have the skills andcapabilities needed to successfully managetheir affairs (BDS) independently?
  14. 14. Intervention Strategy -- HowMaintenance & expansion – can those EASefforts set in motion continue to function aslong as they are needed?Can they replicate and expand their scope ofcoverage – geographically, number ofbeneficiaries reached, breadth of technicalissues addressed – as opportunities arise?Have appropriate linkages been built withtraining centers and universities to maintain asupply of human resources?
  15. 15. Questions?
  16. 16. Terms of Use © Brent Simpson, Michigan State University, MEAS project. This work is licensed under a Creative Commons Attribution 3.0 Unported License.Users are free: • to Share — to copy, distribute and transmit the work • to Remix — to adapt the workUnder the following conditions: • Attribution — Users must attribute the work to the Brent Simpson, Michigan State University, MEAS project (but not in any way that suggests that the author or institution endorses the user or the user’s use of the work).
  17. 17. DisclaimerThis presentation was made possible by the generoussupport of the American people through the United StatesAgency for International Development, USAID. Thecontents are the responsibility of the author(s) and do notnecessarily reflect the views of USAID or the United StatesGovernment.
  18. 18. Consortium Partners SAFE