vredeseilanden & sustainable agricultural chain development
Inclusive Supply Chains
1. Value Chains & Inclusive Business
Chris Claes
BIO workshop on investing in sustainable agriculture
10/07/2014 – BBL2MEET, Tweekerkenstraat 47, 1000 Brussels
2. Terminology
01
table of contents
The Impact We Pursue,
Systems and Complexity
02
Investing in Collective
Farmer Enterprises
03
Investing in Relationships
Between Collective
Farmer Enterprises and
Buyers
04
Practice of
Vredeseilanden/VECO
Working Towards
Inclusive Supply Chains
05
4. What we talk about when we
talk about market chains
farmer
co-operative
trader processor retailer
Value added at each level
cocoa fermented cocoa chocolate paste pralines café experience
https://www.youtube.com/watch?v=mu9TWlcjNKk
The movement of materials
sugar sugar ice cream supermarket
5.
6. Ben Davies, Delhaize, powerpoint presentation, Vredeseilanden General Council, October 2012
7. Pro-Poor Value Chains (VC4D)
• Value chains that have a positive impact on the livelihood of poor
people through:
Creating good rural jobs (often the most poor are laborers)
Supporting small scale enterprises
Investment in communities / taxes payed to governments etc.
Buying from smallholders
Inclusive Supply Chains
• Supply chains that include smallholder farmers (and their
organisations) as suppliers of agricultural products
8. Why focus on smallholders?
• Agriculture has great potential to help with rural poverty
• Most of the world’s food insecure live in rural communities
• Agriculture is proven path out of poverty
• Smallholders produce between 50 to 70 % of the world’s food, we will
be 9 billion by 2050, 70 % will live in cities
• Links to markets are a critical part of creating agricultural
opportunities
9. Value chains, services and
enabling environment
Chain Wide Learning Guide IIED/CDI Wageningen http://pubs.iied.org/16502IIED.html
10.
11. David Bright, Oxfam UK, powerpoint presentation, General Council Vredeseilanden, October 2012
13. The impact we pursue
http://www.fastinternational.org/files/FAST%20SIAMT%201.0%20Full%20Report%20_0.pdf
14. Systems Thinking: Actions have to take into account the whole
system
Poverty reduction only posible when global sustainability addressed:
economic, social, environmental (long term)
Multi-actor engagement, differing perspectives
Added complexity prototyping, short feedback loops
http://policy-practice.oxfam.org.uk/publications/making-markets-empower-the-poor-programme-perspectives-on-using-markets-to-empo-188950
Livelihood strategy
upgrading strategy
Trading relationships
Product value proposition
15. • Interventions in a
particular system
affect the whole
system
• It’s not about
adding up scores,
one critical factor
undermines
sustainability
http://www.apsa.am/images/RISEI
ndicatorsE_RDN1_2009.pdf
17. Intervention areas for upgrading or
developing market chains
• Investing in smallholder farmers (capacity, farm infrastructure,
materials,…)
• Investing in collective farmer enterprises (cooperatives
etc.)
• Investing in service provision
• Investing in SME’s buying from smallholders
• Investing in relationships between buyers – collective
farmer enterprises
• Investing in enabling environment (legislation,
government incentives..)
• …
20. Investing in cooperatives /collective
enterprises
• Being a trustworthy business partner for other chain actors
and for own members
Comply with demand (quality, food safety, good agricultural
practices, sustainability, label requirements, continuous supply,
scale…)
Services to members, internal control systems to guarantee
compliance with demand,
Run the business professionally (management)
Perform to be an added value for the smallholder members
(negotiation capacities, power, but also economic efficiency)
Collective Selling
Processing
• Add value
21. 4. Investing in Relationships Between
Collective Farmer Enterprises and
Buyers
22. Business Models that engage smallholder farmers
• Centralized model: a company provides support to smallholder
production, purchases the crop, and then processes it, closely
controlling its quality (cotton, sugar cane, tea, banana, palmheart…).
• Nucleus estate model: the company also manages a plantation in
order to supplement smallholder production and provide minimum
throughput for the processing plant (oil palm, rubber, mango, …).
• Multipartite model: involves a partnership between private
companies and farmers ( and often government bodies).
• Intermediary model: subcontracting by companies to
intermediaries who have their own (informal) arrangements with
farmers (groundnuts…).
• Informal model: SMEs who make simple contracts with farmers on a
seasonal basis, often repeated annually.
http://www.fao.org/docrep/014/y0937e/y0937e00.pdf
Possible investment
alternatives to landgrabbing
23. Principles Inclusive Business Models
• Chain-wide collaboration with shared goals
Alignment of goals/vision, regular information flow processes, identified champions in
lead firms
• New market linkages
Ability to aggregate and reach high value markets, steady and durable market,
complementary markets for seconds and other products, ability to function without
subsidy
• Equitable and transparent chain governance
transparancy (price structure, grades, standards, incentives), traceability to farm level,
risk sharing, governance mechanisms, shared equity, contracts
• Equitable access to services
Input supplier models, high-quality planting materials, technical support, provision of
credit
• Inclusive innovation (vertical co-innovation, process and product)
Mechanisms for getting farmer input, continuous renewal of product, diversification
• Measurement of outcomes
Feedback mechanisms along the chain, regular assessment process, decisions based on
assessment, assess environmental results
http://www.veco-ngo.org/blog/canned-asparagus-peru-finds-its-way-belgian-supermarket-chain-colruyt
24. 5. Practice of Vredeseilanden/VECO
Working Towards Inclusive Supply
Chains
25. Cases on
www.veco-ngo.org
• Cocoa: Armajaro/Mars
Indonesia
• Fresh Vegetables: Walmart
Nicaragua, Honduras
• Tea: Unilever & local SME,
Vietnam
• Dessert banana: Colruyt,
Agrofair, Senegal
• Organic rice: Indonesia,
Biofresh
• Passion fruit & avocado:
Tanzania, Special Fruit nv.
• Organic plantain chips:
Ecuador, Ethiquable.
29. PRINCIPLE OF
INCLUSIVENESS
• Common goals of
collaboration.
• Identification of leaders.
• Interdependence between
actors.
• Stable market
• Expansion of market
• Diversification of
market
•Quality standards.
• Volumes,.
• Prices
• Risk Management
• Risk sharing
Coordination or provision of
financial and non-financial
services, technology,
certification, etc.
Innovation in
product or service
that generated
actors according to
farmers needs
Evaluation of the business
relationship and
inclusiveness (indicators)
30.
31.
32. Making sense of complex realities
Using Sensemaker® to measure,
learn and communicate about
smallholder farmer inclusion
http://www.veco-ngo.org/blog/using-sensemaker-measure-learn-and-communicate-about-smallholder-farmer-inclusion
