Sustainable Fair Economic Development Philippines - Evaluation Report

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Presentation of Orlando Abelgas on the results of his evaluation of the VCD Program Facilitation. Presented during the VCD in FED: Conversations on Frameworks ++

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Sustainable Fair Economic Development Philippines - Evaluation Report

  1. 1. Sustainable FairEconomic Development (SFED) Evaluation
  2. 2. Sustainable Fair Economic Development (SFED) one of three ICCO major themesSFED sub-programmes• Local Market Development (LMD)• Financial Services (FS)• Private Sector Cooperation (SPC)Objective: to improve the socio-economic position of rural poor households and small producers.
  3. 3. Value Chain Development (VCD) Programme objectives to improve the environment of rural poor• to strengthen the collaborative engagement among the chain actors and support agents (Capacity Building)• to establish new linkages that improve the chain position of small farmers (Market Development)
  4. 4. Value Chain Development (VCD) Programme objectives to improve the environment of rural poor• to create new financial services supportive of value chain development (Financial Services)• to create an enabling environment through lobby and advocacy in which the 4 chains can flourish. (Lobby & Advocacy)
  5. 5. Outcomes• Capacity Building• Market Development• Financial Services• Lobby and Advocacy• Key Factors• Lessons Learned
  6. 6. Two-level Approach• The Programmatic Level• The Enterprise Level
  7. 7. Indicators• ICCO Program inputs: Relevance, Adequacy and Timeliness• Network members: - Composition - Contribution - Commitment - Concrete actions taken
  8. 8. IndicatorsICCO Program inputs: Relevance, Adequacy and Timeliness.Relevance : ICCO inputs provided that had adirect bearing on the development of the valuechain platforms.Adequacy: the inclusiveness of the inputsprovided and/or requested during the operatingperiod.Timeliness: the submission by VCD partners ofrequests for additional inputs and the time lagrequired for the processing andprovision of those requested inputs.
  9. 9. IndicatorsComposition. The composition indicator refersto the actual membership and representationreflected in each network or platform.Contribution. Network members have theirindividual histories, strategies, interests,incentives and constraints. Characteristicssuch as these configure the particularcontribution a network makes in engaging thevalue chains of producers, channels andbuyers.
  10. 10. IndicatorsCommitment. This refers to the dynamismmobilized by the network for itself. Thisdynamism is influenced by the network’sappreciation of its resources (capabilities,opportunities and strengths), and costs(constraints, priorities and weaknesses).Concrete actions taken. This indicatorevidences the current situation of the networkrelative to its performance in a VCD program.
  11. 11. IndicatorsFarmers’ level: Perceptions and Strategy OrientationPerceptions refer to small holders’ & women’sself-assessment of changes in their socio-economic situation resulting from theirinvolvement VCD program.Strategy orientation refers to the collectivepriorities of small holders and womeninsofar as their value chain activities areconcerned.
  12. 12. VALUE CHAINS• Southern Mindanao value chain or Davao cluster• Northern Mindanao value chain or CDO cluster• Metro Manila cluster• Muscovado value chain• Pili value chain, Bicol• Seaweeds value chain, Northern Samar
  13. 13. VALUE CHAINS• Southern Mindanao value chain or Davao cluster• Northern Mindanao value chain or CDO cluster• Metro Manila cluster• Muscovado value chain• Pili value chain, Bicol• Seaweeds value chain, Northern Samar
  14. 14. VALUE CHAINSSouthern Mindanao value chain or Davao cluster
  15. 15. VALUE CHAINS Southern Mindanao value chain or Davao clusterComposition:• Philnet RDI• DPRDI• Don Bosco [all ICCO partners]
  16. 16. VALUE CHAINS Southern Mindanao value chain or Davao clusterMajor strength:Accessed OIKO Credit with ICCO guarantee
  17. 17. VALUE CHAINS Southern Mindanao value chain or Davao clusterMajor weakness:⁻ Split focus between Tagum market and Davao- Manila markets⁻ No group member prepared to take the lead
  18. 18. VALUE CHAINS Southern Mindanao value chain or Davao clusterOpportunities/Recommendation:⁻ Prospect of systematic promotion of organic products does not look bright⁻ ICCO additional investment may not be advisable
  19. 19. VALUE CHAINS• Southern Mindanao value chain or Davao cluster• Northern Mindanao value chain or CDO cluster• Metro Manila cluster• Muscovado value chain• Pili value chain, Bicol• Seaweeds value chain, Northern Samar
  20. 20. VALUE CHAINSNorthern Mindanao value chain or CDO cluster
  21. 21. VALUE CHAINS Northern Mindanao value chain or CDO clusterComposition:- Parfund, APFTI, UMFI (all ICCO partners)- FPSDC
  22. 22. VALUE CHAINS Northern Mindanao value chain or CDO clusterMajor strength:With PARFUND as the only remaining organization,strategy focus is on local rural markets as top priorityand urban markets as secondary.
  23. 23. VALUE CHAINS Northern Mindanao value chain or CDO clusterMajor weakness:PARFUND is overstretched
  24. 24. VALUE CHAINS Northern Mindanao value chain or CDO clusterOpportunities/Recommendations:₋ Value chain cooperation with municipal and local LGUs looks promising.₋ The value chain rice-duck technology merits further support.
  25. 25. VALUE CHAINS• Southern Mindanao value chain or Davao cluster• Northern Mindanao value chain or CDO cluster• Metro Manila cluster• Muscovado value chain• Pili value chain, Bicol• Seaweeds value chain, Northern Samar
  26. 26. VALUE CHAINS Metro Manila cluster
  27. 27. VALUE CHAINS Metro Manila clusterComposition:Don Bosco UMFI, Pecuaria, Kool NE, TRIAS, OikoCredit.OCCP and FPSDC as partners of interest
  28. 28. VALUE CHAINS Metro Manila clusterMajor strength:- Demand side very strong- Premium price for organic rice
  29. 29. VALUE CHAINS Metro Manila clusterMajor weakness:The premium price margin is eroded by higherworking capital financing cost (90-120 days A/R)
  30. 30. VALUE CHAINS Metro Manila clusterOpportunities/Recommendations:Metro Manila organic rice requires a marketingcommunications plan to support earlier market studyidentifying supermarkets (as channel markets) andhouseholds (as end user markets).
  31. 31. VALUE CHAINS• Southern Mindanao value chain or Davao cluster• Northern Mindanao value chain or CDO cluster• Metro Manila cluster• Muscovado value chain• Pili value chain, Bicol• Seaweeds value chain, Northern Samar
  32. 32. VALUE CHAINSMuscovado value chain
  33. 33. VALUE CHAINS Muscovado value chainComposition:Composed of the Negros Organic MuscovadoIndustry Association (NOMIA), the largest of allnetworks.
  34. 34. VALUE CHAINS Muscovado value chainMajor strength:NOMIA as an organization is the largest network.
  35. 35. VALUE CHAINS Muscovado value chainMajor weakness:Negros muscovado value chain players are not yetunited for concrete actions needed for certifiedmuscovado sugar.
  36. 36. VALUE CHAINS Muscovado value chainOpportunities/Recommendations:Upscale TFM can take a more active role.
  37. 37. VALUE CHAINS• Southern Mindanao value chain or Davao cluster• Northern Mindanao value chain or CDO cluster• Metro Manila cluster• Muscovado value chain• Pili value chain, Bicol• Seaweeds value chain, Northern Samar
  38. 38. VALUE CHAINS Pili value chain, Bicol
  39. 39. VALUE CHAINS Pili value chain, BicolComposition:60 micro processors in Naga- The Terminal Pili Store run by Great Choice Pink Enterprise- Capitol Multipurpose Cooperative- Private consolidators and suppliers- Sorsogon Integrated Development Cooperative (SIDECO)
  40. 40. VALUE CHAINS Pili value chain, BicolMajor strength:Market potential is there.
  41. 41. VALUE CHAINS Pili value chain, BicolMajor weakness:Two platforms are not yet fully integrated.
  42. 42. VALUE CHAINS Pili value chain, BicolOpportunities/Recommendations:Successful entrance of IRDF in the existing chainis required.
  43. 43. VALUE CHAINS• Southern Mindanao value chain or Davao cluster• Northern Mindanao value chain or CDO cluster• Metro Manila cluster• Muscovado value chain• Pili value chain, Bicol• Seaweeds value chain, Northern Samar
  44. 44. VALUE CHAINSSeaweed value chain, Northern Samar
  45. 45. VALUE CHAINS Seaweed value chain, Northern SamarComposition:The University of the Eastern Philippines (UEP)College of Fisheries, the Provincial GovernmentEnvironment and Natural Resources Office, the Officeof the Provincial Governor, some 10 out of 13 LGUoffices (MAO, PNP, Agricultural Technician, BaranggayCaptains, SB Chairs for Agriculture, BFAR CentralOffice, BFAR Region 8, and BFAR N. Samar), CERD andSPPI.
  46. 46. VALUE CHAINS Seaweed value chain, Northern SamarMajor strengths:- Composition was deliberately planned- Very strong network governance
  47. 47. VALUE CHAINS Seaweed value chain, Northern SamarMajor weakness:- Still has to gear up to full production capacity of 20-40 tons per month dried seaweeds after the longer, because staggered, start-up phase of farmers’ seaweeds production.
  48. 48. VALUE CHAINS Seaweed value chain, Northern SamarOpportunities/Recommendations:- Institutionalization of the SPPI Local Economy Development model in Capul Island and the 9 expansion municipalities.
  49. 49. ISSUES, ASSESSMENTS Programmatic LevelThe original ICCO conceptualisation of thekey factors in the value chain approachunderestimated the importance of anumber of factors and issues:
  50. 50. ISSUES AND ASSESSMENTS Programmatic LevelThe assumption that all network memberswould have a common interest developingthe same value chain was not consistentlysupported by the facts/findings.
  51. 51. ISSUES AND ASSESSMENTS Programmatic LevelFacilitating the mobilisation of a valuechain working group assumed that therewas only one value chain within the samesub-sector, which development wouldbenefit all members.
  52. 52. ISSUES AND ASSESSMENTS Programmatic LevelThe need for more specific market surveysemerged soon after the sub-sector value chainstudies and the formation of value chainplatforms.These surveys showed the differentiation inmarket segments and subsequently betweenvalue chains within the same sub-sector withVC actors focussing on different marketsegments and value chains.
  53. 53. ISSUES AND ASSESSMENTS Programmatic LevelThe factor of competition and lack ofconfidence between value chain actors had amore negative impact on the level ofcooperation within the VC working group thananticipated.
  54. 54. ISSUES AND ASSESSMENTS Programmatic LevelProgress regarding the creation of new financialservices to support the development of therespective value chains has been limited.Main financial service providers were OikoCredit (with ICCO guarantee) and FPSDC.Cooperative Banks and members of theMicrofinance Councils were not (yet) keen toget involved.
  55. 55. ISSUES AND ASSESSMENTS Programmatic LevelThere are also indications that the position andincomes of small farmer producers areimproving as a result thereof.However it might still be too early in theprogramme to conclude to what extent theposition of small farmers in their respectivevalue chains and their income has tangiblyimproved.
  56. 56. ISSUES AND ASSESSMENTS Enterprise LevelAll networks displayed ample bonding socialcapital; but this has not yet translated tobridging social capital that could be usedbeyond the network.Especially in the case of a common market, likeMCPI for the Samar seaweeds group and MetroManila for the organic rice MM group, a jointinterest and need for strategic cooperationbecame evident, but for the S. Mindanao ORgroup and the Negros Muscovado strategiccooperation was not achieved.
  57. 57. ISSUES AND ASSESSMENTS Enterprise LevelThe facilitation and support activities of ICCOhave been relatively intensive and many of thevalue chain platforms and their members stillheavily rely on ICCO’s input; therefore, amechanism should be put in place to makethese platforms and their members lessdependent on ICCO’s facilitation role.
  58. 58. GENERAL ASSESSMENT Programmatic LevelThe VC programme has been successful inbringing together private sector, financialsector, government, NGO’s and PO’s invarying degrees per network.
  59. 59. GENERAL ASSESSMENT Enterprise LevelAs enterprises, the individual networkbusinesses are still at the start-up stage.This is expected, given the duration of only2 years to date, of the VC programme.No mortality among the networks,where 95% mortality for start-ups,the norm for the first 2 years of operations.
  60. 60. GENERAL ASSESSMENT Enterprise Level- Financial sector (FS) generally conservative; familiarity with the enterprise(s)/entrepreneur(s) drives product development and basic lending decision even of venture capital corporations;- Thus, lag to be expected even from development-oriented financial intermediaries.
  61. 61. GENERAL ASSESSMENT Enterprise LevelData on gender equality needs baseline; best practices, more so.
  62. 62. CONCEPTUAL ISSUES- Confusion between sector, sub- sector and value chain concepts needs resolution.- Markets define value chains. (functional view on a value chain; Value link, GTZ)
  63. 63. CONCEPTUAL ISSUESOriginal Porter framework• Relevant level for constructing a value chain is a firm’s activities in a particular industry (the business unit).• An industry- , or sector-wide value chain is too broad and may obscure important sources of competitive advantage.• Differences among competitor value chains are a key source of competitive advantage.
  64. 64. CONCEPTUAL ISSUESFunctional view of a value chain “A sequence of related business activities (functions), from the provision of specific inputs for a particular product to primary production, transformation, marketing, and up to the final sale of the particular product to consumers .” (Value link, GTZ)
  65. 65. CONCEPTUAL ISSUESIndustry definition: “A group of firms whose products or services, from the customer’s point of view, offer substitute products or services.”
  66. 66. CONCEPTUAL ISSUESEconomic sectors• The economy can be divided into sectors following different criteria. Here, the term “sector” is defined according to broad product market categories. These include, for example, the “agrifood sector”, “forestry”, the “apparel sector” or the “tourism sector”.
  67. 67. CONCEPTUAL ISSUESEconomic sub-sectors• Sectors can be further broken down into sub- sectors by differentiating into specific product or service markets, e.g. “horticulture”, “non- timber forest products” or “ecotourism”.• A network of firms that supplies raw materials, transforms them, and distributes finished goods to a range of end/final markets. Example: Honey subsector: raw honey sold to local markets; processed honey sold to export market.
  68. 68. CONCEPTUAL ISSUESFunctional view of a value chain: “A sequence ofrelated business activities (functions), from theprovision of specific inputs for a particular productto primary production, transformation, marketing,and up to the final sale of the particular product toconsumers .” (Value link, GTZ)Alternative functional view of a value chain: Anetwork of firms that supplies raw materials orservices, transforms them, and distributes finishedgoods and services to particular consumer markets.
  69. 69. CONCEPTUAL ISSUESCoalitions/Networks• Coalitions are long-term alliances with other firms that fall short of outright merger, such as joint ventures, licenses, and supply agreements. (Porter)• In the context of a VCD Program, these coalitions are also referred to as networks.
  70. 70. CONCEPTUAL ISSUESMulti-functional members• Value chain networks are comprised by the various operators or value chain actors, that usually perform multiple value chain functions.• These operators, in turn, may be social enterprise organizations of small holders, farmers or producers either apart from, or as a result of, their involvement in the value chains.
  71. 71. CONCEPTUAL ISSUESNetwork Governance/Firm infrastructure:Network governance may be substituted for theconcept of firm infrastructure consisting of a numberof activities including general management, planning,finance, accountinng, legal, government affairs andquality management.
  72. 72. NETWORK CONFIGURATIONS1. Deliberately planned network composition: Seaweeds Net, N. Samar2. Coalition of the willing: MM Cluster Organic Rice3. Residual organization: N. Mindanao Organic Rice4. Pre-existing network: Muscovado Sugar5. Ad hoc network: Pili Nut, Bicol6. Split network: S. Mindanao: Organic Rice
  73. 73. OVERALL ASSESSMENTICCO Value Chain Development Program: very notably successful, given the challenging network (coalition) structure of the value chains.
  74. 74. THANK YOU

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