ICCO, 04 October 2007
Chain empowerment of farmer organizations Lucian Peppelenbos,  Senior Advisor Sustainable Economic Development
<ul><li>Context: market conditions </li></ul><ul><li>Framework chain empowerment (case Mali) </li></ul><ul><li>Facilitatin...
The context <ul><li>The market has become globalized, integrated, and consumer-driven; state support has been dismantled <...
Impacts on small farmers <ul><li>Market performance varies across regions; as yet no systematized data </li></ul>Multiples...
Then, what is pro-poor growth? <ul><li>In a continent with strong agricultural growth, small family farming is in crisis, ...
<ul><li>Chain Empowerment: </li></ul><ul><li>Supporting African farmers to develop markets </li></ul>
Some problems in the field <ul><li>Low return to investments in forward integration </li></ul><ul><li>Business partnership...
Underlying problem <ul><li>Unclear chain strategies: </li></ul><ul><li>Where are we, where do we want to go, and why? </li...
1 - Chain activities Input procurement Farming Grading and bulking Trading and distribution Processing / warehousing Retai...
2 - Chain management Information (product & processes) Quality assurance Learning & innovation Chain cooperation Market in...
CHAIN  PARTNER CHAIN  CO-OWNER CHAIN  ACTOR CHAIN ACTIVITY INTEGRATOR Chain management Chain activities VCD framework
<ul><li>1500 women, 40 groups, 1 union </li></ul><ul><li>Quality improvement, joint processing, joint retailing    the wo...
Vertical integration Chain management skills 1 2 Shea & women in Mali
<ul><li>1500 women, 40 groups, 1 union </li></ul><ul><li>Quality improvement, joint processing, joint retailing    the wo...
Vertical integration Chain management skills 1 2 3 Shea & women in Mali
<ul><li>1500 women, 40 groups, 1 union </li></ul><ul><li>Quality improvement, joint processing, joint retailing    the wo...
Shea & women in Mali Vertical integration Chain management skills 1 2 4 3
Shea & women in Mali <ul><li>Lessons learnt: </li></ul><ul><li>Neglect of chain management, inconsistent project strategy,...
Chain empowerment strategies <ul><li>1. Upgrading as a chain actor:  The farmers become crop specialists with a clear mark...
Chain empowerment strategies <ul><li>Where are we, where do we want to go, and why? What is the best position for us? </li...
Facilitating chain empowerment Chain mapping and assessment Building engagement Value chain  upgrading Linking  and learni...
<ul><li>1. Chain mapping and assessment </li></ul><ul><li>Assess markets, risks, opportunities, resources </li></ul><ul><l...
<ul><li>4. Monitoring and evaluation </li></ul><ul><li>Lack of tools and methods for M&E </li></ul><ul><li>5. Linking and ...
Key challenges <ul><li>Long-term support </li></ul><ul><li>Entrepreneurial professionalism in POs </li></ul><ul><li>Farmer...
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Chain empowerment of farmer organizations

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Chain empowerment of farmer organizations

  1. 1. ICCO, 04 October 2007
  2. 2. Chain empowerment of farmer organizations Lucian Peppelenbos, Senior Advisor Sustainable Economic Development
  3. 3. <ul><li>Context: market conditions </li></ul><ul><li>Framework chain empowerment (case Mali) </li></ul><ul><li>Facilitating chain empowerment </li></ul><ul><li>Key challenges </li></ul>Overview presentation
  4. 4. The context <ul><li>The market has become globalized, integrated, and consumer-driven; state support has been dismantled </li></ul><ul><li>Four types of markets </li></ul><ul><ul><ul><li>Staple foods </li></ul></ul></ul><ul><ul><ul><li>Bulk commodity export </li></ul></ul></ul><ul><ul><ul><li>Urban markets </li></ul></ul></ul><ul><ul><ul><li>High-value export </li></ul></ul></ul><ul><li>All markets are (in-) directly affected by modernization and concentration of retail and processing </li></ul><ul><ul><ul><li>Centralized procurement (often regional) </li></ul></ul></ul><ul><ul><ul><li>Specialized wholesalers </li></ul></ul></ul><ul><ul><ul><li>Preferred suppliers </li></ul></ul></ul><ul><ul><ul><li>Private grades and standards </li></ul></ul></ul>
  5. 5. Impacts on small farmers <ul><li>Market performance varies across regions; as yet no systematized data </li></ul>Multiples of the national poverty line Average income of rural workers Average income of small farmers
  6. 6. Then, what is pro-poor growth? <ul><li>In a continent with strong agricultural growth, small family farming is in crisis, due to </li></ul><ul><ul><ul><li>Exclusion from dynamic markets (3 & 4) </li></ul></ul></ul><ul><ul><ul><li>Price squeeze on traditional markets (1 & 2) </li></ul></ul></ul><ul><li>“ Making markets work for the poor” (rather than making the poor work for the market): </li></ul><ul><ul><ul><li>More than technical efficiency and ‘market access’ </li></ul></ul></ul><ul><ul><ul><li>Farmers upgrade their position in the value chain to appropriate added value, and to protect themselves from declining terms of trade </li></ul></ul></ul>
  7. 7. <ul><li>Chain Empowerment: </li></ul><ul><li>Supporting African farmers to develop markets </li></ul>
  8. 8. Some problems in the field <ul><li>Low return to investments in forward integration </li></ul><ul><li>Business partnerships fall flat halfway </li></ul><ul><li>Limited skills of farmer organizations (e.g. discipline) </li></ul><ul><li>Pressure to deliver results on short term; projects fall flat when funding ends </li></ul>
  9. 9. Underlying problem <ul><li>Unclear chain strategies: </li></ul><ul><li>Where are we, where do we want to go, and why? </li></ul><ul><li>What skills / assets do we need to get there? </li></ul><ul><li>How much time is it going to take? </li></ul><ul><li> Framework for strategic chain empowerment </li></ul>
  10. 10. 1 - Chain activities Input procurement Farming Grading and bulking Trading and distribution Processing / warehousing Retailing Etc.
  11. 11. 2 - Chain management Information (product & processes) Quality assurance Learning & innovation Chain cooperation Market intelligence Finance Logistics
  12. 12. CHAIN PARTNER CHAIN CO-OWNER CHAIN ACTOR CHAIN ACTIVITY INTEGRATOR Chain management Chain activities VCD framework
  13. 13. <ul><li>1500 women, 40 groups, 1 union </li></ul><ul><li>Quality improvement, joint processing, joint retailing  the women were to become ‘chain co-owner’ </li></ul>Shea & women in Mali
  14. 14. Vertical integration Chain management skills 1 2 Shea & women in Mali
  15. 15. <ul><li>1500 women, 40 groups, 1 union </li></ul><ul><li>Quality improvement, joint processing, joint retailing  the women were to become ‘chain co-owner’ </li></ul><ul><li>Price went up from 300 to 700 CFA/kg; improved status; less firewood </li></ul><ul><li>However, when funding ended, women had no mngt skills, they were mere ‘activity integrators’ </li></ul>Shea & women in Mali
  16. 16. Vertical integration Chain management skills 1 2 3 Shea & women in Mali
  17. 17. <ul><li>1500 women, 40 groups, 1 union </li></ul><ul><li>Quality improvement, joint processing, joint retailing  the women were to become ‘chain co-owner’ </li></ul><ul><li>Price went up from 300 to 700 CFA/kg; improved status; less firewood </li></ul><ul><li>However, when funding ended, women had no mngt skills, they were mere ‘activity integrators’ </li></ul><ul><li>Restart: own staff, business plan, chain dialogue, export of kernels, development towards ‘chain co-owner’ </li></ul>Shea & women in Mali
  18. 18. Shea & women in Mali Vertical integration Chain management skills 1 2 4 3
  19. 19. Shea & women in Mali <ul><li>Lessons learnt: </li></ul><ul><li>Neglect of chain management, inconsistent project strategy, unsustainable results </li></ul><ul><li>NGOs important in initial stages – e.g. organizing groups and technical training </li></ul><ul><li>Support, as soon as possible, the PO directly so to pursue their own business </li></ul>
  20. 20. Chain empowerment strategies <ul><li>1. Upgrading as a chain actor: The farmers become crop specialists with a clear market orientation </li></ul><ul><li>2. Adding value through vertical integration: The farmers move into joint processing and marketing in order to add value </li></ul><ul><li>3. Developing chain partnerships: The farmers build long-term alliances with buyers that are centred on shared interests and mutual growth. </li></ul><ul><li>4. Developing ownership over the chain: The farmers try to build direct linkages with consumer markets. </li></ul>CHAIN PARTNER CHAIN CO-OWNER ACTIVITY INTEGRATOR Chain governance Chain activities CHAIN ACTOR 1 2 4 3
  21. 21. Chain empowerment strategies <ul><li>Where are we, where do we want to go, and why? What is the best position for us? </li></ul><ul><li>What skills / assets do we need to develop from one position to another? </li></ul><ul><li>How to monitor progress? </li></ul><ul><li>How much time is it going to take? </li></ul>
  22. 22. Facilitating chain empowerment Chain mapping and assessment Building engagement Value chain upgrading Linking and learning Monitoring and evaluation
  23. 23. <ul><li>1. Chain mapping and assessment </li></ul><ul><li>Assess markets, risks, opportunities, resources </li></ul><ul><li>Determine entry points (production & market) </li></ul><ul><li>Link up with supporting environment </li></ul><ul><li>2. Chain engagement </li></ul><ul><li>Develop chain vision </li></ul><ul><li>Screen and select partners (production & market) </li></ul><ul><li>Build relationships, agree on goals and measures </li></ul><ul><li>3. Chain upgrading </li></ul><ul><li>Participatory approach, ownership, savings </li></ul><ul><li>OD & ID </li></ul><ul><li>Entrepreneurial attitudes </li></ul><ul><li>Exit strategy </li></ul>Facilitating chain empowerment
  24. 24. <ul><li>4. Monitoring and evaluation </li></ul><ul><li>Lack of tools and methods for M&E </li></ul><ul><li>5. Linking and learning </li></ul><ul><li>Chain facilitator </li></ul><ul><li>Farmer business schools </li></ul><ul><li>Chain platforms </li></ul><ul><li>Learning alliance </li></ul>Facilitating chain empowerment
  25. 25. Key challenges <ul><li>Long-term support </li></ul><ul><li>Entrepreneurial professionalism in POs </li></ul><ul><li>Farmers leadership and clustering </li></ul><ul><li>Private sector as “institutional host” </li></ul><ul><li>Midstream chain actors as key to market inclusion </li></ul><ul><li>Value chain finance </li></ul><ul><li>Effective linking and learning among development agencies </li></ul>
  26. 26. Thank you for your attention

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