Development NGOs as innovation intermediaries: preliminary learnings fromstudy of intermediation processes in smallholder ...
that determine their effectiveness. The paper concludes with a wider discussion of theimplications of this experience and ...
stimulating demand, identifying services and funding opportunities, and coordinating ofnetworks among others.The concept o...
knowledge. So they could either be producers of knowledge, or users of knowledge, or theinterface between producers and us...
opening up of the Indian economy the private players, MNCs and Indian corporate entered thedairy sector. Further by becomi...
relatively small component of the larger process of technology production, supply and use – i.e.the entire innovation proc...
Leeuwis (2004) emphasizes that innovation requires a balance between new technical practicesand alternative ways of organi...
government service providers that existed in the form of NGOs, private companies dealing withspecific commodities and inpu...
out and explore the market. Producer organisers could eventually also contract service providerswho could provide them wit...
magazines whom they trust more than public research institutions. This creates competitionbetween various sources and also...
Husbandry, Govt. of Gujarat. This is the first time that a community based organisation hasapplied and been credited for r...
application in English. SDAU analysed the data collected in the field to confirm parameters suchas age at first calving, l...
If it were not for Sahjeevan, the process would have been delayed and the credit would not havegone to the community. Hist...
smallholder women producers was to create access to credit. Credit created opportunities for thepoor women to acquire buff...
governance mechanism to oversee deployment and use of these resources, and appointed a CEOaccountable to the working group...
fledgling producer company, and support the dairy operations with their own staff anddevelopment funds.The GRAM case stron...
The developmental NGOs in the cases seem adequately poised to overcome issues of neutralityand have the credibility with n...
technology promotion World Development, 18(11), 1481-1499.Dijkman, Jeroen (2009). Innovation capacity and the elusive live...
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Development NGOs as Innovation Intermediaries


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Development NGOs as Innovation Intermediaries Preliminary Learnings from Study of Intermediation Processes in Smallholder Dairy Innovation System

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Development NGOs as Innovation Intermediaries

  1. 1. Development NGOs as innovation intermediaries: preliminary learnings fromstudy of intermediation processes in smallholder dairy innovation systemsMona Dhamankar, India.1AbstractThe paper looks at the role of innovation intermediaries in strengthening the capacity of dairyinnovation systems that enable smallholder producers to maintain their participation in dairyvalue chains in a developing country context changing due to globalisation. Using examples ofNGO led livelihood initiatives in India, it outlines how developmental NGOs function asintermediaries in practice, and discusses the factors that determine their effectiveness. The caseshighlight the significance of intermediation in addressing institutional dimensions that form thecore of innovation management processes. They suggest that developmental NGOs areparticularly effective as intermediaries because they are contextually embedded and enjoy thefreedom to experiment with options and to forge new and/or unconventional linkages. The paperconcludes with a wider discussion of the implications of this experience and the need for someform of continued support for intermediation processes and intermediary organisations indeveloping countries.1. IntroductionThis paper explores the existing and emerging role of innovation intermediaries in addressing theinstitutional dimensions of innovation management processes. This refers to the need for aneutral organisation to manage relationships and outcomes of the collaborative arrangementsand/or partnerships that take place among a diverse set of organisational actors. These actorscould be from the public or private sector, and might be oriented towards research, market and/ordevelopment. Citing examples of NGO led dairy initiatives, the paper outlines how NGOfunction as intermediaries in practice, negotiate working relationships, and discusses the factors PhD researcher, Department of Communication and Innovation Studies, Wageningen University, Netherlands 1 of
  2. 2. that determine their effectiveness. The paper concludes with a wider discussion of theimplications of this experience and particularly its implications for policy in developingcountries.2. Innovation Intermediation: some definitional aspectsIn recent times, the ‘innovation systems approach’ has provided the analytical lens to understandthe shift from the conventional, technology transfer in agriculture and technology development(that was essentially linear, from research to extension to farmers) to a more complex anddynamic process based approach concerned with how farmers and other stakeholders cangenerate and use new knowledge and resources for innovative interventions (World Bank, 2006).Smits (2002) refers to innovation as a successful combination of hardware, orgware and softwareviewed from a societal and economic point of view2. Leeuwis (2004) emphasises that innovationis not an isolated process, but results from coordinated effort and action in a network ofinterdependent actors. While several studies have provided insights into the important role ofnetworks and building linkages among diverse actors for innovation to take place, they also pointout to how weak linkages and interactions between diverse actors at different levels continue toconstrain the innovation capacity of the system and consequently affect development of thesector. In the understanding of innovation dynamics, esp. in agriculture, it is critical to knowwhich actors are involved, what the nature and quality of their interactions is, and what role theyplay in making the innovation take place. In order to stimulate innovation, a good understandingof the various functions within the innovation process is important (Hekkert, 2007).Likewise Leeuwis (2004) asserts that innovation hinges on the integration of ideas, knowledgeand creativity of the different actors, which implies that there is a need for deliberate efforts tofacilitate interaction among various actors whereby negotiation and learning for innovationmight take place. Such facilitation needs to be done with due understanding of theunpredictability of innovation processes like knowledge exchange, transfer of technologies, Hardware relates to the material equipment (mostly) involved and software concerns the knowledge in terms of manuals,software, digital content, tacit knowledge involved in the innovation. Orgware refers to the organisational and institutionalconditions that influence the development of an invention into an innovation and the actual functioning of an innovation (Smits865:2002). 2 of
  3. 3. stimulating demand, identifying services and funding opportunities, and coordinating ofnetworks among others.The concept of innovation intermediation originates from the need to understand networks andthe nature of collaboration and competition that takes place between actors in the networkswhere typically one actor takes on the facilitator role. Winch and Courtney (2007) define aninnovation broker as ‘an organisation acting as a member of a network of actors that is focusedneither on the generation nor the implementation of innovations, but on enabling otherorganizations to innovate. Howells (2006) defines an intermediary as ‘an organization or bodythat acts as an agent or broker in any aspect of the innovation process between two or moreparties. Such intermediary activities include: helping to provide information about potentialcollaborators; brokering a transaction between two or more parties; acting as a mediator, or go-between; bodies or organisations that are already collaborating; and helping find advice, fundingand support for innovation outcomes of such collaborations’. He argues that, This definition isan all encompassing umbrella concept that denotes a variety of actors who have been describedas third parties, intermediary firms, bridgers , brokers, information intermediaries and boundaryspanning organization and even knowledge intensive business services (KIBS) (Howell, 2006).These actors could be either public or private.So basically innovation intermediaries act as mediators. Their role is mainly scanning andprocessing information, selecting appropriate partners for potential collaboration (scoping andfiltering), knowledge brokering, testing and validating technologies and/or institutionalarrangements (piloting). Many times these functions could go unrecognised and undervalued, butthere is lot of foresight required, diagnostic work required and independent advice and mentoringon protecting intellectual property in order to carry out these functions. Some innovationintermediation functions appear to be targeted at individual stakeholders while some have moresystemic focus. Systemic functions would include management of the network, stimulatingdemand articulation, providing infrastructure for strategic decision-making, something thatwould create new opportunities and dynamism to keep the network going. So in a wayinnovation intermediation is hard to define, and there might not be anything like a “pureinnovation intermediary”. There might be an overlap between intermediation and KIBS.Intermediaries are basically organisations that function in the midst of producers and users of 3 of
  4. 4. knowledge. So they could either be producers of knowledge, or users of knowledge, or theinterface between producers and users of knowledge. This is not really linear, but if one looks atthe linear model of technology transfer, innovation intermediaries would be seen as facilitators oftechnology transfer. From a systems perspective on innovation, this is not just transmittingknowledge but is also re-engineering knowledge, and fostering several knowledge flows fromone entity to another, which is also part of knowledge services. Thus the roles are complex andmultiple.While trying to understand the process of intermediation, it is important to see howintermediaries navigate their position in facilitating interactions and linkages between the variousactors within the network. Their roles may range from gathering, controlling and disseminatingknowledge to facilitating dialogue, providing guidance, identifying resources and creatingopportunities for using the resources. (Howells 2006, Klerkx and Leeuwis 2008, Klerkx et al2009, Leeuwis 2004). According to Winch and Courtney (2007), innovation intermediaries orbrokers could be organizations that both act in a liaison role between the sources of new ideasand the users of those ideas in innovation networks, and are also set up specifically to performthis broking role as their core function. The latter are likely to be systemic intermediaries whoare dedicated to facilitating the formation and maintenance of innovation networks asindependent third-party organizations. On the other hand, there are some organizations, likedevelopment NGOs, research organisations that might be established to perform different rolesbut assume intermediary functions only gradually. They might be unaware that they are acting asintermediaries supporting innovation. Nonetheless it is expected that the types and roles ofintermediaries vary with contexts. Such intermediaries can be individuals or organizations whosefunctions depend upon their own access to resources and connections within a particular context.3. Innovation challenges facing the Indian dairy sectorThe performance of the dairy sub-sector in India during the past three decades has been prettyimpressive. It has rapidly evolved and has attracted several new actors, esp. in the private sectorwho have entered the market post liberalization. The first change took place in the early 70’swith the launch of the Operation flood program, with smallholders voluntarily coming togetherto form cooperatives. This was beneficial when the domestic markets were regulated. With the 4 of
  5. 5. opening up of the Indian economy the private players, MNCs and Indian corporate entered thedairy sector. Further by becoming a member of the WTO in 1995, and amending the MMPO in2002, India made a commitment to remove the restrictions on trade in the dairy sub sector (PaulSharma, 2007). Smallholder dairy farming which supports the livelihoods of majority of ruralhouseholds, is poorly prepared for these changes that bring opportunities but with the risk ofbeing marginalized out of domestic markets. For smallholders to remain viable, they requirehigher integration into present day knowledge intensive markets, and this requires dynamicinnovation capacities in order to respond to ongoing changes. There is need for smallholderproducers to innovate, therefore they require efficient, creative and credible intermediaries whocan provide them support to help them engage in competitive and very demanding markets.Productivity enhancement is seen as one option to increase marketable surpluses of smallholdersif they have to improve their competitiveness in present day value chain. Milk productiondepends on various factors such as composition of livestock population, productivity of animals,availability of quality feed and fodder, healthcare services, breeding facilities, processing andmarketing facilities. Production has almost tripled during the last 20 years with a decline in thenumber of low-yielding nondescript milch cattle while the population of crossbred milch cattleexhibited a sharp increase, indicating farmerspreference for crossbreds for milk - this reconcilesthe increase in milk production with lesser number of cows (Sharma and Singh, 2007).Management practices, owing to diminishing common property resources and pastures, thegrazing of animals is on the decline and stall-feeding is on the rise. However there is enough andmore evidence indicating that transition from subsistence to a small-scale enterprise leveldepends not only on increased marketable surpluses and access to better markets, but it alsoexposes such producers and enterprises to rising competition in the global market-place, marketshocks, and changing consumer demands, standards, and norms in distant markets(Dijkman,2009). Changes in markets necessitate presence of a responsive capacity in producersand their enterprises to cope with and thrive within changing contexts and conditions.Moreover as productivity improvement is largely linked to technological interventions, thelimitations of a linear transfer of technology (ToT) model– research to extension to farmer – isnow becoming apparent. There is a growing realisation that ttechnology development is only a 5 of
  6. 6. relatively small component of the larger process of technology production, supply and use – i.e.the entire innovation process where emphasis is placed on putting knowledge and technologyinto use. Technical change often requires complementary changes in, for example, theorganisation of production or the marketing of products. As a result interaction between a diverseset of players is usually required for innovation to take place. While innovation may involveradical technical changes such as introduction of a new breed or processing equipment, it isusually a series of incremental changes –tinkering, adaptation and creative imitation -- intechnology, organisation or strategy. Lastly, technology production and supply processes need toadapt to the agricultural, market and livelihood conditions prevailing in specific contexts atspecific points. (Hall, 2007). Hall (2007) emphasises that It is the institutional context oftechnology development and promotion initiatives – i.e. the combinations of differentorganisations, and the roles, routines and rule sets associated with them – that determine theextent to which these wider processes operate effectively and thus whether innovation is enabledor not. And if the needs of smallholder dairy farmers are to be addressed by innovation, specificinstitutional and governance innovations are usually required. There is need for arrangementsthat resemble networks of researchers, farmers, entrepreneurs, NGOs, funding agencies and otherorganisations involved in the creation, diffusion, adaptation and use of knowledge, as well as inproviding other resources for innovation (Biggs, 1990; Engel, 1995; Hall et al. 2001).All this points out to the need for developing innovation capacity, not of the individual actors butof the entire system that is responsible for making this happen. In a systems sense, this capacityis viewed as the behavior of the loose network of all innovation related-actors, and theinstitutional and policy settings that shape their behavior and evolution (Hall 2010). Itfurther leads to several unanswered questions such as – how can small producers organize theirdemands for knowledge, technology and organizational change. What mechanism will facilitatetheir search for information? Who will decide who is to collaborate? Who will coordinate thenetworks of interaction needed for innovation? Who will monitor the benefits? Which type oforganization (or individual) is most suited (and accepted by all) to facilitate linkages? Howshould they play this role? 6 of
  7. 7. Leeuwis (2004) emphasizes that innovation requires a balance between new technical practicesand alternative ways of organizing – markets, labour, benefit sharing. Thus innovation is asuccessful combination of ‘hardware’ (i.e. new technologies, devices, practices), ‘software’ (i.e.knowledge and modes of thinking), and ‘orgware’ (new/ different social institutions and ways oforganizing) (Klerkx et. al. 2009). In the context of developing countries, each with differentcultures of collaboration, there is need to enhance networking within innovation systems.From an innovation systems perspective, several actors are seen as important to dairyinnovation. These include producers, entrepreneurs, the consultants, researchers, retailers,consumers and policy makers. These actors come together in networks or coalitions, in differentconfigurations, and engage in processes of joint learning and negotiation to shape theinnovations. As indicated in innovation literature, being involved in such networks is the key toinnovation. In such configurations, knowledge generation is not limited to researchorganisations, but each actor generates knowledge and contributes to innovation. Practice-related knowledge can come from entrepreneurs, consultants, farmer producers, and market-related information can come from suppliers, retailers and even consumers. Several additionalfactors such as funding, legal aspects, policy, infrastructure and market development, play a keyrole in these kinds of configurations that shape the innovation process. And here as traditionalintermediaries, NGOs play an important role. This role might have emerged either purposefullyor serendipitously but has several beneficial effects on innovation (Klerkx 2009). Thereforeit is interesting to examine how they perform these roles- specially dealing with issues related toneutrality and credibility (i.e. being perceived as representing specific interest groups or being incompetition with other actors). There are also issues related to the sustenance of the intermediaryfunctions over time, raising questions like who will support/ fund them, and/or how to directlyattribute benefits to their contribution to the innovation.In the dairy sector, over the years, there have been changes in the knowledge infrastructure.Earlier it was the exclusive domain of the public agricultural research system – the universitiesand veterinary colleges, the Indian Council of Agricultural Research (ICAR) institutes coveringdairy and veterinary research, and government extension departments. Knowledge wasconsidered a public good and was provided by the state through its agriculture, animalhusbandry, dairy development and department of cooperatives. These were supported by non- 7 of
  8. 8. government service providers that existed in the form of NGOs, private companies dealing withspecific commodities and inputs. Their role depended a lot on the local context. However in therecent past, in the Indian dairy industry, the entry of the organised private sector in the dairyindustry and strategic alliances or partnerships that are bringing changes in milk production, hasled to the emergence of knowledge as a private good. This kind of knowledge then can then havecharacteristics like excludability. If one has to pay for the knowledge then the poor, smallerproducers might not be able to afford access to such knowledge that is private and commercial,and thus are likely to be excluded. This in a way is the second level of knowledge infrastructure.The type of knowledge required is also changing. Earlier it was more related to the factors ofmilk production –information required to enhance productivity such as feed, fodder, breedimprovement, healthcare etc. But now with the growing demand for a whole range ofdifferentiated products from milk, there is need for a new set of information- technical as well ascommercial (processing, quality control, handling, packaging, storage, transportation etc.) andalso needs a set of specialised services to cater to these new products and differentiatedinformation requirements . This has implications for the knowledge infrastructure.These changes in the interface between the producers and the users of knowledge haveimplications for the way actors interact in a network situation. For instance, on the demand side,the changing structure of the sector makes new demands on the producers’ entrepreneurial skills.They have to cope with restructured markets, they should be able to seek out more opportunitiesand act in a more strategic manner. There is shift expected from a production oriented system toa market oriented system, build more generic business skills. So besides technical information onhow to produce more milk, they also need to plan their production – how many animals shouldthey rear on the resources they have for the business to be viable, how to plan their breedingcycles in order to maintain continuity in milk production, what kind of animals should they keep,how to reduce the lean-flush ratios, shorten inter-calving period – all these are finer aspects ofmaking business related production plans. Farmers are expected to become entrepreneurs alongwith being milk producers. They need to know where the information will be available, that willsupport their business strategies, and supports the innovation they need. There is a need for thesmallholders to shift from being recipients/ poor beneficiaries of development programs wherethey take whatever comes to them, free to being more proactive and organise themselves and go 8 of
  9. 9. out and explore the market. Producer organisers could eventually also contract service providerswho could provide them with the latest research and market information. In the past there havebeen market failures due to information asymmetries, therefore the competency of smallholderswas questioned. They faced constraints with regard to setting up innovation projects. Theirsituation is akin to SMEs in the industrial sector where there is lack of awareness aboutorganisational deficiencies or strategic deficiencies. So when smallholders come together theymight inadequately poised to decide which legal format is more suitable for them to accessmarkets, to enhance their business, to maximise profits and so on. They have difficulties inarticulating their needs. They probably are strongly entrenched in existing traditional networksand therefore it is very difficult for them to move from one network to another. This sometimeshinders development of new ideas, new knowledge and stops new insights from coming in. As aconsequence, smallholders are ignorant about and/or do not have access to appropriate sources ofknowledge and information. This is compounded by other practical constraints like lack of time,resources and funds for innovation. Thus there is range of constraints which affect innovation onthe demand side.On the supply side, the traditional information providers also have several constraints andchallenges. With increased product differentiation and producer specialisation there would befarmers who produce certain quality milk only for cheese production or produce cow milk with acertain fat percentage that can be only used to make cow ghee which has a great demand. Thiscalls for customised services in order to respond to such a heterogeneous demand for knowledgeand information. This in a way is a shift from traditionally provided technical information togeneric business support services for enhanced market access. It is also seen that the people whoprovide traditional extension services are not equipped to provide this support esp. on non-dairyaspects. So there are either subject matter specialists who provide technical information or non-dairy business experts who often are unable to relate to smallholder farmers. It is mostly left tothe farmers to integrate information from both sources. The traditional service providers likeresearch and extension departments, universities therefore need to be more “client-oriented” andto work in a more demand-driven way rather than in a supply-driven service delivery mode.However, they also lack the motivation and the incentives which come in the way of working ina demand driven way. This therefore reduces their appeal with smallholders who start lookingtowards other sources of information who might be NGOs, private processors, suppliers, 9 of
  10. 10. magazines whom they trust more than public research institutions. This creates competitionbetween various sources and also the need for strategic alliances.4. Case studiesThe case studies presented below explore the intermediary domain, specifically looking at howdevelopment NGOs and producer organisations, set up for different functions gradually take onthe role of facilitating multi-actor interactions, and how they position themselves in networkssupporting innovation processes and how they contribute to these processes. The case studiesalso aim to understand innovation processes leading to enhanced innovation capacity that iscentral to maintaining smallholder participation in dairy value chains. The innovation capacityrefers to the capacity of the innovation system to adapt, and involves reworking ideas, resourcesand relations and links (Hall It is not limited to the individual capacity of smallholderfarmers or their organisations alone, but also farm-level processes and it includes policy andinstitutional environments.4.1 Case study 1: A case of arranging intellectual property protectionThis case illustrates the efforts of a development NGO – Sahjeevan - to forge partnershipsbetween a national research organisation, an agricultural university, a government linedepartment and a community based traditional buffalo breeders association to initiate a processto register a local buffalo breed maintained by the community, thereby protecting theirintellectual property rights. The interactions that took place over a two-year period, among thisdiverse group of actors, led to the first instance of a breed recognition application beingsubmitted and granted to traditional livestock-keepers in India.Banni is a non-descript buffalo belonging to the Kutch region in Gujarat in Western India. TheMaldharis, traditional livestock keepers of the region play a major role in breeding, evolutionand conservation of the Banni buffalo, and have been rearing them as their main source oflivelihood for years. In 2009, the Banni Breeder’s Association3 consisting of Maldharis engagedin selective breeding and natural mating, submitted an application for breed recognition jointlywith the Sardarkrushinagar Dantiwada Agricultural University and the department of Animal The Banni Pashu Uchherak Maldhari Sangathan, Reg.No. F/1932/ Kutch, dtd. 11/08/2009; Society Reg.No.Guj/1756/ Kutch, dtd. 11/08/2009 10 of
  11. 11. Husbandry, Govt. of Gujarat. This is the first time that a community based organisation hasapplied and been credited for registering a breed with the National Bureau of Animal GeneticResearch, Govt. of India. Prior to this scientists often confused Banni with Murrah buffaloeseven though the local experts maintained that it was different from Murrah. To resolve the issue,Sahjeevan organised an animal fair and invited scientists to the area to assess the animals and theMaldharis rearing practices for themselves. They were also accompanied by scientists of thelocal agricultural university. When the scientists were convinced that it was a different breed,they were willing to initiate the process of breed recognition. As the first step, it was decided tojointly undertake an in-situ breed conservation project, funded by the department of AH,Government of Gujarat.As far as field level processes were concerned there was no standard procedure for how acommunity could register a breed. Therefore Sahjeevan wrote to the National Bureau of AnimalGenetic Resources (NBAGR) asking for guidelines- NBAGR took time (6 months) to preparethe guidelines in consultation with various scientist groups. It was decided that SDAU would betake care of the technical aspects, whereas the Maldharis would be responsible for fieldprocesses4. Sahjeevan helped the community form a group of expert local breeders from amongthemselves to work closely with SDAU. While selecting elite animals, SDAU was of the viewthat high yielding animals - producing more than 10 litres – would be the general criteria,whereas the Maldharis expert group came out with 8-10 other parameters that characterised thebreed, such as texture of the coat, shape of the body, shape of the horn etc. knowing full well thatanimals who possessed all these characteristics would be high yielders, but may not be thehighest. SDAU appointed enumerators for milk recording and data collection, but as thecommunity was motivated and keen on getting their breed recognised, they proactively collecteddata on their own and provided it to the university.The application consisted of two parts –i) breed description, and ii) application for registration.,As the breed was traditionally prepared and maintained by the community, Sahjeevan insistedthat the breeders association would be the first applicant in the process, and the othercollaborating agencies would second the application. Sahjeevan assisted them in preparing the4 Sahjeevan had earlier involved them in documenting traditional knowledge about animal breeding and hadpresented a paper in a national ITK Conference in New Delhi. 11 of
  12. 12. application in English. SDAU analysed the data collected in the field to confirm parameters suchas age at first calving, lactation length, lactation yield etc. Information for the first part camefrom the findings of the in-situ project, and from other independent studies carried out by SDAUin collaboration with NBAGR.In the case of establishing common rights over the Banni grassland, Sahjeevan has beeninstrumental in creating a platform for representatives of the Forest department (Centralgovernment), Land revenue department (govt. of Gujarat), environmental activitists(Kalpavirksha, Paryavaran mitra), enviro-legal defence cell (govt.of India) and several NGOsworking on common land rights issues to interact with and understand the issues of thetraditional livestock keepers of Banni. This opportunity for dialog is a critical input if commonrights of the community are to be restored.In subsequent years, during the 4th Annual animal fair (November 2010) Banni’s BioculturalCommunity Protocol (BCP) was released. An initiative coordinated by Sahjeevan between theBreeders’ Association and Natural Justice, the BCP is essentially a declaration of rights for thelocal livestock-keeping community. Drawing upon national and international law as well ascustomary rights, the document is an assertion of the Maldharis’ right to protect their livelihoodsand the biodiversity of Banni. The Maldharis state plainly their request to be informed of andinvolved in any government decision regarding the region’s biodiversity and affecting itslivelihoods. Moreover, the Maldharis call for a cessation of industrial activities and furtherdevelopment in and around Banni.Lessons from SahjeevanSahjeevan brought together several actors relevant to the innovation process, e.g. consultingNBAGR for guidelines/ standard procedures for breed recognition and providing them to thebreeders association – the latter would never have known of nor contacted NBAGR. Sahjeevanmotivated the traditional breeders to pursue the task of breed recognition. It also facilitatedconvergence of agenda among the SDAU, AH department, NBAGR and the breeder’sassociation and steered their actions towards a common goal. 12 of
  13. 13. If it were not for Sahjeevan, the process would have been delayed and the credit would not havegone to the community. Historically none of the livestock breeds registered to date have beenreared at government research organisation farms, and yet have been registered by universitiesand government research stations. This unprecedented breeder association led Banni buffaloregistration thus was an important achievement for the community. As a consequence, the pricesof the animal have doubled and there is an increased demand for Banni buffalo semen for cross-breeding across the country, which has proven beneficial to the community.The case illustrates the emergence of new partnerships and the role of a development NGO-Sahjeevan- in initiating institutional innovation and inclusiveness in a public sector domain thathas been clearly influenced by historical patterns and mutual apprehension. It also led to puttingin place, new guidelines and institutional policies to support community led breed recognitionprocesses. Sahjeevan was able to facilitate productive interactions between traditional breedersand scientists, and thereby create opportunities for mutual learning. The scientists worked closelywith the traditional breeders to develop protocols and data collection to determine breedcharacteristics.4.2 Case study 2: Facilitating organisational innovation and institutional innovation inorder to respond favourably to market factors (GRAM)It is widely acknowledged that access to adequate and timely financial services for all actors in valuechains is a key element for success. The key features of this case are the institutional arrangementsthat evolved over time for mobilising finances to upscale business in order to sustain ruralwomen producers in a dairy value chain. The dairy that started as an income generationenterprise of a micro-credit federation, eventually became the first all women milk producercompany in the country.Most established dairies in Andhra Pradesh, India are cooperative dairies that have been able tosustain because most of their capital investment for land and machinery came in the form ofinterest free loans secured by the government under the Operation Flood program. However aprivate dairy producer company like the Intideepam Mahila Dairy (IMD) in the Nizamabaddistrict of Andhra Pradesh, promoted by an all-women micro-credit federation, had to dependupon commercial financial organisations to raise capital. The first step towards inclusion of 13 of
  14. 14. smallholder women producers was to create access to credit. Credit created opportunities for thepoor women to acquire buffaloes. However they soon realised that access to credit does notnecessarily create livelihoods unless linkages for supporting infrastructure and services were alsocreated. This is where GRAM5, the NGO instrumental for promoting micro-finance andlivelihood programs in the area, stepped in and worked out a systematic strategy for mobilisingresources to arrange for that.In 2005 the women’s microfinance federation6 started the dairy as an income generationenterprise with an initial investment of Rs.35 lakhs7 of their own. This money was used to set upthe first Bulk Milk Cooling Unit (BMCU) in the area. GRAM contributed personnel to workwith the dairy for 10 months through their own development funds. When the BMCU becameviable it generated interest and confidence in the women producers as well as in the market,about the dairy and it’s potential. The following year (end of 2006) they negotiated an interestfree in-kind loan for another BMCU from Vishakha Dairy, a large cooperative dairy in theAndhra Pradesh. This was with the understanding that the milk collected would be supplied toVishakha Dairy. Based on the experience in 2 clusters, the dairy gained confidence to expandtheir operations. With GRAM’s assistance they prepared a business plan with an outlay of Rs.8.35 crores8 for 20 more BMCUs in two districts of Nizamabad and Adilabad to cover moreproducers. In 2007, the federation approached Oikocredit9 commercial credit, and the Rabobankfoundation and Agriterra for capacity building funds. GRAM10 received and managed thedevelopment funds. Around the same time GRAM also obtained funding from the FordFoundation for organizing milk producers and establishing transparent milk procurement andmarketing system – this core support to GRAM enabled the dairy to mobilise other resources.Simultaneously, jointly with GRAM, the federation constituted a Dairy Working Group as a GRAM Abhyudaya Mandali (GRAM) a not-for-profit organization established in1980, has been working towardsempowerment of the disenfranchised men and women including the physically challenged, in the drought prone Nizamabad andAdilabad districts of A.P. In the past 15 years, GRAM has successfully promoted and nurtured thrift based self-help groups(SHGs) that have graduated to self-reliant CBOs in the form of mandal level federations duly registered as Mutually Aided Thriftand Credit Cooperative Societies (MACS)6 Indur MACS Federation, 1 lakh rupees = 100,000 rupees 1 crore rupees = 100 lakh rupees9 A private funding organisation providing credit/ working capital to the microfinance sector as well as to cooperatives, fair tradeorganizations and small-to-medium enterprises (SMEs) in the developing world, with a special emphasis on rural areas andwomen.10 As the dairy producers organisation was not formally incorporated, GRAM used their FCRA (Foreign Contribution RegulationAct) registration in order to receive foreign grants on behalf of the dairy. 14 of
  15. 15. governance mechanism to oversee deployment and use of these resources, and appointed a CEOaccountable to the working group. The all-women producer company was formally registered in2009. In 2010, GRAM assisted the producer company to prepare another business plan andproposal to raise funds to expand dairy activities. Of the total requirement of Rs. 4.3 crores, thecompany asked NABARD for deficit finance of Rs. 1.3 crores as loan, with the remaining to becontributed from the dairy profits and grants to GRAM.From a viability point of view, the expansion had implications for increasing the scale ofproduction. GRAM decided to apply the ‘self-help’ approach that has been successful in thriftand credit programs, could be used for organising smallholders as commodity-based self-helpgroups, to help them graduate from subsistence level to small enterprises in terms of scale andcapital. Farmers in the area produce multiple commodities such as half acre of cotton, one acre ofpulses and oilseeds, therefore instead of having single commodity cooperatives, GRAM cameout with an organisational innovation to create a multi-commodity company – the Telanganaagri-producer company - to help producers link to markets in as many ways as possible. Forinstance GRAM got ITC paper mills to supply planting material for tree fodder crops as dualpurpose crops- the fodder is needed in a dry area like Adilabad district, and negotiated buy-backarrangements for the wood with ITC for the paper mills. The agri-producer company thusfunctions as a platform (mother company) with the much needed commercial orientation formore and diverse actors to come together for serious engagement with small producers.Lessons from the GRAM caseThis is a case of the role of innovation intermediaries in linking rural entrepreneurs to financialservices. One of the striking features of the case is the consistent handholding support providedby the NGO-GRAM to a producers company to forge linkages and partnerships primarily forfinancial and technical resource mobilisation. With paucity of government grants and subsidies,they resorted to raising funds from commercial financial organisations, the latter being verydifferent in culture and ways of working. Creating platforms for this seemingly dissimilar groupof organisations to come together for mutual benefit would not have been possible withoutintermediation of GRAM. As an intermediary, GRAM was mainly involved in scanning theenvironment for relevant financial organisations, convince them of the creditworthiness of the 15 of
  16. 16. fledgling producer company, and support the dairy operations with their own staff anddevelopment funds.The GRAM case strongly suggests that for innovation intermediaries to be effective, they have tobe contextually embedded, requiring considerable experimentation and institutional adaptation.Owing to their rapport and relationship with producers and their organisations, developmentNGOs operate with considerable freedom to explore options and develop new linkages – thismight not be possible with government agencies or even private companies who might haveregulatory restrictions to be so. In the case, GRAM has acted on behalf of the women’smicrofinance federation and later the producer company while forging partnerships and linkagesfor financial mobilisation. In this process the office bearers of both these community-basedorganisations (CBOs) gained substantial exposure to procedures and working systems ofcommercial finance as well as donor organisations. Subsequent transactions also indicate that theCBOs developed the confidence and the skills to transact with these actors independently.5. Discussion – Development NGOs as innovation intermediariesIn both the cases, to a large extent the intermediation by the NGOs has helped sustain dairyfarming activities of the small producers and their organisations. The NGOs have had aconsiderable stake in the innovation process by virtue of initiating the processes and beinginstrumental in deciding the outcome of the process; nonetheless they have been able toinfluence working practices at the producer level and also in some cases at the regional level –e.g. in GRAM’s case, negotiating with NABARD to split funding in the form of both grant to theNGO, and loan to the producer company. They have encouraged producers to build relationshipswith relevant actors from the market and civil society domain, and in the process have facilitatednew and useful configurations that are central to innovation. By at times acting on behalf of thenetwork partners, the NGOs have reduced the uncertainty and risk of failure that coulddiscourage actors from coming together in the early stages of the innovation process. They actedas a ‘translators’ between the different ‘worlds’, and performed mediating roles in case ofconflict about issues like the attribution of intellectual property rights in the Sahjeevan case,and/or division and utilisation of funds in the GRAM case. 16 of
  17. 17. The developmental NGOs in the cases seem adequately poised to overcome issues of neutralityand have the credibility with not only producer groups but also donor agencies. Their goals andobjectives are aligned with most of the actors in a multi-actor configuration however their workculture and orientation might differ. NGOs as development organisations are used to operatingindependently and as such as perceived neutral -this is one of the main reasons of theireffectiveness and fosters collaboration in multi-actor settings. What they need is continuedsupport for their activities either through public or donor funded projects in order to play theirrole effectively. The intermediary role blends with their traditional roles as developmentfacilitators, and therefore minimises role ambiguity. In some cases there presence might threatenprivate commercial agencies and keep a check on vested interests if any.5. ConclusionsThis study reiterates the fact that NGOs are not specialist intermediary organisations but take upthe intermediation function as need emerge, and are mostly in addition to their traditional role asdevelopment interventionists. While the latter might have a bearing on their neutrality andcredibility vis-à-vis other actors within the network, it works favourably in the context ofinclusion of smallholder producers in value chains. Moreover historically development NGOshave been perceived as neutral as compared to private companies or even governmentorganisations and programs with specific mandates. Nonetheless these are functions that requirededicated funding. Funds could be raised either from government/ public sector or from donorsor even from contributions from producer collectives. These observations have importantimplications for governments in developing countries and donors as there is a risk ofintermediation functions being withdrawn with ending of projects (Klerkx Thispoints to the need for concerted efforts towards building on the acquired intermediation skillsand social capital built for other development endeavours.ReferencesBiggs, S. D. (1990). A multiple source of innovation model of agricultural research and 17 of
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