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Value chains for Food & Nutrition Security


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Washington, 13 January, 2015
Matthias Jager

Published in: Science
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Value chains for Food & Nutrition Security

  1. 1. Value chains for Food & Nutrition Security Washington, 13 January, 2015 Matthias Jager Since 1967 / Science to cultivate change
  2. 2. Agriculture has for the most part, forgotten about nutrition Agriculture research, programs and policy have not focused on maximizing nutrition outputs from farming systems Increasing interest in • Food systems approach • Role of agricultural biodiversity
  3. 3. >7,000 120 30 Edible species used at local level Important at national scale 90% of the caloric needs Maize, wheat, rice: 60% Crop diversity today
  4. 4. Sustainable Food Systems - APR14 Source: SCN News no. 40 2013
  5. 5. Treating and preventing Under and Overnutrition – from pills to improved diet and livelihoods
  6. 6. Global burden of undernutrition caused 1 over 3 million child deaths per year and stunting prevalence in children under 5 affected at least 165 million children (Black et al., 2013). Overemphasis of agricultural research on energy dense staple crops in combination with the limited support for nutrient-dense non-staple grains and legumes, and the lack of attention to the relatively higher prices of micronutrient-dense food such as fruits, vegetables, and livestock products, has led to food supply policies that perpetuate a cycle of under-nutrition in developing countries (ISPC, 2014). Strong donor interest to test “interventions along the entire agricultural value chain to increase the availability of safe and nutritious foods linking smallholder farmers and their associations to markets through inclusive business models and reducing post/harvest losses”. Background
  7. 7. The nutrition-sensitive value chain • The products, processes, people and policies which deliver valuable nutrients to vulnerable consumers • Innovations and interventions at any point in the chain post farm gate which address nutritional improvement in target population groups where there is evidence that the focal foods are consumed by the (rural and urban) poor
  8. 8. Sustainable Food Systems - APR14 Per Capita Food Losses and Waste (kg/year)
  9. 9. Sustainable Food Systems - APR14
  10. 10. Sustainable Food Systems - APR14
  11. 11. Driving Dynamics of Urbanization HEALTH Urban nutritional “double burden” • Under-nutrition • Overweight & obesity Urban food safety Increased consumption of energy dense cheap and processed food Sustainable Food Systems - APR14
  12. 12. • African urbanization is accompanied by rapid growth in urban incomes and by urban (and to a lesser extent rural) diet diversification. These trends are similar to those found in Asia, with Asia just somewhat ahead in the same trends below. • Urbanization combined with income increases and diet diversification provides major opportunities as “motors of growth” for rural areas of Africa. In Asia this major trend has been leveraged to meet the growth and poverty alleviation targets in rural areas. Background
  13. 13. The aim is to increase the production and consumption of more diverse, safe and nutrient-dense foods for improved food security, nutrition and income of smallholder farmers, peri-urban and urban consumers (focusing on the 1000 days target groups and other vulnerable populations). the central need to leverage urbanization and diet diversification to promote rural-urban supply chains and rural growth as solutions to rural poverty (focusing on women and youth). A multidisciplinary research team in partnership with national and international development organizations and partner institutions will apply a holistic, demand driven, impact oriented action research approach to assess sustainable food availability, food access, food use, food quality, food safety and food utilization, giving particular concern to gender equality, inclusive business relationships and sustainability of agricultural production. Objectives
  14. 14. Sustainable Food Systems - APR14 ……. Sustainable and efficiently performing food value chains to decrease food losses, contamination, nutrient leakages and environmental impacts along the chain, and improve access to affordable, nutrient dense and safe quality food especially in urban and peri-urban areas through inclusive business models……….
  15. 15. Short/Long term strategy Short term: • Closing the knowledge gap: Assessment of supply and demand constraints along the different stages of the value chain to access and utilization of nutrient dense, safe and diverse foods by vulnerable urban and peri-urban consumers (incl. nutrient leakages and physical losses, willingness to pay, consumer preferences, distribution etc.). Long term: • Develop and test solutions to upgrade target value chains in order to increase the availability of affordable, safe and nutrient-dense food for target populations
  16. 16. CIAT’s strategic initiative on Sustainable Food systems 2016 UN International Year of Pulses The Pan-Africa Bean Research Alliance (PABRA) was established by the International Center for Tropical Agriculture (CIAT) in 1996. By increasing the competitiveness of bean markets, PABRA aims at providing consumers with better products and contribute to the economic growth of 29 African member countries working with more than 350 partners. Entry points
  17. 17. Immediate priorities/countries • Crop priority: • 1. beans • 2.broader food basket (context specific, addressing specific micro-nutrient deficits) • Countries: • East Africa bean corridor (Kenya, Ethiopia, Uganda, Tanzania) • Central America: Nicaragua, Honduras
  18. 18. PABRA – Bean corridors
  19. 19. • BMZ proposal on Value chains for nutrition • Deadline: 31 March 2015. 1.2 M Euro • Final product: Nutrient dense bean based composite flour • Target consumer groups and numbers: Urban, peri-urban and rural households at the BoP, with the focus on vulnerable groups: Pregnant and lactating mothers, Children: 6-59 months • 100.000 consumers after 3 years. • Potential: 5 million Uganda, 8 million Kenya cosnumers • Potential Eastern and southern Africa: 50 million • 50 farmer associations in Central and Western Uganda, 7.000 farmer member, 5000 farmers and 5 associations under the umbrella of Kenaff, 5 counties in the Western Kenyan bean corridor • SMEs:East African basic foods, Nutreal (Uganda), Lasting solutions, starwi (Kenya) • KALRO, NARO, various universities in Uganda, Kenya and Germany Workplan 2015
  20. 20. • 2015: Implementation of Ford project: “Informal markets for poverty reduction and food security: Exploring policy options in Nicaragua and Honduras” • Partners: Lutheran World Relief, Swisscontact • Food basket approach: Beans, Cheese, Tomatoes • (a) understand the existing rural-urban linkages between small producers and poor urban consumers; (b) identify leverage points where public policies for informal market channels can serve to increase benefits both for rural producers and urban consumers; (c) assess the potential of building more inclusive business models among informal market actors. (d) engage with key national and municipal government actors and development donors to promote the testing and evaluation of promising public policy and business model interventions. Workplan 2015
  21. 21. • BMZ/GIZ Germany: One World No Hunger. • 9 African countries, India and Cambodia). • 1 Billion Euro/Year, 100M for multilateral cooperation • Green innovation centers: Value chains, income generation • Food and nutrition security • Inclusive business models Workplan 2015
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  23. 23. • IDRC, DFATD Canada: • developing, testing and applying ways to scale up food security and nutrition innovations. • Deadline March 2015. 1.5 M CAD • Identify additional bilateral funding opportunities • FAO, Promoting quinoa in 14 African countries Workplan 2015
  24. 24. Enabling environment (public / donor policies) Willing buyers (private sector policies) Capable farmers (skills, capacity & organization) Science for impact: Linking Farmers to Markets New business models for sustained trading relationships
  25. 25. How do I package the results of the previous exercises into a prototype cycle? How to develop a prototype Key tool #4 The Prototype Cycle 27
  26. 26. The double-facing value proposition Key tool #2 The Business Model Canvas
  27. 27. 29
  28. 28. 30
  29. 29. Key questions Key tool #3 The New Business Model principles 1. Chain-wide collaboration _______________ Do actors share the same goals? Do actors exchange information regularly? Are there structures in place to motivate collaboration or shared problem solving? Is there one or more “champions” who will lead the process of co- innovation? Do all actors understand and acknowledge the interdependence of the trading relationship? 2. Effective market linkages _______________ Are trading relations stable? Are trading relations profitable? Do actors take advantage of market opportunities? Do actors respond quickly enough to the changing needs of clients? 3. Fair and transparent governance _______________ Are sale/purchase volumes and prices communicated clearly? Are quality standards clear and consistent across the chain? Are risks understood and shared proportionately along the chain? Are trading relationships based on formal contracts or clear informal agreements? 4. Equitable access to services _______________ Do producers have access to technical support services provided by the buyer or an indirect actor? Do producers have timely access to market information provided by the buyer or an indirect actor? Do producers have access to financial services provided by the buyer or an indirect actor? 5. Inclusive innovation _______________ Are innovation processes carried out collaboratively? Who participates and why? If innovation is evident, who gains from the results? Are there profit- sharing mechanisms in place? Are small-scale producers encouraged to participate in inclusive innovation? 6. Measurement of outcomes _______________ Have indicators been established that will measure the success of the business relationship? Are the results of the business relationship measured frequently? Are there feedback loops in place to guarantee effective chain-wide management and decision-making? 31
  30. 30. Key tool #3 The New Business Model principles Principle 1: Chain-wide collaboration Strongly agree Strongly disagree N/A Why? 1 We frequently exchange information formally* with our provider. ⑤ ④ ③ ② ① ⓪ ⃝ 2 We frequently exchange information informally* with our provider. ⑤ ④ ③ ② ① ⓪ ⃝ 3 We are aware of the effects our decisions have on our provider. ⑤ ④ ③ ② ① ⓪ ⃝ 4 Our commercial goals* are aligned with those of our provider. ⑤ ④ ③ ② ① ⓪ ⃝ 5 Our social goals * are aligned with those of our provider. ⑤ ④ ③ ② ① ⓪ ⃝ 6 Our environmental goals are aligned with those of our provider. ⑤ ④ ③ ② ① ⓪ ⃝ 7 We work closely with our provider to resolve problems. ⑤ ④ ③ ② ① ⓪ ⃝ 8 We are able to respond quickly to problems that may occur to do with our provider. ⑤ ④ ③ ② ① ⓪ ⃝ 9 We recognise and value the interdependence between ourselves and our provider. ⑤ ④ ③ ② ① ⓪ ⃝ 10 Our activities and roles complement well those of our provider. ⑤ ④ ③ ② ① ⓪ ⃝ 11 Incentives* (financial and non-financial) exist to enhance collaborative behaviour with our provider. ⑤ ④ ③ ② ① ⓪ ⃝ 12 Champions have been identified to lead the collaboration process with our provider. ⑤ ④ ③ ② ① ⓪ ⃝ 13 We use information and communication technology (ICT)* to enhance collaboration with our provider. ⑤ ④ ③ ② ① ⓪ ⃝ Total points = Average score = Total points ÷ (13 – Number of criteria marked N/A) = ______________________ ______________________ Scorecard for buyers (cont’d) 32
  31. 31. Case example: REOPA and Colryt, Peru Herramienta clave #3 Los principios para modelos de negocio incluyentes Supermarket (Belgium)Importer (Belgium) Processor (Peru) Producer Organization (Peru) Principle # 1: Chain-wide collaboration Currently established: • NOLIKO heads up collaboration • Clear roles among actors • Common objective to add value to product • Focus on problem-solving To improve in the future: • Contribute to REOPA’s stable income • Work to share social goals with Gandules • Improve regularity of information flow Colruyt, a Belgian supermarket chain, purchases asparagus from REOPA, a Peruvian smallholder farmer organization. REOPA receives support from the Belgian NGO Veco Andino, which also facilitated the application of LINK Methodology with other supply chain actors Glandules (canned asparagus) and Scano Noliko (imports asparagus to Belgium). 0.0 1.0 2.0 3.0 4.0 REOPA Gandules SAC Scana Noliko Colruyt Inclusive Innovation Chain-wide collaboration Effective Market Linkages Measurement of resutls Equitable access to services Fair & Transparent Governance Note: Veco Andino did not apply Principle 4: Equitable access to services
  32. 32. Origins • Link’s heart “the new business model principles” initially arose from expert discussions between CIAT, IIED and the Sustainable Foodlab and were tested in a 24-case study carried out in Latin America, Asia and Africa and thereupon distilled into the current six themes. • The base on which these principles built up on are drawn from Alexander Osterwalder’s Business Model Generation which has been adapted to rural and agricultural purposes. • LINK is a Prototype itself and currently in its third revision (since 2012), thus constantly evolving constructing upon new insights and lessons learnt.
  33. 33. What is LINK’s value proposition? • Nailing down inclusive business: Despite its increasing popularity there is a lack of practical and concrete approaches on how to operationalize and monitor inclusive business. The diversity of conceptual frameworks further complicates this issue. • Provide a methodology attractive to both producer organizations and private sector partners by simple and accessible language and novel business tools. • Offer concrete entry points for private sector actors to make supplier relationships more inclusive. • Facilitate exchange and mutual understanding between business partners. Inclusive business: Commercial relationship between a private company and a group (formal or informal) of producers whereby both the buyer and seller generate social, economic and environmental value in order to sustain long-term profitable interdependence.
  34. 34. LINK’s (simplified) Theory of Change LINK Methodology Output Outcome(s) Uptake by NGOs, public sector actors and companies. Intended Impacts Trading relationships with: • Increased stability • Mutual satisfaction • Durability • Resilience • Frequent and effective communication • Transparent governance • Joint innovation • Stable and profitable returns Increased mutual understanding (PO: business orientation, Buyer: Smallholder farmer context)
  35. 35. Lessons learnt • Theory: Less is more • Practice: More is more • Positive uptake from NGOs (i.e. Veco, CRS, Swisscontact, CATIE, IICA, Practical Action, Prisma) and companies (i.e. Unilever, Walmart, Colruyt, ) • For communities, much confusion is generated by the multitude of different definitions and concept around inclusive business and the variety of approaches promoted by development actors. Needs streamlining. • The LINK facilitator needs a certain level of expertise and experience in participatory facilitation and business approaches • The management of the facilitating NGO needs to be ‘on board’ CIAT provides training/guidance to 14 case studies that are currently underway in Latin America Partial implementation of selected tools of LINK Methodology in 13 cases in Colombia is completed Other cases are/were being implemented in Indonesia (Veco), Ethiopia Kenya and Uganda (Ford Foundation)