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LINKING WORLDS: EXISTING FRAMEWORKS




Source: Seville, Don. Sustainable Food Lab for Linking World Conference.
“OUR GOAL is not to link the poorest
   farmers to the most demand market
   but to invest in moving farmers up and
   to make markets more accessible?

        Can we help companies                                          Can we help farmers
        source down a level?                                              move up a level?


        Can benefits trickle down?              1-2% are the commercial farmers
                                                (2% of farmers account for 50% of maize sales)

            Can they compete with                         3-15% are regularly selling into markets
                     commercial?
   Can we integrate VC with food                                       20-30% are occasionally connected to
     security and local markets?                                       markets and are food buyers

Low barrier cash crops, transition                                                 40-50% are subsistence
     strategies, basic agronomic                                                   producers, buy in food,
                  improvements?                                                    get most cash from off
                                                                                   farm work.
Source: Seville, Don. Sustainable Food Lab for Linking World Conference.
ELEMENTS FOR INCLUSIVE
                  BUSINESS MODELS

  Capable farmers                                              Willing buyers
 (skills, capacity &                                           (private sector
       organization)                                                  policies)



      Enabling environment
      (public / donor policies)


                                NEW BUSINESS MODELS FOR
                             SUSTAINED TRADING RELATIONSHIPS


Adapted from www.regoverningmarkets.org by CIAT
THIS TOOLKIT IS DESIGNED TO
         help a group of market chain actors and stakeholders:




Discover opportunities
                          Implement, validate        Produce results that are
for innovation.
                          and evaluate               equitable, viable, feasible
                          interventions that are     , durable and inclusive.
                          inclusive of small-
                          holders.                   Facilitate a systematic
                                                     learning process.
the market   on critical   the existing   the change   the innovation   test, adjust, i   and measure
chain        points in     business       strategy     prototype        mprove the        results and
             the chain     model                                        interventions     impacts
THE PRODUCTION SIDE:           THE MARKETING
comprises the set of             comprises the
activities, mechanisms        activities, mecha
and relationships for           and relationshi
providing a good or               selling that go
 ervice, in other words            service, or in
 or creating value. The           words for cap
partner network -- the                  value. Br
 upply chain and its                     speakin
coordination – is a vitally         production s
 mportant source of             associated with
competitive advantage.           while the mar
                                        side gene
                                    revenues, th
                               marketing also e
ANALYZE THE EXISTING BUSINESS MODEL
The resolution of      For farmers and         Fair and               One of the special     New business          The business
problems, in both      their                   transparent            challenges faced       models promote        axiom states that
the commercial and     organizations, mark     governance refers      by small-scale         innovation by         you cannot manage
social performance     et                      to the                 producers is the       multiple actors       what you do not
of new business        linkages should         establishment and      lack of access to      along the chain in    measure. Our sixth
models requires all    provide a stable        enforcement of         services such as       products and          new business
or most chain          market with clear       clear and              finance, market        services as well as   model principle is
actors set shared      quality, volume and     consistent grades      information, and       the processes that    to incorporate
goals                  price signals as        and standards,         best agronomic         underpin both.        tailored indicators
for collaboration.     well as access to       clear                  practices that could                         and monitoring
The development        key services            commitments to         improve quality,       Innovations should    plans to assess the
of a systemic view     (Principle 4). These    buy and sell certain   yields, food safety,   be done ‘with’        health of the on-
of the chain           linkages must           volumes of certain     and environment        smallholder           going trading
recognizes and         contribution to         grade products at      performance.           farmers, rather       relationship as a
values the             improved                certain times, and                            than ‘for’ them.      for-profit business
interdependence of     livelihoods. For        equitable              Successful             Inclusive access to   and also its
the actors.            buyers, solutions       processes of risk      solutions enable       innovation provides   effectiveness as a
Reaching and           must provide a          management.            smallholders to        a means to remain     vehicle for
implementing           consistent supply                              access credit,         competitive in        community
agreement often        of safe, quality        Mutually               knowledge,             dynamic markets,      development.
involves               products at a           recognized             technology, and        build the
identifying one or     competitive price.      interdependency        develop incentives     commercial value      Constant
more champions         The achievement of      between chain          that                   of goods and          monitoring of the
to lead the process.   both producer and       actors is key.         encourage              services; and,        health of the
                       buyer goals in          Shared                 producers to invest    share innovation      trading relationship
                       practice requires       commercial risk        in their own           gains among           reduces the risk the
                       the delivering social   and insurance          production based       partners all of       minor problems will
                       and commercial          against failure are    on market needs.       which builds          destroy the

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Ciat Seas Of Change

  • 1.
  • 2. LINKING WORLDS: EXISTING FRAMEWORKS Source: Seville, Don. Sustainable Food Lab for Linking World Conference.
  • 3. “OUR GOAL is not to link the poorest farmers to the most demand market but to invest in moving farmers up and to make markets more accessible? Can we help companies Can we help farmers source down a level? move up a level? Can benefits trickle down? 1-2% are the commercial farmers (2% of farmers account for 50% of maize sales) Can they compete with 3-15% are regularly selling into markets commercial? Can we integrate VC with food 20-30% are occasionally connected to security and local markets? markets and are food buyers Low barrier cash crops, transition 40-50% are subsistence strategies, basic agronomic producers, buy in food, improvements? get most cash from off farm work. Source: Seville, Don. Sustainable Food Lab for Linking World Conference.
  • 4. ELEMENTS FOR INCLUSIVE BUSINESS MODELS Capable farmers Willing buyers (skills, capacity & (private sector organization) policies) Enabling environment (public / donor policies) NEW BUSINESS MODELS FOR SUSTAINED TRADING RELATIONSHIPS Adapted from www.regoverningmarkets.org by CIAT
  • 5. THIS TOOLKIT IS DESIGNED TO help a group of market chain actors and stakeholders: Discover opportunities Implement, validate Produce results that are for innovation. and evaluate equitable, viable, feasible interventions that are , durable and inclusive. inclusive of small- holders. Facilitate a systematic learning process.
  • 6. the market on critical the existing the change the innovation test, adjust, i and measure chain points in business strategy prototype mprove the results and the chain model interventions impacts
  • 7.
  • 8. THE PRODUCTION SIDE: THE MARKETING comprises the set of comprises the activities, mechanisms activities, mecha and relationships for and relationshi providing a good or selling that go ervice, in other words service, or in or creating value. The words for cap partner network -- the value. Br upply chain and its speakin coordination – is a vitally production s mportant source of associated with competitive advantage. while the mar side gene revenues, th marketing also e
  • 9. ANALYZE THE EXISTING BUSINESS MODEL
  • 10.
  • 11. The resolution of For farmers and Fair and One of the special New business The business problems, in both their transparent challenges faced models promote axiom states that the commercial and organizations, mark governance refers by small-scale innovation by you cannot manage social performance et to the producers is the multiple actors what you do not of new business linkages should establishment and lack of access to along the chain in measure. Our sixth models requires all provide a stable enforcement of services such as products and new business or most chain market with clear clear and finance, market services as well as model principle is actors set shared quality, volume and consistent grades information, and the processes that to incorporate goals price signals as and standards, best agronomic underpin both. tailored indicators for collaboration. well as access to clear practices that could and monitoring The development key services commitments to improve quality, Innovations should plans to assess the of a systemic view (Principle 4). These buy and sell certain yields, food safety, be done ‘with’ health of the on- of the chain linkages must volumes of certain and environment smallholder going trading recognizes and contribution to grade products at performance. farmers, rather relationship as a values the improved certain times, and than ‘for’ them. for-profit business interdependence of livelihoods. For equitable Successful Inclusive access to and also its the actors. buyers, solutions processes of risk solutions enable innovation provides effectiveness as a Reaching and must provide a management. smallholders to a means to remain vehicle for implementing consistent supply access credit, competitive in community agreement often of safe, quality Mutually knowledge, dynamic markets, development. involves products at a recognized technology, and build the identifying one or competitive price. interdependency develop incentives commercial value Constant more champions The achievement of between chain that of goods and monitoring of the to lead the process. both producer and actors is key. encourage services; and, health of the buyer goals in Shared producers to invest share innovation trading relationship practice requires commercial risk in their own gains among reduces the risk the the delivering social and insurance production based partners all of minor problems will and commercial against failure are on market needs. which builds destroy the

Editor's Notes

  1. For projects that work with private sector partners, we often work at the value chain level to promote trade between groups of producers needing new or improved trade and companies needing more or improved supplyWhen working in value chains, it is important to understand the actors and how the create assets for your work or challenges. Who are your key partners? What are their goals and constraints? Who do we need to recruit as a partner? Who is neutral that just needs to be informed? Who is a blocker that needs to be managed?There are many different entry points – starting with farmers and looking for a buyer. Starting a with new intermediary. Starting with a lead firm. In the cases of working with a business partner, a good first step is to really understand what the product opportunity is. What are the requirements – cost, quality, etc – that the farmers need to meet to be successful? Is the farmer story important to the product proposition?Next is understanding the capacity gap between the current farming and processing performance and what would be needed to be successful. What investments are needed? Is this a reasonable and achievable gap? How can the partners work together on this?Next is the structure of the trading relationships. It is not just about a sourcing opportunity – but an inclusive, durable, and fair one. Looking to the business model principles, are there needs and opportunities around collaboration? Market linkages? Transparency and risk sharing? What services are needed by the farmers and the intermediary?A typical weak point in inclusive business models is the “specialized intermediary” – the business that is sourcing from small scale producers and having to meet the souring requirements of modern fast moving supply chains. Understanding whether the requirements can be met, and whether the basica business model -- including he costs of services to promote and sustainable inclusive – can be carried by the value proposition is critical.Finally to increase impact and reduce risk means investment at the household level. A single value chain should be one of a number fo strategies…
  2. NEED SLIDE: Objective_ buildsustainabletradingrelationships. How: Discover, design do. (use photo)
  3. descriptions and outcomes.