MFIs, NGOs, Government and the formal private sector can all contribute to bring the poor into value chains as producers, service providers or employees. This workshop will provide concepts and tools to better integrate farmers and other micro entrepreneurs into the input and output markets of agricultural and non-agricultural value chains. These tools will include clustering farmers and other entrepreneurs to improve the efficiencies of value chains. The workshop will promote and examine the benefits diversifying income sources for poor farmers to reduce their risk and enhance their resiliency.
Instructions: to open hyperlink right click link, then click “open hyperlink”Back up plan:http://www.mediafire.com/folder/buqofmmlby2g0/FIELD_Pocket_Guide
Workshop Sessions: Group 1 Wednesday, October 9, 2013 – 16:30-18:00 hrsIntroduction: 5 minutes, Dan Norell shares introductions and poses main question along with short overview of value chains. Ending 4:35 pm.Brief presentations: 8 minute presentations. Ending 5:15 pm.Each presentation should be modeled after the “Ted Talk-Style” Speaker Presentation, which emphasizes the following: A very focused message delivered in a compelling manner No words in the PowerPoint (if you chose to use one), only 1 or 2 keywords with images/picturesEngage the audience on an emotional level Reveal curiosity and passion, tell a story, speak of failures or successes, communicate dreams, do not sell from the stage, do not read your speechWorkshop Session World Café: 35 minute session in which 5 speakers and moderator divide into separate groups and respond to attendees questions and comments that follow topics and themes of presentations. Participants can move to different groups as they chose. Ending 5:50 pm.Closing: 10 minutes Closing & Key Takeaways—Broad themes from Speakers and then Dan final overall. Ending 6:00 pm.
Gisela-Tiongson- Velasco is the Executive Director of Jollibee Group Foundation, the corporate social responsibility arm of the Jollibee Foods Corporation. She holds a Master’s degree in International Policy and Practice from the George Washington University.David Ruchiuis currently the Africa Director of Farm Concern International Farm Concern International, FCI, an Africa-wide Market Development Agency, Farm Concern International develop pro-poor marketing models and strategic alliances to enhance economic growth among poor communities in various countries in Sub-Saharan Africa. Daniel Zoltani is the Regional Director for Whole Planet Foundation in Asia. He is responsible for identifying viable partners, and overseeing and expanding a portfolio spanning the region. Daniel holds degrees in Economics and International Affairs from the University of Colorado.Dr. VenkateshTagat, presently works as Chief General Manager, NABARD, Head Office, Mumbai, joined Reserve Bank of India as Rural Credit Officer in 1982 at Bangalore. With a doctorate in Soil and Water Management from IARI, New Delhi, Dr. Tagat has wide experience of working in the fields of agriculture, value chain systems, agronomy, watershed, and dry land farming.Eduardo C. Jimenez serves as Microfinance Adviser to the Central Bank of the Philippines, focusing on policy issues affecting the practice of microfinance and inclusive finance in the banking sector. Concurrently, he is also serving as a Regional Associate for the Alliance for Financial Inclusion a Bangkok based network of policy makers and regulators from over 65 countriesOpening – Dan NorellIntroduce the topicIntroduce the speakersPose the Central Questionshow the Field Guide videoGisela-Tiongson-VelascoHow can the farmers be clustered into groups to better link to markets?The experience in AsiaBringing all the market actors together – David RuchiuHow can the farmers be clustered into groups to better link to markets?The experience in AfricaRoles of MFIs to bring the poor into value chains -Daniel B. ZoltaniDr. VenkateshTagat – The role of financial institutions to strengthen farmer organizationsShare on the NABARD work to build special support systems to bring poor farmers into value chains through strengthened producer groups. Strong farmer institutions are able to take loans for expanding agricultural production.Share on medicinal plant value chain and the cashew value chain in the state of Tamil Nadu, IndiaThe Role of Government – Ed JimenezIn the Philippines the government has several policy initiatives in the banking sector that's addressing the workshop question, i.e., savings, mandated credit allocation for SME and Agriculture as established by enacted laws, mobile/phone banking that makes access both to credit and savings more convenient
Jollibee Foods Corporation is a Filipino company that was founded thirty five years ago and has thrived to become the largest food company in the Philippines. In 2012, it had a System Wide Sales of $2 billion and a Net Income of $89 million. JFC has a total store network of 2,652 stores worldwide. Abroad, it operates 562 stores in USA, China, Hong Kong, Vietnam, Brunei, Saudi Arabia, Qatar, Dubai, Kuwait, Singapore, and Indonesia.
As our Chair and CEO Tony Tan Caktiong said, “If we as a food company can serve as a market to small farmers, then we can make a difference in their lives.”
These are Arnold Dizon and Wency Gomez, farmers from a province in Central Philippines. They have been planting onions for thirty years. When we met them in 2008, they were ready to give up on onions because their perennial problem was finding a regular market. They had experienced planting products that no one ended up buying. Prices were always uncertain. They had gone through two straight years of selling onions at a loss. When traders bought their onions, there was no distinction between low or high quality – everything was sold at the same low price. During high season, price of onions went down to as low as 10 cents per kilo.
The group was formalized as the Kalasag Farmers Producers Cooperative. They studied the particular size and variety of white onion required by Jollibee. The Kalasag farmers computed for their cost of production and formulated a planting schedule and supply plan that would enable them to consistently deliver onions throughout the harvest season.
Kalasag has become a regular supplier to Jollibee since 2009. This year, they delivered 350 metric tons of white onions, which is over the original volume allocated to them. Kalasag has a 100% loan repayment rate, which makes them a valued client to financing institutions. They have added hot pepper to their products for JFC and they have started selling onions to other institutional buyers such as CDO Foodsphere and Splash Foods Corporation.
The Farmer Entrepreneurship Program utilizes the Clustering Approach to Agroenterprise developed by CRS. This is the farmers' journey of eight steps that takes them through the process of organizing themselves, matching the right product and market, mapping out a supply plan, and creating their agroenterprise business plan to ensure sustainable delivery.
To reach more small farmers, FEP trains local institutions in the Clustering Approach. These institutions, composed of the local government, microfinance institution, and the academe, form the Site Working Group that guides the farmers through the development of their agroenterprise.
Part of the program includes linking the farmers to MFIs to avail of Value Chain Financing. The loans accessed by the farmers go not only towards purchasing inputs like seeds and fertilizers. Other important components -- such as post-harvest facilities, cold storage, delivery trucks -- are part of the finance plan as well.
FEP has attracted other institutional markets such as supermarkets and food processors. The potential to expand to more farmers and more markets is high.
The process of linking small farmers to institutional markets and ensuring their sustained business relationship is not a technical fix. FEP involves the process of transforming institutional arrangements to help the farmers become significant actors in the value chain.
In closing, allow me to refer to the Jollibee Chair and CEO, Mr. Tony Tan Caktiong, whose vision led to this program. He has always acknowledged that there are and there will be challenges but he always reminds us that there are and there will be enormous opportunities as well. We started this program 5 years ago, but we know that with the determination and passion to make this work, we will once again discover new ways in doing things to overcome challenges and create a better future for our small farmers.
The Haiti Hope Project and Value Chain Finance:The Haiti Hope Project is a five-year (2011-2015), $9.5 million public-private partnership designed to create sustainable economic opportunities for Haitian mango farmers and their families by linking people to information, capital and markets. Key obstacles: inconsistent quality and weak quality control, inadequate infrastructure for transport and processing, diminishing soil health and food insecurity. In addition, farmers often feel pressure to sell their fruit before it is ripe, sacrificing much of its value. In order to provide a market for the mangos WFM needs to sign a contract guaranteeing the specified quantities, prices, delivery times and quality of the Mangos. The contract is with Perry Exports LLC a private company works with the formed farmer associations. In order to meet such requirements, the non-profit TechnoServe has supported Perry Exports and the formed associations with post-harvest services and logistical support such as grading, packaging, training as well as developing processing opportunities making the non-profit an integral actor in the chain. Yet without credit the chain could not function. Value chain finance: The purpose of value chain finance targeting the poorest is to reduce hard collateral requirements as barriers of entry. The Haiti Hope Project: provided full and partial guarantees for commercial banks as a creative way to leverage funds.In a triangle collaboration, partnered with localMFIs. Regarding Whole Planet Foundation, WPF has supported Fonkoze – Haiti’s leading microfinance institution since 2009. This year, more than 450 tons of fresh mangoes were sold through Whole Foods stores throughout the United States, a 150 percent increase from last year…
Community Livestock and Dairy Development Project: Commitment to the whole chain. Challenges: The lives of Bangladeshis in Bangladesh revolve around livestock. Of the 160 million people in Bangladesh, more than 70% rely on livestock to some degree for their livelihood. Yet dairy value chains either do not exist or operate inefficiently. GMPF decided to build its own milk chain. It designed a supply chain consisting of three tiers each operating as an independent franchise: Village pooling points, where the farmers can bring their milk on a daily basis, even in very small portions. Bulk milk cooling centres, where the milk from various village pooling points is collected and cooled.Dairy plants - where the milk from various cooling centres is processed, packaged, and distributed to the market outlets.Throughout the loan term a network of support spanning the value chain is provided to the borrower. Financing Forming groups and providing in-kind loans while helping selecting stronger and more productive animals.Improving productivity, Breeding, advising on concentrated feed, and buying inputs in bulk, Disease prevention Vaccinations and periodic visits by veterinarians to check on the animals’ health.Capacity building Training on bookkeeping, accounting, management and help with formalizing the group. Insurance: All borrowers who have purchased a cow have the option of obtaining insurance on that animal. If the cow dies, coverage reimburses the borrower 80% of the original value of the cow. This insurance is a onetime deduction of 2.5% of the loan made before the cow is purchased. Conclusion: The holistic model provides the necessary support and resources to increase dairy production and secure a fair price at reliable local markets in rural Bangladesh…
Agricultural Finance: Expanding Access to Finance in the Eastern Hills of Nepal: Mercy Corps, Nirdhan and Whole Planet Foundation. Agricultural finance or external finance. Here, microfinance institutions, banks and other financial agents become chain supporters in one-to-one relationships with a chain actor. Challenges: Looking at the “spice” chain in Nepal many opportunities were underused. The potential for ginger production was much higher than in reality and the techniques used by the farmers of storage were inadequate. Strategy: The farmers were organized in groups by Nirdhan and trained by Mercy Corps on how to improve the quality of their production method. The groups of famers were provided with business planning, cash flow analysis, disease management, pre and post harvesting techniques, low-cost storage, drying and grading knowledge, and collective marketing training. Agricultural Loan Product Development: An agricultural loan product with a cash-flow based repayment schedule was developed, piloted, and implemented under EAF. Deficit Funding Model: The project was innovative as Mercy Corps provided technical support to Nirdhan to foster outreach through a deficit subsidy model that ensured the sustainability of Nirdhan’s growth. Delivering a combination of both technical and financial services to smallholder farmers yielded several benefits. The combined technical and financial assistance provided compounded the impact on increasing production and profitability of these project participants…
The presentation depicts the role played by medicinal plants gatherers and planters in the value chain of herbal medicines and highlights the improvements in the processes at the local level. It also delineates the importance of evolving specific credit product for the local NGO to make immediate payments to gatherers and also enable them to hold the inventory to meet the requirements of the industry.
Harnessing local knowledge of medicinal plant gatherers is the “Key step” for sustainable harvesting of medicinal plants . The participatory process also enables the traceability of the product.
Medicinal Plant gatherers in action- sowing of seeds for sustaining wild collection in wastelands to drying of the produce. It is to be appreciated that DRYING is the most critical operations in the value chain, which sets the quality of the produce. The community should be incentivized for this important critical operation. Picture Description : Top Left : Sowing of Phyllanthus sp in wastelandsTop Right : Extraction of Cyperus tubersBottom Left : Drying of Lotus StemsBottom Right : Drying of Neem leaves
Farmers planting medicinal plants in their small land holding.Picture Description: Left: Planting of PhyllanthusRight: Basil in growing stage.
A typical scene at Village Level Procurement Centre. Transparent practices in weighing of the produce builds lot of trust.
Community led infrastructure for preparing the produce to warehousing and transportation.
Payment of money by cheque to medicinal plant gatherers, as compensation for toil in collection, and post harvest operations. The “Incentive” should be not only for the value of the produce and appear to the community as “fair value”.
The second part highlights the technical interventions required at the “Bottom of the Pyramid” to improve the efficiency , reduce drudgery and design of the credit product for the same.
A simple technology like Cashew Cutters which costs INR3000 makes a lot of difference to women.
Simple infrastructure like dryers and grading creates value to the produce.
Technical interventions are required at the farm level to replace the senile plantations with improved varieties so as to enhance the availability of raw cashewnuts on sustainable basis
Member driven Producers Organizations are potential vehicles for adding value to the members,
2.5 billion of unbankedand that is just an estimate, it could be much higher; about 1.8 billion or 72% have mobile phones.Main reported barriers to access are cost of services, physical distance to access points and lack of documentation.Data shows potential of technology and innovation to overcome barriersHuge untapped market
Most, if not all of these regulators, and specifically the BSP allows the private sector (associations, chambers, even NGOs) to comment on proposed changes embedded on a proposed circulars; town hall meetings, conferences are done. Even NGOs are invited to work with the BSP.
Proportionate Regulation vis-à-vis Proportionate RiskRegulations follow the marketMobile banking: Bank-led and Telco-led but as early as 2005Branchless banking: MBOsFinancial Products: Micro-agriculture, 18-months; Support for the establishment of AGSF (administered by LBP; Banks are now accepting ‘no frills’ savings accounts from the poor (minimum of PhP100), no maintaining balance and no dormancy rules; Allowed RBs and Thrift Banks to offer microinsurance through partnership with providers.The Congress of the Philippines also passed several laws mandating banks to set aside portion of their loanable funds to be lent out to agri/agra sector and the MicroSME.
Commitment to sound financial inclusion principlesBoldness to think beyond the box; frame of mind, attitudeAdaptive and flexible, yet compliant to standardsNationalistic yet global in outlookKnowledge focused, thus evidence-based policiesEarthy mind; give up ivory towers; visit the field and interact directly with the farmers and the poor!Responsive: Regulations follow the market
Expanding value chains to include the poor
Expanding Value Chains to Include the Poor
Senior Technical Advisor
World Vision US
How can financial service providers, NGOs, Government
and the private sector better integrate poor farmers and
other microentrepreneurs into value chains?
· Ms. Gisela Velasco, Executive Director, Jollibee Group
· Mr. David Ruchiu, Africa Director, Farm Concern
· Mr. Daniel B. Zoltani, Regional Director for
Asia/Pacific, Whole Planet Foundation, Thailand
· Dr. Venkatesh Tagat, Chief General Manager,
Business initiatives Department, NABARD – Head
office, Mumbai, India
· Mr. Ed Jimenez, Central Bank, Government of the
The Farmer Entrepreneurship Program:
Linking Farmers to Institutional Markets
Jollibee Group Foundation
Capacity to leverage debt is poor for the small
producers’ driven chains due to their poor equity base
Access to bank credit from the formal institutions is
Local traders/existing market players can create hurdles
like beating down the prices
Lot of financial resources and time is required to build
the capacities of the small producers’ organisations.
World Bank-Findex: (148 Countries) 2.5 billion of adults do not have access to formal financial system
Thinking Beyond the Box Policies: BSP Experience
Discussion Outputs Group 1 – Ms.
Structuring how to work together and identifying needed support. Give access to
What does each bring to the table?
Risk mitigation for the value chain (insurance)
Better understanding of value chain/players
Build business linkage between economic actors
Include MFIs in measure of financial inclusion
– Redefinition of financial service
– Start at both ends
– Leaders, facilitators
Discussion Outputs Group 2– Mr.
• Collective approach
• Business must see opportunities
• Social entities and government
– Pricing – inputs
– Encourage insurance
– Competitive pricing
– Educate farmers on negotiating
Discussion Outputs Group 3– Mr.
Government should ensure infrastructure
MFI’s to broker information for farmers
Platform linking fund providers with cooperatives
Provide credit guarantees for loan portfolio
Organize farmers into market linkages
Empower farmers groups to own their projects
Work/partner with large corporations using supply chains
Create village production centers for sustainable value chains
Lack of education, market information, technical know how
Access to financial services/diversified
Service providers – lack of knowledge
• Bridging the gap:
– Fully understanding the value chain
– Establishing network for facilitating partnerships
– Designing agri-financial products/services responsive to needs
Discussion Outputs Group 4 – Mr.
• Broaden the definition of financial inclusion and not
limit the banking sector
Better coordination among regulators
Cohesively towards financial inclusion
Tax relief for value chains – social enterprises
More towards a guarantee mechanisms
• Appropriate agriculture insurance
– call attention of donors to increase insurance
• More holistic planning
– From inputs, infrastructure, etc.