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Brussels Briefing 47: Ishmael Sunga "Promoting regional trade through PPPs and agribusiness development"

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The Brussels Development Briefing n.47 on the subject of “Regional Trade in Africa: Drivers, Trends and Opportunities” took place on 3rd February 2017 in Brussels at the ACP Secretariat (Avenue Georges Henri 451, 1200 Brussels) from 09:00 to 13:00. This Briefing was organised by the ACP-EU Technical Centre for Agricultural and Rural Cooperation (CTA), in collaboration with IFPRI, the European Commission / DEVCO, the ACP Secretariat, and CONCORD .

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Brussels Briefing 47: Ishmael Sunga "Promoting regional trade through PPPs and agribusiness development"

  1. 1. Involvement of farmers inInvolvement of farmers in PPPs: a practical example andPPPs: a practical example and perspectivesperspectives Brussels Briefing n. 47 Brussels, Belgium, 03rd February, 2017 Ishmael Sunga Chief Executive Officer
  2. 2. contentscontents • Introduction • A practical example of PPPs- the Value Chain Initiative (VCI) - • Implementation arrangements • Main results • Lessons and observations • Recommendations
  3. 3. • Agricultural development is multi-dimensional, involving many elements, disciplines, factors and actors. • A multi-stakeholder and systems approach is thus required. • Commercialisation of primary production will be a key driver to the transformation of the agricultural sector. • PPPs are increasingly used as a vehicle for smallholder commercialisation. • Broken smallholder value chains- root of lack of commercial viability of smallholder production. • SACAU has been involved in both the concept, design and implementation of PPP configurations. • The Value Chain Initiative (VCI) as a practical example of PPPs. introductionintroduction
  4. 4. • Concept: value chain-based cooperation to unlock value for all players in the chain; and lending primarily based on the strength of the value chain. • Guiding principle: risk sharing by all, and profit taking for everyone after marketing. • Partnership configurations/the players: Input suppliers; machinery/equipment services partner; commercial finance; off-taker; insurance services and farmers’ organisation. a practical example of PPP- thea practical example of PPP- the value chain initiative (VCI)value chain initiative (VCI)
  5. 5. • MOU signed. • Hosting and facilitation by SACAU. • Partners’ review and coordination meetings. • Local implementation agency on a SLA. • Special purpose vehicle established implementation arrangementsimplementation arrangements
  6. 6. • 2000 ha of maize. • 67 farmers involved. • USD1.4m production loan secured. • Pre-financing (USD423,000) of inputs and services prior to loan approval. main resultsmain results
  7. 7. • Productivity increase-+200%. • Enhanced access to finance. • Access to expert technical advice, services and extension. • Access to structured markets. main results (cont)main results (cont)
  8. 8. • PPPs are indeed an effective vehicle for the development of the smallholders. • PPPs are effective in de-risking production, marketing and financing smallholder agriculture. • Potential of PPPs grossly underutilized. • Farmers not deriving maximum value from PPPs due to limited negotiation, deal making and other capabilities. • Lack of commercial/business development capabilities hampering the participation of farmers’ organisations in PPPs • Farmers are rarely the initiators of PPP arrangements. They are approached • Technology transfer not happening enough. • The stability and predictability of the policy and operational environment matters. • Farmers aggregating around off-takers/service providers and thus not reaping the leverage/benefits of aggregation. lessons and observationslessons and observations
  9. 9. • Develop strategy for maximising great potential for PPPs • Design practical mechanisms for ensuring fairness/equity in the sharing of risk and return in PPPs • Support farmers to proactively identify business opportunities and use PPPs as a vehicle for making it happen on their own terms • Support FOs to develop commercially related capabilities • Establish a business development facility to support farmers in engaging in PPPs • Use PPPs to drive the development of a younger generation of farmers • Measure the performance of PPPs in terms of the extent to which farmers involved are investing in growth and development of their farms • Need for farmers to have a stake in the higher value segments of the chain recommendationsrecommendations
  10. 10. Thank You

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