UNIDO TCB event

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The opening presentation at the UNIDO trade capaicy expert consultation event. Vienna November 2009

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  • Committed to fair trade home and abroad Sales $25B Part of Walmart since 1999 – No2 retailer
  • UNIDO TCB event

    1. 1. Horticultural Products From Africa: A view from the field
    2. 2. Typical Vegetable Supply Chain
    3. 3. A Private Sector Solution Vertical integration EU marketing division Vertical integration Private Standards Vertical integration Lead Supplier MARKETS PRODUCTS COSTS INFORMATION CAPITAL EXPERTISE
    4. 4. The model that was needed Organized farmers and agri sector Diagram Source re-governing markets IIED Bill Vorley
    5. 5. SO WHAT WAS MISSING ?
    6. 6. Receptive commercial sector <ul><li>“ To you it is a bag of salad, dropped into the supermarket trolley with the weekly groceries” </li></ul><ul><li>“ The world is running out of water and British supermarket shoppers are contributing to global drought” </li></ul><ul><li>The Independent May 2006 </li></ul>
    7. 7. Receptive commercial sector – still under pressure <ul><li>Asda </li></ul><ul><li>Part of Wal-mart Group </li></ul><ul><li>UK Sales of $25B </li></ul><ul><li>UK No #2 retailer </li></ul><ul><li>Loyal customer base </li></ul><ul><li>High customer trust </li></ul><ul><li>Committed to supporting Fair trade at home and abroad </li></ul>Andy Bond, President and CEO of ASDA will today (Tuesday 6th May) pledge to source an additional £30 million worth of fresh produce from African farmers over the next five years at the Africa Millennium Goals Summit hosted by Prime Minister, Gordon Brown.  ASDA PRESS CENTRE Tuesday 6th May, 2008
    8. 8. The model that was needed Some organized farmers and agri sector Diagram Source re-governing markets IIED Bill Vorley
    9. 9. Organised Agriculture Partnerships - Challenges <ul><li>Availability of land </li></ul><ul><ul><li>Current ownership </li></ul></ul><ul><ul><li>State Vs Current occupants </li></ul></ul><ul><ul><li>Heritage land and natural boundries </li></ul></ul><ul><ul><li>Migration paths of people and animals </li></ul></ul><ul><li>Lack of structural points of contact </li></ul><ul><li>Joint venture potential </li></ul><ul><li>Expansion capital investment - high cost locally </li></ul><ul><li>Eventually acquisitions became inevitable as easier </li></ul><ul><li>Integration of local independent capacity (flexibility) – not visible </li></ul>
    10. 10. Organised Agriculture Potential - Challenges <ul><li>Long productive seasons with short “shoulders” </li></ul><ul><li>Seasonality causes </li></ul><ul><ul><li>Loss of skilled staff or high costs of retention </li></ul></ul><ul><ul><li>Transport critical mass issues leading to higher costs </li></ul></ul><ul><ul><li>Potential window for competitors to “steal” supply base </li></ul></ul><ul><li>Lack of structural points of contact </li></ul><ul><li>Multiple crops or multiple use of the same crop </li></ul><ul><ul><li>‘ Added Value’ or processing potential </li></ul></ul><ul><ul><li>Alternative markets or local cash crops </li></ul></ul><ul><li>Possibility of flexible land use with neighbours or other agri-business </li></ul>
    11. 11. Organised Agriculture <ul><li>Small Farmers bring OPPORTUNITY </li></ul><ul><ul><li>Premium products </li></ul></ul><ul><ul><li>Flexibility </li></ul></ul><ul><ul><li>Proven technical ability </li></ul></ul><ul><ul><li>Good PR for hard pushed brands </li></ul></ul><ul><li>Lack of structural points of contact </li></ul><ul><ul><li>Fresh produce is commoditised and uncertain it is unlikely that small farmer virgin projects will emerge from a cold start </li></ul></ul><ul><ul><li>The coordination and consolidation of projects into bigger more efficient entities is more likely to succeed but who will be the convener ? – SCALE ! </li></ul></ul>
    12. 12. The model that was needed Some organized farmers and agri sector Diagram Source re-governing markets IIED Bill Vorley
    13. 13. Facilitating public technical sector <ul><li>Exporting to Europe </li></ul><ul><ul><li>Competent authority (EU) </li></ul></ul><ul><ul><li>Local certification bodies (PVS) </li></ul></ul><ul><ul><li>Suitable testing laboratories (MRLs) </li></ul></ul><ul><ul><li>Pesticide registration scheme </li></ul></ul>GlobalGap BRC ETI smallholder Fair Trade Organisation BOPP – UK packhouse Tesco Natures Choice M&S Field to Fork Ministry Of Labour Department Of Health Kenya Bureau Of Standards NEMA – National Environment HEBI – Ethical Business FPEAK – Exporters Assoc Marketing Stds 1148/2001 Harmful Organisms 29/2000 Food Safety - 882/2000 MRL Residues 91/414/eec Traceability 178/2002
    14. 14. Facilitating public infrastructure <ul><li>Operating in country </li></ul><ul><ul><li>Labour, agriculture ministries, educational infrastructure </li></ul></ul><ul><ul><li>Neutral fiscal policies for exporters (import / export ) </li></ul></ul><ul><ul><li>Stable currency to £,$,€ </li></ul></ul><ul><li>Public / Private partnership </li></ul><ul><ul><li>Opportunities to develop shared infrastructure </li></ul></ul><ul><ul><li>Potential to delegate infrastructure operations to local business over time </li></ul></ul><ul><ul><li>Effective public bodies and /or parastatals – facilitators not barriers </li></ul></ul><ul><li>Lack of structural points of contact </li></ul><ul><li>Transport infrastructure </li></ul><ul><ul><li>Local links to airports and ports essential </li></ul></ul><ul><ul><li>Air / tourist and passenger traffic helpful – competition attractive </li></ul></ul><ul><ul><li>Mature industrial relations and high %age operation statistics at exit points </li></ul></ul>
    15. 15. A Private Sector Solution - A closed private loop ? Vertical integration EU marketing division Vertical integration Private Standards Vertical integration Lead Supplier MARKETS PRODUCTS & A UNIDO Solution ? Develop Competitive Supply-side Capacities Prove Conformity with Market Requirements Connect to the Market Compete Conform Connect
    16. 16. Connecting to markets ten years on .... Compete Conform Connect MARKETS Connect ? Standards Institute Accreditation Board Industrial Metrology Institute BIPM International Weights and Measures ISO ILAC / IAF Calibration Laboratories Inspection Bodies System Auditors System Certifiers ISO 22000 ISO 9000 ISO 14000 Testing Services Adapted from UNIDO TCB
    17. 17. Thank you

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