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Value Chain Analysis and Development Training


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Value Chain Analysis and Development Training at Adama for CAFOD/TROCAIRE/SCIAF partners staffs.

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Value Chain Analysis and Development Training

  1. 1. CAFOD/TROCAIRE/SCIAF Livelihood program Value Chain Analysis and Development Training Teshale Endalamaw November, 2012 Adama
  2. 2. Value Chain approach in implementing our Livelihood program Joint office of CST, Ethiopia
  3. 3. Objective of this session 1. To develop common understanding on what does Value Chain (VC) mean among our selves 2.The value chain approach as a means in our LH Program
  4. 4. 1.What do we mean by Value chain? • A value chain links the steps a product takes from the farmer to the consumer. • It includes research and development, input suppliers and finance (market and fin. Institutions). • Our targeted Pastoralists/small farmers combines these resources with land, labour and capital to produce commodities.
  5. 5. continued • It is more than increasing production and create access to market. • Is a means and it is not an end by itself
  6. 6. 2.The value chain approach as a means in our LH Program. • In our current LH program cycle, we do not think only increasing production and productivity but we emphasize also on value adding. • It is put as one implementation strategy in the PPD and reflected as “Increasing incomes through Value chain promotion”
  7. 7. continued • The detail strategies are put in the PPD as follows: -Promoting environmentally sustainable VC such as aloe Vera production, cactus, gums and incense production -Encouraging sustainable rural-urban linkages -CB in Product processing -improving market access
  8. 8. continued -improving rural storage and processing facilities (e.g. Grinding mills) -promoting indigenous knowledge and skills -promoting use of appropriate technology in product processing -encouraging the role of cooperatives
  9. 9. Sub Sector Analysis
  10. 10. Sub Sector Analysis – STEPS 1. Establish Initial Understanding of the Sub Sector 1. 2. Collect data Draw a preliminary sub sector map 2. Refine Your Understanding 1. 2. 3. Refine the sub sector map Quantify dimensions of particular interest Analyse constraints and opportunities in the sub sector 3. Select Value Chain for Analyses & Development 1. 2. Analyse constraints and opportunities in the chain Explore opportunities for leveraged interventions
  11. 11. Difference between a sector, sub-sector, cluster and value chain
  12. 12. Alternative Selection Criteria High Competitiveness Potential Competitiveness • Gender • NRM • HIV/AIDS Crosscutting Issues Impact • Employment • Income • MSME potential • Income distribution • MSME growth • Livelihood and Security
  13. 13. Selection Process
  14. 14. Group Work • Conduct a sub-sector analysis for your intervention area
  15. 15. Other Selection Criteria Competitiveness Impact • Market Share • MSE participation • Market Growth • Income generation • Competition (Global • Cross-cutting Employment generation threats) • Industry Leadership • MSME growth • Substitutes • Livelihood and • End Markets (Opportunities) • Supporting Markets • Enabling Environment • Infrastructure • Policy security • Sustainability • Natural Resource Management • Gender • Trafficked women • HIV/AIDS
  16. 16. Value Chain (VC) Concept
  17. 17. Value Chain Concept • Exercise 1: opening exercise- Human Chain – Human Chain exercise reflection- (photo) • Participants experience & brainstorming – Real life – examples – • two or three from participants • Mango example – see next slide
  18. 18. AA Wholesalers Mango Juice Asseffa Wife Awassa Addis Ababa Middle East Shasmene India Friends Awassa SM Sidama Arba Minich India
  19. 19. Value Chain: The full range of activities that are required to bring a product or service from its conception to its end use A Value Chain is: a vertical alliance of enterprises (collaborating in various degrees) involving all stages, from conception to disposal defined by its raw material and market segment actors actively seek to support each other to increase efficiency and competitiveness Invest time, effort and money, and build relationships to reach a common goal of satisfying consumer needs - -
  20. 20. Définition of Market Value Chain Consumers products information Industry – processing Big traders / Exporters Small producers Small traders Environmen t . Policies . Banks . Support services Etc… Sellers of resources & services
  21. 21. Steps in VCA & Development Value Chain Selection Economic Mapping Sub-sector Analysis Value Chain Analysis Learning & Innovation Monitoring performance & Assessing demand Intervention plan Implementation Value Chain Intervention Plan
  22. 22. Three levels of the value chain CHAIN ACTORS CHAIN SUPPORTERS CHAIN CONTEXT
  23. 23. Value Chain Lens Global Enabling Environment Global Retailers National Enabling Environment Sector-specific providers Cross-cutting providers Financial (cross cutting) National Retailers Exporters Wholesalers Processors/Traders Producers Input Suppliers
  24. 24. Value Chain Analysis
  25. 25. What is Value Chain Analysis? • Value chain analysis is a process for understanding the systemic factors and conditions under which a value chain and its firms can achieve higher levels of performance.
  26. 26. Why VCA? When using value chains as a means for fostering growth and reducing poverty, the analysis focuses on identifying ways to contribute to two objectives: i) improving the competitiveness of value chains with large numbers of small firms, and ii) expanding the depth and breadth of benefits generated.
  27. 27. Value Chain Analysis – – – – – • • – Data collection value chain mapping Assess constraints and opportunities Identify potential interventions Special focus points Gender sensitive value chain analysis Governance & power issues Common mistakes in conducting a VCA
  28. 28. Data collection & value chain mapping  A number of tools and techniques are used to conduct value chain analysis such as: 1. in-depth studies: involving the use of a combination of tools such as sound desk researches, interviews, and focus group discussions are key information collection strategies 2. participatory form of subsector/value chain analysis etc.
  29. 29. What is Participatory Value Chain Analysis (PVCA)? • Is a process conducting a VCA through the participation/consideration of different actors in the value chain. • There are different activities and actors with different levels of understanding of the market and points of view. • This makes it necessary to involve all stakeholders to have a clearer picture of the market.
  30. 30. PVCA Rationale  Promotes dialogue and accountability between Value chain participants  Promotes the direct involvement of stakeholders in solving problems on there own/independently  identification of bottlenecks and appropriate intervention  Develops a sense of ownership among stakeholders  Sustainability of the impact of suggested solutions a and efforts
  31. 31. Cont…. Key dimensions  Mapping the chains, networks and systems  Mapping the geographical spread  Identifying the key stakeholders  Measuring the relative value accruing  Identifying the governance structures  Mapping the interventions directly targeting different levels of the chain, network or system  Clarifying the direct, indirect or unintended impacts  Exploring the different alternative levels of intervention or strategy . PVCA involves:  Mapping  Quantitative and qualitative research
  32. 32. Cont…. Key stages     Scoping the analysis: clarification of questions and investigation strategy Preliminary value chain mapping Participatory value chain analysis Setting up sustainable structures for sectoral and inter-sectoral accountability. Principles        . Stakeholder participation Visual and diagram mapping - accessible to all stakeholders Dialogue between stakeholders & mutual understanding and respect for their different opportunities and constraints. Equity and empowerment Incorporation of poverty and gender analysis throughout the process Ensuring participation of the most vulnerable and supporting their information and action needs Formation of sustainable systems for ongoing accountability of enterprise and chain governance
  33. 33. Cont…. Additional Variables to be considered  gross output values, net output values (that is, gross output, minus input costs)  the physical flow of commodities along the chain  the flow of services, consultants and skills along the chain  employment, where relevant distinguishing between permanent (on payroll) and temporary (off payroll) staff, gender, ethnicity  destination of sales - for example to wholesalers and retailers; concentration of sales amongst major buyers; number of buyers, imports and exports, and to which region
  34. 34. Special Focus Points Gender sensitive value chain analysis model Not to overlook gender dimension (1) all information will be disaggregated by gender in all possible cases, (2) activities that include and exclude women will be identified for emphasis, (3) economic, social, political, psychological factors which caused for the situation will be assessed and (4) caution will be made in intervention selection to select gender sensitive value chains and intervention points
  35. 35. Governance & power issues  Governance describes which firms within a value chain set and enforce the parameters under which others in the chain operate. Embedded in governance are inter-firm relationships, power dynamics and the distribution of benefits. • Governance and power relationship are important issues – To understand the governance and power relationship – To empower the target actors
  36. 36. Governance & power issues
  37. 37. Common mistake in VCA • Failure to Consider the End User’s Requirements • Assuming a Fixed Industry Structure and Static Relationships among Stakeholders • Inattention to Learning and Information Flows • Inadequate Attention to Relationship Dynamics • Failure to Verify Data • Failure to Filter Constraints • Opportunities and Constraints are Identified that are Not the Most Important
  38. 38. Value Chain Mapping
  39. 39. What is VC Mapping • Is an illustrative presentation of linkages in a value chain and the different actors/ stakeholders so as to create a clear understanding of relationships, activities and what is seen and encountered • It is a vital step that follows the initial selection of value chains and • Guides the analysis of selected value chains
  40. 40. Mapping – the reasons  To assist us in understanding the sub sector  To assist us in communication (in/external)  To identify actors, roles and relationships  To identify markets (segments)  To identify channels (product flows) To identify trends (dynamics)
  41. 41. Objectives of VC Mapping  To gain a basic overview of the value chain to  guides the full value chain analysis to be undertaken  Identify constraints and possible solutions at different levels in the value chain  Identify the location and position of the poor in the value chain  Visualize networks to get a better understanding of connections between actors and processes  Demonstrate interdependency between actors and processes in the value chain
  42. 42. Types of VC Map Basic Map • Functions – Product life cycle from conception to end use • Participant(s) at each function • Linkages between the participants–horizontal and vertical Detailed Map • Added value or gross margins of each function • Number of firms performing each function • Volumes moving between levels
  43. 43. VALUE CHAIN MAPPING: BASIC MAP Four steps: 1. Identify the functions 2. Identify the participants 3. Complete the work sheet 4. Draw the initial map
  44. 44. STEP 1: IDENTIFY FUNCTIONS Functions – Retail – Wholesaling – Processing – Assembly – Production – Input Supply
  45. 45. STEP 2: IDENTIFY THE PARTICIPANTS Participants  Village Stockists  Input Supply Companies  Small Scale Producers  Producer Associations  Medium-scale and Commercial Producers  Oil Processors  Wholesalers  Retailers
  47. 47. VALUE CHAIN MAPPING: DETAILED MAP 1. 2. 3. 4. 5. Identify the functions Identify the participants Complete the work sheet Draw the initial map Analysis of overlays – – – Number of actors performing each function Volumes moved between one level to another Value added/gross margins
  48. 48. An important overlay: Simplified Gross Margin (SGM) Selecting market
  49. 49. Simplified Gross Product (SGP) and Simplified Gross Margin (SGM) • SGP = Turnover (gross sales) – direct cost • SGM = SGP-T (sales) x 100 T (sales) • Simplified gross margin: • profitability of actors in the chain • make comparison between functions and actors horizontally and vertically • comparing or benchmarking with other VCs
  50. 50. SGP T = Turnover (sales)
  51. 51. SGM F3 SGP F2 SGP F1 SGP
  52. 52. Critical Success Factor (CSF) Selecting market
  53. 53. Group work: Select potential chain from one of the sub sectors selected from previous exercise 1. Main actors  input suppliers  Producers  collectors  bulking  processors  Wholesalers  Retailers  Consumers 2. Secondary actors  Research institutions  Government organizations  non-government organizations 3. Facilitators  Draw a draft map
  54. 54. VC Program Formulation
  55. 55. Different donor approach 1. A “comprehensive planning approach”  based on detailed analytical value chain mapping and market analysis preceding interventions;  it uses different methodologies:  to map the physical flow of commodities along the chain, output values at different stages of value chains, export market potentials, the regional spread of value chains, inter-firm cooperation, production efficiency, etc.
  56. 56. Different donor approach 2. Participatory workshop- centered tools for value chain analysis with less academic rigor and stakeholder workshops as a key element; 3. Incentives for private sector-driven projects whereby donors leave the conception and implementation of initiatives to corporate value chain leaders 4. Hybrid (common)
  57. 57. Approach comparison Comprehensive planning approach Participatory workshop-centred USAID (PVCA), GTZ ITC (SHAPE), (Valuelinks), FAO Mesopartner (PACA) (Commodity SCA for propoor rural growth), ILO, FIAS Incentives for private sector-driven projects GTZ (PPP), USAID (Global Development Alliance), DFID (Business Linkage challenge fund), Dutch & Danish fund most complete picture of the structure and potentials of a value chain, appropriate to draw the least bureaucratic option as it actively on stakeholder involves private change agents and experiences, it is more ‘governors’ of value chains flexible and less costly, Costly and tends to be donor- rather than private sector-driven; Provides less systematic information; it implies a certain risk of subsidizing private gains rather than public goods, it may restrict the participation of other stakeholders, and it makes independent performance measurement difficult.
  58. 58. VC upgrading strategies
  59. 59. Upgrading Strategies 1 1 Process improvement (efficiency) : A Between the actors B Within one actor • Logistics: e.g. reducing the time-to-market • Quality: e.g. standardisation and consistency • Costs: e.g. reducing inputs • Capacities: e.g. increasing volumes
  60. 60. Upgrading Strategies 2 2 Product innovation : A By one actor B Cross functional teams • Improving existing products • Designing new products • Creating marketing & design capacity
  61. 61. Upgrading Strategies 3 3 Functional upgrading : A Adding functions B Changing functions • Adding sorting, grading & packing functions • Reducing production and adding exporting
  62. 62. Upgrading Strategies 4 4 Moving to other VCs: A changes upstream B changes downstream • Identifying more interesting suppliers • Identifying more promising market segments
  63. 63. Value Chains and Finance Some key concepts
  64. 64. A Sub-Sector System: comprised of multiple value chains Enabling Environment • Business • Political/regulatory • Socio-Economic Support Products/ Services Markets
  65. 65. A Value Chain System Final Consumers Distribution Enabling Environment • Business • Political/regulatory • Socio-Economic Local Markets Trading / Processing Production Inputs Value Chain Support Products/ Services Markets
  66. 66. What elements do we Analyze in a Value Chain System? • Actors in the value chain and those that support chain (can be private, public or civil society) • External environment, or the broader legal / national / socio cultural / infrastructure / context in which the chain operates • Dynamics of the value chain and service markets: individual and firm behaviors, power structures, and how these affect the functioning of the chain • Supply and Demand of the market and the chain including volumes, cost and pricing, numbers of actors, consumer preferences
  67. 67. What are we looking for in our analysis? • Constraints affecting the Target group, e.g.: o Limited Access to inputs o Lack of information about market demand o Insufficient finance to grow business • Opportunities for the target group, e.g.,: o Growing market demand o Potential for increased efficiencies and quality o New varieties available • Leverage points or new models
  68. 68. Leverage Points and New Models • Ways to upgrade the value chain system (to the benefit of the target group) that are targeted, efficient and cost effective • Do not try to fix everything (triage) • Identify positive deviants and variations that are working • Design value chain programs around these if possible
  69. 69. Value Chain Financing Financial Services Financial flows Inputs Production Trading / Processing Distribution Product flows Support services Value Chain Financing – external and internal financing, largely credit Consumption
  70. 70. Example Value Chain Actors and Financial (Credit) Needs Large and Medium Exporters and Wholesalers Working Capital Line of credit / Overdraft Long term investment loans Processors Working capital Line of credit / Overdraft Investment loans Traders / Dealers Trade credit Producer Groups Investment loans for seasonality Working capital Farmers Savings Working capital Input Suppliers Trade credit Seasonal credit
  71. 71. Producer / Association Model: example, direct finance and producer association repayment Repayment of loans on behalf of farmer Banks/ SACCOs/ FIs Ba ckw ard lin and kag fo Ba es rwa ckw rd ard lin and kag for es wa rd Bac kwa rd a link nd fo age rwa rd s Produ cer As s Grower Finance Grower Finance Finance Grower ociatio n
  72. 72. Lead Firm Model: Example, buyer borrows money, finances chain Banks / Financial Institutions Fin a nc e Wholesale Buyers Processors / Aggregators Pro du Flow of products cti on Flow of finance Grower Grower Grower Grower
  73. 73. Buyer ‘Guarantee’ Model: Example, buyer confirmed; finance direct to grower Finance Banks / Financial Institutions Repayment si Processor / Supermarket Flow of Finance e nc st a Flow of products and services Finance s lA ts ica uc hn rod ec p T of t s, u le Sa Inp Grower Grower Finance Grower Out grower/ Marketing Coop Grower Grower
  74. 74. Facilitator Driven VC Model: wholesaler / producer group agreements Banks Flow of finance Flow of services Flow of facilitation Service Provider Buyers Facilitators Services Producer Associations Producer Agreements Facilitators
  75. 75. Example Financing Instruments Category Example Financing instrument Agricultural product based • • • • Input supply credit Buyer credit Contract farming finance Direct credit to farmers Physical asset based • Warehouse receipt system • Re-purchase agreements • Leasing for production, processing etc. Risk mitigation • Insurance • Futures Financial enhancements • Loan Guarantee
  76. 76. VC M and E
  77. 77. Targeting & Monitoring & Evaluation  Impact ! Institutional changes VC performance Company performance BDS performance Household changes
  78. 78. Monitoring is an ongoing activity! • Projects and Programmes need to follow-up their progress • Successes and failures need to be looked at while projects and programmes are running • Monitoring is an internalised process of team communication, continuously undertaken while implementing, whereas • Evaluation is an act of stopping implementation to reflect past activities (but drawing from information from monitoring).
  79. 79. The World of Impact Monitoring Performance Monitoring Impact Monitoring Process Monitoring Result-based Monitoring Input Monitoring Impact Indicators Activity Monitoring Impact Model Implementation Monitoring Impact Assessment Evaluation Outreach Outcome Impact Chain Output Monitoring Outputs Benefits Impacts
  80. 80. What to monitor in projects – Performance & Impact Monitoring Performance Impact • Observing outputs against planned activities • Focussing on effect of outputs: impacts! • Providing information for project management • Day-to-day activity  To trigger short-term adjustments in operation • Observing the direct benefit of outputs • Strategic steering of implementation  To self-evaluate whether activities contribute to objectives
  81. 81. Impacts are ... ... changes that have a causal - or at least a plausible - link to a project/programme ... a change of circumstances as a consequence of an intervention, it can be intended or unintended, positive or negative. ... there: from the first moment of intervention and they continue to occur all the time. ... rather the result of social interaction than a straight-forward interventions ... the result of complex interactions and thus, a complex matter to deal with!
  82. 82. Model of Interaction Direct of Output Indirect Use Benefit Project Benefit Engel, P., The Social Organization of Innovation, 1997
  83. 83. The GTZ Impact Model (II) Indirect Benefit Direct Benefit (Goal) Use of Outp uts ution? Attrib ation ! Observ Poverty Alleviation Output s GTZ Activi tiesPartn
  84. 84. Illustration: which of the 100 Bricks did we donate?
  85. 85. Impact Models: A chain of changes What do we expect to happen in value chain promotion? Intervention; i.e. extension Specific Input providers Primary producers Specific Inputs Production Specific Inputs C H Logistics centres, Industry Transformation Trade Transformation A N G Final Consumers Traders Consumption Trade E Consumption !
  86. 86. Indicators in Value Chains „There is increasing interest in, and use of, private sector tools for performance and impact measurement; i.e. consumer market research tools for measuring changes in markets and private sector business tools for measuring service provider performance.“ Some examples: • Customer satisfaction • Repeated customers • Number of enterprises demanding a service • Satisfaction with last service purchased • Percentage of women-owned enterprises
  87. 87. Group work 1. Group one – AVH, CCGG and ASE (Shara) 2. Group two – GPDI, AFD, SOS Sahel, EAPDA (Mango) 3. Group three – GPDI, AFD, SOS Sahel, EAPDA (Banana)
  88. 88. Instruction for field work • Map and analyze the value chain for the main commodity you selected 1. Functions 2. Operations 3. Number of actors per function 4. Relation between actors 5. Volume per operation 6. SGM per actor 7. Critical Success Factor for selected commodity 8. Support actors and their functions 9. Strength and weakness 10. Factors affecting primary production 11. Macro environment influence
  89. 89. Guideline for presentation • Value chain map • Value chain analysis: • What are the main bottlenecks in the chain • What are the opportunities to strength the chain • What are the opportunities to promote the local product • Conclusion • What are the potential contribution of this particular Value chain for HH livelihood and Food Security
  90. 90. Market Information
  91. 91. Brainstorming points 1. What do you understand from market information? 2. Where do you get market information? 3. How do you get market information? 4. Do you get market information timely?
  92. 92. Definition: ‘Any information used or required to support marketing decisions’ •It can range from simple average price to information like; •long term price trend •Quality of produce, •Volumes of supply and demand, •Weather conditions from areas where commodities are coming from, •Location •New crop varieties in the market, •Product suppliers and potential buyers and their characteristics •Production and Marketing costs •Seasonal tendencies like harvest or planting time, etc
  93. 93. Cont… • In principle market information is a business resource that contributes to the know – how and increases the chances for agricultural chain actors to manage prevailing situations and plan for the future market opportunities. • In business, market information influences two functions of business that is Production and Marketing. • The information obtained will assist them to verify the following perimeters in either production or marketing;-
  94. 94. Cont … Production To Determine : -Quantities produced for given market Marketing To; Support the farmers/trader to sell more to the current buyers -Quality desired by buyers Support the sourcing and research for better markets -Time of demand (variations in seasons) Secure medium and long term markets for sustainable production The allowed transaction cost Secure market that offer the best prices.
  95. 95. Cont… • All business activities involved in the movement of commodities from production to consumption is marketing. [Referred to as a supply chain]’ • Therefore farmer’s market information needs are those that enable them make rational and relevant decisions. • Market information offers essential pivoting resources to the chain actors with a view of making them competitive and better players in the market.
  96. 96. Cont… • Agricultural Market information essentially fulfils some of the key facts of market chain actor’s competitiveness in the market by;- – – – – Become better informed than the competitors or suppliers Be able to dictate terms of purchase or supply Maximize the bargaining power To enable appropriate planning within give supply chain and season – To make enough money from each harvest at the time of sale. • Market information services have the function of collecting and processing market data systematically and continuously, and of making it available to market participants in a form relevant to their decision making.
  97. 97. Market information needed by small scale farmers include: • Information on: – product planning – price details of seeds, fertilizers, pesticides and their availabilities – current prices. – forecast of market trends – sales of timing – improved marketing practices – the product season predictions based on weather patterns – group marketing opportunities
  98. 98. Possible Forms of disseminations People based Electronic Media Print Media Development field staff FM radios Newsletter Contact farmers Television Public Notices boards School teachers, religious leaders, opinion leaders SMS- Mobile Newspapers Private sector agribusiness Internet Posters Extension workers Emails Pamphlets Marketing animators Info village booths
  99. 99. Challenges and Constraints in Agricultural Marketing Information Disseminations Challenges Accessibility Interpretation Storage Usability Two major constraints Cost of acquisition Knowledge of availability
  100. 100. Different tools to obtain Market Information • Internal records and reports • Conducting market research • Through a deliberate design of market intelligence systems and marketing information models to provide marketing insights and support the decision makers • Informal networking and sharing; many of the organizations, entrepreneurs, and farmers gain marketing knowledge and insights in such ways • Organizing meetings, workshops, visits for various purposes among business partners and stakeholders (eg. MSPs, business arrangement meetings, etc) • Attending trade fairs
  101. 101. Market Information and VCD Input suppliers Producers Traders/ collectors Processors Distribution channels (export /import/ domestic) Markets (intl/ domestic) •Knowledge of the market • helps to identify opportunities, challenge and requirements for success • helps stakeholders make informed decisions on their production and commercial activities • helps to implement strategies and adoption of Market Information Price innovations to maintain the competitiveness of the Quality business and the value chain Quantity • contributes to market transparency: levels the ground Availability for players -impacts governances
  102. 102. The value chain Information Divide VC Segment Inputs Production Processing/exporters Logistics Consumer Small scale farmers Large scale farmers Farmer Groups SMEs /Local private companies, Regional Processors MNCs Retailers Wholesalers, brokers Transporters, Warehousing Households Primary Actors Traders manufacturers, public and private input providers Secondary Actors Information Required Information Sources Financiers, Government, Donors, Researchers, Quality and Standards Bodies, Info service providers, BDS Prices Standards Volumes Market Profitability Input Costs/ Services Profitability Level of Demand Markets/ Weather etc Standards/ improved technology Sources of supply Capacity utilisation Trends/ Markets / Profitability Standards Volume/ Capacity Utilisation/ Profitability/quality requirements Availability Quality Price Value for Money Own records Orders/ Contracts Sector studies Govt bulletins/Group Meetings/ Radio/ Mobile/ Contracts Traders/other farmers Own records Orders/ Contracts Sector studies Market research Producers/ Traders/information service provides (public or private) Orders/ Contracts Own records Sector studies/Traders/inf ormation service provides (public or private) Marketing Campaigns News/ Press Own experience
  103. 103. Access to Information by VC actors • Traders and processors/exports have their own networks to access up-to-date market information and are keen on investing to acquire the right information • On the other hand producers (small scale farmers) are commonly isolated and suffer from lack of information. Brain storm on the reasons why farmers lack market information compared to other actors in the value chain?
  104. 104. Market Information System An MIS is a public or private service, which regularly collects information on markets and communicates it timely and on a regular basis through various media to farmers, traders, companies, government officials, policymakers and other interested persons
  105. 105. Types of MIS Different types of MIS Public (Government-run MIS) Example: common in most developing countries under the ministry of Agriculture Strengths Weakness •Are independent and unbiased •Do not always reach the smaller farmers •May not be up-to-date or may be made available too late to be of any use •May not be very accurate •Provide little analysis •Offer information over several years •Provide information that can be used to help farmers get better prices and plan for production •Free MIS by Non-governmental Organizations (LINKS by ILRI, Market Node by CARE) •Unbiased •Accurate •Free •Accessible by small holders •Not sustainable •Only reach small groups
  106. 106. Cont … Type of MIS Strengths Weakness -up-to-date -not biased -not comprehensive -costly -may not be easily accessible Traders, agro-processors or exporters -up-to-date information -might be biased -semi-accessible -costly (EPOSPEA, EHBPA, contract farming) -sustainable Stakeholders initiated MIS -is based on needs of actors -un biased -accessible -up-to-date and accurate -highly dependant on stakeholders commitment (Producer groups, or individual Farmers) -easily accessible -highly accepted /trusted source -may not be accurate -is not comprehensive BDS providers (‘Reuters Market Light’ in India)
  107. 107. Summery of challenges of Existing Public MIS service in Ethiopia
  108. 108. Main tips for designing an MIS • Start small and grow big later on: Experience shows that it is always better to start the MIS small and expand it later, according to resources and skills needed for gradual management and reinforcement. • Focus on priority and essential information • Use already available information sources to avoid duplication • Find ways of simplifying and reducing charges for collecting and processing.
  109. 109. Exercise • For each value chain 1. List out the information need (gap) 2. Identify existing structures and information sources available 3. Make recommendation on how to build on existing initiatives to put in place better MIS in the sector?
  110. 110. Tip…
  111. 111. Business Development Service
  112. 112. Business Development Services (BDS)  are services that improve the performance of the enterprise, its access to markets, and its ability to compete.  is a wide array of business services, both strategic and operational.  are designed to serve individual businesses, as opposed to the larger business community.  Is the wide array of non-financial services critical to the entry, survival, productivity, competitiveness, and growth of SEs.  include training, consultancy and advisory services, marketing assistance, information, technology development and transfer, and business linkage promotion.
  113. 113. A distinction between "operational" and "strategic" business services. • Operational services are those needed for day-to-day operations, such as information and communications, management of accounts and regulations. • Strategic services are used by the enterprise to address medium- and long-term issues in order to improve the performance of the enterprise, • Access to markets, and its ability to compete. • For example, strategic services can help the enterprise to identify and service markets, design products, set up facilities, and seek financing.
  114. 114. Specific areas of BDS service • • • • • • • Market information Entrepreneurship training Market research Facilitate & linkage with technologies Advisory support & technical services Provide non financial services Consultancy service on the areas of marketing and agricultural entrepreneurship promotion • Introduce and sell new technologies such as – equipments, tools, ideas etc • Provide Technical service • Sample Business plan format
  115. 115. Business plan (BP) • A BP is a written document – carefully prepared by an entrepreneur or a business development service provider that describes • the objective of the business, • the proposed action with the necessary steps to enable the business to reach those objectives. • Planning is thinking & working out – what to do, how to do & when to do relevant activities • A BP is a profile of your business made up of partly words and partly numbers. – The word describe about your business, products and or service, customers, competitors, operations, sales, marketing, etc. – The numbers estimate your cash flow, income & expenses, balance sheet, break-even analysis, etc.
  116. 116. Entrepreneurship
  117. 117. What is Entrepreneurship? • What comes in your mind when you listen to the word Entrepreneurship? or • How do you understand Entrepreneurship?
  118. 118. Entrepreneurship What are the characteristics of entrepreneurs’ ?
  119. 119. Entrepreneur is a person • Who organizes, manages and assumes risk of running an enterprise • Who owns a business – sell of manufacturing (any product), Trading (buying & selling), Service business at profit • Who Does new things or does in new ways – Have high drive and higher activity level – Constantly aim to achieve goals and guided by their goals and work hard – Know their strength and weakness and resources and constraints while striving for their goals
  120. 120. What are the differences between characteristic of an entrepreneur and self employed? Entrepreneurship and IGA/Self Employment Self Employment /IGA – A women running a small business establishment & looking after her business all alone is said to be self employment Entrepreneur • When a women starts a small business & employs few to keep it running but manages the enterprises • Is who initiates & establish econ. Activity/enterprise • All entrepreneurs are self employed but all self employed aren’t entrepreneurs.
  121. 121. Process of Entrepreneurial dev’t ( three features) Motivation, developing economic insight , promoting managerial skill, confidence, information, etc 2. Development Identification, selection, 1.Initiation Process of Entrepreneurial Dev’t 3. Support Establishing and running an enterprise (finance, working place, machinery, power, incentives, etc)
  122. 122. What are the factors that influence entrepreneurship?  Gov. policy  Financial availability  Infrastructure  Econ. Dev’t  External env’t  Socio cultural factors
  123. 123. What are the steps that an entrepreneur will take to set up and manage her business?
  124. 124. Developing women entrepreneurs
  125. 125. Plenary discussion Describe the role of women
  126. 126. Plenary: What are the typical gender challenges of women entrepreneurs? • • • • • Gender biased and self imaging Balancing work & family responsibility Gender stereotyping Physical and psychological intimidation Lack of opportunity for decision making
  127. 127. Group work: Problem tree analysis • Pictorial and symbolic presentation of a tree • Instructions for Problem Tree Analysis • What are the factors that hinder women business owners from success? • Use a picture of tree & include the following
  128. 128. 1. Choose a problems in starting an enterprise: social (family, community, religious, etc); economic and Gender 2. What do women would like to achieve/see in society: Specific results/benefits - leaves 3. Social supports (gov’t & non-gov’t inst.) -Trunk 4. Roots causes responsible for limiting women to achieve what they want: Beliefs, values/attitude  See the possibility of being responsible for the risks involved in the establishment of the enterprise
  129. 129. What are the major challenges in Enterprise development? • Access to adequate and timely support • Perception of the society – bias against women:- acceptance of women as entrepreneur; dilemma women’s role as mother & entrepreneurs; lack decision making opportunity, etc • What can be done? – entrepreneurial attitude & behavior competencies
  130. 130. Summary: Why Women Entrepreneurship development The main objectives • To increase HHs income and ensure alterative livelihood options – build effective/successful enterprise • To motivate and reinforce the entrepreneurial traits & abilities - Behavioral inputs and build confidence to overcome fear of failure • To facilitate decision to setup new enterprise /expand existing ones - Business opportunity input • To develop required managerial skill & competencies for making enterprise successful -Information inputs, Technical/commercial inputs, Managerial input
  131. 131. Developing personal entrepreneurial competency (PEC)
  132. 132. Personal Entrepreneurial Attitudes and traits (PEC) 1. Initiatives 2. See and Acts on opportunities 3. Persistence 4. Information seeking 13. Risk taking PEC 5. Concern for high quality, innovation and efficiency 12. Goal setting 6. Commitment to work contract 11. Use influencing strategies 7. Systematic planning 10. Persuasion 8. Problem solving 9. Self confidence Professor David McClelland, 1983 research on Personal Entrepreneurial Behavioral Competencies(PEBC)
  133. 133. The importance of PEC in each stages of Enterprise development
  134. 134. Facilitation Skill
  135. 135. What does facilitation mean? • Facilitation: – Is to help others to use their potential not our potential – Is providing information not teaching – Supporting not directing – Understanding how it is for others – Inquiring – not interrogating
  136. 136. Good facilitation requires the following • Creating safe environment for people to share experiences, make mistakes disagree with you – Make sure they have enough space for self responsibility, initiative, risk/possibility, etc. – Appreciate contributions & those sharing challenges – Help people to solve their own problems – do not be tempted to give solution by yourself – Celebrate success and congratulate on failure – see it as opportunity to learn about self – Let others know that you understand their feelings and statements
  137. 137. Cont… • Be a role model – Give easy access to info., clear advice & ensure by paraphrasing – Recognize with courtesy & listen with full presence – all ideas are valid – Assess congruence of conversations on meetings – Make sure that you declare lessons you learnt at each meeting & complement – Maintain tone of respect, express your feelings clearly – Admit your mistakes publicly – say it out – Invite your people to give you feedback, appreciate it and complement