Producer Organizations - some WorldFish Experiences

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Presented by Michael Phillips, Malcolm Beveridge, and Wayne Rogers at the Producer Organization workshop, held in Cairo, Egypt on the 25th of September 2012.

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Producer Organizations - some WorldFish Experiences

  1. 1. Producer Organizations- some WorldFish experiencesMichael Phillips, Malcolm Beveridge and Wayne RogersProducer Organization workshop25th September 2012, Cairo, Egypt
  2. 2. Overview• Background• Case studies• Lessons• The presentation is based largely on Asian experiences
  3. 3. Definitions and characteristics• Several definitions of producer organizations, but key characteristics – Membership based organizations – Provide services to members – Access to these services is a key reason to become a member• These characteristics distinguish producer organizations from NGOs and “traditional’ organizations
  4. 4. .. organizations may operate at different levels• Local level – farmers clubs, self-help groups• “Mid” level – farmers associations, federations of farmer clubs• “Higher” level – National or regional federations, unions, associations
  5. 5. .. the case for producer organizations • collective/scale efficiencies for farmers an industry • increased bargaining power • lower production costs • improved access to input and services – e.g technical, credit, bulk purchase/discounts; • empowerment of farmers, particularly smaller producers • increased voice and influence
  6. 6. .. but they also have costs and challenges• takes time• needs trust• needs investment• transaction costs can be high• participation and benefit sharing• free riders• sustainability (beyond projects)
  7. 7. Some experiences
  8. 8. India – crowded coastal aquaculturePartnership • Excellence • Growth
  9. 9. Background• India is a significant producer of aquaculture products – produces $10b of shrimp and fish – 70-80 % small-scale farms < 2 hectares• Underforming in early 2000• Response from 2000 – onwards • project investment in better farm management and society development • govt invested “umbrella” society - NaCSA in 2007
  10. 10. Investments in small-scale farmers• Better Management Practices (BMP): – pilot of 10 farms in 2002 – extensive roll out post 2002• Organizational improvements – societies and clusters in common waterways
  11. 11. .. more activities• improving field extension services – village based, with close contact with farmers – communication and education campaign• improving connections to value chain players – hatchery operators, feed manufacturers, lastly markets
  12. 12. Success relied on local farmer societies• 20-30 people – common water supply management – access to technical services – credit (Bank) – bulk purchase of seed and feed – synchronized shrimp stocking
  13. 13. Outcomes – improved pond yields• Kg/farmer increased by 376%• Total production increased from 37 tons p.a. to 870 tons p.a.1,400 1,1921,2001,000 913 800 800 870 672 Total production p.a kg/farmer 736 730 600 Total production p.a. tons Total number of farmers 379 400 308 250 200 147 130 58 5 - 37 4 22 40 Baseline (2001 survey) 2002 2003 2004 2005 2006
  14. 14. Outcomes – improved farmer incomes• Increase in net profit per farmer from $278 p.a. to $2,648 p.a.• Profit margins increased from 25% to 40% 7,000 6,621 6,000 5,072 5,000 4,000 3,556 Revenue per farmer p.a. 3,000 2,648 Profit per farmer p.a. 2,107 2,029 Production kg/farmer 2,000 1,368 1,113 889 843 1,000 342 1,192 278 913 800 - 250 379 308 Baseline (2001 2002 2003 2004 2005 2006 survey)
  15. 15. Outcomes – excellent project returns • Strong returns - $272k investment generated net5,100,000 profits of $3.52m 4,833,3334,800,0004,500,0004,200,0003,900,000 Revenue generated - total $8,884,444 3,733,3333,600,000 Net profit generated - total $3,524,4443,300,000 Investments - total $272,0003,000,0002,700,0002,400,0002,100,000 1,933,3331,800,000 1,493,3331,500,0001,200,000 900,000 600,000 177,778 122,222 300,000 163,542 44,444 17,778 48,889 81000 4,444 50,000 31,000 - 40,886 28,000 43,000 39,000 Baseline (2001 2002 2003 2004 2005 2006 survey)
  16. 16. Indian societies - lessons learned• There can be significant impacts for small-scale farmers, but: – it takes time for solid results  slow change in knowledge, attitude and practice among farmers – good and reliable services at grass- root brings the real change – “lead farmers” important – engage with stakeholders along value chain – direct financial/in-kind support to farmers brought negative results.
  17. 17. Farmer cooperative in Aceh, Indonesia 72 71 08 74 09 10 11 16 17 05 73 06 07 14 15 13 12 04 03 01 02
  18. 18. Recent history– Internal conflict – mid 90s till 2004– Earthquake and tsunami in December 2004– Responses  Humanitarian  Infrastructure rehabilitation  Improved management and rebuilding farmer organizations
  19. 19. Investments in managementand farmer organizations • “Better management practices” • Organization re-building  Farmer groups  Clusters  Local services  Moving towards a formal membership-based cooperative • Communications
  20. 20. Groups and cluster approach• Village level groups• Watershed clusters Cluster: Petuah Neuheun (5-10 Kelompok) - Village: Kontak Petambak Kelompok (10-20 Farmer/Group) ~2500 Farmers
  21. 21. Outcomes - participation • Core farmer group increased from 47 in 2007, to 2,639 in 2010 • Additional 19,500 farmers received indirect benefits Post- 47TsunamiRehabilit ation 2005-06 2007 2008 2009 2010 Village level Cluster level Districts Districts Rehabilitation of Damaged 11 villages 4 Clusters 84 Villages 100 Villages farms and 47 farmers 34 Village 1150 farmers 2656 farmers restart of farming 22 Ha 260 farmers 1027 Ha 2250 Ha 3 tonnes 184 Ha 105 ton shrimp 250 tonnes Shrimp 22 tonnes 35 ton fish 100 ton fish
  22. 22. Economics provides a strong incentive forbetter management
  23. 23. Informal groups to a formal cooperative• Farmer groups as members• “Technical team” merged into and paid for by cooperative.• Cooperative services: – Enterprise credit – Technical and market services – Secures quality seed and quality/cheaper feed inputs for members through bulk purchase and contracts – Market access
  24. 24. .. the Aceh cooperative business model• Financed through: – Membership fee – Microfinance commission – Seed commission (small) – Feed commission – Marketing and trade – Trading provides the biggest return but is most demanding
  25. 25. Major lessons from Aceh• Simple technical improvements deliver benefits. These are best delivered through local groups• Investments in organizational development and local services pay off• Takes time – “patient capital”• Partners of different skills• Market access can make a difference long-term, but needs skills an time• Cooperative business model but best income through vertical integration
  26. 26. FEAP - an example of an “apex” federation • “FEAP is the united voice of the European aquaculture production industry, being the federation of national aquaculture associations that represent professional fish farming in Europe.” http://www.feap.info/intro.asp
  27. 27. FEAP - activities• Advisory role – to the European Commission and the European Parliament as well as other aquaculture stakeholder organization• Research and innovation investments• Annual award – individuals who have made an outstanding contribution to excellence in European aquaculture• Participation and promotion – actions and discussions on aquaculture
  28. 28. Lessons• There are many examples globally where producer organizations have made importance contributions to the development of aquaculture• What is success?• What are success factors?
  29. 29. What is a successful producer organization? – achieves the objectives agreed upon by members – retains or expands membership – makes progress towards financial and managerial self- reliance and sustainability, inspiring members to maintain their participation in the organization – improves self-esteem, and the economic and social well- being of members
  30. 30. Internal factors that influence success..– Common and clearly agree objectives– Technical and managerial capacity– Demand-driven and beneficial service delivery– Sound governance and management– Strong leadership– Group cohesion– Business model– This all takes time!
  31. 31. External factors that influence success – External partnerships (govt, NGO’s, donors) – Private sector relations – Enabling institutional environment
  32. 32. M.Phillips@cgiar.orgWorldFish and CGIAR Research Program on Livestock and Fishwww.worldfishcenter.orgAcknowledgements – Swiss Agency for Development and Cooperation (SDC),Resource Legacy Fund, GIZ and FAO/Allfish
  33. 33. WorldFish resourcesVideosFarming Waters, Changing Lives: https://vimeo.com/40206928Investing in hope: Ruslis story:http://www.worldfishcenter.org/feature/fish-farms-help-post-tsunami- acehnese-communitiesPublicationsKasam et al (2010) - http://www.fao.org/docrep/014/i2275e/i2275e00.htm

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