The central question of the international workshop is how to move from islands of success to “seas of change”. And that raises questions about working at scale, having impact in depth, and sustaining inclusive supply chains over time. Generally speaking, the Seas of Change Initiative is shooting to get insight into five major dimensions:
- Drivers that necessitate inclusion and scaling in this theme
- What do we scale: What are the incentives?
- What are the mechanisms for scaling?
- What is the context within which these are happening and need to happen?
- Where do we need to put more energy into to take this forward?
What follows are summaries of 10 themes that have a central position on the second workshop day. The summaries include relevance, key questions and initial contributions. The theme overview can also be downloaded here
1. Certification: Possibilities and limitations at scale and traceability alternatives
“What is needed to scale up towards sustainability?”
In recent years many companies have made bold commitments to sustainability, with sustainability standards seen as a crucial tool for achieving those. Governments are also increasingly specifying sustainable products in their public procurement and other policies. However, it remains challenging to reach scale. Market share of the certified products is still limited. But at the same time, in some markets buyers are confronted with a lagging supply response, in others, certified suppliers see limited uptake in the market.
Scaling towards sustainability requires significant investments in relationships, capacity building, information networks and technology. It also requires governments, the private sector, standards systems and NGOs to find new and creative ways to work together.
In this workshop we will discuss the challenges and opportunities to lift sustainability standards towards a mainstream market position.
The workshop will start with three inspiring introeductions provided by:
Mr. Jan Kees Vis, Global Director Sustainable Sourcing Development of Unilever
Mr. Han de Groot, Director of Utz Certified
Mr. Michael Nkonu, Director Fairtrade Africa
After this we will involve the audience in a lively debate, discussing the main challenges based on critical statements.
From this discussion we will derive key recommendations for the public, private and research sector on how to
proceed on this topic.
2. Ensuring greater local spin-off from global value chains – the case of horticulture
Horticulture can be significant in terms of inclusiveness of small farmers. In particular, export oriented agriculture can produce a series of important spinoffs to the local economy (such as crop rotation for improved food security, and introduction of more sustainable practices; for instance drip irrigation for the fields). However, important challenges remain to scale up inclusive business in horticulture. The space for smallholders is constrained by market requirements in terms of consistent quality and availability which calls for organisation and aggregation of supply and quality control.
The session aims at exploring which are the incentives that lead to inclusive models in the horticulture session, which are their success factors and challenges, which is their impact on smallholders, and which are the opportunities/mechanisms for their scaling up. In terms of scaling up opportunities, we focus on particular at whether there have been positive spin-offs of export oriented horticulture on local markets and food security.
- Which are the incentives that drive inclusive models in the horticulture sector? Is there a business case for smallholder inclusion?
- What are the key success factors of inclusive horticulture business, which are the key challenges?
- Which are the mechanisms of scaling? (Certification and capacity building, system innovations, professionalization of the labour force and producer organisations, fair and transparent governance, equitable sharing of risk, the presence of an ethical agent)?
- What is the scale of impact that is being achieved, in terms of Expansion of local/regional market and food security? And improved farmers’/workers’ livelihood?
- What innovative approaches are being developed that can be scaled up and/or replicated? In which contexts are they likely to be effective, where not?
- How can we help farmers to adapt to the pull culture of supermarket?
Theme Leader/facilitator: Dave Boselie, Sustainable Trade Initiative
CDI support (reporter): Lucia Wegner, Seas of Change Researcher
Lead contributors (initial examples to get discussion going):
- Africa Juice, Harry Van Neer (very interesting business model for passion fruit export from Ethiopia, now they are replicating it for fish)
- Eunice Mwongera, Hillside Green, Kenyan company which exports fresh fruit and vegetables (good example of an inclusive business).
- Smeding: Mijn Boer concept of direct sourcing from emerging farmers in South Africa on basis of unique tracking & tracing system.
- Mark Lundy, CIAT (Reflecting on previous speakers and recent developments of various Latin American cases applying strategies such as total product procurement and direct sourcing strategies, cf. Costco – Cuatro Piños case of French beans}
3. Innovative finance structures for inclusive agribusiness at scale
Large-scale livelihood improvement means that tens if not hundreds of thousands of small-scale producers must be able to affordably invest in improved production means, market knowledge, capacity training, storage facilities, etc that will directly benefit themselves. Funding inclusive initiatives, however, is not that same as conventional agricultural sector developments. Since inclusiveness means building trust and working on power between actors, longer return on payment requires ‘patient’ capital. And how does one reach the thousands of producers, when most of them are not organised formally and have limited collateral? Different risk management strategies are necessary, and new communication channels must be built drawing on multiple actor groups.
Key issues/questions that will be looked at include:
- What do ‘inclusive’ market developments require in the way of new financing needs and offer as opportunities?
- What new risks and barriers to large-scale funding are linked to greater inclusiveness?
- What innovative approaches are being developed that can be scaled up and/or replicated? In which contexts are they likely to be effective, where not?
- A new borrower base must be understood better in terms of capacity to borrow, viable rates of return, risk categories etc. to allow better assessment of who can be lent what under what conditions and to reduce transaction costs.
- It is crucial to find the right point of engagement: who is interacting with large numbers of small-scale producers and potential borrowers, who could provide a financial supporting role?
- Need to invest in innovative risk management mechanisms (such as insurance and hedging through futures), in particular risk sharing through a value chain.
The International Finance Corporation and Rabobank will kick off the discussion with experiences in innovating in this area.
4. Kick-starting productivity: What do we need to do differently from the last 40 years to realise 204x productivity jumps?
For over 40 years agriculture research centres, agri-businesses and extension systems globally have put huge efforts into raising agricultural productivity. This has led to many successes, but not for all. In many product groups small-scale producers are producing at 3-5 times below what are readily achievable production levels. Productivity must go up significantly to meet growing global food demands. For the hundreds of millions living on several dollars a day, meaningful livelihood improvement requires doubling or tripling production. So what do we need to do differently to get the productivity jumps needed?
Some of the questions we will consider include:
- What is the scale of change that needs to be targeted?
- What has forty years of global research and extension taught us about critical aspects of productivity jumps? It’s easy to end up with a largely technocratic list of dozens of key factors. Can we/do we need to narrow this down without ignoring the complexity that must be considered in a more integrated way?
- Who are the critical players that need to work on this together? Just looking at smallscale producers is not enough: decades of producer and production led work still is missing enormous groups.
- What does it mean to take a good initiative and scale it factor 20, 50, 100? Globally estimates of small-scale producers vary from 500-800 million, while current initiatives often don’t go beyond tens of thousands.
Three parties working daily on this question will kick off the group debate.
- International Fertiliser Development Centre: André de Jager, Director West Africa
- Ecom Agroindustrial Corp.: Dave Rosenberg, Global Sustainability Director
- Africa Harvest: Daniel Kamanga, Communications Director
5. Local sourcing for local markets
With the earth’s population growing, our current food supplies will soon be insufficient to feed all. In this context of growing scarcity, Africa offers both market and production opportunities.
The largest population growth will occur in Africa, where at the moment only 20% of total food production capacity is used. In a context of scarce supply, short-term commodity trade is no longer the right business model. Companies have discovered that long-term relations are needed to secure the commitment of supplying farmers. To build successful long-term relationships, companies must address farmers’ needs.
In other words, companies must aim both for profitability and improving farmers’ livelihoods. This is what Sustainable Local Sourcing for local markets is all about!
In the session on Sustainable Local Sourcing people can discuss with Heineken, Multiflower, Star Café and a Zambian rice company about the drivers and conditions for making Sustainable Local Sourcing a success:
- “What are required investments for Sustainable Local Sourcing?”
- “What can be the role of NGOs and government agencies?”
- “How is Sustainable Local Sourcing both profitable for suppliers and buyers?” are questions that will be discussed.
The session will be facilitated by KIT and Agri-ProFocus. More information on the business cases and Local Sourcing can be found at www.local-sourcing.com
6. Working effectively with large numbers of producers
For companies, farmer organizations, and non-profits, working efficiently with large numbers of producers raises new challenges about service delivery, roles and responsibilities, payment / financing mechanisms, information flow, etc.
We will explore several angles on this question:
- How do we reach large numbers of farmers through trading chains, and specifically, how do we reach beyond the farmers already organized into functioning cooperatives? Here we are trying to “reach” farmers with systems of traceability, market access, good standards and practices, and training to boost farm performance. How do we maintain control? Work with existing institutions? Stories to start us off will include:
- Rainforest Alliance and the Kenya Tea Development Agency are now aiming to reach over 450,000 tea farmers with certification and supporting services. Over the life of this effort, they have gone through several major organizational and financial mechanism challenges that offer provocative lessons.
- Olam International has been working to extend the reach of buying, technical assistance, and certification to very remote areas to increase volumes.
- How do we reach large numbers of farmers through agronomic improvement initiatives? Here we are trying to reach farmers with better varieties, training, etc to improve productivity, quality, and incomes.
- AGRA-Alliance has an example of using an unusual medium – a soap series called Shamba – as a vehicle for extension to smallholder farmers and rural households.
- How do we reach large numbers of farmers with better information services? Here we are trying to reach farmers with technology – cell phones, etc – that can increase access to market information, basic ag information services, ability to make deals, etc.
7. Effective partnerships: funding, roles and scaling
Hosted by SNV with inputs by Dirk-Jan de With (Unilever), John Lamb (Abt Associates, USA), Sheikh Noor Ullah (Acumen Fund, Pakistan) and David Rosenberg (Ecom Agro-Industrial Corp).
Over the last ten years private companies and NGOs have started to collaborate in agri-food chains at levels not seen before. Companies started to engage with NGOs to develop their social and sustainability profile. And increasingly also to help develop their supply base. NGOs started to engage with companies for their specific qualities in getting to scale and assuring economic sustainability. Indeed there is sufficient evidence that such collaborations have the potential to boost the engagement of small farmers in agri-food chains – in ways that serve both farmer incomes and empowerment as well as economic efficiency, supply volumes and the social contract of businesses.
At this stage many funders seek to invest in public-private collaborations. But successes are mixed. Many partnerships invented at high levels have difficulty delivering on-the-ground. Investors/funders complain too little feasible and fundable propositions are developed.
In this session an interesting mix of lead persons will bring in real-life experiences and help to stage a conversation on the following questions:
- Is it true that public-private partnerships are essential and working?
- What has worked? And why was that? Has it really led to scale?
- Why don’t we see it more often / leading to larger scales? What are key challenges we meet?
- What do we learn about roles? And how to do it more often, successfully and at larger scale?
- Do we understand the financing arrangements/sources needed? Do we need change in models?
The discussion is expected to enrich thinking and practice of all kinds of partners in the room – international and national companies, NGOs, farmers organisations, governments, donors and investors.
8. Policy: Where and how can it make a difference?
Markets, profits and entrepreneurial opportunity drive inclusive agri-food business, for small and large players alike. But markets operate within policy and enabling environments of differing regulations and standards; qualities of infrastructure; business climates; levels of public investment in research and extension; and options for public private partnerships.
This theme will explore what we do and don’t know about creating supportive policies and an enabling environment for inclusive business and where the critical leverage points are for going to scale. Questions to be explored include:
- How important is ‘inclusive agri-food market’ development becoming for public policy?
- What the major policy directions and differences of key countries/regions and what are the results and implications?
- What policy mechanisms are emerging as effective or ineffective?
- What are key policy needs of businesses who are trying to work more inclusively and how should/can government respond?
- What are key implications for donors and multi-lateral agencies?
A set of 5-minute inputs will frame the discussion.
- Steve Wiggins, ODI “What are the big policy issues and why should government care?”
- Chris Brett, Olam International – “Critical issues from a private sector perspective”
- Bill Vorely,IIED “Thinking laterally: insights from Regoverning Markets and new directions”
- Juan Cheaz, Rimisp/Mark Lundy, CIAT – A Latin American Perspective
- Mr Cuong Nguyen Hoa, Deputy Director of Enterprise Development Agency Ministry of Planning and Investment, Vietnam – An Asian perspective
- To be announced (due to last minute cancellation) – An African Perspective
9. Practical evidence of the business case on scaling food and nutrition security
Première! You will be the first to receive practical evidence, collected by the BoP Innovation Center and GAIN, on existing business strategies that improve the access to food and nutrition for the Base of the Pyramid (BoP). This inventory was part of the preparatory work for the PPP strategy 2SCALE: “Towards Strategic Clusters in Agribusiness through Learning in Entrepreneurship” (2012-2016). This strategy is developed by IFDC, ICRA and BoP Innovation Center, in close cooperation with a growing number of Dutch and African companies.
The goal of 2SCALE is to improve rural livelihoods in 8 countries in sub-Saharan Africa, through the development of competitive agro-food industries. From 2012 onwards, the project aims to include more than 1 million smallholder farmers and 5000 other SMEs in around 450 viable agribusiness clusters. Those clusters will target local food markets, including the BoP segment.
To make a better connection between agribusiness clusters and local food markets, the BoP Innovation Center broadened the understanding of the range of possible business strategies to low-income food markets in developing countries. Based on desk research, expert interviews and an in-depth analysis of 18 cases, key lessons are identified in terms of barriers to growth, scaling processes and objectives, adequate business models and most relevant customer needs.
In this session you will learn about the 5 key business interventions identified. You will be invited to comment and add to the recommendations for future action. And, finally, opportunities for potential practical participation and collaboration will be discussed.
10. Learning fast: Systems for rapid large-scale learning
Going to scale with inclusive agri-food markets is a significant innovation challenge for business and development organisations alike. Innovation depends on feedback about what is working and what is not and why. We need the numbers about what impact is being achieved where and how and we need a good analysis of the reasons for success and failure. Business is now also facing the challenge of putting in place the metrics to report on their sustainability commitments, and development organisations are under great pressure to be explicit about the impact they are having with public funds. Our interviews leading up the Seas of Change event have made it very clear, across the board, our monitoring systems are week and relatively little in-depth cross case study analysis has been done. This session will explore the information needed by different stakeholders for scaling inclusive agri-food markets and how to create the networks, research and learning platforms needed to drive rapid innovation.
The session will explore:
- The monitoring and reporting need for business and how they are responding
- Metrics and protocols for assessing private sector development
- The role and potential of multi-stakeholder learning platforms
- Research needs and how this can be better coupled to the needs of business and policy