Change Management in Agriculture to Achieve Smallholder Impact at Scale

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1 Change Management in Agriculture to Achieve Smallholder Impact at Scale Marco Ferroni Rothamsted Research, Institute Seminar October 29, 2015

2 Overview Drivers Feeding the world Transforming farming How we respond Some examples 2

3 Yield growth fatigue World cereal yield, annual yield increase, and population growth 3 Data source: FAOSTAT. R square of the fitted trend line of cereal yield is Cereal yield increase is calculated based on the fitted line.

4 Yield hotspots, 4 crops % rates of annual crop yield change, 13,500 jurisdictions Source: Ray et al. (2013) 4

5 Irregular structural transformation paths Factors at play: Population size and growth Arable land endowment, farm size Outmigration and nonfarm sector absorption of surplus labor in good jobs Labor productivity (ag, non-ag); income disparity Productivity in manufacturing vs overall demand The figure represents the cumulative annual growth rates from 1970 (=0) to 2007 of: the active population in agriculture (x-axis) the income differential between agricultural and non-agricultural workers (y-axis) measured with the Labour Income Ratio in 1990-US$ Source: Dorin et al, 2013 Globalization; market integration 5

6 More on this topic 6 Virtuous Lewis path of OECD and transition economies not replicable everywhere Much of Asia, with its land constraint, likely headed into different directions, with growing income disparities between workers in agriculture and manufacturing, and persistent structural poverty This has major implications for livelihoods, food security and the resilience of systems Farmer-inclusive modes of development need to be in place in this situation to support rural income, feed everyone and help prop up employment-fostering demand Technology, services and access to markets at the core of integrated (rural) agri-food systems encompassing production and processing and paid-for environmental services The question is how differentiation will evolve; along paths that include part-time farming on smallish farms, operational consolidation of farms, offfarm employment in rural industries and services, formal industrial jobs and unstable informal sector work?

7 Our response (1/2) Cross-cutting efforts to incubate products, methods, solutions... 7

8 Our response (2/2) Improved inputs & finance: - Seeds - Insurance - Seed treatments - Subsidy policies... and to deliver them to farmers, aggregators, users Improved production efficiency: - FarmForce - Agronomy, extension - Mechanization Clientele = pre-commercial small farmers Interventions are p shipbased, time-bound, increasingly integrated, designed for rapid scaling Support agricultural value-chains and local commerce to improve productivity, product quality, market access and thus profitability of smallholder farmers More profitable outputs: - Market access - Market information - Farmer aggregation - Harvesting & storage 8

9 Some characteristics Established in staff globally, mostly in local teams Funding: Syngenta AG; third-party investors Focus on selected countries as well as multi-country operations Operate through partnerships and hubs R&D PPPs, seed industry, ag insurance (insurers, re-insurers, aggregators), ag credit (banks, microfinance organizations), digital decision tools (agribusinesses, NGOs); mechanization Farmer hubs, producer organizations, contract farming (with NGOs, aggregators, government-support); self-funding Jump-start markets for inputs, services, farm produce (>> expand size of the pie) Influence policy through policy analysis, dialogue, outreach (>> enhance FTO) Influence eco-system of actors: we lead, supply tools, others co-invest (>> widen and align constellation of actors) Deepen impact by integrating the offer (e.g., seed, credit and insurance) Organisation: small HQ team, core group in each country, extra services engaged through partnership programs 9

10 One thing we learned No adoption of tech change at scale in the absence of items below Relevant products Links to output markets PPPs Functioning input markets Enablers of farmer demand 10

11 Weather insurance 11

12 Drought tolerant crops Targeting 3.5mn hectares of OPV maize in India, Indonesia, possibly Myanmar Partnership for breeding low-cost maize hybrids with improved dry-season yields CIMMYT: Genetic diversity, field trialing network, experience in variety release Syngenta: Molecular screening platforms, elite germplasm, performance assessment, product development Syngenta Foundation: PPP models, royalty and IP ownership schemes; brokering function Distribution of new varieties through local seed companies 12

13 Seed systems development Seeds Systems Problem: Smallholders can t access quality seeds yields stay low SFSA: Breed in neglected crops, Technology Transfer models for Public to Private; Test & introduce new varieties, Support local seed production through building markets, Investigate adjacent technologies Smallholder benefits: Raise yields, improve income, diversify Introduce new varieties (foundation seed, proprietary varieties, licensing) Enabling partners Private local medium-sized seed companies Build the market for seeds (advanced market commitment, credit/savings, offtakers, input insurance) Provide financial assistance (working capital, investment, business training) Integrate new seed technology (seed treatment) Private sector crucial, but many seed companies need links to breeders & assurance of markets 13

14 Farmer support services Farmer Hubs 14

15 Digital tools to link farmers to markets The first integrated mobile platform to manage smallholder outgrower schemes New: digital processes Old: paper-based processes Centralized information, up-to-date and accessible Time-consuming, error-prone Difficult to aggregate Data inconsistencies Processing delays Traceability difficult Better planning and management of staff / farmers Complete traceability / reduced auditing Easier compliance with standards Improved communication 15

16 Change Management in Agriculture to Achieve Smallholder Impact at Scale