BRIA in-house, Regional Knowledge Sharing WS PPP astari.dharma@giz.de 1 Value Chain promotion with PPP BRIA in-house, Regional Knowledge Sharing WS PPP Can Tho, 22/03/2017 by BRIA RS - AD
Value Chain promotion The collaboration between public agencies and the private sector is a basic principle in value chain promotion Source: 2014 FAO, 2008 Value Link, 2016 SDG astari.dharma@giz.de 2
Sustainable VC astari.dharma@giz.de Source: 2014 FAO 3
The value chain map astari.dharma@giz.de Source: 2008 ValueLink 4 Basic sequence of functions in an agribusiness value chain 1 Specific Inputs Production Consumption Transformation Trade Provide - equipment - inputs Grow, harvest Produce the primary stage etc. Classify Process Pack Transport Distribute Sell Prepare Consume Categories of operators in value chains and their relations Specific Input providers Farmers, (primary producers) Packers, Agroindustry Traders (sales pt.) Consumers of pineapple juice (the market)
Concept: micro meso macro levels Source: 2008 ValueLink astari.dharma@giz.de 5 Micro Functions directly related to the product Input suppliers Primary producers Processors, industry Wholesalers, retailers Consumers Meso 1 Information Markets, partners Support functions benefiting all operators alike Public Research search, finances.. Collaboration Promotion projects Advocacy/ common interests Fairs, joint marketing Functions supporting the business climate acro Infrastructure : Roads, electricity, water Legal framework: Food laws, taxes Political framework Sector support
Upgrading Solutions BRIA in-house, Regional Knowledge Sharing WS PPP Service arrangements Norms & standards Service provider Policies Technology providers Primary producers Processing Industry Traders Consumers (the market) Association Vertical linkages Buyer Credit New Business model Horizontal linkages Source: 2008 ValueLink astari.dharma@giz.de 6
BRIA in-house, Regional Knowledge Sharing WS PPP Horizontal & vertical biz linkages The coordination between different chain operators is at the core of the value chain concept Vertical business linkages - between operators of various stages of the value chain especially those between suppliers and buyers Horizontal collaboration between operators working at the same stage particularly important from a pro-poor perspective as linked with market access for MSME, women Source: 2008 ValueLink astari.dharma@giz.de 7
Horizontal business linkages BRIA in-house, Regional Knowledge Sharing WS PPP Cooperating to achieve commercial advantages 1 Final Consumers Trader, Retailer Industrial company Farmers and microenterprises no longer operate independently The producer cooperative becomes the enterprise through which business transactions are made. Producer (SME) cooperative Enterprise network Specific input provider Source: 2008 ValueLink astari.dharma@giz.de 8
BRIA in-house, Regional Knowledge Sharing WS PPP SCALE!! Collaboration inter-stages: Micro - Meso - Macro Common areas of PPP collaboration: Formulation of policies Quality control Technology transfer Training & qualification Infrastructure Source: 2008 ValueLink astari.dharma@giz.de 9
Horizontal networks of enterprises Cooperating to exercise political influence BRIA in-house, Regional Knowledge Sharing WS PPP Final consumers 1 Trader, Retailer Industrial Company Big associations and business organizations start playing a political role defending the interests of the industry. Federation of associations Producer association Commercial department Enterprise network Specific input provider Source: 2008 ValueLink astari.dharma@giz.de 10
Example of VC model BRIA ID Input Supply Production Processing Wholesale Processing Retail Consumption Provide and supply inputs for seed production i.e. source seed, fertilizer, pesticides, machinary, etc Produce rice seed by following GAP Rouging Harvesting Drying Shorting Cleaning Packaging Labeling Warehousing Warehousing Transporting Warehousing Transporting Source Seed Producer Fertilizers Distributors Pesticides Distributors Farmers Seed Grower Group Wholesaler State-owned Company Kiosk Gapoktan/Farmer Association Farmers Agriculture Ministry BRIA BB PADI Seed Association BRIA BPSB PT Sang Hyang Seri PT Pertani BRIA Agriculture Department Source: 2016 BRIA Indonesia astari.dharma@giz.de 11
BRIA in-house, Regional Knowledge Sharing WS PPP Types of PPP set-up Informal cooperation Inviting voluntary contributions and sponsorship of companies for activities of common interest Short-term cooperation in studies, conferences and business delegations Formal public private partnerships (PPP) PPP contracts in which both public agencies and private enterprises invest significantly into the same project side by side, yet without any financial flows between them PPP contracts in which the public side pays a private partner promoting the chain and generating a public benefit (not for making upgrading investment in the own interest of the company!) Source: 2008 ValueLink, 2008 World Bank, 2014 FAO astari.dharma@giz.de 12
BRIA in-house, Regional Knowledge Sharing WS PPP Important preconditions / success factors for public-private partnerships Both sides share a common interest The private company has a long-term commercial interest in the value chain and be present locally Both sides are willing and capable of investing into the project There has to be a net benefit from cooperating for both sides (win-win situation, clear revenue & cost est.) Third parties, especially small-scale suppliers should be able to participate in, and benefit from the collaboration The collaboration is based on trust, open and flexible Compliance with contractual agreement Competitive and transparent Clear governance structure Source: 2008 ValueLink, 2008 World Bank astari.dharma@giz.de 13
astari.dharma@giz.de 14 Titel der Veranstaltung Thank You! BRIA Regional Secretariat Office http://www.better-rice-initiative-asia.org Astari Widya Dharma Regional Project Coordinator - Better Rice Initiatives Asia (BRIA) Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH E : astari.dharma@giz.de