SNV s inclusive value chain approach Presented at the Multi-stakeholder Conference on Agricultural Investment, Gender and Land in Africa: Towards inclusive, equitable and socially responsible investment. Cape Town, South Africa. 5-7 March, 2014 Background and history of SNV An international development organization committed to eliminating poverty and inequity worldwide and improving good governance. Envisions a society where all people enjoy the freedom to pursue their own sustainable development. To achieve this vision SNV works to build local capacity. Provides technical assistance, project implementation, knowledge development, brokering, advocacy and investment advisory services to public, private, and civil sector organisations in 1) Agriculture, WASH and Renewable Energy Headquartered in the Netherlands, SNV was founded in 1965 90 Offices in 35 countries, half in Africa Over 850 field-based professional advisors 60-70% of the local / national 2
Approach to inclusive Value Chain development Market led value chain development Systemic and holistic response to emerging issues Shared value, (Inclusive Business Approaches) Market linkages (smallholder farmers and companies) Emphasis on women and youthful farmers and their livelihoods Strengthening local organizations and institutions Value chain financing Governance, Advocacy, Knowledge Development Climate Smart agriculture and sustainable land and water use Integration of Food Security 3 Value chain Development Systemic Challenges: 1. How to empower poor producers and rural SMEs? 2. How to facilitate meaningful dialogue between value chain actors and promote fair business relationships? 3. How to develop strategic knowledge and marketoriented proactive decision-making? 4. How to secure financing in a fair and sustainable way? 5. How to facilitate access to affordable value chain and business development services? 6. How to guarantee an equitable, conducive and inclusive environment for the pro-poor development of the value chain? SNV Services: 1. Producer Group Strengthening 2. Multi-Stakeholder Platforms - Frameworks 3. Market Intelligence 4. Value Chain Financing Models 5. Local Service Provider Strengthening 6. Public Policy Management 4
Inspiration from Mai Samanga 5 Mai Samanga s Story Chairperson of the Mpangwa Banana Producer Group Has a plot of banana with about 800 plants Sells to Matanuska, a key banana company in Zimbabwe Earns $6,000 - $8,000 p/a from sale of bananas Built her own house, got a passport, started a another business I have bought the couch I have always wanted to buy, a 24-inch colour television for myself, and paid my children s school fees. 6
So what is secret behind her success? A product with a clearly defined market Buyers willing to do business with smallholder producers Private Sector confidence in women producers Producers who understand agriculture as a business A clear understanding of how the value chain works Transparency in contracting: All parties knew what they were into A clear motivation/need to associate in a group Bargaining power - negotiate with buyers (price, services etc) Everybody a winner (win-win-win) (Buyer-Producer- RDC) Advocacy with local authorities (the road is improved, school) Clear governance and accountability mechanisms 7 Gender in our work Staff with knowledge and skills to address gender equity Diagnosis of gender inequities at all levels Focus on gender-related constraints and opportunities M&E of gender impact of our work, sex-disaggregated data Participatory approach: Know them, design with/for them and account to them Make business case of working with women to private sector Create gender sensitive agriculture support services A comprehensive package of services (CBS, Market, Credit) Create incentives for private sector to work with women Create Fund in Zim ($36 m for impact investment, SHF, gender, youth, environment) 8
Sidella s sesame project in Zimbabwe The challenge/ opportunity Low returns from cotton in the Zambezi Valley Perennial failures of maize due to droughts Established demand for cowpeas and sesame: an opportunity Intervention Contracting smallholder farmers as producers (in groups) A farmer-based incentivised extension team Additional value chain financing through ZADT CREATE Fund Capacity building support from a specialist from SNV (LCB) Results 1,480 smallholder farmers (60% women) have access to sustainable markets for sesame and cowpeas Increased income ($600/ha vs $25 from cotton) Knowledge transfer on improved production Up-scaled to 8000 farmers 2013/14 season, new areas 9 Honey value chain development in Zambia The challenge/ opportunity Low productivity, low quality, high chain inefficiencies Intervention Value Chain analysis for constraints and opportunities and ideas for action Producer group strengthening Results Production increased from 150 to 3000 ton per/yr 60% increase in price per kilogram of honey 120% increase in average income for 13,500 beekeepers Brokered investment of US$ 300.000 for the processing company Zambia Honey Council established and developing quality standards for export branding of Zambian honey and beeswax 10
Oil seed Value Chain Development - Uganda The challenge/opportunity Competition in the sunflower market in Uganda Mukwano Vs Mt Meru Millers High transaction cost working with individual contract farmers (outgrowers) Unreliable supply from smallholder outgrowers Need to strengthen company and outgrowers to secure sustainable supply Intervention Multi-stakeholder platforms (MSPs) to discuss industry wide issues Producer group strengthening Participatory value chain analysis on the MSP with focus on gender equity Results to Date: 480 producer groups formed (including 12,000 producers) Mukwano Industries committed to purchase 100,000 tons valued at US$30 million. Mukwano Industries provided extension services, high-quality inputs, competitive prices, assured markets and increased processing capacity and bulking facilities. 11 Sesame Project with Export Trading in Mozambique Attractive cash crop (Up to 1000 USD/ha return) First year, small project, negative results, side selling Second year, continued with 180 farmers, promoting productivity enhancement through training extension and demo plots and a focus on training women, demo-plots, adding female trainers Third year, 592 farmers, added mechanisation and pesticides Fourth year 4500 farmers large uptake, expanding to second province and farmers increasing plot sizes. Lessons: From experience allow 2-4 years learning curve Female extension trainers and women only group sessions in highly patriarchical communities Smaller demo plots and markets close to homesteads for women 12
Critical success factors It all starts with a robust value chain analysis Plan inclusion from the beginning, not an afterthought Choose value chains with clear motivations for all actors Private sector commitment and leadership Clarity of contractual mechanisms and obligations Give voice to all value chain actors including women Create safe platforms for discussion Agriculture as a business training for smallholders NGOs should be impartial brokers always Soft capital for impact investment, risk sharing and reduction of transaction costs of working with the BOP 13 THANK YOU Contacts SNV Zimbabwe 6 Caithness Road, Eastle Harare, Zimbabwe Larry Attipoe (Country Director) lattipoe@snvworld.org Elton Mudyazvivi (Sector Leader, Agriculture) emudyazvivi@snvworld.org 14