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In our livestock fish proposal, we highlight our intention to “foster partnerships that harness the respective strengths of research and development partners, including the private sector” (p. iv).
This is because, as we note, “increasingly, opportunities are being created to partner with the private sector, tapping into their research and business expertise to benefit the target value chains, while at the same time providing a means to create market pull or ensure commercial provision of appropriately designed pro-poor gender responsive inputs and services that promote and support uptake of productivity-enhancing technologies by the target groups” (p. 9).
The Consortium Board has challenged us “for a better explanation of how this sector will contribute to value chain development and scaling out the outcomes.”
One of the reviewers was more critical, saying: “Where somewhat unrealistic expectations are raised throughout the document is where numerous suggestions for private sector involvement are made. It appears not justified to assume major private sector investment in the context of the value chains targeted by the Programme given that they are somewhat marginal to the large market dynamics preferred by the private sector.”
To address these comments, we propose to describe in more detail how we envisage involving the private sector as partners along the following lines.
The private sector is targeted as a key partner because its commercial orientation will improve the viability, appropriateness and ultimate sustainability of the value chain development strategies. It will be engaged at a range of levels.
As an international science partner
Large international companies have impressive capacity in R&D and can leverage patented technologies that can accelerate the discovery process. ILRI has partnered in the past with pharmaceutical companies for vaccine development. More recently, ILRI and WorldFish Centre have similarly engaged with international feed companies in developing feed products tailored to small-scale systems. ILRI is currently partnered, for example, with one company in field testing prototype feed products appropriate for beginner dairy farmers in Kenya and Uganda. CIAT collaborates with multinational seed companies for the dissemination of bred grass cultivars mainly, but not only, targeted at the Latin American market.
The motivations for an international company may partly be to meet corporate social responsibility objectives, but clearly remains largely commercial. Such collaboration provide opportunities to develop appropriately designed products aimed at emerging markets that have been ignored to date, as well as facilitating testing of new products. For our proposed research program, once a new technology has proven its viability, such companies can immediately scale it up for subsequent widespread dissemination from a healthy profit motive.
As a national business partner
Within specific value chains, we will seek to identify opportunities where existing companies could contribute to developing the value chain in a pro-poor manner while expanding their own business. A current example is the East Africa Dairy Development project, a large-scale intervention being implemented by Heifer Project International and other partners, with ILRI supporting as the knowledge partner. A Kenyan genetics company, African Breeders Services Total Cattle Management Limited (ABS TCM LTD), is one of the core partners in the project; not only does it benefit from the immediate business gained from working with project, but it also is keen to test strategies for creating new markets among lower-income dairy farmers who they have failed to reach previously. Similarly, the WorldFish Center has partnered with the commercial feed industry in Egypt to help develop fishmeal and fish oil free nutritionally complete tilapia feeds. In pork value chains, an opportunity may be to replicate smallholder outgrower schemes with the small meat processing enterprises that have appeared in Uganda, and so on.
As a local small-scale business partner
At local level, we are finding it increasingly critical to help develop—and often create—small-scale business services to support emerging production and marketing systems. This approach will be central to value chain development efforts. In post-tsunami Aceh, for example, the WorldFish Center has fostered thousands of small-scale, enterprise-oriented aquaculture businesses, improving food security and helping create resilient livelihoods. Under the dairy development project mentioned above, ILRI has been instrumental in responding to feed demand by introducing and promoting small-scale feed processing services. On the output side, training and certification schemes for informal milk traders have been developed for upgrading these important market services. Similar experiences exist from the work of CIAT and partners in Latin America with milk collection centers and small-scale cheese factories, and in SE Asia working with livestock traders and national institutions to connect consumer demand to producers.
The key is to create a vibrant network of local business actors who each have it in their interest to sustain the development of the value chain.
Our questions for your comment:
- Is this description of our strategy to partner with the private sector clear and sufficient?
- What is missing?
- Are there other examples that we can cite to demonstrate how the private sector can be actively engaged in pro-poor value chain development?
I see no problem with your strategy re international, national and small-scale business partners. However you seem to have missed the important private sector partners along the value chain. The local slaughter , butchers and meat retail chains, and; the local fish collection and retail platforms are effective and important partners and play crucial roles in advancing the small scale based industry. The local livestock slaughtering and fish collection facilities are normally closer to the small producers, and significantly promote market access.
Ahmed: Excellent input, as always! We totally agree — we certainly have these types of partners in mind, too, but for purposes of presentation/simplification, we had assumed they would fit either under the ‘national’ or the ‘local small-scale’ type partners. But evidently our text doesn’t communicate that adequately — so now we know where we need to add some clarification! Thanks!
Very good idea
Understanding small-scale private sector players in Africa’s rural livestock and fish markets -including their associations- should be the beginning of if the project is to be “pro-poor’ In this case agricultural or livestock economists will have to work closely with other researchers. CGIAR will also have to come up with innovative ways of ensuring the emerging innovations or benefits reach the poor or target groups.
Mapping out the various players in the value chain will be our first task — understanding how they operate, how they can be upgraded to produce more efficiently, and how they can contribute to poverty reduction will be the objective of the subsequent action-research. So, agreed!
I would agree to the comment of the reviewer. Looking on your strategies mentioned in the international and national level, it seems (from my point of view how I understood it) you will be working for the benefits of giant private sector… which deviated from your concept of pro-poor. if you will be working for pro-poor, the strategies on local business small scale business part or better on the marketing arm of People Organizations or Associations I will be in favor of… if you want to help them, work directly with them… The National and International will just follow. They have the resources to utilize and they come into the picture easily when there are opportunities… However, those in marginal level need more help given that they directly working with the entities you wanted to reach…
I don’t agree. Our objective is not to identify partners who we can help directly, but rather partners who can contribute to designing the solutions that help our target populations. Certainly local private sector actors contribute local expertise for those solutions and help us evaluate their viability. But local actors do not have the capacity to contribute to basic research, such as providing state-of-the-art feed manufacturing techniques that can be applied to improve storability of feeds in harsh environments, or an extensive database on the variability in the nutritional composition of forages and other animal feeds across a range of environments. These types of contributions are also important in helping advance our development of appropriate solutions for the poor. The international company is willing to make such contributions not only for good PR, but mainly to get the jump on competitors on what it sees as a potential market for supplying goods and services that support poor livestock keepers as they intensify their production. As stressed in our proposal, what is important is being clear about expectations of each partner and understanding what motivates their willingness to contribute. Does that make sense?
How to best partners with private firms to enhance pro-poor value chain development?
In lots of countries, in the context of privatization of the livestock sector, research institutions have been pro-active in supporting the set up of commodity associations. Those associations have been important in offering a “forum” for discussion and negotiation about the respective roles of private firms, farmers organisation, individual farms and government services in the value chains. In the livestock sector, especially, those commodity association have played a crutial role in defining new market rules for thoses rapidly changing livestock economies : pro-poor trade policies, adapted quality regulation, land access policies, etc.
Many different types of commodity associations have emerged in the livestock sector : National boards (such as the National dairy board in Kenya), interprofessional associations (such as the federation des acteurs de la filière lait local – FENAFILS in Senegal), interprofessionnal comities, innovation plateforms (as mentionned in the CRP3.7, p.44), etc. Those commidity associations are sometimes entirely private, but mostly rely on a public-private partnership. They are one of the numerous new institutions that are now taking part in the so-called “public-private governance structure”, i.e. in the increased engagement of multiple actors in policy decision, following the general State withdrawal in developing economies.
The “innovation plateforms” concept developed in the p. 44 of the CRP3.7 is one form of such institutions. But as it is related to a specific project, and as it is animated by researchers, it might not be as sustainable as a formal commodity organisation. It might also not be as powerful as a formal representative organisation, in order to negociate new regulations.
ILRI could contribute to best partner with the private sector in pro-poor livestock and fish value chain development by playing a role in the emergence of those new commodity associations.
Another small comment. We (researchers working on smallholder livestock development) often forget to do research on industrial strategies. To work on pro-poor development also means to work on macro-actors, such as feed industries, meat exporters, dairy powder traders, dairy processing comanies, etc. Industrial firms are quite complicated and we need specific methodologies to work on them, in order to better capture their role and their impact on value chains transformations. We could probably put some more efforts on that?
I am writing to support your response as written. I think it really explains what you are trying to do and nicely refutes the reviewers comment. When built into the whole project, private sector involvement at all levels an help to leverage resources that the private sector can bring to the table. More importantly, it provides focus on the wider profit potential within the entire value chain that can be a driver for overall economic development while improving the outlook for the sector to survive, expand and prosper after the project is done.