Simon Groot, 2019 World Food Prize Laureate and founder of East-West Seed Continue reading
Leighona Bernstein, Communications Manager at CropLife International Continue reading
By Amy Chambers on behalf of Fintrac’s Feed the Future Enabling Environment for Food Security project.
Working with the private sector is key to fostering vibrant agricultural market systems, and successfully integrating smallholder farmers into these efforts has the potential to pull millions of smallholders out of poverty.
There is an additional key factor in the mix, however. The elusive yet all-encompassing enabling environment — i.e. policies, laws, regulations, and norms that influence behavior in a market system — can derail even the best-laid business plans. By reshaping incentives to the point of hampering initial investment or efforts to scale, enabling environment conditions can create barriers that de-incentivize firms from doing business in a particular market.
To better inform donor support for these actors, we need a stronger understanding of how enabling environment factors influence the decision-making of firms who are either doing or trying to do business in markets inclusive of smallholders. The good news is that the experience and knowledge from the private sector actors either doing or trying to do business in these markets is out there.
What We Heard From the Private Sector
In August 2018, the Feed the Future Enabling Environment for Food Security project interviewed 25 small- and medium-sized agribusiness companies serving smallholder farmers across Bangladesh, Guatemala, Nigeria, Uganda, and Kenya. For each, we endeavored to understand why they invest where they do, the challenges they face in entering and operating in new markets, and what type of support these companies leverage to assist in tackling enabling environment challenges to their investments.
While their stories were unique, the consensus was the same: the enabling environment impacts the structure, speed, and scale of the investment. For one investor, the lack of regulatory protocols for a new technology delayed the investment by more than a year. For another, the complexity of local contract law contributed to shifting focus to other markets. Frequent changes in customs procedures or outright corruption caused others to scale back or reorient their businesses to countries with more stable environments for investment. Typically, the business survives, yet the slower pace of investment or capital flight to safer markets caused by a weak enabling environment limits smallholder farmers’ access to the new technologies and services these businesses provide.
True to the axiom “time is money,” investors expressed little patience for the speed of reforms brought about through industry associations and formal public-private dialogue mechanisms. Though nearly 80 percent of those interviewed participate in these platforms, when faced with a pressing issue, investors favor narrow, action-oriented approaches that quickly bring the issue to relevant policymakers’ attention, such as leveraging informal connections with government officials or independently organizing public seminars or dialogue on specific issues.
What This Means for Donors and Other Development Partners
USAID and other development partners can play a crucial role in building a better enabling environment by identifying key regulatory impediments to investment and facilitating targeted, issue-specific collaboration between the public and private sectors to resolve these issues.
This support includes conducting baseline data studies to provide a starting point for public-private dialogue, assessing gaps in the legal and regulatory framework for new technologies and industries, bringing comparative evidence from other countries to bear on domestic policy discussions, and facilitating productive dialogue by bringing key decision-makers and investors to the table.
For a full discussion of the study’s findings, readers can access the report and summary learning note here.
A version of this post originally appeared on Marketlinks.org. Featured photo credit: Fintrac
Mark Young, Chief Technology Officer at Climate Corporation, looks at how digital technology can empower farmers, feed the world and protect the planet
Farmers face a dual challenge. How can they produce the food required to feed the world, while protecting the planet at the same time? The solution will rest on finding effective ways to minimize the losses of energy, water and nutrients associated with farming.
Digital agriculture – the use of data to make more informed decisions about managing agronomic operations – holds the key to increased efficiency on the farm.
It allows farmers to act with precision, known as precision agriculture. Drones, sensors and farm robots can tell us precisely where and how much water should be applied, keeping losses to an absolute minimum. They can spot pests and disease early and generate prescriptions to optimize soil and crop health.
As populations continue to grow, the world’s farmers have the formidable task of providing nutritious food for 9 billion people by 2050. Several fierce challenges still stand in their way as our world resources are under more strain than ever, whilst at the same time more frequent and extreme weather conditions caused by climate change are affecting farmers ability to produce enough food to meet demand. These issues are incredibly complex to solve, yet are becoming increasingly urgent. Public-private partnerships (PPPs) are one way in which expertise from different fields can be combined to reach innovative agricultural solutions.
What are Public-Private Partnerships?
Public-Private Partnerships are formed by public organisations and private sector businesses in order to share knowledge, skills and expertise allowing them to meet a common goal. They operate on the principle that by combining their strengths, all partners can make better progress than they would alone.
Public partners include research institutes, universities and NGOs, who have the ground-level knowledge and understanding of the issues in question. Private partners includemultinational corporations or producer associations, who can not only inject capital into projects, but also provide specialist skills and provide successful marketing and distribution channels. According to Syngenta, public investment in productivity-enhancing agricultural research and development has been declining in most of the world outside China. Private investments and capability, on the other hand, continue to grow.
In the instances of agriculture and food security, PPPs can be especially effective. The following quote is taken from Crop Life International’s brochure : “Advancing Agricultural Innovation through Public-Private Partnerships”
Collaborative partnerships can effectively bridge the gap between public and private sectors’ distinctive competencies in order to meet farmers’ needs.
For national governments, partnerships offer a way to translate shared research outputs into useful, relevant tools for their own farmers. They can offer access to a greater variety of technology choices; they can spread and share the financial burden of research; and they can create a flexible, expert resource for capacity-building.
For the private sector, public-private partnerships have potential to increase the leverage of a deep knowledge-base. They offer a mechanism to share the costs of infrastructure and diffusion, and also an opportunity to increase the effectiveness of technologies over time. Finally, they can make individual innovations better adapted to local conditions, and in so doing enhance the quality and quantity of sectoral knowledge.
Public-Private Partnerships in practice
Such partnerships are already in progress in the developing world. In Africa, a new public-private partnership called Water Efficient Maize for Africa (WEMA) was formed in 2008 to help smallholder farmers and their families by using advanced plant breeding and biotechnology to develop more drought tolerant maize varieties.
The partnership comprises of the not-for-profit organization the African Agricultural Technology Foundation who co ordinate, as well as private agricultural companies such as Monsanto and BASF who provide access to access proprietary germplasm, advanced breeding tools and expertise, and drought-tolerant transgenes for use in WEMA research.
It is estimated that the maize varieties developed over the next decade could increase yields as much as 20 to 35 percent under moderate drought conditions compared to the hybrids available in 2008. This would equate to an extra two million additional tonnes of food during times of drought for participating countries.
Another example of a successful public-private partnership has been studied by IFPRI in their 2008 report “Building Public Private Partnerships for Agricultural Innovation”. The project based in Bolivia aimed at improving the productivity and competitiveness of peanut cultivation in the Mairana Valley and sought to improve income for peanut producers by 25%.
Several partners were involved in the process: The Association of Oilseed and Wheat Producers (ANAPO) assumed responsibility for technical assistance and technology transfer, while the Bolivian Agricultural Technology (SIBTA) and the Mairana municipality government provided the financing. A fixed price for the product was set before the harvest and ensured by a buyer, Shirosawa S.R.L, which markets peanuts to international markets in Japan and elsewhere. Both ANAPO and the SIBTA had previous experience with development projects in the peanut sector, and as a result, had access to a broad spectrum of information about principal actors, production procedures and the commercialization of peanuts. In fact, it was this knowledge of the opportunities and limitations in the peanut sector that motivated them to form the partnership.
The benefits that the producers have received from the partnership include a reduction of production costs by 30 percent, a 40-percent increase in yields, the strengthening of the farmer organization, and the transfer and introduction of new technology. In addition to achieving the project’s goals, other unexpected achievements were realized: new production and commercialization skills were acquired and partners initiated collaboration with other actors in the sector.
It is clear that there is no ‘silver bullet’ that will solve the myriad challenges facing smallholder farmers today. It is also apparent that by combining the expertise of different bodies, that is to say, allowing partnerships between public and private sector organisations, we have the potential to reach sustainable and innovative agriculture solutions.
A recent BBC article has identified some clever examples of agricultural innovations:
- Electrostatic powder
Exosect, an integrated pest management (IPM) innovation company, has pioneered the use of a charged wax powder that is soaked in synthetic female pheromones and then attached to male insects. When sprayed over crops, male insects are attracted to each other, rather than to females, leading to a reduction in mating, egg laying and consequent crop damage with the benefit of very few pheromone dispensers. The powder is environmentally friendly, and works 24/7 in all weather conditions. The company is also starting a UK government project to tackle insects in grain storage. Around 16% of the world’s grain is destroyed by insects in storage.
- Monitoring Irrigation
PureSense is a company that provides farmers with the tools and support needed to manage irrigation more effectively. They use a Field Monitoring Station that collects real-time data from a grower’s field, orchard or vineyard by monitoring soil and climate conditions every 15 minutes. By monitoring how much moisture there is in the soil in real-time, they adjust the farms’ irrigation systems accordingly via wi-fi. More accurate irrigation scheduling have resulted in water savings of 10% to 40% and the project has produced increased crop yields of 5% to 15% per year.
- Connecting farmers to buyers
FarmsReach is an US-based online marketplace that connects farmers to business buyers. This makes it easier for restaurants and independent supermarkets to buy produce from local farmers.