Stories tagged: public-private partnership

Learning From the Private Sector Experience Working With Smallholder Farmers

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.

Credit: Fintrac

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 Featured photo credit: Fintrac

Farming First Release: Innovation and Incentives for Farmers Needed to Protect World’s Biodiversity

Farming First Press Release in Recognition of International Day of Biological Diversity:

Farming First calls on governments to enable agricultural innovation and empower farmers to safeguard the world’s biodiversity while increasing global food production.

Sustainable agricultural production needs to be achieved through both accelerated research programmes and broader uptake of existing technologies by farmers.   Public-private partnerships are key to identifying and addressing these innovation gaps as well as disseminating effective agricultural tools and technologies to farmers.

Ajay Vashee, President of the International Federation of Agricultural Producers (IFAP) says:

Government leaders need to recognise how interconnected agriculture and biodiversity protection are. Today’s farmers are the true stewards of our global ecosystem.

The twin challenge of conserving ecosystems while ensuring future food security means that the role of the farmer is more crucial than ever. With 2.3 billion more mouths to feed by 2050, food production must increase by 70 per cent, according to the U.N. Food and Agriculture Organisation, despite the threats of climate change and limited availability of natural resources.

Like biodiversity, agriculture benefits from fertile soils, fresh water and natural predators, and farmers can also play a role in maintaining natural habitats and other ecosystem services.

Luc Maene, Director General of the International Fertilizer Industry Assocation says:

Farmers around the world are facing competing pressures to grow more food while preserving the world’s biodiversity.  To succeed, agriculture and biodiversity conservation efforts must walk hand in hand.

The Farming First coalition supports the following principles for protecting biodiversity through agriculture:

  • Safeguarding natural resources through sustainable agricultural practices such as sustainable use of land, water and energy resources, conservation agriculture, cultivation of local species and giving value to marginal areas such as wetlands and forests.
  • Sharing knowledge of agriculture’s role in preserving biodiversity through stewardship programmes for farmers and government mechanisms for incentivising biodiversity-friendly practices.
  • Building local access to agricultural tools and infrastructure which help protect biodiversity, such as multi-cropping systems or crop rotation, without jeopardising agricultural production.
  • Protecting harvests by building storage facilities and transport mechanisms, whilst providing support to farmers in managing weather variations and minimising the amount of yield lost to prevent further expansion in land used for agriculture.
  • Enabling access to markets via payment incentives for ecosystem services, such as carbon sequestration, reforestation, measures against desertification and other sustainable land management practices as well as developing and supporting markets for underutilised local species which encourage local biodiversity.
  • Prioritising research imperatives by addressing both farmers’ needs and the specificities of local ecosystems as well as factoring in farmers’ local expertise and providing resources such as seed banks.

Supporting Rural Development in Guatemala

In the Cuchumatanes Highlands in Guatemala, The International Fund for Agricultural Development (IFAD) has been supporting a rural community development project.

The project aims to improve the livelihoods of 22,000 families with incomes below the poverty line. A needs analysis demonstrated that one of the problems in the area was poor handling and application of crop protection products, leading to health and environmental risks.

As a result, IFAD formed a partnership with CropLife Latin America to provide training for the project beneficiaries.

A multiple approach was used: teaching Integrated Pest Management (IPM) concepts and proper, safe use of crop protection products to farmers and their families, school teachers and health workers; a one-year course for schoolchildren on environmental protection; training teachers on the benefits and risks of crop protection products; communicating to housewives the importance of washing farmers’ clothes separately so as to avoid contamination of other clothes and water supplies; providing information to health workers at medical and paramedical levels on treatments in the event of accidents; and the training of trainers to amplify the reach of the programme goals.

A similar programme has started in the Dominican Republic and plans are being implemented to expand it throughout Central America.

This initiative in Guatemala echoes two of Farming First’s principles: Sharing knowledge and Building local access and capacity.

There are currently four IFAD-supported projects ongoing in Guatemala. Among them is a rural development project in the Western Region.

The target group comprises smallholder farmers, landless farmers, and microentrepreneurs and artisans. The programme will reach minority groups, particularly indigenous populations with lower educational levels and very limited access to productive resources.

For farmers in Guatemala, such assistance is needed as the country is facing the worst drought in 30 years.

Public-Private Partnership Creates Model Farm and Agricultural Resource Centre for Trinidadian Farmers

The fertilizer company, PotashCorp (PCS) teamed up with the government of Trinidad and Tobago, where their largest ammonia-based fertilizer production facility is located, to build a demonstration farm and research centre. The PCS Model Farm and Agricultural Resource Centre is a 75-acre educational and demonstration farm designed to help teach Trinidadian farmers, extension workers, and students about the latest agricultural techniques.

Created with funding from PotashCorp, and run on land leased from the Government of Trinidad and Tobago, the farm will include:
– six greenhouses for cultivation of various crops;
– demonstration plots for introducing new technologies and management techniques to farmers;
– an Agricultural Resource Centre for training small farmers; and
– cultivated land for growing a broad range of agricultural products.

The farm is helping Trinidad bridge the gap between understanding how the fertilizer company uses the country’s vast natural gas resources to produce nitrogen and how the end-product, ammonia, contributes to food security by providing farmers with the plant nutrients they need to increase their yields sustainably.

Developing and sharing new agricultural technologies like this is one of the important contributions of the private sector in agriculture.

Watch the video here:

Using Supply Chain Partnerships to Support Agriculture in Africa

Unilever has been an active proponent of schemes to broaden the supply-base and support local livelihoods, particularly in its tea and palm-oil estates.

Lipton/Unilever Tea has a partnership with Rainforest Alliance on sustainability certification. Another partnership with Tanzania Forest Conservation Group, Ministry of Natural Resources, World Agroforestry Centre and the World Conservation Union also promotes Allanblackia seed production for fat/oil, as a substitute for palm oil in spreads, soap and as an alternative source of farmer income.

Farmers, transporters and crushers benefit, and the value of Allanblackia trees encourages farmers to reverse deforestation.

Serving Malawi Farmers by Reducing Credit Risks for Agrodealers

CNFA established credit insurance in 2001 in Malawi to guarantee repayment of half of the money borrowed by agricultural input retailers to stock their shops.

This greatly expanded the number of rural distributors and decreased the distances farmers travelled to obtain inputs, sometimes quite dramatically, resulting in savings in both time and travel costs.

By 2005, retailers covered by the guarantees earned more than $1 million (plus a significant amount not underwritten by the credit insurance). Their success boosted local economies, raised Government tax receipts and increased the provision of non-agricultural services.

After the 2005 food crisis, the Government distributed seeds and fertilizers in order to prevent the situation from worsening. The 2006 maize crop rebounded significantly, but the impact on private-sector retailers was devastating: commercial sales of fertilizers slumped by 60-70 per cent.

A coalition engaged with the Government to transform the support programme into a private-public partnership. Retail sales have since recovered.