workshop iii technoserve
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Sustainable Participation of Small Holder
Producers in Commercial Value Chains
PROJECT NURTURE
Agribusiness Forum, Uganda
5th October 2010
Coca-Cola, Gates Foundation and TechnoServe established a
partnership to improve the lives of thousands of farmers and families
4-year pilot
54,000 farmers in
Kenya & Uganda
Mango & passion
fruit
Doubling small
producer fruit
incomes
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Project Overview
NURTURE
Summary
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Capitalize on growing market opportunity with strong
economic proposition for small-scale producers
Multiple routes to market / buyers (resilience)
>1 large-scale anchor buyer (↓ risk, stability)
Select project areas with greatest potential for
competitiveness & impact
Identify & address constraints across entire VC
Facilitate win-win relationships with partners that have skill,
will & resources to tackle constraints
Support farmers to organize into sustainable, self-governing
business groups
Select Best Practices Applied in Project Nurture
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Compelling market demand for domestic mango and passion fruit juice,
creating attractive long-term opportunity for small holder farmers
Note: * SSA = Sub-Saharan Africa; MNC = Multinational Corporation
Source: FAO, Euromonitor Fruit commodity projections, BMGF/Dalberg
• Market value of fresh and
processed fruit in SSA ~$11.5B
• Processed fruit consumption
growing ~6% annually in Africa
and globally
• Region has tremendous potential
to capitalize on this demand, but
many MNCs import juice
concentrate
• Due to lack of sufficient capacity
to process and poor
infrastructure. Estimated that
locally produced concentrate can
cost 33%-50% less than imports
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3
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5
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2.7
5.8
2.7
5.6
Fresh Fruit Processed Fruit
Projected consumption growth
Percent (CAGR ‘07-12)
AfricanGlobal
Value chain analysis indicates mango farmers can expect
a profit margin of ~50%
MANGO – Projected Four Year Totals(U.S. Dollars per Farmer)
K E N Y AU G A N D A
Key Drivers
• Multiple markets
(export, open air,
wholesale,
processors)
• Improve value
chain efficiency
• Improve
productivity
Demand
resilience, less
wastage
Post intervention Current
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Targeted regions chosen based on agronomic suitability,
poverty density, and number of farmers
New Mango and Passion Fruit PBG sites
Overlap in existing and future PBG sites
• Eastern • Eastern
• Central
• Rift Valley
Uganda Kenya • Agronomic conditions
and number of farmers
helps assure sufficient
volumes for
commercial production
& sustainability of
farmer-run enterprises
• Poverty density used to
ensure project reaches
largely farmers earning
<$2 / day
Intervention focus across the value chain to ensuring producers and
buyers achieve mutual success and project sustainability
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Input Suppliers
Farmers / Producers
Assemblers /Traders
Wholesaler / Processor
Retailers Customer
Seed dealers / nurseries
Fertilizer suppliers
Farm implement providers
Agricultural ext. officers
Export
Local Processing Companies
Fresh Fruit and Puree Domestic /
Export Market
Small scale farmers
Processing
Credit / Financing Institutions
TechnoServe is a facilitator / trainer across the value chain
Traders
Farmer Groups
(PBGs)
Additional TNS partners
Trainers:
Facilitators /
mobilizers:
Wholesalers
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Local markets
Project Nurture
BMGF
TNS
Govern-ment.
Coke
ECABU
• Financial
Services: Equity
Bank, Centenary
Bank
•Seed Propagation
& Research: KARI,
NaCCRI
• Farmer
mobilization &
training: AMA,
Farm Concern
International
• Agronomy: Real
IPM
• Various
Business units
within the
system
• Bottlers in each
country
Business Units
Partners• Subject matter experts
Facilitate win-win relationships with partners that have
skill, will and resources to tackle constraints
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Producer Business Group (PBG) model
PBGsSmallholders
Coca-Cola
Processors
Definition: PBGs are registered businesses owned by 50-100
small-scale farmers
• Coordinate bulk produce sales
• Provide crop productivity training
• Facilitate access to inputs, credit, and market information
• Enforce produce grading
TechnoServe’s Producer Business Group (PBG) model used
to organize & empower farmers, to create sustainability
Other market Channels
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Self-governing producer business groups act as ‘hub’ to
address multiple supply chain issues on a sustainable basis
Productivity
Improvements
Farmer
Organization
Market
Linkages
Supply Chain
ChallengesTechnoServe’s Approach
• Smallholders
fragmented, lack
market access
• Multiple market
intermediaries
limit farmer profit
• Processors unable
to source enough
quantities of high
quality fruit
• Smallholders
often lack
awareness about
market
opportunities
Train farmers in good agricultural
practices and business skills to:
− Improve marketable yields
− Improve fruit quality
Organize farmers into sustainable,
self-governing business groups to:
− Reduce intermediate linkages
− Create economies of scale for
resources
Manage supply needs through direct
market linkages to:
− Diversify production mix
− Produce forcommercial market
Contact Information
TechnoServe headquarters:
1800 M Street, NW, Suite 1066, South Tower
Washington, DC 20036
Tel: +1 202 785 4515
Fax: +1 202 785 4544
Email: technoserve@tns.org
For office locations around the world, check www.technoserve.org
Thank you!
Sunny
Processors
Reco Industries
• Kenyan-based fruit processors, focused on puree production
• Produces puree for sale to customers domestically and as exports
• Began full-scale commercial production of puree in 2009 (current
capability of 40MT of puree per day)
• Ugandan-based fruit processor, focused on puree / concentrate
production
Sunny Processors has indicated achieving sufficient supply at the quality and
volume required as the primary bottleneck to increasing capacity utilization
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Local processors are a critical piece of the value chain and
will be buying the fruit directly from the farmer groups
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