Session 5: Partnering

1

Including presentations by Universal Industries, ExAgris and Concern Universal

2

SmallholderProduc on

Aggrega on

PrivateSectorProcessing&

Sales

Inputs

MarketDemand

partnering

Partnering in agribusiness

Private sector needs access to farmers

3

SmallholderProduc on

Aggrega on

PrivateSectorProcessing&

Sales

Inputs

MarketDemand

partnering

Partnering in agribusiness

Private sector needs access to farmers

Farmers as consumers

Farmer outputs for their supply chain

Private sector needs access to farmers

4

SmallholderProduc on

Aggrega on

PrivateSectorProcessing&

Sales

Inputs

MarketDemand

partnering

Partnering in agribusiness

Private sector needs access to farmers

Small holder farmers need access to markets/information

Security & information

Sales avenues & fair prices

5

SmallholderProduc on

Aggrega on

PrivateSectorProcessing&

Sales

Inputs

MarketDemand

partnering

Partnering in agribusiness

Private sector needs access to farmers

Small holder farmers need access to markets/information

Security & information

Sales avenues & fair prices

Farmers as consumers

Farmer outputs for their supply chain

Private sector needs access to farmers

ExAgris: Collaboration to Achieve Commercial and Developmental Goals

6

Jim Goodman

Managing Director

ExAgris Africa

ExAgris Programmes involving

collaboration with NGOs

– Development services unit

– Paprika, chilli and groundnut outgrower programme

– Environmental conservation

– Development and integration of people with disabilities

(DIDP)

– Church youth exchange programme with Africa Link UK

7

• 20,000+ outgrowers supported by NGO staff with technical back-up from EAA

• 10 full time staff + transport and head office back up

• 12 NGO/project partners on estates

(WALA, TLC, FIDP, BELIFA, FIDP, Farmers Forum, Concern Universal, Chinansi CADECOM)

• Market/contracts

• EAA provides seed and access to limited inputs.

• Collaboration with Government field staff

• Project support

Paprika, Chilli and Groundnuts Programme

8

• Links commercial and CSR objectives

• Based on core competencies and capacities

• Founded on some basic development principles

• Shareholder buy –in and support

ExAgris provides

• Small amounts of land for training, for production of a group surplus and for quality seed production

• Extension staff to deliver technical advice/training and to facilitate group organisation

• Buy crop or link to markets

• Capitalisation of working capital revolving fund on limited basis

• employment – injects money into local economy

Development Services Unit

9

Four Wheels for Success on Rural

Development Vehicle

Technical

Capacity

(Extension)

Social Capital

Development

- mutual support

- collective

decisions

- bargaining

power

- entry point for

service provides

Finance

-credit and

savings

- enterprise

skills

Market

Land

Soil

Water

(Biological resources)

10

Collaboration – why do it?

• A common long term interest in national development goals

being achieved.

• Common ground between development objectives and

corporate objectives (CSR)

• Both NGO programme objectives and commercial

objectives are influenced by national development goals.

• Possible development of sustainable income for NGOs

11

What is needed for successful

collaboration?

• Know each other well

• Clear goals, objectives agreed by management and a common understanding of why collaboration is to be considered.

• Clear identification of risks at the outset.

• An MoU which sets out clearly:

– Goal and objectives of the collaboration

– Background of each party

– The investments both parties need to make;

– Roles and responsibilities.

• Clear communication of MoU down the organogram of each party.

• Early identification of where conflicts of interest may arise.

• A mechanism for monitoring, reviewing and re-planning the collaboration effort.

12

Examples of common objectives

• Sustainability

• Increased agricultural productivity

• Extension

• Soil conservation

• Increased use of improved seed.

• Reduced incidence of HIV/AIDs

• Increased numeracy and literacy among rural populations

• Environmental conservation

13

Triggers for collaboration

• Donor programmes increasingly recognise value of NGO-

PS collaboration

• New technology

• New markets

14

Challenges

• Scepticism

• Misconceptions about goals and available resources

• Lack of sound analysis or information, e.g. About the market, or a new

technology.

• Un-met or unrealistic expectations

• Free-riders

• Lack of openness

• Some donors do not have mechanisms for direct funding of private

sector developmental activities.

• False assumptions about funding

• Lack of public sector recognition of/support for, role of collaborative

mechanisms, e.g. Note failure of CFA processes

15

Universal Industries

16

Navin Kumar

General Manager

Universal Farming and Milling Ltd

Background and Introduction

– Universal Industries Ltd is arguably the largest manufacturer of

Biscuits, Snacks, and Confectionary in Malawi and has been

operating for the past 54 years.

– UIL has 4 major manufacturing sites in Blantyre, Limbe, Njuli and

Mzuzu.

– Universal Farming and Milling Ltd is a fully owned subsidiary of UIL

with a mandate to develop the agro processing sector.

– UFML was set up to backward integrate the major processes of UIL.

17

Background and Introduction

– UFML has two divisions; namely the Agriculture section and the Agro

processing section.

– The 5 crops that UFML handles are Coffee, Irish Potato, Maize,

Cassava and Soya.

– The strategy is to be involved right throughout the value chain to

exercise quality control and add value.

– The two crops where we are actively involved from the farmer level

and working with partners or forming partnerships are Irish Potato

and Cassava.

18

Irish Potato

– UIL requires more than 2000 MT of good quality Irish Potato for

processing into Potato Crisps.

– Over the past years the company has struggled to get the right quality

of Potato even though it is willing to pay a good price.

– Traditionally we have been procuring from the small holder farmer in

the Tsangano area of Ntcheu.

– Various factory including no introduction of new germplasm through

good quality seed has lead to the deterioration of the overall quality of

the Potato and this has a direct effect on the quality of the processed

crips.

19

Partnerships on Irish Potato

– During the past 4 years UIL has been part of a very successful Public

Private Partnership funded by Irish Aid

– CIP ( International Potato Centre), Concern Universal, MoAFS and

UIL form this partnership.

– The key results of the first phase included releasing of new

technology for Potato seed multiplication using the Aeroponics

system and the release of 6 new Potato varieties in the country.

– As the project moves on to the second phase part of the focus is on

increasing the number of farmers who will receive good certified seed

and increasing productivity.

20

Partnerships on Cassava

– UFML procures approximately 800 MT per annum of dry makaka

which it converts into fine cassava flour for the export market and the

local baking / biscuit manufacturing industry

– Over the past couple of years UIL has partnered with the C:AVA

project led by the National Resources Institute, University of

Greenwich.

– With BIF support the market survey and full project analysis has been

conducted whilst the small holder farmer organisation is in progress

– The main aim of this project is to produce HQCF – High Quality

Cassava Flour for the export market using fresh cassava procured

locally

21

Partnerships on Cassava

– The project is in its final phase of implementation after many hurdles

along the way caused by the economic downturn in the country

during the past one year.

– Once in production this plant will require 20 MT of fresh cassava per

day to produce 4 MT of finished HQCF.

– UFML is looking at various partners to procure the fresh cassava root

from including farmer groups and commercial farmers

– UFML has already had introduced to various farmer groups by the

WALA project.

22

Why partnerships and observations

– During the setting up of the Irish Aid funded Potato project it was seen

that UIL did not have any organised groups of farmers and those that

we were dealing with were loosely connected to us through traders.

• We needed to organise farmers

• To identify advanced farmers with good agri techniques

• To monitor their land and soil quality

• To effectively provide technical backstopping

• To have clear procurement plans among others

– UIL did not have the capacity and skills to do this and hence

partnered with Concern Universal on the Potato Project

23

Why partnerships and observations

– Using this partnership to leverage on their skills of organising farmers

into groups.

– Most NGOs already formed groups in the clusters they are working

therefore it becomes easy for UIL to start working immediately on

agriculture

– When pricing is agreed between the company and the farmer

organisation the NGO plays a moderator role.

– Sharing of extension workers on technical backstopping

– Assist in preventing of side selling

24

Why partnership and comments

– Success of a partnership will depend on the following

• To clearly define the roles and responsibility of the partners where

resources are shared. For example – Extension officers

• The company should understand that the NGO is only providing

an opportunity for its farmer groups to access a market and the

relationship is to be built by the company or in other words playing

the role of a facilitator.

• To have clear channels of communication between the partners

and whilst communicating with the farmer groups.

25

Why partnerships and comments

– The “face” of the company to be always seen by the

farmer groups.

– To convince the farmer groups that this is not one off

trade but a long mutually beneficial partnership

26

Success of a partnership through creation

of wealth

For a partnership to be called a success, once the NGO

moves out of the area the farmer and company should

have a healthy mature relationship where the farmer has a

market to which he can supply a good consistent quality

and quantity of the required raw material at an agreed price

and therefore leading to creation of wealth in rural

communities.

27

Concern Universal

28

Jo Thomas

Sustainable Livelihoods Coordinator

Concern Universal

29

Context

Private Sector v Civil Society

• Misplaced mistrust

Big Challenges

• Doubling of population by 2050

• Doubling of food production by 2030

• Urbanisation: who stays in rural areas?

• Climate change

29

30

Summary

NGO Role

• Initial inspiration process

• Innovation and scale up

• Ensuring business is hearing the voice of communities, working sustainably yet profitably

INSPIRATION

CREATIVITY & INNOVATION

SCALE-UP

COLLABORATION

30

31

CU Scope and Scale

• £ 15 million/annum

• 9 country programmes, 7 in Africa

• Focus on improving livelihoods and food security

• 2.3 million people

31

32

Africa Progress Panel: Business Advisory

Group

32

33

Gambia is Good (GIG)

• A horticultural sales & marketing business partnership between Haygrove (a private UK business) and CU

• Established 2004 with seed funding from BLCF

• A market outlet and distribution channel for small-scale Gambian farmers, helping to enable their transition from subsistence farming to commercial enterprise.

• Links between rural areas and the tourist industry.

• Sustainable tourism development (The Travel Foundation).

• Training and demonstration facility for farmers and tourists

• Purchases from 1,000 growers, 90% women.

• Cash income up from +/- zero up to £150 per month. Over the last 3 years, GiG growers have increased income by an average of 500%.

• Recently taken over by Haygrove

33

34

CU Malawi

• £ 7 million annually

• 10 districts

• EC, Irish Aid, DfID

• 650,000 rural people

• Livelihoods, WASH, Resilience

• Hanging in, Stepping Up, Stepping Out

34

35

CU Strategy Malawi

Creating opportunities for lasting improvement in people’s lives

by

empowering people to reduce social and economic vulnerability and inequalities

Objective 1

SERVICE DELIVERY

Increased quality and

coverage of

community focused

service provision

Objective 2

REDUCING

VULNERABILITY

Targeted interventions to

enhance community

resilience to climate

change and increase

agricultural production

Objective 3

PRO-POOR GROWTH

Stimulating local

economic development

and pro-poor growth

Underpinned by:

Partnerships (with District Councils, National Government, CBOs and Civil Society and the

Private Sector)

Learning and Advocacy (evidence-based research to maximise impact and influence

policy and practice)

Development Approaches (HIV/AIDS, Gender, Environment, Human Rights) 35

36

Pillar 3 Outcomes

• Increased household income from enhanced off-farm and on-farm enterprises

• Access to financial services for households and businesses

• Improved access to markets

36

37

Farmer organisation

LDSP

• 3 associations in Dedza/Ntcheu, 3000 members

• Groundnuts, soya, potatoes

• Technical, management & governance training

• Possible FT certification

Sugar capacity building

• 2500 outgrowers in 2 main growing areas

• Existing structures but ...

• Technical: cane growing and food crop husbandry, business understanding

• Outgrower management (MIS, finance)

• Governance (representation, transparency)

• FT certification Dwangwa, compliance issues Kasinthula

• Civic issues (land, literacy, HIV)

37

38

Access to finance

CUMO

• 60,000 rural clients

• Cashless, branchless system

• Average loan 13,000 MK

• Agriculture risky unless linked to a buyer contract

Airtel Money

• Cash distribution to 10,000 vulnerable households

• Potential mechanism for CUMO, information services

Carbon finance

38

39

Access to information

• Supporting district service delivery

- agric. but also linkages across departments

• Linking researchers to communities (CIP, ICRISAT, IITA, ICRAF)

• Linking farmers to national level (CISANET, sector working groups)

• Research dissemination e.g. Conservation Agriculture

• Extension materials e.g. smallholder sugar production

39

40

Access to markets

• Illovo, Universal Industries, Afrinut

• Information sharing on market requirements

• Meeting the market – trade fairs, visits

• Value chain understanding (walk farmers through the chain)

• Training to meet market requirements quality, consistency, quantity, variety

• Negotiating skills – not just about price

• Bulking for economy of scale

• Certification

40

41

Key lessons on NGO role

• NGO role as facilitator not actor

- farming as a business

- producing for market

- overcoming mistrust farmers have of private sector

• Linkage between farmers, private sector, academia and government

• May deliver services in the short term but must stimulate BDS market

• Comparative advantage in farmer/community organisation

• Ancillary civic issues (literacy, HIV)

• Lobbying for appropriate infrastructure development

• Social conscience/guarantor e.g. sustainable pricing, involvement of women, supporting farmers to demand good services

41

42

“Inclusive business”

Supply

Market

Reputation

Food Security

Social Cohesion

Peace

Access to Basic Services

Scale up

of

inclusive

business

42

So what? Implications for partnering in agribusiness

43

Q1: Who is doing what?

Who wants want?

Who can offer what?

44

Q2: What are the potential benefits?

Through shared

costs and better

delivery systems

Efficiency

By creating more

appropriate products

and services

Effectiveness Through developing

new ways to

address issues and

complex challenges

Innovation

By sharing risk

& responsibility

Mitigated risk

By expanding the

organizational

markets and

networks

Enhanced reputation &

credibility

To people, markets,

information &

knowledge

Access Capacity

building/

development of

staff

Capacity

Q3 (part 1): What are the potential risks?

Conflicts of

interest

Loss of

autonomy

Drain on

resources

Time investment

in partnership

building

Implementation/

coordination

challenges

Poor

performance by

other partners

Negative

reputation

impact

Potential risks (for all partners)

Q3 (part 2): What are the key challenges?

Hidden agendas

Power imbalances

Winning at any cost

Transparency

Core principle

Q3 (part 2): What are the key challenges?

Hidden agendas…….

Equity

Core principle

Q3 (part 2): What are the key challenges?

Power imbalances…….

Partners winning at the expense of others…

Mutual benefit

Core principle

Q3 (part 2): What are the key challenges?

Q4: Does it matter if partners have different

goals?

Organisation #1

mission/principles

Organisation #2

mission/principles

Partnership

51

Q5: What is and isn’t a “partnership”?

• One party decides

• One party purchases (or donates) a specific

resource

• Inflexible expectations and contract with

clear deliverables decided at the beginning

• Limited interest or buy-in from partners

beyond contractual agreements

• Transparency not necessary

• Risk and reward individually mitigated

• Relationship must fulfil contractual

obligation; equity not needed

• Co-generation of programme

• Partners bring together a range of

complementary resources and

competencies

• Ongoing discussions with organic

deliverables adapted to local,

changing realities or unexpected

events

• Transparency essential

• Risk and reward shared

• Equity core to vision

Relationship Spectrum

Which is right based

on each situation?

Definition

A cross-sector partnership is....

An ongoing working relationship between

organisations from different sectors....

....combining their resources and competencies...

....and sharing risks.....

....towards achieving agreed common objectives....

....while each achieving their own individual

objectives.

More than the sum of its parts 53

Q6: Where do I start.....how do I start

doing it again better?

Be transparent and clear what

you want

Be prepared

Clarify objectives and make sure needs are

being met

Start small... and be realistic

Question assumptions and

define accountability

Handle disagreements, disappointments and

frustrations early

Start by creating a

shared vision and

mission

54

Kerry Johnstone, Private Sector Development Advisor,

UK Department for International Development

Closing Remarks

55

Immediate

• Feedback forms – thank you!

• Report of key findings

• Sharing the directory

electronically - send your details

by Friday

Building on today

•In your organisation…

•Share with others?

•What more could and should BIF

do?

What Next?

56

On the Practitioner Hub

• Event page on Hub – link will be emailed

• Access to presentations, YOU can add

comments or a blog!

KnowHow pages:

• Partnerships in inclusive business:

http://businessinnovationfacility.org/page/k

now-how-partnerships-for-inclusive-

business

• Engaging farmers as suppliers and clients:

http://businessinnovationfacility.org/page/k

now-how-farmers-as-suppliers-and-clients

Hub Library

• Partnerships category – includes

partnering tools

Please contact us for further information:

Karen Smith: karen@imanidevelopment.com

Georgina Turner: georgina@imanidevelopment.com

Caroline Ashley: caroline@carolineashley.net

Ellen Carey: ellen.carey@uk.pwc.com

Find out more about BIF and inclusive business on the Practitioner Hub at www.businessinnovationfacility.org

Contact: enquiries@businessinnovationfacility.org

Thank you!

The Business Innovation Facility (BIF) is a pilot project funded by the UK Department for International Development (DFID). It is managed for DFID by

PricewaterhouseCoopers LLP in alliance with the International Business Leaders Forum and Accenture Development Partnerships. It works in

collaboration with Imani Development, Intellecap, Renaissance Consultants Ltd, The Convention on Business Integrity and Challenges Worldwide.

This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act

upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is

given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PricewaterhouseCoopers

LLP and the other entities managing BIF (as listed above) do not accept or assume any liability, responsibility or duty of care for any consequences of

you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it. The views

presented in this publication are those of the author(s) and do not necessarily represent the views of BIF, its managers, funders or project partners. 57