Value Chain Analysis and Development Training
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Transcript of Value Chain Analysis and Development Training
CAFOD/TROCAIRE/SCIAFLivelihood program
Value Chain Analysis and Development Training
Teshale EndalamawNovember, 2012
Adama
Value Chain approach in implementing our Livelihood program
Joint office of CST, Ethiopia
Objective of this session
1. To develop common understanding on what does Value Chain (VC) mean among our selves
2.The value chain approach as a means in our LH Program
1.What do we mean by Value chain?
• A value chain links the steps a product takes from the farmer to the consumer.
• It includes research and development, input suppliers and finance (market and fin. Institutions).
• Our targeted Pastoralists/small farmers combines these resources with land, labour and capital to produce commodities.
continued
• It is more than increasing production and create access to market.
• Is a means and it is not an end by itself
2.The value chain approach as a means in our LH Program.
• In our current LH program cycle, we do not think only increasing production and productivity but we emphasize also on value adding.
• It is put as one implementation strategy in the PPD and reflected as
“Increasing incomes through Value chain promotion”
continued
• The detail strategies are put in the PPD as follows:
-Promoting environmentally sustainable VC such as aloe Vera production, cactus, gums and incense production
-Encouraging sustainable rural-urban linkages-CB in Product processing-improving market access
continued
-improving rural storage and processing facilities (e.g. Grinding mills)
-promoting indigenous knowledge and skills-promoting use of appropriate technology in
product processing-encouraging the role of cooperatives
Sub Sector Analysis
Sub Sector Analysis – STEPS
1. Establish Initial Understanding of the Sub Sector1. Collect data
2. Draw a preliminary sub sector map
2. Refine Your Understanding1. Refine the sub sector map
2. Quantify dimensions of particular interest
3. Analyse constraints and opportunities in the sub sector
3. Select Value Chain for Analyses & Development1. Analyse constraints and opportunities in the chain
2. Explore opportunities for leveraged interventions
Difference between a sector, sub-sector, cluster and value chain
Alternative Selection Criteria
High Competitiveness Potential
• Gender• NRM• HIV/AIDS
Competitiveness
ImpactCross-cutting Issues
• Employment• Income• MSME potential • Income distribution• MSME growth• Livelihood and Security
Selection Process
Group Work
• Conduct a sub-sector analysis for your intervention area
Other Selection Criteria
Competitiveness
• Market Share
• Market Growth
• Competition (Global
threats)
• Industry Leadership
• Substitutes
• End Markets
(Opportunities)
• Supporting Markets
• Enabling Environment
• Infrastructure
• Policy
ImpactImpact
• MSE participationMSE participation
• Income generationIncome generation
• Employment Employment
generationgeneration
• MSME growthMSME growth
• Livelihood and Livelihood and
securitysecurity
• Sustainability Sustainability
Cross-cuttingCross-cutting
• Natural Resource Natural Resource
ManagementManagement
• GenderGender
• Trafficked Trafficked
womenwomen
• HIV/AIDSHIV/AIDS
Value Chain (VC) Concept
Value Chain Concept
• Exercise 1: opening exercise- Human Chain – Human Chain exercise reflection- (photo)
• Participants experience & brainstorming– Real life – examples –
• two or three from participants• Mango example – see next slide
IndiaIndia
India India
Middle EastMiddle East
Awassa SMAwassa SM
Asseffa WifeAsseffa WifeAwassaAwassa
Mango JuiceMango Juice
FriendsFriends
Arba MinichArba Minich
Addis AbabaAddis Ababa
SidamaSidama
AA WholesalersAA Wholesalers
ShasmeneShasmene
A Value Chain is: a vertical alliance of enterprises (collaborating in various degrees)
- -
involving all stages, from conception to disposal
defined by its raw material and market segment
Value Chain: The full range of activities that are required to bring a product or service from its conception to its end use
actors actively seek to support each other to increase efficiency and competitiveness
Invest time, effort and money, and build relationships to reach a common goal of satisfying consumer needs
Définition of Value Chainpr
oduc
ts
Small producers
Small traders
Big traders / Exporters
Industry – processing
Market Consumersin
form
ation
Environment
. Policies. Banks
. Support services
Etc…
Sellers of resources & services
Steps in VCA & Development
Value Chain Selection
Value Chain Intervention
Plan
Value Chain Analysis
Learning & Innovation
Intervention plan Implementation
Monitoring performance & Assessing demand
Economic MappingSub-sector Analysis
CHAIN ACTORS
CHAIN SUPPORTERS
CHAIN CONTEXT
Three levels of the value Three levels of the value chainchain
Global Enabling Environment
National Enabling Environment
ProducersFinancial (cross cutting)
Input Suppliers
Sector-specific providers
Cross-cutting providers
Wholesalers
Exporters
National Retailers
Processors/Traders
Global Retailers
Value Chain Lens
Value Chain Analysis
What is Value Chain Analysis?
• Value chain analysis is a process for understanding the systemic factors and conditions under which a value chain and its firms can achieve higher levels of performance.
Why VCA?
When using value chains as a means for fostering growth and reducing poverty, the analysis focuses on identifying ways to contribute to two objectives:
i) improving the competitiveness of value chains with large numbers of small firms, and
ii) expanding the depth and breadth of benefits generated.
Value Chain Analysis
– Data collection
– value chain mapping
– Assess constraints and opportunities
– Identify potential interventions
– Special focus points
• Gender sensitive value chain analysis
• Governance & power issues
– Common mistakes in conducting a VCA
Data collection & value chain mapping
A number of tools and techniques are used to conduct value chain analysis such as:
1. in-depth studies: involving the use of a combination of
tools such as sound desk researches, interviews, and focus
group discussions are key information collection strategies
2. participatory form of subsector/value chain analysis
etc.
What is Participatory Value Chain Analysis (PVCA)?
• Is a process conducting a VCA through the participation/consideration of different actors in the value chain.
• There are different activities and actors with different levels of understanding of the market and points of view.
• This makes it necessary to involve all stakeholders to have a clearer picture of the market.
PVCA Rationale
Promotes dialogue and accountability between Value chain participants Promotes the direct involvement of stakeholders
in solving problems on there own/independently
identification of bottlenecks and appropriate intervention
Develops a sense of ownership among stakeholders
Sustainability of the impact of suggested solutions a and efforts
PVCA involves: Mapping Quantitative and
qualitative research
Key dimensions Mapping the chains, networks and systems Mapping the geographical spread Identifying the key stakeholders Measuring the relative value accruing Identifying the governance structures Mapping the interventions directly
targeting different levels of the chain, network or system
Clarifying the direct, indirect or unintended impacts
Exploring the different alternative levels of intervention or strategy
.
Cont….
Key stages Scoping the analysis:
clarification of questions and investigation strategy
Preliminary value chain mapping
Participatory value chain analysis
Setting up sustainable structures for sectoral and inter-sectoral accountability.
Cont….
Principles Stakeholder participation Visual and diagram mapping - accessible to all
stakeholders Dialogue between stakeholders & mutual
understanding and respect for their different opportunities and constraints.
Equity and empowerment Incorporation of poverty and gender analysis
throughout the process Ensuring participation of the most vulnerable and
supporting their information and action needs Formation of sustainable systems for ongoing
accountability of enterprise and chain governance
.
Additional Variables to be considered gross output values, net output values (that is, gross output,
minus input costs) the physical flow of commodities along the chain the flow of services, consultants and skills along the chain employment, where relevant distinguishing between
permanent (on payroll) and temporary (off payroll) staff, gender, ethnicity
destination of sales - for example to wholesalers and retailers; concentration of sales amongst major buyers; number of buyers, imports and exports, and to which region
Cont….
Special Focus Points
Gender sensitive value chain analysis model
Not to overlook gender dimension
(1) all information will be disaggregated by gender in all possible cases,
(2) activities that include and exclude women will be identified for emphasis,
(3) economic, social, political, psychological factors which caused for the situation will be assessed and
(4) caution will be made in intervention selection to select gender sensitive value chains and intervention points
Governance & power issues
Governance describes which firms within a value chain set and enforce the parameters under which others in the chain operate. Embedded in governance are inter-firm relationships, power dynamics and the distribution of benefits.
• Governance and power relationship are important issues
– To understand the governance and power relationship
– To empower the target actors
Governance & power issues
Common mistake in VCA
• Failure to Consider the End User’s Requirements• Assuming a Fixed Industry Structure and Static
Relationships among Stakeholders• Inattention to Learning and Information Flows• Inadequate Attention to Relationship Dynamics • Failure to Verify Data• Failure to Filter Constraints• Opportunities and Constraints are Identified that
are Not the Most Important
Value Chain Mapping
What is VC Mapping
• Is an illustrative presentation of linkages in a value chain and the different actors/ stakeholders so as to create a clear understanding of relationships, activities and what is seen and encountered
• It is a vital step that follows the initial selection of value chains and
• Guides the analysis of selected value chains
Mapping – the reasons
To assist us in understanding the sub sector To assist us in communication (in/external) To identify actors, roles and relationships To identify markets (segments) To identify channels (product flows)To identify trends (dynamics)
Objectives of VC Mapping
To gain a basic overview of the value chain to guides the full value chain analysis to be
undertaken Identify constraints and possible solutions at
different levels in the value chain Identify the location and position of the poor in the
value chain Visualize networks to get a better understanding of
connections between actors and processes Demonstrate interdependency between actors and
processes in the value chain
Types of VC Map
Basic Map• Functions– Product life cycle from
conception to end use• Participant(s) at each
function• Linkages between the
participants–horizontal and vertical
Detailed Map• Added value or gross
margins of each function• Number of firms
performing each function• Volumes moving between
levels
VALUE CHAIN MAPPING: BASIC MAP
Four steps:1. Identify the functions2. Identify the participants3. Complete the work sheet4. Draw the initial map
STEP 1: IDENTIFY FUNCTIONS
Functions– Retail– Wholesaling– Processing– Assembly– Production– Input Supply
STEP 2: IDENTIFY THE PARTICIPANTS
ParticipantsVillage StockistsInput Supply CompaniesSmall Scale ProducersProducer AssociationsMedium-scale and Commercial ProducersOil ProcessorsWholesalersRetailers
STEP 3: PARTICIPANT FUNCTION WORK SHEET
VALUE CHAIN MAPPING: DETAILED MAP
1. Identify the functions2. Identify the participants3. Complete the work sheet4. Draw the initial map5. Analysis of overlays
– Number of actors performing each function– Volumes moved between one level to another– Value added/gross margins
An important overlay:Simplified Gross
Margin (SGM)
Selecting market
Simplified Gross Product (SGP) andSimplified Gross Margin (SGM)
• SGP = Turnover (gross sales) – direct cost
• SGM = SGP-T (sales) x 100 T (sales)
• Simplified gross margin:• profitability of actors in the chain• make comparison between functions and actors horizontally and vertically• comparing or benchmarking with other VCs
SGP
T = Turnover (sales)
SGP
SGP
SGP
SGM
F3
F2
F1
Critical Success Factor (CSF) Selecting market
Group work:
Select potential chain from one of the sub sectors selected from previous exercise
2. Secondary actors Research institutions
Government organizations non-government organizations
3. Facilitators
Draw a draft map
1. Main actors input suppliers Producers collectors bulking processors Wholesalers Retailers Consumers
VC Program Formulation
Different donor approach
1. A “comprehensive planning approach” based on detailed analytical value chain mapping
and market analysis preceding interventions; it uses different methodologies: to map the physical flow of commodities along
the chain, output values at different stages of value chains, export market potentials, the regional spread of value chains, inter-firm cooperation, production efficiency, etc.
Different donor approach
2. Participatory workshop- centered tools for value chain analysis with less academic rigor and stakeholder workshops as a key element;
3. Incentives for private sector-driven projects whereby donors leave the conception and implementation of initiatives to corporate value chain leaders
4. Hybrid (common)
Approach comparison
Comprehensive planning approach
Participatory workshop-centred
Incentives for private sector-driven projects
USAID (PVCA), GTZ (Valuelinks), FAO (Commodity SCA for pro-poor rural growth), ILO, FIAS
ITC (SHAPE), Mesopartner (PACA)
GTZ (PPP), USAID (Global Development Alliance), DFID (Business Linkage challenge fund), Dutch & Danish fund
most complete picture of the structure and potentials of a value chain,
appropriate to draw on stakeholder experiences, it is more flexible and less costly,
the least bureaucratic option as it actively involves private change agents and ‘governors’ of value chains
Costly and tends to be donor- rather than private sector-driven;
Provides less systematic information;
it implies a certain risk of subsidizing private gains rather than public goods, it may restrict the participation of other stakeholders, and it makes independent performance measurement difficult.
VC upgrading strategies
Upgrading Strategies 1
1 Process improvement (efficiency) :A Between the actorsB Within one actor• Logistics: e.g. reducing the time-to-market• Quality: e.g. standardisation and consistency• Costs: e.g. reducing inputs• Capacities: e.g. increasing volumes
2 Product innovation :A By one actorB Cross functional teams• Improving existing products• Designing new products• Creating marketing & design capacity
Upgrading Strategies 2
3 Functional upgrading :A Adding functionsB Changing functions• Adding sorting, grading & packing functions• Reducing production and adding exporting
Upgrading Strategies 3
4 Moving to other VCs:A changes upstreamB changes downstream• Identifying more interesting suppliers• Identifying more promising market segments
Upgrading Strategies 4
Value Chains and Finance
Some key concepts
A Sub-Sector System: comprised of multiple value chains
Support Products/ Services Markets
Enabling Environment
• Business
• Political/regulatory
• Socio-Economic
A Value Chain System
Support Products/ Services Markets
Enabling Environment• Business
• Political/regulatory
• Socio-Economic
Inputs
Production
Trading / Processing
Distribution
Final Consumers
Value Chain
Local Markets
What elements do we Analyze in a Value Chain
System?• Actors in the value chain and those that support chain (can be private, public or civil society)
• External environment, or the broader legal / national / socio cultural / infrastructure / context in which the chain operates
• Dynamics of the value chain and service markets: individual and firm behaviors, power structures, and how these affect the functioning of the chain
• Supply and Demand of the market and the chain including volumes, cost and pricing, numbers of actors, consumer preferences
What are we looking for in our analysis?
• Constraints affecting the Target group, e.g.:o Limited Access to inputso Lack of information about market demando Insufficient finance to grow business
• Opportunities for the target group, e.g.,:o Growing market demando Potential for increased efficiencies and qualityo New varieties available
• Leverage points or new models
Leverage Points and New Models
• Ways to upgrade the value chain system (to the benefit of the target group) that are targeted, efficient and cost effective
• Do not try to fix everything (triage)• Identify positive deviants and variations that
are working• Design value chain programs around these if
possible
Value Chain Financing
Financial flows
Product flows
Financial Services
Trading / Processing
Inputs Production Distribution Consumption
Value Chain Financing – external and internal financing, largely credit Value Chain Financing – external and internal financing, largely credit
Support services
Example Value Chain Actors and Financial (Credit) Needs
Large and Medium Exporters and Wholesalers
Working CapitalLine of credit / Overdraft
Long term investment loans
ProcessorsWorking capitalLine of credit / Overdraft
Investment loans
Traders / Dealers Trade credit
Producer GroupsInvestment loans for seasonality
Working capital
FarmersSavings
Working capital
Input SuppliersTrade credit
Seasonal credit
Producer / Association Model: example, direct finance and producer association repayment
Producer AssociationBanks/ SACCOs/ FIs
Grower
Grower
Grower
Finance
Finance
Finance
Bac
kwar
d an
d fo
rwar
d
linka
ges
Back
ward
and
forw
ard
linka
ges
Back
war
d an
d fo
rwar
d lin
kage
s
Repayment of loans on behalf of farmer
Lead Firm Model: Example, buyer borrows money, finances chain
Wholesale Buyers
GrowerGrower Grower Grower
Finan
ce
Prod
uctio
n
Flow of finance
Flow of products
Processors / Aggregators
Banks / FinancialInstitutions
Buyer ‘Guarantee’ Model: Example, buyer confirmed; finance direct to grower
Grower Grower Grower Grower Grower
Banks / Financial Institutions
Processor /Supermarket
Fina
nce
Finance
Inputs, Technica
l Assi
stance
Sale of products
Flow of Finance
Flow of products and services
Repayment
Finance
Out grower/ Marketing Coop
Facilitator Driven VC Model: wholesaler / producer group agreements
Buyers
Producer Associations
Banks
Services AgreementsFacilitators
Producer
Facilitators
Flow of finance
Flow of services
Flow of facilitation
Service Provider
Example Financing InstrumentsCategory Example Financing instrument
Agricultural product based • Input supply credit
• Buyer credit
• Contract farming finance
• Direct credit to farmers
Physical asset based • Warehouse receipt system
• Re-purchase agreements
• Leasing for production, processing etc.
Risk mitigation • Insurance
• Futures
Financial enhancements • Loan Guarantee
VC M and E
Targeting & Monitoring & Evaluation Impact !
VC performance
Company performance
Household changesBDS performance
Institutional changes
Monitoring is an ongoing activity!
• Projects and Programmes need to follow-up their progress
• Successes and failures need to be looked at while projects and programmes are running
• Monitoring is an internalised process of team communication, continuously undertaken while implementing, whereas
• Evaluation is an act of stopping implementation to reflect past activities (but drawing from information from monitoring).
The World of Impact Monitoring
Performance Monitoring Impact Monitoring Impact Assessment
Input Monitoring
Activity Monitoring
Implementation Monitoring
Process Monitoring
Output Monitoring
Impact Chain
Impact Model
Impact Indicators
Result-based Monitoring
Outputs ImpactsBenefits
Outreach
Evaluation
Outcome
What to monitor in projects – Performance & Impact Monitoring
Performance
• Observing outputs against planned activities
• Providing information for project management
• Day-to-day activity
To trigger short-term adjustments in operation
Impact
• Focussing on effect of outputs: impacts!
• Observing the direct benefit of outputs
• Strategic steering of implementation
To self-evaluate whether activities contribute to objectives
Impacts are ...
... changes that have a causal - or at least a ... changes that have a causal - or at least a plausible - link to a project/programmeplausible - link to a project/programme
... a change of circumstances as a consequence of ... a change of circumstances as a consequence of an intervention, it can be intended or an intervention, it can be intended or unintended, positive or negative.unintended, positive or negative.
... there: from the first moment of intervention and ... there: from the first moment of intervention and they continue to occur all the time.they continue to occur all the time.
... rather the result of social interaction than a ... rather the result of social interaction than a straight-forward interventionsstraight-forward interventions
... the result of complex interactions and thus, a ... the result of complex interactions and thus, a complex matter to deal with! complex matter to deal with!
ProjectUse of OutputDirect BenefitIndirect Benefit
Engel, P., The Social Organization of Innovation, 1997
Model of Interaction
GTZ
Input
Use of Outputs
Poverty Alleviation
Direct Benefit(Goal)
Outputs
Indirect Benefit
Activities
The GTZ Impact Model (II)
Attribution?
Partner
Observation !
Illustration: which of the 100 Bricks did we donate?
Impact Models: A chain of changesWhat do we expect to happen in value chain promotion?
SpecificInputproviders
Primaryproducers Traders
Final Con-sumers
Logisticscentres,Industry
SpecificInputs
Trans-formation
Trade ConsumptionProduction
C H A N G E !
Intervention; i.e. extension
Trans-formation
Trade ConsumptionSpecificInputs
Indicators in Value Chains
Some examples:
• Customer satisfaction
• Repeated customers
• Number of enterprises demanding a service
• Satisfaction with last service purchased
• Percentage of women-owned enterprises
„There is increasing interest in, and use of, private sector tools for performance and impact measurement; i.e. consumer market research tools for measuring changes in markets and private sector business tools for measuring service provider performance.“
Group work1. Group one – AVH, CCGG and ASE
(Shara)2. Group two – GPDI, AFD, SOS Sahel,
EAPDA (Mango)3. Group three – GPDI, AFD, SOS Sahel,
EAPDA (Banana)
Instruction for field work • Map and analyze the value chain for the
main commodity you selected 1. Functions2. Operations3. Number of actors per function4. Relation between actors 5. Volume per operation6. SGM per actor7. Critical Success Factor for selected commodity8. Support actors and their functions9. Strength and weakness 10.Factors affecting primary production11.Macro environment influence
Guideline for presentation
• Value chain map• Value chain analysis:
• What are the main bottlenecks in the chain• What are the opportunities to strength the
chain• What are the opportunities to promote the
local product
• Conclusion• What are the potential contribution of this
particular Value chain for HH livelihood and Food Security
Market Information
Brainstorming points
1. What do you understand from market information?
2. Where do you get market information?3. How do you get market information?4. Do you get market information timely?
Definition: ‘Any information used or required to support marketing decisions’
•It can range from simple averageIt can range from simple average priceprice to information liketo information like;;
•long long termterm priceprice trend trend
•Quality Quality of produce, of produce,
•VolumesVolumes of supply and demand, of supply and demand,
•Weather conditionsWeather conditions from areas where commodities are coming from areas where commodities are coming
from,from,
•LocationLocation
•New New crop varietiescrop varieties in the market, in the market,
•Product Product supplierssuppliers and and potentialpotential buyersbuyers and their characteristics and their characteristics
•Production and Marketing Production and Marketing costscosts
•Seasonal tendenciesSeasonal tendencies like harvest or planting time, etc like harvest or planting time, etc
• In principle market information is a business resource that contributes to the know – how and increases the chances for agricultural chain actors to manage prevailing situations and plan for the future market opportunities.
• In business, market information influences two functions of business that is Production and Marketing.
• The information obtained will assist them to verify the following perimeters in either production or marketing;-
Cont…
Cont …
Production Marketing
To Determine : To;
-Quantities produced for given market
Support the farmers/trader to sell more to the current buyers
-Quality desired by buyers Support the sourcing and research for better markets
-Time of demand (variations in seasons)
Secure medium and long term markets for sustainable production
The allowed transaction cost Secure market that offer the best prices.
Cont…
• All business activities involved in the movement of commodities from production to consumption is marketing. [Referred to as a supply chain]’
• Therefore farmer’s market information needs are those that enable them make rational and relevant decisions.
• Market information offers essential pivoting resources to the chain actors with a view of making them competitive and better players in the market.
• Agricultural Market information essentially fulfils some of the key facts of market chain actor’s competitiveness in the market by;-
– Become better informed than the competitors or suppliers
– Be able to dictate terms of purchase or supply
– Maximize the bargaining power
– To enable appropriate planning within give supply chain and season
– To make enough money from each harvest at the time of sale.• Market information services have the function of collecting and processing
market data systematically and continuously, and of making it available to market participants in a form relevant to their decision making.
Cont…
Market information needed by small scale farmers include:
• Information on: – product planning
– price details of seeds, fertilizers, pesticides and their availabilities
– current prices.
– forecast of market trends
– sales of timing
– improved marketing practices
– the product season predictions based on weather patterns
– group marketing opportunities
Possible Forms of disseminations
People based Electronic Media Print MediaDevelopment field staff FM radios Newsletter
Contact farmers Television Public Notices boards
School teachers, religious leaders, opinion leaders
SMS- Mobile Newspapers
Private sector agribusiness Internet Posters
Extension workers Emails Pamphlets
Marketing animators Info village booths
Challenges and Constraints in Agricultural Marketing Information Disseminations
ChallengesAccessibility Interpretation Storage Usability
Two major constraintsCost of acquisition Knowledge of availability
Different tools to obtain Market Information
• Internal records and reports
• Conducting market research
• Through a deliberate design of market intelligence systems and marketing
information models to provide marketing insights and support the decision
makers
• Informal networking and sharing; many of the organizations, entrepreneurs,
and farmers gain marketing knowledge and insights in such ways
• Organizing meetings, workshops, visits for various purposes among business
partners and stakeholders (eg. MSPs, business arrangement meetings, etc)
• Attending trade fairs
Market Information and VCD
Markets (intl/ domestic)
Distribution channels (export/import/
domestic)
ProcessorsTraders/collectors
ProducersInput suppliers
Market InformationMarket Information
Price
Quality
Quantity
Availability
•Knowledge of the marketKnowledge of the market
• helps to identify opportunities, challenge and helps to identify opportunities, challenge and
requirements for successrequirements for success
• helps stakeholders make informed decisions on their helps stakeholders make informed decisions on their
production and commercial activitiesproduction and commercial activities
• helps to implement strategies and adoption of helps to implement strategies and adoption of
innovations to maintain the competitiveness of the innovations to maintain the competitiveness of the
business and the value chainbusiness and the value chain
• ccontributes to market transparency: levels the ground ontributes to market transparency: levels the ground
for players -impacts governances for players -impacts governances
The value chain Information DivideVC Segment Inputs Production Processing/exporters Logistics Consumer
PrimaryActors
Traders manufacturers,
public and private input
providers
Small scale farmersLarge scale farmers
Farmer GroupsSMEs /Local private
companies,Regional Processors
MNCs
RetailersWholesalers,
brokersTransporters,Warehousing
Households
SecondaryActors
Financiers, Government, Donors, Researchers, Quality and Standards Bodies, Info service providers, BDS
InformationRequired
PricesStandardsVolumesMarket
Profitability
Input Costs/ ServicesProfitability
Level of DemandMarkets/ Weather etcStandards/ improved
technology
Sources of supplyCapacity utilisationTrends/ Markets /
ProfitabilityStandards
Volume/Capacity
Utilisation/Profitability/quality
requirements
AvailabilityQualityPrice
Value for Money
InformationSources
Own recordsOrders/
ContractsSector studies
Govt bulletins/Group Meetings/
Radio/ Mobile/ ContractsTraders/other farmers
Own recordsOrders/ Contracts
Sector studiesMarket research
Producers/ Traders/information
service provides (public or private)
Orders/ ContractsOwn records
Sector studies/Traders/information service
provides (public or private)
MarketingCampaigns
News/ Press Own experience
Access to Information by VC actors
• Traders and processors/exports have their own networks to access up-to-date market information and are keen on investing to acquire the right information
• On the other hand producers (small scale farmers) are commonly isolated and suffer from lack of information.
Brain storm on the reasons why farmers lack market information compared to other actors in the value
chain?
Market Information System
An MIS is a public or private service, which regularly collects information on markets and
communicates it timely and on a regular basis through various media to farmers, traders,
companies, government officials, policymakers and other interested persons
Types of MIS
Different types of MIS Strengths Weakness
Public (Government-run
MIS)
Example: common in most developing countries under the ministry of Agriculture
•Are independent and unbiased
•Offer information over several years
•Provide information that can be used to help farmers get better prices and plan for production
•Free
•Do not always reach the smaller farmers
•May not be up-to-date or may be made available too late to be of any use
•May not be very accurate
•Provide little analysis
MIS by Non-governmental Organizations (LINKS by ILRI, Market Node by CARE)
•Unbiased
•Accurate
•Free
•Accessible by small holders
•Not sustainable
•Only reach small groups
Cont …
Type of MIS Strengths Weakness
BDS providers
(‘Reuters Market Light’ in India)
-up-to-date
-not biased
-not comprehensive
-costly
-may not be easily accessible
Traders, agro-processors or exporters(EPOSPEA, EHBPA, contract farming)
-up-to-date information
-semi-accessible
-sustainable
-might be biased
-costly
Stakeholders initiated MIS -is based on needs of actors
-un biased
-accessible
-up-to-date and accurate
-highly dependant on
stakeholders commitment
(Producer groups, or individual Farmers)
-easily accessible
-highly accepted /trusted source
-may not be accurate
-is not comprehensive
Summery of challenges of Existing Public MIS service in Ethiopia
Main tips for designing an MIS
• Start small and grow big later on: Experience shows that it is always better to start the MIS small and expand it later, according to resources and skills needed for gradual management and reinforcement.
• Focus on priority and essential information • Use already available information sources to
avoid duplication• Find ways of simplifying and reducing charges
for collecting and processing.
Exercise
• For each value chain1. List out the information need (gap)2. Identify existing structures and information sources
available3. Make recommendation on how to build on existing
initiatives to put in place better MIS in the sector?
Tip…
Business Development Service
Business Development Services (BDS)
are services that improve the performance of the enterprise, its access to markets, and its ability to compete.
is a wide array of business services, both strategic and operational.
are designed to serve individual businesses, as opposed to the larger business community.
Is the wide array of non-financial services critical to the entry, survival, productivity, competitiveness, and growth of SEs.
include training, consultancy and advisory services, marketing assistance, information, technology development and transfer, and business linkage promotion.
A distinction between "operational" and "strategic" business services.
• Operational services are those needed for day-to-day operations, such as information and communications, management of accounts and regulations.
• Strategic services are used by the enterprise to address medium- and long-term issues in order to improve the performance of the enterprise,
• Access to markets, and its ability to compete. • For example, strategic services can help the enterprise to identify
and service markets, design products, set up facilities, and seek financing.
Specific areas of BDS service
• Market information• Entrepreneurship training• Market research• Facilitate & linkage with technologies• Advisory support & technical services• Provide non financial services • Consultancy service on the areas of marketing and agricultural
entrepreneurship promotion • Introduce and sell new technologies such as – equipments,
tools, ideas etc • Provide Technical service • Sample Business plan format
Business plan (BP)• A BP is a written document
– carefully prepared by an entrepreneur or a business development service provider that describes
• the objective of the business,• the proposed action with the necessary steps to enable
the business to reach those objectives.• Planning is thinking & working out
– what to do, how to do & when to do relevant activities• A BP is a profile of your business made up of partly words and
partly numbers.– The word describe about your business, products and or
service, customers, competitors, operations, sales, marketing, etc.
– The numbers estimate your cash flow, income & expenses, balance sheet, break-even analysis, etc.
Entrepreneurship
What is Entrepreneurship?
• What comes in your mind when you listen to the word Entrepreneurship?
or
• How do you understand Entrepreneurship?
Entrepreneurship
What are the characteristics of entrepreneurs’ ?
Entrepreneur is a person
• Who organizes, manages and assumes risk of running an enterprise
• Who owns a business– sell of manufacturing (any product), Trading (buying & selling), Service
business at profit
• Who Does new things or does in new ways– Have high drive and higher activity level
– Constantly aim to achieve goals and guided by their goals and work hard
– Know their strength and weakness and resources and constraints while striving for their goals
Entrepreneurship and IGA/Self Employment
– A women running a small business establishment & looking after her business all alone is said to be self employment
• When a women starts a small business & employs few to keep it running but manages the enterprises
• Is who initiates & establish econ. Activity/enterprise
• All entrepreneurs are self employed but all self employed aren’t entrepreneurs.
Self Employment /IGA Entrepreneur
What are the differences between characteristic of an entrepreneur and self employed?
Process of Entrepreneurial dev’t
( three features)
2. Development
3. Support
1.Initiation
Process of Entrepreneurial
Dev’t
Identification, selection,
Motivation, developing economic insight , promoting managerial skill, confidence, information, etc
Establishing and running an enterprise (finance, working place, machinery, power, incentives, etc)
What are the factors that influence entrepreneurship?
Gov. policyFinancial
availabilityInfrastructureEcon. Dev’tExternal env’tSocio cultural
factors
What are the steps that an entrepreneur will take to set up and manage her business?
Developing women entrepreneurs
Plenary discussion
Describe the role of women
Plenary: What are the typical gender challenges of women
entrepreneurs?
• Gender biased and self imaging
• Balancing work & family responsibility
• Gender stereotyping
• Physical and psychological intimidation
• Lack of opportunity for decision making
Group work: Problem tree analysis
• Pictorial and symbolic presentation of a tree
• Instructions for Problem Tree Analysis
• What are the factors that hinder women business owners from success?
• Use a picture of tree & include the following
1. Choose a problems in starting an enterprise: social (family, community, religious, etc); economic and Gender
2. What do women would like to achieve/see in society: Specific results/benefits - leaves
3. Social supports (gov’t & non-gov’t inst.) -Trunk
4. Roots causes responsible for limiting women to achieve what they want: Beliefs, values/attitude
See the possibility of being responsible for the risks involved in the establishment of the enterprise
What are the major challenges in Enterprise development?
• Access to adequate and timely support• Perception of the society
– bias against women:- acceptance of women as entrepreneur; dilemma women’s role as mother & entrepreneurs; lack decision making opportunity, etc
• What can be done?– entrepreneurial attitude & behavior
competencies
Summary: Why Women Entrepreneurship development
The main objectives
• To increase HHs income and ensure alterative livelihood options – build effective/successful enterprise
• To motivate and reinforce the entrepreneurial traits & abilities - Behavioral inputs and build confidence to overcome fear of failure
• To facilitate decision to setup new enterprise /expand existing ones - Business opportunity input
• To develop required managerial skill & competencies for making enterprise successful -Information inputs, Technical/commercial inputs, Managerial input
Developing personal entrepreneurial
competency (PEC)
1. Initiatives 2. See and Acts on opportunities
3. Persistence
4. Information seeking
5. Concern for high quality, innovation and efficiency
6. Commitment to work contract
7. Systematic planning
8. Problem solving 9. Self confidence
10. Persuasion
11. Use influencing strategies
12. Goal setting
13. Risk taking
Personal Entrepreneurial Attitudes and traits (PEC)
PEC
Professor David McClelland, 1983 research on Personal Entrepreneurial Behavioral Competencies(PEBC)
The importance of PEC in each stages of Enterprise development
Facilitation Skill
What does facilitation mean?
• Facilitation:
– Is to help others to use their potential not our potential
– Is providing information not teaching
– Supporting not directing
– Understanding how it is for others
– Inquiring – not interrogating
Good facilitation requires the following
• Creating safe environment for people to share experiences, make mistakes disagree with you
– Make sure they have enough space for self responsibility, initiative, risk/possibility, etc.
– Appreciate contributions & those sharing challenges– Help people to solve their own problems – do not be tempted
to give solution by yourself– Celebrate success and congratulate on failure – see it as
opportunity to learn about self– Let others know that you understand their feelings and
statements
Cont…
• Be a role model
– Give easy access to info., clear advice & ensure by paraphrasing
– Recognize with courtesy & listen with full presence – all ideas are valid
– Assess congruence of conversations on meetings
– Make sure that you declare lessons you learnt at each meeting & complement
– Maintain tone of respect, express your feelings clearly
– Admit your mistakes publicly – say it out
– Invite your people to give you feedback, appreciate it and complement