Alfred SchmidleyScientist, Business Model and Value Chain Specialist
International Rice Research Institute (IRRI)
APEC CONFERENCEStrengthening Public-Private Partnership to Reduce Food
Losses in the Supply Chain
“Advancing Post-Harvest Technologies and Management to Reduce Losses in
Rice Value Chains”
Westin Hotel, Chinese Taipei6 August 2013
Agenda
1. Overview: Reducing PH losses
2. Advancing PH technologies – an integrated approach– Improved technologies– Business models– Multi-channel extension and delivery– Multi-stakeholder platforms
3. Historical lessons and recommendations
International Rice Research InstituteLos Baños, Philippines
Mission
Reduce poverty and hunger,
Improve the health of rice farmers and consumers,
Ensure environmental sustainability
Through research (& delivery) partnerships
Established in 1960 by the Ford and Rockefeller Foundations
Yield breakthroughs in rice production
1960s • Yields approx.
1.5 t/ha• Famines predicted,
slow growth
Today• Yields approx. 4 t/ha• Foundation for
economic growth
Traditional rice: more biomass than grain, high duration
Modern HYVs: more grain, less biomass, shorter durations
低脚乌尖“semi-dwarf”
Manual threshing1-5%
Sun drying3-5%
Cutting, handling1-5%
Open storage5-10%
Village milling20-30%
Small retailers
Machine threshing1-5%
Combine harvesting1-5%
Mechanical drying1-2%
Sealed storage1-2%
Commercial milling5-30%
Large retailers
Crop Consumption
Physical losses 15-25% in traditional postharvest chain in SE Asia
Physical losses in mechanized postharvest chain
Quality losses resulting in 10-30% loss in value
Average Postharvest Losses
Benefits of Reducing PH losses
• Increased resource efficiency
• Decreased pressures on land and the environment
• Increased food security for the poor – more rice in rice bowls.
• Increased affordability of rice and price stability.
• Increased income for farmers
• Increased livelihood opportunities
Advancing PH technologies and best practices
1. Improved technologies and options
2. Business models
3. Multi-channel extension & delivery
4. Multi-stakeholder platforms / Learning Alliances
1. Improved PH technologies
Common reasons Why technology fails to be adopted...
1. Top-down approach to dissemination rather than “bottom up” market building (e.g., public sector programs that give away free equipment)
2. Lack of “buy-in” from end-users, insufficient knowledge about technology use and benefits.
3. Technology not adapted to suit local needs (i.e., “one size fits all ”)
4. Focus on component technologies alone (w/o recognition of other needs or a clearly defined “business case” for adoption.)
5. Attempts to outscale technologies w/o regard for building sustainable local supply chains.
…equipment graveyards are monuments to lessons unheeded
Technology Adaptation NeedsLocally produced Centrally produced
Characteristics• Complex parts (laser)• Local content (bucket)
Major Support Needs• Demonstrate agronomic
benefits• Establish supply chain• Industrial extension• Business models for
usage and delivery
Characteristics• Mass produced• Very simple or very
complex (SB, combine)
Major Support Needs• Establish supply chain• Support services
(training, after sales)• Regulations• Economic analysis
Characteristics• Simple technology• Complex processes
Major Support Needs• Technology transfer• Industrial extension• Machinery testing• Demonstrate benefits• Capacity building (users,
manufacturers)• Business models for
usage There is no “one size fits all”
Flat bed dryer Laser land leveling Hermetic Super bag
M.Gummert, 2012
Feeding the Technology Pipeline
A.Salvatiera, 2012
2. Business models
Postharvest “system”
Rice markets
Farmers Service providers Millers
MillingStorageDryingThreshingHarvesting
Distributor
Retail Dealers
Service / Repair
ComponentSuppliers
Fabricator
Traders
Production
Business models
1. Improved technology options2. Business models3. Value chains (postproduction
and technology supply)4. Other cross sector value
creators
Other “value creators”
• Research• Extension• NGOs & community
organizations• Banks/MFIs/finance • Policy-makers
Business Model Workshops:What is a business model? What for? How one can be used? Why?
A Tale of Two Dryers…
Left: Defunct dryer Right: Functioning dryer
Both dryers were installed about the same time supported by public sector donor monies. The left one now defunct was grouped-owned by a local farmers cooperative and remains unoperable andunused. The right one was taken over by a single farmer-entrepreneur who now owns and operates a thriving contract services business (based on a Learning Alliance supported Business Plan)As an unexpected outcome, two farmers trained to install and operate the now dyfunct dryer earn money by helping millers and others install theirs!
(Source: A. Schmidley IRRI PH Project, 2011)
Multiple uses of a business plan 1. Analyze my farm enterprise
2. Evaluate a new activity (technology or practice)
3. Communicate one’s business to stakeholders
4. Attract resources and addt’l capital if needed
5. Guide implementation, manage risk
BUSINESS PLAN for
PADDY DRYING SERVICES
Mr. Koul SavoeunEntrepreneur & Cooperative Head
Mobile: 092 571 231
Balat Meaychey Agriculture Development CooperativeBalat Village, Norea Commune, Sangke District
Battambang Province
Jan 2012
Key learnings:
1. MFIs: Need to offer flexible loan products and services to expand in this key target segment.
2. Farmers: Important of cash flow in a seasonally fluctuating business.
3. Research & extension: integrate actor resources & technical support minimizes risk & benefits of all parties.
Cambodia Highlights – Business ForumsIdentified areas for collaboration:
1. Assist existing MFI clients with technical and other support to optimize efficiency and profitability of PH enterprise (& minimize risk).
2. Train MFI staff about PH technologies & opportunities with business plans from actors.
3. Learning activities to increase financial and market literacy so rural actors can manage loans and new enterprises.
A Business Model approach....1. Treats farmers as private sector actors trying to maximize profits from
farm enterprise activities.
2. Looks at the end-user’s enterprise model to make a “business case” for adoption (not just “disseminating” technology).
3. Translates technical benefits into a quantifiable “value proposition” for end-user purchase of technology. (No free or unsustainable giveaways beyond demo or piloting.)
4. Addresses both “production” and “technology supply” value chains. (e.g., linking retailers to participatory trials and farmer demand for technologies.)
5. Leverages shared learning and integration of actors. (e.g. Learning Alliance helps facilitate learning and outscaling activities with the private sector – though this is a work in progress!)
3. Multi-channel extension and delivery
Multi-channel extension and outreach: Hermetic Storage
5 t Cocoon
0
6
12
18
0 20 40 60 80Storage time, days
O2
conc
entr
atio
n, % Claypot
PVC drum lrgPVC drum sml
Principles• Container with low oxygen permeability• Biological activity inside reduces oxygen
quickly• Insects die at low oxygen level• Container prevents moisture absorption
Participatory trials and data collection: Farmers and local extension/outreach partners
“As we can see (right), Super bags purchased for P100, times 6 bags is P600 for the first season. During my trial, I stored seed for 3 months, and my germination rate improved from 82% to 94% for Super bag stored seed. As a result I saved P1,224 in seed next planting. This is my profit and much more than cost of the Super bags which I can re-use w/o buying again next season, increasing my profit even more.”
Marilyn Aranas, female farmerButuan, March 2012
Philippines highlight
4. Multi-stakeholder Platforms and & Learning Alliances
National Learning Alliances – a work in progress)
Multi stakeholder platform including key public and private stakeholders
Source: R. Flor, T. Mendoza, IRRI, 2011
Plan Act Reflect and capture
• Flexible partnership allows new partners to get on board• Leverages co-funding• Captures learning and makes it available to others• LA is cross-cutting (technologies, business models, extension/delivery, private
sector)
Outscaling & cross-country learning:Combine harvesting
• Response to labor shortage and high harvesting cost• Physical losses reduced from 4-10% to 1-2%• Timeliness -> Better quality
Vietnam: approx 8,000+ combines in the Mekong 2004-2012
Cambodia PH Learning Alliance2009-2012
Improved Postproduction Management = Reduced Losses, Reduced Risk and Reduced Cost
• Extreme labor shortage• Increased production• Delay in harvesting
– Losses– Burned rice fields (2009)
• Labor cost of manual harvesting: US$ 160
• No combine harvesting
Cambodia 2007
Prey Veng Province, 2012
• Combine harvesting cost: US$ 100-120
• (Manual harvesting cost: US$ 180-220)
• Losses reduced to 1-2%• Improved quality• Employment generation: Contractors,
service providers, workshops• 2000 plus combine harvesters, all types
Cambodia 2012
M.Gummert, 2012
Flat Bed Dryers: Key issues• Local production (assist local workshops with
technical support)• Adaptations (up scaling)• Performance testing• Financing (users)• Operator training• Multi-extension pathways needed
Public sector can play a key role here!
M.Gummert, 2012
Will Project cycles limit sustainable development & delivery?Example: Processes for flat bed dryer development, Cambodia
Dryer manuf. training in Vietnam, technology transfer
Project installs 4t demo unit at farmers group
Business model development for farmers group
Training for users
Blower testing training
Local manufacturer starts production
Local manufacturer develops next generation dryer (recirculating dryer)
Other manufacturers copy, millers install dryers
Manufacturers increase capacity to 8-20t, problems with blower
2007 2012
New rice husk furnace
2008 2009 2010 2011
Linking with financing institutions
0
Testing of recirculating dryer
Project
Local manufacturers
Dryer users
Farmers groups Commercial use Commercial and contract
Promotion
1 3 ~20 ~200
M.Gummert, 2012
2013End-users experiencingtechnical problems outscaling. Support?
Summary & Recommendations
1. Component technologies are needed but insufficient for sustainable adoption. (A better functioning “systems approach” is needed.)
2. Each sector should stick to their respective mandates. Public sector giveaways don’t work. PPP’s should NOT be about govt going into business.
3. Group ownership of equipment by farmers hasn’t worked. These tend to go hand-in-hand with public programs for free or heavily subsidized equipment. This distorts agro-machinery markets, retards sector development, and limits choices and options available to actors.
4. Technology adaptation is important to suit local needs (i.e., “one size doesn’t fit all”). Technical support for local manufacturers is essential.
Summary & Recommendations (cont’d) 5. Local product champions are often linked to successful technology
advancement (e.g., farmer leader, researcher, NGO) who stay involved or “stick with” the longer process.)
6. Building sustainable supply chains are necessary for sustainable outscaling and delivery. “Push-and-pull” approaches work best.
7. Multi-stakeholder platforms can facilitate learning, sharing lessons, and integration of actors around a range of needs. (technical adaptation, piloting business models, building supply chains, private sector engagement, and cross-country learning.
8. Time needed for advancing technologies and sustainable adoption is around 10 years if history is any indication. Short-term (3-5 year) project cycles generally result in local actors/stakeholders “falling away” mid-stream or before commercially sustainable thresholds are crossed.
谢谢
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