Gender and SFED

By Angelica Senders (Programme Specialist Capacity Development and Learning)

On April 23, a meeting was held on gender and SFED. The objective of the meeting was to discuss the gender plans of the SFED department.

We started with a presentation on the Agri-profocus (APF) gender learning network, in which ICCO plays an active role. This network started about a year ago with the aim to jointly:
1. develop a conceptual framework for gender and value chains;
2. make tools and instruments accessible;
3. develop ways to monitor and evaluate our successes.

A very informative learning history was made about the experiences of the network druing the first year. The document is downloadable from the blog on the Ning (website) of the gender network: http://genderinvaluechains.ning.com/ I herewith would like to recommend this ning. Don't forget to click on the icon for the 'tools wiki'.

Furthermore we discussed the plans to describe in-depth a variety of value chains from a gender perspective. Together we generated a number of ideas, in the three continents, which will be worked out jointly with Margreet Mook, gender specialist of ICCO.

More reading? Look at the following Powerpoint (don't forget to select the 'full screen' option, below on the right)

Gender DREO 23 April, 2009

View more presentations from Compart User.

Non-Timber Forest Products in the Honduran Moskitia

Introduction
The Honduran agricultural frontier is moving up into the natural reserves of La Moskitia, home of the indigenous Miskitos, Tawahkas and Pech. (Il)legal logging and extensive animal husbandry are quick ways for making money here, yet treathen Honduras’ tropical rainforests and the livelihoods of its indigenous inhabitants. MOPAWI, a development agency for La Mosquitia and partner organization of ICCO, is looking to manage the forests more sustainably, through the commercialization of Non-Timber Forest Products (NTFPs).

Background
From its establishment in 1985, MOPAWI has been stimulating the commercial production of cocoa, but in more recent years other NTFPs like batana (Elaeis Oleifera) and swa (Carapa Guianensis) have grown more important. Although both swa and batana have been used for centuries by the indigenous people of La Moskitia for different medical and cosmetic purposes, the commercial value of these products was never recognized, until recently.

In 2000, A Canadian entrepreneur, Dennis Simioni discovered the amazing properties of batana for the hair during his holidays, which eventually led to the foundation of a new cosmetics company, Ojon Corporation. Ojon Corporation has formed a strong alliance with MOPAWI and is currently buying large quantities of NTFPs from the zone. Using an origin based product marketing strategy they sell shampoos, conditioners and moisturizers to the highest segment of the Canadian and US cosmetics market.

After less legal and less sustainable economic activities, like logging and narcotrafficking, the commercialization of NTFPs has become the most important source of income for a large number of indigenous communities in La Moskitia. The population of La Moskitia predominantly exists of subsistence farmers that can really use the monetary income for the purchase of medicines, the studies of their children, clothing and to improve their housing conditions. Currently, the target group consists of around 2000 families producing batana, 400 families producing swa and, 600 families producing cocoa.

Roles and responsibilities of the different actors in the chain
At this point, MOPAWI has a strong role in the value chain of the NTFPs, taking care of the purchase and logistics of the different products and negotiating contract terms with Ojon Corporation. In return, MOPAWI receives a fixed quota over every liter of batana or swa delivered to the representative of Ojon Corporation in San Pedro Sula, the country’s man harbor. Basically MOPAWI is fulfilling the role of a trading company in the value chain.

At the same time MOPAWI is also forming local committees of producers in every village and councils with representatives of different committees, which in turn are organized into one overarching association per region. These associations are to take over some of MOPAWI’s current roles over time.

Apart from building local management capacity, MOPAWI also provides technical assistance to the producers of the different NTFPs.

(Technical Facilitator of MOPAWI)
Barriers to development of local management capacity
MOPAWI’s transition of a chain actor to a chain facilitator has been complicated by a number of factors. First of all, the level of education of the target group, the producers of the NTFPs, is very low. Illiteracy lies between 50% and 80%, depending on the community. People with higher education are scarce, yet essential for a solid management and administration of the different associations. Finding honest and competent local administrators is difficult and professionals from other parts of the country do not want to work in the isolated Moskitia. The number of local organizations failing because of mismanagement and corruption is troublesome, despite numerous capacity building programs of GTZ, the EU, FUNDER and MOPAWI. The Moskitia sometimes appears to be a cemetery of failed local economic development initiatives.

A second constraint to the empowerment of local organizations is transportation. The majority of the communities are rather small and geographically dispersed.
In addition, most of the communities can only be reached by motorboat over water. Fuel is expensive in La Moskitia, because it has to be brought from outside of La Moskitia and there is no physical infrastructure connecting La Moskitia with the rest of the country (which actually might be a good thing as otherwise the region would probably have already been robbed of all its natural resources). These conditions make the logistic process difficult and require good planning and coordination between the different communities.

(Transporting the Ojon Palm Fruit)

Finally, communication means between communities are limited. There is no phone network in the region and the fast majority of the communities do not have internet access or electricity. Radio communication is a possibility for most communities, yet not always readily accessible.
Due to these constraints the process of empowering local producer based organizations (at community, regional and intraregional levels) in taking over chain responsibilities of MOPAWI is a rather slow-paced process. Lack of personnel for the building of capacities of the producer based organization slows this process even further down. It seems unlikely at this moment that MOPAWI will redraw entirely as a chain actor, yet what role it will take in the future is still a point of discussion.

Dependency
Ojon Corporation has a strong commitment and interest in La Moskitia. Its product names, its slogans, its commercials, its whole marketing strategy is based on the image of ancient tribes using magical hair products, long time hidden from humanity in the tropical rainforests of Honduras. In addition, Ojon is profiling itself as a socially responsible enterprise; not only buying its raw materials from La Moskitia, but also actively contributing to the sustainable development of the region.

Ojon Corporation pays considerably better prices for the NTFPs to the indigenous producers, than producers in other parts of the world receive for the same products. Ojon is moreover MOPAWIs main donor and pays for the cost of an educational project that is setting up several schools in different remote communities.
It seems to be a win-win situation for all the actors in the value chain. Ojon has a solid marketing strategy, MOPAWI a flexible donor, and the producers a good price for their products. To a large extent this is true, yet one connotation should be made. Exclusivity contracts have been closed with each individual producer, making it impossible for other potential buyers to compete with Ojon Corporation. In addition, Ojon Corporation has protected the extraction of batana with patents. Although it is not likely that there are buyers willing to pay as much as Ojon Corporation for the Batana and Swa oils, Ojon’s demand for the NTFPs is limited. The potential production of NTFP is much higher than required by Ojon Corporation and because of the described constraints; entrance of potential buyers to purchase the overproduction is made impossible.

(SWA oil producers)
The purchase orders placed by Ojon Corporation, also directly influence MOPAWIs budget, creating instability in the NGO’s operations (e.g. how much personnel to contract each year). MOPAWI’s is highly dependent on Ojon Corporation and has the difficult task to balance its NGO activities (Natural Resource Management, building local management capacities, and defending indigenous rights) with its business activities (the commercialization of the NTFPs).

Maarten den Uyl (Junior Business Advisor ICCO-MOPAWI)e-mail. maartendenuyl[at]hotmail.com

Monitoring Food Security

Beste Collega's
Hierbij stuur ik jullie de pdf versie van het rapport dat ik geschreven heb over het gebruik van indicatoren door DREO partners om voedselzekerheid te monitoren. Ik wil jullie tevens bij deze nogmaals bedanken voor jullie input en medewerking.

Ik vond het leuk om dit onderzoek uit te voeren en hoop dat de resultaten en aanbevelingen bruikbaar zullen zijn. Voor eventuele verdere opmerkingen, suggesties of commentaar, ben ik bereikbaar op mrijerse@hotmail.com.

Met vriendelijke groet,
Marja Rijerse
Junior Policy AdvisorDepartment Research & Development ICCO

Case study: Savanna Farmers Marketing Company Ltd

Introduction
In 2004, ACDEP, a network of 20 agricultural development stations in Northern Ghana, launched the Farmers Agricultural Production and Marketing (FAMAR) Project. This project aims at the development of supply chains from small-scale farmers in Northern Ghana to agro-processors inside or outside Ghana. As part of the project, Savanna Farmers Marketing Company (SFMC) was established. The other part of the project is to develop three layers of farmer based organisations (FBOs) that will become shareholders in SFMC in the future. SFMC is now in its third season. The company is successfully marketing sorghum, groundnuts, soybean and sheanuts for over 5,000 farmers, selling to customers in Ghana. Development of primary (community-level) and secondary (district-level) FBOs is in progress, set-up of tertiary (regional) level cooperatives is yet to start.

The project model
In the value chain design, a deliberate choice was made to set-up a commercial company for the marketing of the farmers’ produce separate from the FBO. This is different from the traditional cooperative model where farmer cooperatives are expected to perform the marketing function themselves. The advantage of this split is that the marketing is done by professionals and that the long term interest of the marketing function is balanced against the short term interest of the farmers.

Groundnut farmer

The role of the NGO ACDEP was to provide training and technical assistance in order to develop the farmers organisations. It was a deliberate choice to not make the NGO a chain actor, because of the risks of lack of business focus and lack of sustainability. Separating the business role from the NGO role worked very well. They each have different interests and this creates healthy tensions between the NGO goal (poverty reduction) and the business goal (volume and profitability). There is however a concern that the business will focus too much on its business objectives, thereby jeopardizing the equally important social goals. Governance of the company is therefore a challenge at this moment.

Sorghum farmer

An important lesson is that farmers are far more receptive to capacity building (e.g. agronomic extension and training in group development) when they know there is a ready and attractive market for their produce. We call this the push-pull model. The company pulls the farmers into the chain by providing a secure market. The NGO pushes the farmers in the right direction by assisting them with capacity building.

Development of SFMC
SFMC needed seed capital to start the business. It was not possible to get this capital from local sources and therefore ICCO decided to provide a loan to the NGO ACDEP to be used to buy the shares in the company, thereby providing the seed capital. This made ACDEP the shareholder, holding the shares in trust for the farmers. ACDEP appointed an independent Board of Directors. The ICCO business advisor was appointed Managing Director.

Soybean farmer

Savanna decided to start trading sorghum, soybean and groundnuts. In the third year sheanuts were added as a fourth product. The number of farmers in the first season was 3,000 growing to 5,000 in year 3. The farmers are organised in groups of between 10 and 20 members. Savanna signs formal supply contracts with these groups. As part of the contract, farmer groups have the possibility to access production credit, either directly from Savanna or through local banks.

Involvement of farmers
In 2004 the farmers were organized through the agricultural member stations of ACDEP. The start was not easy. At the start sensitization meetings were held, whereafter contracting meetings were held in which the leaders of the groups signed formal contracts with Savanna Farmers for supply of produce. The main enticement for the farmers to participate was initially the credit that was provided. But in the second season the farmers started to see the benefit of the marketing service. Gradually the most committed groups sustained (most groups that fell apart could not repay the credit or did not meet the supply demands), and in 2007 these groups were assessed against a set of criteria for group development. The best performing groups are coached in order to help them to become certified as a co-operative under Ghana co-operative law.

With the high illiteracy level of farmers (over 90 %) and the lack of tradition to form groups as challenge, the step to form secondary groups of farmers at station level worked well. They represented the primary groups at local level. Having capable leaders in place had a very positive impact on the performance of the primary groups. Another key success factor was the huge investment of time in dialogue with farmers. This helped a lot in building trust and in getting feedback from the farmers. The next step in the process is that the farmers need to build and formalize their primary and secondary groups, so that they finally can become shareholders of SFMC. It is expected that the handover of the shares will take place within the next three years.

Truckloading at warehouse

The credit caused a lot of groups to break down. We applied a group credit concept in which the group as a whole is responsible for repayment of the total credit taken. This meant that in some cases members of a group had to pay-off the debt of other groups members that failed to supply to our company. Our rule was (and is) that groups that don't pay off their credit are not given more credit in the next season. Many of the groups where this happened fell apart for this reason.

Pricing model
Savanna has many competitors. Especially for the groundnuts, the number of traders is high. It is a product with strong price fluctuations. Since contracts in Ghana do not have much value, it was very difficult for SFMC to guarantee the supplies of peanuts when SFMC’s price was lower than the price of traders. Therefore, in the first year there was a large number of farmers that did not obey the contracts and sold their product to traders.

After long discussions it was decided not to penalize these farmers immediately, but to withhold their loans in the second year. The ‘carrot – stick approach’ was introduced. When the loans were not repaid from the first year, these farmers were excluded from further credit. This penalty system worked out quite well. In the first year the repayment percentage of credits (through supply of produce) was 70 %, in the second year it was 85 %. This was done through a quite strict monitoring system. The farmers who violated the roles where immediately visited by a representative from SFMC, and with some of them they confiscated some assets of farmers.

Farmers decide who they sell to mostly on price. It is therefore important for SFMC to offer a price to farmers at least equal to the market price. But this is easier said then done when you operate in an intransparant volatile market and when you have a customer who wants the best price in the market as well.

SFMC started applying a fixed price model with both farmers and customers. In the first year the price was determined at the start of the planting season. This created difficulties when the market price exceeded the Savanna price and farmers started diverting. This made us decide in the second year to fix the price at the beginning of the harvest season. This allowed us to anticipate on price fluctuations. SFMC is also experimenting with a so called staircase price model. In this model, the season starts with a fixed price for farmers and for the customer. When the market price goes up and reached the fixed farmer price, SFMC renegotiates a higher fixed price with the customer and increases the fixed farmer price.

Farmers as shareholders in the company
The interests of SFMC are sometimes in line with those of the farmers, but sometimes they conflict, for instance when the farmer price is concerned. By making farmers shareholders in the company, their interest is safeguarded. The second reason for involving farmers in the company is to be able to pay them dividend in order to keep them in the value chain.

Farmers are not yet shareholders in the company. They first have to build and formalize their primary and secondary groups before this process can start. The shares are presently held in trust for the farmers by ACDEP. The conditions for hand-over of the shares to the farmer groups have been agreed between ICCO and ACDEP (because ICCO provided the funds to ACDEP for buying the shares). We expect that the handover will start within the next three years, but that it will take several years before all shares are handed over. This because farmer groups do not develop at the same speed.
In the mean time farmers do not have a formal say in the company, although they are consulted on important issues. ACDEP is looking for ways to get farmer representatives more involved in decision making, even before they become shareholders in the company.

This article is written by Ties Kroezen

e-mail. tieskroezen@yahoo.com

Business Advisor ICCO in Ghana from June 2004 - July 2007

De rol van NGOs bij de ontwikkeling van graanbanken in Ethiopië

Vandaag, 1 november, organiseerde Egbert Hoving voor een groep van 15 geïnteresseerde DREO collega’s een discussie met Frans van Hoof, een consultant die recentelijk het ICCO graanbanken programma evalueerde. De discussie was gefocust op de vraag of wij ons binnen de ICCO ketenontwikkelingsprogramma’s moeten beperken tot samenwerking met onze huidige partners, NGOs, of dat het beter is samenwerking aan te gaan met gespecialiseerde commerciële actoren (BDSen), die al een rol spelen in ketenontwikkeling.

Punten die ter tafel kwamen:

• Het dilemma om sociale doelstellingen (voedsel zekerheid) en economische (inkomen) in één programma (Graanbanken) te willen realiseren;
• De vraag of in geval van de graanbanken wel van een waardeketenprogramma gesproken kan worden (de hoeveelheid graan die omgaat in graanbanken en de toegevoegde waarde is zeer beperkt, graanbanken leveren dan ook nooit meer dan een marginaal inkomen aan boeren);
• Het door NGOs’ geïmplementeerd training programma voor boeren organisaties levert vooral veel voordelen (geld) voor NGOs maar levert relatief weinig op voor boeren organisaties;
• Het kennelijke onvermogen van NGOs om een effectief capaciteit versterking programma voor boeren organisaties op te zetten (veel standaard trainingen, weinig follow up en coaching ontbrekende praktijk relevantie..);
• In lijn hiermee de vraag of we NGOs als (toekomstige) BDS-en moeten zien (de meeste NGOs hebben daarvoor niet het potentieel, nog los van het feit dat NGOs in Ethiopië geen inkomsten mogen genereren, in Kenia schijnen wel ervaringen in deze richting te worden opgedaan met NGOs die een gespecialiseerde business support unit opzetten, vergelijkbaar met een ontwikkeling die Ethiopische NGOs eerder hebben doorgemaakt bij het opzetten van MFIs);
• De vraag of er nog een rol is voor NGOs naast BDS-en (jazeker voor makelaars en faciliterende diensten bij het ontwikkelen van pro-poor ketens, die nooit commercieel betaald zullen kunnen worden);
• En tot slot de vraag wat leidend moet zijn de keus voor de keten of die voor de boeren organisatie (een commercieel denkende boerenorganisatie zal ook een keten willen ontwikkelen waar een markt voor is, moet dat perse een ICCO geselecteerde keten zijn?) Volgens de deelnemers is binnen het ICCO LMD programma de keten minder leidend dan in het internationale markt programma.
  

Frans kwam onder andere met de volgende aanbevelingen:

• De suggestie om farmerorganisaties actief in het management van het capaciteitsontwikkelingsprogramma op te nemen;
• Het advies om granen echt als keten te zien en als zodanig te ontwikkelen, volgens Frans is er wel degelijk een groeiende markt voor granen in het industrialiserende/ urbaniserende Ethiopia;
• Hiervoor moet wel gewerkt worden aan vorming van netwerken/ unions want de primaire organisaties zijn te klein om levensvatbaar te worden en anders kan niet worden voldaan aan de commerciële behoeftes in deze ketens in termen van kwantiteit en kwaliteit;
• Sterke boeren organisaties, die ook in staat zijn om zich op andere ketens te richten als de markt verandert moet uiteindelijk onze doelstelling zijn.
  

Meer lezen


by Angelica Senders
Programme Specialist Capacity Development

E-Conference DREO advisors 24th October - 7th December 2007

Dear Colleagues,

Starting from 24th October an E-conference will be held to exchange experiences about Value Chain development.

Three advisors will share their case through e-mail and you are able to talk to them through a skype or teleconference on the 6th November. The cases will deal about value chain development in Ethiopia, Philippines and Honduras. You will have the possibility to ask questions, provide suggestions or tell about your experiences.

In week 4 (15 - 23rd November) you will have the possility to talk by e-mail to Mr. Hans Posthumus who is a specialist on Value chain development. On the 21st and 22nd November we will have again a tele- and skype conference to share thoughts with him.

On the 4th December we will finalize the conference with a skype teleconference meeting.

In case you have an interest to participate, please mail to mr. Simon Koolwijk for more information or registration. e-mail. faccom@xs4all.nl

For participants who see this message after the 25th October, can still get in touch with Simon Koolwijk to discuss if participation is still possible.

Regards,

Simon Koolwijk.

Virtual Knowledge Center Organic Cotton under construction

Tuesday last week representatives of Helvetas, Organic Exchange, Historic Futures and ICCO met to discuss the further development of a community of practice, combining the Communities of Practies (CoP) experiences of Helvetas and the strengths of the Prganic Exchange website as it is now, and which is still further developing.
Issues that guide this process are a shared interest in
- Transparency and traceability of the market from producer to consumer,
- Combining/joining expertise
- Making accessible who-is-who information
- Creating a platform for sharing of grassroots (farmers', producer organisations') experiences.

For more details, please contact Marian van Weert
(RW)