LIMAS value chains ► DESEMP Poultry, Honey, Sesame, Cashew ► Open call for business proposa ls (business forums, media) (Organic) pulses, Rice, Sunflower,

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Presentation transcript:

LIMAS value chains ► DESEMP Poultry, Honey, Sesame, Cashew ► Open call for business proposa ls (business forums, media) (Organic) pulses, Rice, Sunflower, Horticulture ► Supporting services to VC primary producers BDS, VBAs, Tractor service, Poultry feed sales/feedmill, Extension service. ► Not VC related (business model introduction) Farm-block, MATI ”incubator”, Contract farming, Organic certification

2 Some key strategic agribusiness support approaches ► Demand driven activities –open to new opportunities ► Introduction of new business models for multiplication ► Support based on client business plans & profitability ► Business formalisation –not business as usual; learning through formalisation ► Long term support/on-site mentoring –short term formal training not effective ► Support should not distort competition excessively ► Strengthen internal value chain collaboration –CF; market, finance, trust building, TA transfer (2 ways) ► Key players are the VC stakeholders, not LIMAS; the project close and then

► Development of local private BDS service –DCs/NGOs not business oriented; ex. DADP funds not utilized effectively. ► LIMAS does not manage any business or buy any commodities –no commercial experience, unfair to the private competitors ► Development of VC business service provision -cluster development. ► Handling of business information –confidentiality; not for public consumption. ► Strengthen private sector; effective demands for services from the public sector ► PPP is less feasible when the private sector is as weak as in Mtwara/Lindi. ► Private-public dialog through business forums and specific investment support; raising taxation issues, utility provision etc. Some key strategic agribusiness support approaches

District distribution of LIMAS agribusiness support

Key LIMAS business support services ► Business registration and BP formulation (incl. stakeholder consultations, training assessments) ► Business training/mentoring ► Market linkages & information ► Pilot technology transfer & skills ► Land/water titles and processes ► Finance sourcing; no LIMAS loan facility. Internal savings LIMAS cannot fund: ► Machinery & equipment except for pilot technology ► Raw materials, salaries etc.

Business support sequence ► Value chain assessment ► Business support applications ► Application assessment (scoring) & selection ► Memorandum of Agreement for support ► Business plan preparation; plan scoring assessment ► LIMAS support action plan/budget ► Support implementation

Business is risky ► Business is risky –many start-ups fail; also some of those supported by LIMAS ► Market events etc. can kill good business plans, central sectorial planning etc. ► LIMAS role partly to take out part of the risk for investor – through funding of various business activities in the start-up phas ► Some LIMAS choices of new business models are risky –BDS, farm block, ”incubator”, private extension ► LIMAS risk mitigation through value chain analysis, business plan preparation, up-front business risk assessments. But business development never streamlined.

Some lessons ► Up-country businesses with experience/finance are ready to investment in the region ► Lack of finance/cash management for investment, especially among local businesses (delayed/reduced cashew payments a serious constraint in this regard). ► Many companies lack proper accounting systems and financial statement ► Land procurement and title issues are often delaying investment ► Contract farming needs time to mature and some processors need TA for CF management ► ”Political” influence in commodity markets and farmer organisation an issue.