Public – Private Partnerships in Smallholder Agriculture An NGO perspective on the potential and limitations of PPPs to stimulate pro-poor market linkages

Our Mission TechnoServe works with enterprising people in the developing world to build competitive farms, businesses and industries. 1

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Can PPPs be a good tool in transforming smallholder Ag??? 3

The context for smallholder participation is often their asset endowments and vulnerability contexts Financial Capital Natural Capital Social Capital Physical Capital Human Capital Smallholders

PPPs can be a useful approach to ‘crowd in solutions’ to the smallholder universe Market Access Finance Technical Knowhow Weak Institutions 5

A multi-dimensional approach is therefore necessary, not just business but social as well Civic Society Government Smallholders Business (Private Sector) 6 Markets Finance Technology Policy -Incentives -Penalties Infrastructure Co-finance Enabling Env. Support Services

Labor and productionQuality control and bundlingWholesalingRetailing An example in South Africa has shown what is possible 7 Emerging farmer 1 Technical Support Services Financial & Management Services Pack House Emerging farmer 2… Emerging farmer …8 Farm Jobs Retailer 1.Identify farmers with access to suitable assets 2.Provide a suite of services to farmers ( TA, A2F,A2M) 3.Leverage preferential procurement and Social Progs. 4.Expanding farms results in additional sustainable jobs 5.TNS exit facilitated by building local institutions TechnoServe Programme Management Local Farmer Owned Services Companies 5

The project has ambitious targets and commitments Farmers by 2015,15000 new jobs 9 project sites established R50m budget over 3 years 3 new sites in the pipeline R10m Rand Match Funding R10m in inputs finance Financial Service Partners Engaged Retailers, Processors and Wholesale Markets Market Partners Mobilised

These PPP interventions will have long term success if they strengthen market systems A market system is the network of buyers, sellers and other actors that come together to trade in a given product or service. The participants in a market system include: Direct market players – producers, buyers and consumers who drive economic activity in the market Suppliers of supporting goods and services -- such as finance, equipment, transport, technology and business consulting Entities that form and influence the business environment -- such as regulatory agencies, infrastructure providers and business associations. 9

When market systems thrive, they result in long term sustainability 10

Lessons Learned Successful PPP must attempt to solve mutual problems of both the public and private sector. There is often a mismatch between the readiness of the public sector to translate ambition into practical action. The private sector responds to carrots ( incentives ) and sticks (regulation) Challenge Funds ( e.g. The Jobs Fund ) are a good tool for government incentives for the private sector. Pain avoidance and maximum pleasure are key factors to balance in brokering relationships Actions don’t always follow the linear pathway! Its a marathon, and not a 100m dash ( PPPs require time and patient capital ). 11

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Questions?? 13