Building Successful Producer Organizations and Market Links in Africa: Lessons Learned Continuing Challenges

Summary  Introduction  Key Lessons Learned  Continuing Challenges

Introduction

Cooperative Principles Voluntary Membership Democratic Member Control Member Economic Participation Autonomy & Independence Continuing Education & Training Cooperation Among Cooperatives Concern for Community

CLUSA’s approach evolved over a 20 CLUSA’s approach evolved over a 20 year period year period Started in Niger (83-93) Started in Niger (83-93)

Summary – CLUSA’s Approach Basic focus: generating tangible economic benefits Key elements of the approach include: decentralization experiential training step by step process building capacity and ownership promoting transparency, responsibility and accountability addressing technology gaps linking farmers to markets

Three different experiences: Phase 1 – (1980’s) Phase 1 – (1980’s)  mostly in West Africa  focus at the village/primary society level,  associations with large membership,  multiple economic activities and enterprises,  strong emphasis in institutional building, building,  links to commercial financing.

Phase 2 (1990s) move to southern Africa move to southern Africa focus at the primary (farmer group) and focus at the primary (farmer group) and secondary levels secondary levels production and marketing (Zambia), initial production and marketing (Zambia), initial out grower scheme development out grower scheme development strong focus in commodity marketing (Moz) strong focus in commodity marketing (Moz)

Phase 3 – (past 3-5 years) mostly in Southern Africa and parts of West mostly in Southern Africa and parts of West Africa Africa stronger commodity chain stronger commodity chain more attention to building/strengthening more attention to building/strengthening secondary structures secondary structures achievement of higher economies of scale achievement of higher economies of scale vertical market vertical market integration integration

Initial POTC development and penetration of outside markets.

What Seems to Work Key Lessons Project Design and Implementation adapt to specific economic and social context continually being fine tuned good agriculture potential reasonable infrastructure and market access start with a market focus work toward vertically integrated along the value chain (production to market) build efficiency and economies of scale

Project Design and Implementation (cont) vision and exit strategy clearly spelled out vision and exit strategy clearly spelled out careful staff selection and training careful staff selection and training effective administrative and M&E systems effective administrative and M&E systems

Producer Organization Primary Society Level: organization emerges from members common organization emerges from members common interests interests focus on building member and organization focus on building member and organization capacity and discipline capacity and discipline encourages accountability and transparency effectively represent member’s interests focus on two or three high potential crops part of a larger network

Producer Organization Secondary/Third Tier Structures natural extension of primary level societies natural extension of primary level societies add value to primary level add value to primary level sound business principles sound business principles strong management information strong management information systems systems managed by professionals managed by professionals have capable boards have capable boards

Secondary/Third Tier Structures (cont) are subject to regular audits; are subject to regular audits; are linked to a network of secondary are linked to a network of secondary (in-country) and third level structures (in-country) and third level structures (regional and global) (regional and global) have access to capital have access to capital

Technology, Inputs and Credit low tillage technologies have shown to be a low tillage technologies have shown to be a highly effective tools to increase productivity highly effective tools to increase productivity a distributor model is an effective way to get a distributor model is an effective way to get inputs and extension to farmers and increases inputs and extension to farmers and increases loan repayment loan repayment production credit is most effective when part production credit is most effective when part of an integrated, market driven operation; of an integrated, market driven operation; marketing credit from traders and banks marketing credit from traders and banks increase volumes traded by farmers increase volumes traded by farmers guarantee funds and other risk reduction guarantee funds and other risk reduction mechanisms are critical to link farmers to mechanisms are critical to link farmers to reliable financing reliable financing

Market Links understand how the market works have access to market information market and business planning are essential meet agreements - quality, quantity and timeliness Long term win-win business relationships good communication system and adequate infrastructure (e.g. warehouse) supportive policy environment, open access to markets), adequate infrastructure physical safety are critical

Challenges To Move Forward Producer Organizations more management capacity and member more management capacity and member discipline discipline strengthen role of women - leadership strengthen role of women - leadership take better advantage of market take better advantage of market opportunities opportunities strategies that add value and build strategies that add value and build economies of scale economies of scale improve quality, productivity and efficiency improve quality, productivity and efficiency capitalization and finance capitalization and finance enter into policy dialogue enter into policy dialogue

African and US Governments support effective policies and legal support effective policies and legal environments environments strategic issues affecting competitiveness strategic issues affecting competitiveness (e.g. capacity building, corruption, (e.g. capacity building, corruption, infrastructure, ag. subsidies…) infrastructure, ag. subsidies…) open access to markets open access to markets incentives for private investment incentives for private investment increase support for agriculture production increase support for agriculture production and trade, processing and marketing and trade, processing and marketing

UN Millennium Development Goals 1. Eradicate extreme poverty and hungerEradicate extreme poverty and hunger Halve the proportion of people living on less than a dollar a day and those who suffer from hunger. 2. Achieve universal primary educationAchieve universal primary education Ensure that all boys and girls complete primary school 3. Promote gender equality and empower womenPromote gender equality and empower women Eliminate gender disparities in primary and secondary education preferably by 2005, and at all levels by Reduce child mortalityReduce child mortality Reduce by two thirds the mortality rate among children under five 5. Improve maternal healthImprove maternal health Reduce by three-quarters the ratio of women dying in childbirth. 6. Combat HIV/AIDS, malaria and other diseasesCombat HIV/AIDS, malaria and other diseases Halt and begin to reverse the spread of HIV/AIDS and the incidence of malaria and other major diseases. 7. Ensure environmental sustainabilityEnsure environmental sustainability Integrate the principles of sustainable development into country policies and programmes and reverse the loss of environmental resources. Reduce by half the proportion of people without access to safe drinking water. Achieve significant improvement in the lives of at least 100 million slum dwellers.

THE REAL CHALLENGE 8. Develop a global partnership for developmentDevelop a global partnership for development Targets: Develop further an open trading and financial system that includes a commitment to good governance, development and poverty reduction – nationally and internationally Address the least developed countries’ special needs, and the special needs of landlocked and small island developing States Deal comprehensively with developing countries’ debt problems Develop decent and productive work for youth In cooperation with pharmaceutical companies, provide access to affordable essential drugs in developing countries In cooperation with the private sector, make available the benefits of new technologies – especially information and communications technologies.

END RESULT Higher Incomes Economic Growth Empowerment