1. Fostering Country-Owned Policy Strategies for Agriculture and Rural Development
Adopt and implement a country-owned strategy for agriculture and rural development
THEME
Day 2
Mobilising Investments
The roles of public sector, private actors and donors
SESSION 4
Joyce Cacho, Ph.D.
International Consultant
Finance & Agribusiness Value-Chain Investment
October 4, 2006
Saly, Senegal
Regional Outreach Event
Sub-Saharan Africa

2. Focus on Africa – diverse challenges; similar responses.
GDP smaller than competing non-OECD member countries.
Solid GDP growth - insufficient to dramatically increase per capita income.  
Ghana: BLUE SKIES
Mozambique: PESCAMAR
Tunisia: BORGES Tunisie, S.A.
Uganda: TILDA or AMPRO  
NOTES
* Russia, Prussia, Austria
** For comparison (sq. km.): Australia=7,686,850; France=547,030; Germany=357,021; Japan=377,835; Netherlands=41,526; U.K.=244,820; U.S.A.=9,631,418.
*** estimates.
Source: The World Factbook;
OECD Regional Outreach: Sub-Saharan Africa
Saly, Senegal | October 4, 2006

3. Focus on Africa – diverse challenges; similar responses.
Agriculture continues to dominate their economies.     
NOTES
* Russia, Prussia, Austria
** For comparison (sq. km.): Australia=7,686,850; France=547,030; Germany=357,021; Japan=377,835; Netherlands=41,526; U.K.=244,820; U.S.A.=9,631,418.
*** estimates.
Source: The World Factbook;
OECD Regional Outreach: Sub-Saharan Africa
Saly, Senegal | October 4, 2006

4. Focus on Africa – diverse challenges; similar responses.
The 3 factors combined suggest a need to emphasize investment in agri-based value-chain that (a) generates employment, and (b) enhances the technology base in FDI host country.     
NOTES
* Russia, Prussia, Austria
** For comparison (sq. km.): Australia=7,686,850; France=547,030; Germany=357,021; Japan=377,835; Netherlands=41,526; U.K.=244,820; U.S.A.=9,631,418.
*** estimates.
Source: The World Factbook;
OECD Regional Outreach: Sub-Saharan Africa
Saly, Senegal | October 4, 2006

5. Making the ‘agri-supply chain’ the relevant unit of analysis for:
THE CHALLENGE
Making the ‘agri-supply chain’ the relevant unit of analysis for:
Agriculture AND Commercial policy making
Investment decision making
Poverty alleviation strategies …including policy implementation instrument selection
SIMULTANEOUSLY!...to get more “bang” from the local (national and regional) economy!
OECD Regional Outreach: Sub-Saharan Africa
Saly, Senegal | October 4, 2006

6. Regional commodity market(s)
THE KEYS
Regional commodity market(s)
Regulatory harmonization in
Grades & Standards determined in the region
Legal code that governs warehouse receipting systems (Uniform Commercial Code)
TRUSTWORTHY enforcing regional institution(s)
Employ financial structuring to distribute credit at commercial terms, throughout the agri-supply (value) chain.
OECD Regional Outreach: Sub-Saharan Africa
Saly, Senegal | October 4, 2006

7. AGRICULTURE is AGRIBUSINESS Fork  farm…and back!
RAW MATERIAL FLOW 1.
FARM PRODUCTION 3.
WHOLESALE
Bulk 4.
PRIMARY PROCESSING 5.
SECONDARY PROCESSING 6. 7.
PACKAGING 8.
DISTRIBUTION +
RETAIL 2.
COLLECTION/
STORAGE 9.
EXPORT/
IMPORT
SEEDS
FERTILIZER
CHEMICALS
WATER
REGIONAL COMMMODITY MARKET(S)
VALUE FLOW
The agri-value chain does NOT have to be contained
within national borders!
OECD Regional Outreach: Sub-Saharan Africa
Saly, Senegal | October 4, 2006

8. AGRICULTURE is AGRIBUSINESS Fork  farm…and back!
Possible if ALL stakeholders, play an APPROPRIATE ROLE, i.e.
Government policy makers and donors with the capacity to manage LARGE PROJECTS concentrate on INFRASTRUCTURE to connect markets (roads, telecommunication, education).
Politicians pass the same legislation establishing a UNIFORM COMMERCIAL CODE where warehouse receipts are legitimatized as COLLATERAL and reform LAND POLICY.
Commercial banks have to shift their attention from the security of sovereign risk in government treasuries to profitable operations.
Private sector view themselves as ‘industry captains’ that VALUE a consistent NATIONAL/REGIONAL raw material supply.
Donors, NGO’s and multi-lateral food and agriculture agencies dramatically improve systemization of their actions within and across their agencies  removing the local market distorting impact AND making available greater their resources to reduce grassroots vulnerability to weather and conflict risks.
International Research links production risks with regional consumer demand.
OECD Regional Outreach: Sub-Saharan Africa
Saly, Senegal | October 4, 2006

9. Each STAKEHOLDERS has an APPRORIATE role!
RAW MATERIAL FLOW
Donors; Multi-lateral food agencies; NGO’s
Private Sector
(entrepreneurs + established companies)
Farmer Associations 1.
FARM PRODUCTION 3.
WHOLESALE
Bulk 4.
PRIMARY PROCESSING 5.
SECONDARY PROCESSING 6. 7.
PACKAGING 8.
DISTRIBUTION +
RETAIL 2.
COLLECTION/
STORAGE 9.
EXPORT/
IMPORT
SEEDS
FERTILIZER
CHEMICALS
WATER
REGIONAL COMMMODITY MARKET(S)
Nat’l/Regional Governments; LARGE multilateral concessionary financiers
Int’l Research
Commercial Banks
Politicians
VALUE FLOW
OECD Regional Outreach: Sub-Saharan Africa
Saly, Senegal | October 4, 2006

10. Each STAKEHOLDERS has an APPRORIATE role!
RAW MATERIAL FLOW
Donors; Multi-lateral food agencies; NGO’s
Private Sector
(entrepreneurs + established companies)
Farmer Associations 1.
FARM PRODUCTION 3.
WHOLESALE
Bulk 4.
PRIMARY PROCESSING 5.
SECONDARY PROCESSING 6. 7.
PACKAGING 8.
DISTRIBUTION +
RETAIL 2.
COLLECTION/
STORAGE 9.
EXPORT/
IMPORT
SEEDS
FERTILIZER
CHEMICALS
WATER
REGIONAL COMMMODITY MARKET(S)
COORDINATION is PIVOTAL to REAPING THE REWARDS FROM AGRI-VALUE CHAIN SYSTEMS!
Nat’l/Regional Governments; LARGE multilateral concessionary financiers
Int’l Research
Commercial Banks
Politicians
VALUE FLOW
OECD Regional Outreach: Sub-Saharan Africa
Saly, Senegal | October 4, 2006

11. LAND POLICY FINANCIAL MARKETS COMMUNICATION
Adopting APPROPRIATE roles, delivers a coordinated agribusiness system.
REGIONAL
FOOD
SYSTEM
COMMERCIAL CODE
UNIFORM
LAND POLICY
MARKETS
COMMODITY MARKETS
FINANCIAL
SCI + TECH
RESEARCH
PROCESSING
NICATION
COMMU
FARM PRODUCTION
FINANCIAL MARKETS
COMMUNICATION
OECD Regional Outreach: Sub-Saharan Africa
Saly, Senegal | October 4, 2006

12. What is your APPROPRIATE role? Keep in mind…time is ticking!
ECONOMIC
GROWTH
SUB-SAHARA REGIONS
after
Coordinated implementation of agri-value chain strategy
Decreased volatility
Manageable uncertainty
Consistent investment
Economic revival of rural areas
Diversified REGIONAL economies
CURRENTLY IN SUB-SAHARA REGIONS
Volatile
High Uncertainty
Inconsistent investment
Chronic vulnerability in rural areas
YEARS
OECD Regional Outreach: Sub-Saharan Africa
Saly, Senegal | October 4, 2006

13. Trade Agreements  POSITIVE Investment Implications
…but…
Export destination countries’ broad trade policies (EBA, AGOA) facilitate access to high-income consumer markets
 Critical to ‘financing economics’ of FDI businesses in Sub-Saharan Africa
Increasing number of Bilateral Investment Treaties complement Trade Agreements
 Brings investment opportunities in Sub-Saharan Africa to the attention of potential investors
Industry ‘food safety’ initiatives in export destination countries (Europe GAP)
 Improves technology adoption along the value-chain
Sovereign credit ratings (Standard & Poor’s/UNDP)
 Helpful for including the emerging market country’s competitiveness in initial stages of the investment decision process
UNCERTAINTY/RISK: Credibility of preference, i.e., Banana challenge – Lat. Am. ; end of Multi-Fiber Agreement
UNCERTAINTY/RISK: Increasing # of bilateral agree. = increased administrative demand on emerging market countries
UNCERTAINTY/RISK: Increases administrative burden on the smallholder farmers/entrepreneurs in FDI host country
UNCERTAINTY/RISK: FDI host countries’ ‘new’ political system credibility and < 100% financial market liberation
OECD Regional Outreach: Sub-Saharan Africa
Saly, Senegal | October 4, 2006

14. CONCLUSIONS FDI to Africa, today, is static.
To move to a dynamic ‘flow’ concept with FDI, requires:
Improved coordination between OECD member countries’ trade policies and industry led ‘food safety’ initiatives;
Emphasize multi-lateral trade agreements over bilaterals;
Policy focus that fosters entrepreneurship in FDI host countries, with a special focus on agriculture based products, i.e. food, industrial chemicals, pharmaceuticals;
Allocating a segment of trade policy budgets to infrastructure investment in FDI host countries because economic growth supports trade.
OECD Regional Outreach: Sub-Saharan Africa
Saly, Senegal | October 4, 2006

15. What is your APPROPRIATE role? Keep in mind…time is ticking!
SUB-SAHARA REGIONS
after
Coordinated implementation of agri-value chain strategy
Decreased volatility
Manageable uncertainty
Consistent investment
Economic revival of rural areas
Diversified REGIONAL economies
ECONOMIC
GROWTH
YEARS
CURRENTLY IN SUB-SAHARA REGIONS
Volatile
High Uncertainty
Inconsistent investment
Chronic vulnerability in rural areas
Sustained economic growth pivots on adopting a value-chain approach to coordinating regional food consumption and production and stakeholders in Africa (policy makers and voters) taking responsibility for accountability in delivering catalyzing change.
OECD Regional Outreach: Sub-Saharan Africa
Saly, Senegal | October 4, 2006

16. Thank You! Joyce Cacho, Ph.D. E-Mail: cachojas@aol.com
International Consultant
Finance, Agribusiness Value-Chain Investment

17. What is your APPROPRIATE role? Keep in mind…time is ticking!
SUB-SAHARA REGIONS
after
Coordinated implementation of agri-value chain strategy
Decreased volatility
Manageable uncertainty
Consistent investment
Economic revival of rural areas
Diversified REGIONAL economies
ECONOMIC
GROWTH
YEARS
CURRENTLY IN SUB-SAHARA REGIONS
Volatile
High Uncertainty
Inconsistent investment
Chronic vulnerability in rural areas
Sustained economic growth pivots on adopting a value-chain approach to coordinating regional food consumption and production and stakeholders in Africa (policy makers and voters) taking responsibility for accountability in delivering catalyzing change.
OECD Regional Outreach: Sub-Saharan Africa
Saly, Senegal | October 4, 2006