GIZ and the Private Sector for Sustainable Agriculture and Rural

GIZ and the Private Sector for Sustainable
Agriculture and Rural Development
Deutsche Gesellschaft für
Internationale Zusammenarbeit (GIZ)
Dr. Gerd Fleischer
Brussels, 12 December 2012
Abteilung „Ländliche Entwicklung und Agrarwirtschaft“
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Challenges (1)
Agriculture/agroindustry (again) in focus since food price crisis
2007/2008, but:
 Need to overcome long period of past underinvestment needs stable
framework conditions
 Pattern of high volatility on many agricultural commodity markets which
triggers panic responses (eg. export bans)
 How to balance the interests of consumers and producers of food?
Many developing countries are net food importing countries
 Private sector investment is key driver of agricultural growth – how to
stimulate long-term, sustainable investment?
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Challenges (2)
 Investment in agriculture contributes to poverty alleviation (World
Development Report 2008), but:
 How to assure that investment creates jobs and income, thereby
having positive impacts on rural poverty ?
 Can smallholder agriculture be competitive in the long run and without
public support?
 Limited experience with „inclusive business models“
 Need for capacity development of smallholder farmers and small and
medium local enterprises – how to generate investment from private
and public resources?
 Standards drive markets – compliance of smallholder agriculture?
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GIZ Experience in public private partnerships
 Since 2000, GIZ implements a PPP programme on behalf of the
German Federal Ministry for Economic Cooperation and
Development (BMZ)
 Key elements:
 Matching grant programme for individually designed development
projects
 Competitive bidding for selected thematic fields
 Beyond CSR: project is attached to core business of the company
 Most of the projects work with one firm in a specific location, with
limited budget and short duration
 Strong interest of specialised importers, trading houses and processors
in getting closer to the source
 GIZ provides experience on the ground, working with farmers and
government institutions
 Several multi stakeholder initiatives on sustainability standards
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2. Cooperation with the Private Sector
PPPs in the Agricultural Sector
1.Projects in the field of social
and ecological standards and
certification (39 %)
10%
11%
39%
2.Projects with the coffee sector
(20%)
12%
17%
3.Projects in the field of
promoting and optimizing value
chains (14%)
4.Projects in the field of quality
management and training/
coaching (11 %)
5.Projects with the cocoa sector
(10%)
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Some Examples of Successful Private
Sector Cooperation
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3. Examples
Sustainable Vanilla in Madagascar
85% of world market‘s Bourbon Vanilla is grown in Madagascar;
Smallholder production; vanilla production alone hardly sustains
farmers livelihoods
The German company Symrise is a supplier of chemical and natural
odorants and flavourings to the food industry. Company is on track
to source all its vanilla supply from sustainable production.
Project objective: Improve quality and quantity of vanilla production
and create higher local added value, thereby improving the
livelihoods of smallholders in Madagascar
Approach
 Farmer training on production parameters
 Give farmers greater share of the value chain to ensure
sustainability
 Secure farmers nutrition through integrated rice projects
 Farmers remain independent for their vanilla sales
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3. Examples
African Cashew Initiative (ACi)
Background
 Main Partner: Bill & Melinda Gates Foundation (BMGF)
 Implementation: GIZ
 Target Countries: Benin, Burkina Faso, Côte d‘Ivoire, Ghana,
Mozambique
 Duration: 07.2009 – 3.2019
 Total volume: 37,3 Million Euro (BMGF: 16,9 Million Euro, BMZ: 3,4
Million Euro, NGOs: 17 Million Euro)
Starting Situation
 Low productivity, inferior quality, insufficient management skills of
smallholders
 Limited competitiveness, insufficient access to markets
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3. Examples
Goals
1.
2.
3.
4.
Market access and improved marketing
Increase of productivity and quality
Increase of Added Value
Up-scaling through Learning Effects and Innovation
Approaches






Increase of productivity and quality through counselling on good
agricultural practices
Improvement of access to advisory services and production resources
Promotion of local processing through the installation of processing
facilities
Formation of farmer organisations
Linkage to international markets
Improvement of framework conditions
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Pertinent issues and salient details
 Transaction costs
 Integrating smallholders into supply chains has risks and
rewards („inclusive business models“) – there are high upfront
investments needed – will private sector partners walk this last
mile upstream in the value chain, even if they have after
options?
 Scale
 Spatial variation: Pilot projects with individual agribusiness firms
too often remain just at that level
 Upgrading value chains is key objective, but increased
management complexity when several private sector players
are involved
 Shift to food crops: new challenges
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The German Initiative for
Agribusiness and Food Security
(GIAF)
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4. GIAF
Background and Scope
 Initiated by German agribusiness firms
 Foundation: June 2012
 Members: 35 multinational and mid-size companies as well as industry
associations
 Platform to design and implement joint projects in a pre-competitive
manner, based on tested and replicable models for scaling up
 Strong focus on food crops for domestic and regional demand
Approach
 Adopt the value chain concept in a comprehensive manner, working
with several players along the chain
 Turning the conventional value chain approach upside down: demandled approach
 Long term, regional and sector wide approach
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4. GIAF
GIAF Intervention Model
Companies
Private
Implementation
Intervention: Quality und Standards
Intervention: Sustainable supply chain
People
• Retail sector
• Consumers
Trade
• Wholesale
• Industry
Market
Intervention: Food fortification
Intervention: Inclusive Business Models
• Food industry
• Food
processing
Trade
• Farmer
• Regional
trade
• Middle-Man
• Family
Processor
Intervention: Post-harvest management
(Storage, Processing)
Services
• Supply of
inputs
• Workers
Farmer
Intervention: Basic education and
training of farmers and rural workers
Implementation
Public
Abteilung „Ländliche Entwicklung und Agrarwirtschaft“
GIZ – DeveloPPP
Seite 13
Some preliminary conclusions
 There is an evolving agenda and a need to adopt innovative
modalities in public-private sector cooperation
 This requires donors to allow private sector to play a leading role –
and for private sector to be willing to take on that role. However,
partnerships raise the prospect of limited donor funds leveraging
private resources to increase development impact and the
sustainability of investment
 Capacity development at local level is key to achieve sustainable
impacts
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Thank you for your attention
Contact:
Dr. Gerd Fleischer
Project Director
Agricultural Trade and Private Sector Cooperation in Rural Areas„
Deutsche Gesellschaft für
Internationale Zusammenarbeit (GIZ) GmbH
Postfach 5180
D-65726 Eschborn
[email protected]
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