ifad greenin value chains presentation
Post on 19-Jul-2015
473 Views
Preview:
TRANSCRIPT
© Bios Partners 2008
Greening Value ChainsAre value chains an entry point for managing natural assets ?
Steve Homer
© Bios Partners 2008
10 second biography ...
• 25 years in international agriculture and horticulture
• Flamingo Holdings CSR manager - €300M supply to EU supermarkets
• Ethical Trading Initiative Board Member
• Former GlobalGap Board of Directors
• CMI Agri-Certification Governing Board
• Public and private standards and development consultancy
DFID/Chatham House Procurement Forum
IIED/NRI Trends in private Agri-food standards
B&M Gates Foundation New Business Models
Unilever standards benchmarking consultancy
UNIDO – Trade standards compliance reporting
World Bank – Standards consultancy
GFSI – Standards benchmarking consultancy
WTO STDF – Private standards briefing
Meatco Namibia – EU supermarket entry requirements
© Bios Partners 2008
Content ...
© Bios Partners 2008
Good Agricultural
Practice
Globalgap
Good Manufacturing
Practice
BRC
IntegritySocial & Ethical
ETI
SA 8000
Environmental
ISO 14001
Rainforest Alliance
CARBON !
Business Equity
Fair Trade
Provenance
Integrity to provenance ...
5 years
© Bios Partners 2008
Drivers - Campaigns & media…
• “To you it is a bag of salad, dropped into the supermarket trolley with the weekly groceries”
• “The world is running out of water and British supermarket shoppers are contributing to global drought”
• The Independent May 2006
© Bios Partners 2008
Why Now ?
• Sceptical consumers• World food shortages• Climate change• Buy local• Credit crunch• Oil prices
• Mature supply chains reverting to survival mode and more ‘risk averse’
© Bios Partners 2008
Pesticide residues in food, worker health and safety
Packhouse labour conditions, excess corporate profit
Climate Change Debate
The lens - A ten year UK retail cycle
© Bios Partners 2008
Public response to carbon ...
• PAS 2050:2008 - Specification for the assessment of the life cycle greenhouse gas emissions of goods and services
• Sponsored by Defra and the Carbon Trust
• PAS 2050 builds on existing methods established through BS EN ISO 14040 and BS EN ISO 14044 by specifying requirements for the assessment of the life cycle GHG emissions of products.
• Similar initiatives in many countries – The public / private institution approach.
© Bios Partners 2008
EQUALITY & RIGHTS
ISO 22000
ISO 9000
ISO 14000
Testing Services
Private Standards Framework
Private GAP
Private GMP ENVIROMENTAL
Business to Business
SOCIAL & LABOUR
Business to Consumer Business to Society
1990 20102000
© Bios Partners 2008
A private response - BENTONVILLE, Ark., July 16, 2009
• Walmart will provide each of its 100,000 global suppliers with a survey of 15 questions to evaluate their own company’s sustainability. The questions are divided into four areas:
– Energy and Climate
– Natural resources
– Material efficiency
– People and Community
• Walmart is helping create a consortium of universities that will collaborate with suppliers, retailers, NGOs and government to develop a global database of information on the lifecycle of products – from raw materials to disposal.
• Walmart will provide the initial funding for the consortium, but it is not our intention to create or own this index.
© Bios Partners 2008
• Environmental and Pesticides
– Our unique approach with 'Nurture' offers us the fantastic opportunity to pioneer standards around the use of pesticides, reducing energy usage and allows us to break new ground improving and enhancing the local environment.
• Social and Ethical
– Working in partnership with the ETI we ensure our suppliers are annually risk assessed on ethical standards and worker welfare to ensure that all standards are achieved. Our dedicated technical team also visit suppliers to ensure continuous conformance. This is evaluated and monitored using SEDEX, the Supplier Ethical Data Exchange.
How does Nurture work?Each grower is audited on an annual basis to ensure they meet the required high standard Tesco has set. No matter where in the world we source our fruit and vegetables from and who we work in partnership with we use one standard this is Nurture.
Business to Business Business to Consumer Business to Society
1990 20102000
The combination standard B2B becomes B2C
© Bios Partners 2008
Carrefour
• Quality
• Food Safety
• Code of Conduct/Supplier Charter
• Global Compact
• 20% energy consumption pledge
• GSCP – Social and labour rights
• Parenthood Charter
Business to Business Business to Consumer Business to Society
1990 20102000
© Bios Partners 2008
Content ...
© Bios Partners 2008
SmallholderGrower
Packer – ProcessorExporter
DistributionAir Freight
UK Break BulkFreight Distribution
UK Packer Importer
SupermarketDistribution Hub
Regional Distribution Centre
Supermarket Retail Store
CustomerConsumer
Freight DistributionCustoms & Health Inspections
UK Packer Importer
UK MarketWholesaler
Retailer / CatererTrader
CooperativeInformal Merchant
Field staff & management
%age of product not suitable for export
Freight charges dependent on availability & exchange rate
Capital investment in buildings & packhouses.
Certification charges & staff costs and wages
Expensive levy charges applied to transport
Chilled distribution so expensive running costs
QC inspections grade out & rejections
Inspections , delays, fees & rejections
Capital, rates, staff and running costs
QC inspections specifications & more potential rejections
If product is not sold then wasted
Product wasted if not sold
Consumer looking for best value for money
Consumer looking for best value for money
Typical Vegetable Supply Chain
• “The trouble with the English is that they spend all of their time cleaning
their neighbours houses”
• Kenyan farmer 2009
© Bios Partners 2008
Sustainability changes in value chains are chain wide
• “The trouble with the English is that they spend all of their time cleaning their neighbours houses”
• Sustainability demands and concerns from the north are not widely understood by small farmers and are seen as imposing values
• Conservation of natural resources for long term gain is tough to sell to a farmer who has six children to educate today
• There is no mainstream market premium for sustainable products – sustainability premiums must come from more efficient value chains
© Bios Partners 2008
Misconceptions ... And opportunities
• Select ‘positive’ intermediaries
• Make the chain more transparent
• Invest in the intermediary services
• Encourage co investment between farmers and intermediaries
Producer Intermediary Intermediary 2 Wholesaler RetailerProducer Intermediary Wholesaler Retailer Retailer$Informal services
•Mobilisation•Consolidation•Finance•Planning•Transport•Risk
http://www.regoverningmarkets.org – Bill Vorley & Felicity Proctor
© Bios Partners 2008
Efficient targeted intervention and investment
• 3000 farmers
• 100 farmer groups
• Consolidator exporter
• 10 Retailers
• 60 million consumers
© Bios Partners 2008
Market inclusion new model
Organized and Empowered farmers
© Bios Partners 2008
Content ...
© Bios Partners 2008
Flowers grown by rural smallholders
• 3000 smallholders
• Growing local vegetables
• Not “certified”
• Flowers are upgrade products
• Current supply to the Dutch auction as a commodity via the intermediary
© Bios Partners 2008
Wilmar Naturegrown
• Naturegrown provides (with USAID)
– Shade nets for crops– Seedlings for Delphinium, Strelitzia,
Agapanthus– Building grading sheds– Supplying appropriate chemicals and
fertilizers on crop payback terms
• Training currently includes (Africa Now)
– GAP and Agronomy– On farm record keeping– Forming and registering legal
associations (SHGs)– Farm committees and policy meetings
© Bios Partners 2008
Wilmar Flowers
• A ‘trader’ providing
– Group planning
– Raw material
– Start up funding
– Weekly group aggregation of auction prices
– Working with NGOs like USAID and Africa Now
• NEW BUSINESS MODELS – BMGF/IIED intervention started 2009
© Bios Partners 2008
New Farmer Groups
Farmer Groups
USAID/FINTRACAgricultural practice and awareness
training
Africa NowOrganising self
help groups and micro finance introductions
Wilmar flowers
Auction 2
Auction 1
Auction 3
Sales Aggregation
Crop Planning
Agronomy & Materials Support
Miami Freight Agent
Wilmar flowers
New Flower Varieties &
Inputs
EU based flower packer
Wilmar flowers
New Flower Varieties &
Inputs
Upgraded Farmers
Rainforest Alliance
Certification
Upgraded Farmers
Upgraded Farmers
© Bios Partners 2008
Greening the value chain
• $5000 for training and certification of farmers
• $3000 for purchase of protective clothing !
• 15 weeks of trade with ASDA at a steady market price (not premium) returned $6000 extra revenue to farmers
• Premium was derived from new market access, cost of certification covered in 15 weeks
• Capturing rural best practice and applying that to capture market access. Small farmer flower growing protocol.
• Investing in the intermediary – RA certified farmers are differentiated from his competition.
© Bios Partners 2008
Wilmar flowers
Upgraded Farmers
Farmer Groups
UK based Freight Agent
Miami Freight Agent
EU based Freight Agent
Northern and Central Kenya
Potentialother
regionalgroups
Farmer Groups
Upgraded Farmers
Southern and Western Kenya
Phase two – Entrepreneurial funding
Rainforest Alliance certified + Local farmer protocol
Investment here greens the local value chain – but does not address upstream?
© Bios Partners 2008
Content ...
© Bios Partners 2008
Monday, 1 June 2009 Greenpeace Website
“A three-year, undercover investigation by Greenpeace into Brazil’s booming cattle industry has exposed links between some of Britain’s biggest brands and the destruction of the Amazon rainforest. Cattle ranching in the Amazon region is now the single biggest cause of deforestation in the world, and the expansion of this industry is being driven by the global export market”
Another Issue Looms
© Bios Partners 2008
The drivers and issues move fast…
• Exclusion from EU market ?
– Phytosanitary
– Public Regulation
– Nation States
– Science based
– Invisible to consumers
– WTO arbitration
• Barrier to return 1 year later ?
– Environmental
– Unregulated
– Private Entities
– Allegation Based
– Visible to consumers
– Arbitration by ??????
© Bios Partners 2008
Summary – The public debate
• The sustainability debate is now veryB2C with a “viral media” and less B2Bdriven
• The drivers themselves are more subjective and less scientifically drivenand are potentially more damaging to brands who do not react quickly
• The gatekeeper criteria controlling market entry to the global retailer and manufacturer brands are not radically changing in food safety but are expanding quickly into provenance or credence issues.
• Proliferation of feel good labels have become short term “proxy” standards as the scientific debate is still unresolved.
© Bios Partners 2008
© Bios Partners 2008
Namibia fact file... 2M Cattle and 2M people
• Second least densely populated country in the world, approx size of Texas
• 50% of the population live below the international poverty line (US$1.25/day)
• 70% at the population are involved in cattle farming and agriculture
• 70% of Meatco cattle are sourced from larger, well organised commercial farmers
• Over the last 10 years Meatco have invested in excess of N$200m in the Northern Communal Farming Areas of Namibia.
• Meatco, through the Meatco Foundation run many outreach and development projects for rural farming communities
© Bios Partners 2008
Meatco Cattle and Factories
• Meatco cattle are:
• Produced naturally in an open and healthy environment with no hormones or antibiotics allowed
• Fully traceable back to the supplying farm
• From selected, accredited farms
• Processed in Windhoek and Okahandja – both fully accredited and regularly audited to EFSIS and BRC standards
• Expertly chilled following slaughter with full pH testing
• Butchered to specific retail customer specification
Cattle on the Voigtland commercial farm
A Family in the northern community area
© Bios Partners 2008
Ethical Branding - “ Fair Beef ” Label
• Objective to establish “Good for Development” beef product
• Consult with expert partners such as WWF, Solidaridad & UTZ to gather
best practice advice and stakeholder input
• Develop a wider Southern Africa Farming platform from our small pilot
• “Sustainable Beef Development” Round Table – African voice !
• EU Retailer Support
• Looking for US support
• Prove to OIE that Africa can be aresponsible beef export producer in the future ?
© Bios Partners 2008
CSR DevelopmentEthical Branding - “ Fair Beef ” Label
• Farmers – Livelihood improvement
• Staff – fair treatment and welfare
• Community – trickle down of export benefits
• Environment – at least a neutral impact of farming
• Not for profit foundation – stakeholder involvement
• Donor development networking – attract partners - aid for trade
© Bios Partners 2008
CSR & Certification Activities
• Cooperation with stakeholders to manage outreach and development projects – WWF, Solidaridad
• Water borehole projects and bush reclamation and pasture management
• GPS – UK marketing agent for Meatco investing and promoting sustainable beef – Livelihood improvement
• 2 Scandinavian, 1 European retailer now direct supply and talking about African beef
© Bios Partners 2008
Brand Extension
© Bios Partners 2008
EU Retailer Development
© Bios Partners 2008
Phase 2 – Entrepreneurial funding
• The northern communal areas cannot export – VCF and OIE clearance
• The northern communal areas have the largest volume of cattle farmers
• Creation of a holding lot, cooking plant would open access to 200,000 rural farmers excluded from high value markets (c.$50 per animal).
• Matched funding with state meat company $4MUSD required over 2 years
• No funding for export, no funding for meat, Namibia “not poor enough”
• With 200 Million Cattle in Africa and only two countries able to export to the EU the potential to pilot in Namibia is huge.
© Bios Partners 2008
Greening Value ChainsAre value chains an entry point for managing natural assets ?
Steve Homer
THANK YOU
“Linking Worlds”DON SEVILLESustainable Food Lab
“Re-governing Markets”BILL VORLEYIIED
New Business ModelsBMGF SFL/IIED
top related