Building Successful

Producer Organizations and Market Links in Africa:

Lessons LearnedContinuing Challenges

SummarySummary

IntroductionIntroduction Key Lessons Learned Key Lessons Learned Continuing ChallengesContinuing Challenges

IntroductionIntroduction

Cooperative Principles

Voluntary MembershipDemocratic Member Control

Member Economic ParticipationAutonomy & Independence

Continuing Education & TrainingCooperation Among Cooperatives

Concern for Community

• CLUSA’s approach evolved over a 20 CLUSA’s approach evolved over a 20

year periodyear period• Started in Niger (83-93)Started in Niger (83-93)

Summary – CLUSA’s ApproachSummary – CLUSA’s Approach

Basic focus: • generating tangible economic benefitsKey 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:Three different experiences:

Phase 1 – (1980’s)Phase 1 – (1980’s) mostly in West Africamostly in West Africa focus at the village/primary society focus at the village/primary society

level,level, associations with large membership,associations with large membership, multiple economic activities and multiple economic activities and

enterprises, enterprises, strong emphasis in institutional strong emphasis in institutional

building, building, links to commercial financing. links to commercial financing.

Phase 2 (1990s)Phase 2 (1990s)• move to southern Africamove 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), initialproduction and marketing (Zambia), initial

out grower scheme developmentout grower scheme development• strong focus in commodity marketing (Moz) strong focus in commodity marketing (Moz)

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

Initial POTC development and penetration of outside markets.

What Seems to WorkKey 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 outvision and exit strategy clearly spelled out• careful staff selection and trainingcareful staff selection and training• effective administrative and M&E systemseffective administrative and M&E systems

Producer OrganizationProducer Organization Primary Society LevelPrimary Society Level::• organization emerges from members common organization emerges from members common • interestsinterests• focus on building member and organizationfocus on building member and organization

capacity and disciplinecapacity 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 OrganizationProducer OrganizationSecondary/Third Tier StructuresSecondary/Third Tier Structures• natural extension of primary level societies natural extension of primary level societies • add value to primary leveladd value to primary level• sound business principles sound business principles • strong management information strong management information systemssystems• managed by professionals managed by professionals • have capable boardshave capable boards

Secondary/Third Tier Structures (cont)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 capitalhave access to capital

Technology, Inputs and Credit 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 productivityhighly 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 repaymentloan 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 farmersincrease 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 financingreliable 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 Challenges To Move ForwardTo Move Forward

Producer OrganizationsProducer Organizations• more management capacity and membermore management capacity and member disciplinediscipline• strengthen role of women - leadershipstrengthen role of women - leadership• take better advantage of market take better advantage of market opportunitiesopportunities• strategies that add value and build strategies that add value and build economies of scaleeconomies of scale• improve quality,improve quality, productivity and efficiencyproductivity and efficiency• capitalization and finance capitalization and finance • enter into policy dialogueenter into policy dialogue

African and US Governments African and US Governments • support effective policies and legal support effective policies and legal

environmentsenvironments• 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 marketsopen access to markets• incentives for private investmentincentives for private investment• increase support for agriculture productionincrease support for agriculture production

and trade, processing and marketingand trade, processing and marketing

UN Millennium Development Goals

1. Eradicate 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 education Ensure that all boys and girls complete primary school

3. Promote gender equality and empower women Eliminate gender disparities in primary and secondary education preferably by 2005, and at all levels by 2015.

4. Reduce child mortalityReduce by two thirds the mortality rate among children under five

5. Improve maternal healthReduce by three-quarters the ratio of women dying in childbirth.

6. Combat HIV/AIDS, malaria and other diseasesHalt and begin to reverse the spread of HIV/AIDS and the incidence of malaria and other major diseases.

7. Ensure 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 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 RESULTEND RESULT

Higher IncomesHigher Incomes

Economic GrowthEconomic Growth

EmpowermentEmpowerment