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Not by technology and money alone – blog #6
Publicado el: 24 - noviembre - 2017
Finding ways to embed coaching services in the cost-structure of the value chain – A blog series on the importance of relational capacity strengthening in local agribusiness partnerships
In March 2017, 2SCALE1 consortium partner ICRA organised a review and capitalization workshop. ICRA agribusiness trainers, who have been training and coaching supply chain actors in the 2SCALE programme for several years, came together from Benin, Ghana, Mali and Nigeria. The objective was to collectively reflect and draw lessons from their work. The gathering included a write-shop to translate these lessons into stories. This resulted in a booklet of 15 stories illustrating the importance of strengthening functional capacities, i.e. relational and organisational “soft skills” that make local actors function better in their value chain as agribusiness partners. Each blog in this 6-weeks series showcases two stories from this booklet and highlights how the stories address a specific theme in agribusiness development. This last blog features stories on the future of coaching services and the process of how to embed these into the cost structure of commodity value chains.
The future of agribusiness support services: new challenges for an old profession
The role of advisors in agribusiness is ever changing. Whereas conventional advisors mainly work with farmers, in the 2SCALE programme ICRA equipped these intermediaries to become agribusiness coaches. One of their main tasks is to foster the generation of new ideas for action by all involved market players in a particular value chain. The coaches need to be keen to innovative opportunities that can shake value chain actors out of their old habits and ways of thinking. This extends their role and terms of reference, as they move from being a purely technical advisor for primarily farmers to a facilitator and on-the-job coach of local agribusiness partnerships. This shift does not come easy, as described comprehensively in 2SCALE’s thematic paper on business support services. A key challenge: how to embed the coaching services into the cost structure of the value chain? The below stories from Nigeria show how agribusiness cluster (ABC) actors themselves find ways to continue the coaching services and cover for its costs.
Coaching after project funds end: ‘We want to pay for you to stay!’ (Maize-Nigeria partnership)
“If you had to pay to continue getting coaching services after the 2SCALE project ends, would you pay - or would you rather drop the whole thing?” As ICRA agribusiness trainer of the maize partnership in Nigeria, I – Gbenga Idowu - was very interested to see what would happen next. So with this question hanging in the air, I started a discussion with about twenty representatives of the four maize ABCs in Nigeria. The participants represented producers, input suppliers, marketers and women processors conducting maize business in towns across three states in the South West zone of Nigeria. They were no strangers to me, having been part of the 2SCALE project for the last 3-4 years. The question was greeted with a moment of deep silence in the room. The participants seemed to be deeply challenged by it, as the coaching services for their clusters over the years have been funded through 2SCALE.
Then the silence was broken. One after the other started sharing the major business breakthroughs in their clusters and in their individual businesses, which they attributed to the coaching services. The high value they placed on the combination of technical, organisational and business relationship building services provided to them was not in doubt. Going back to the opening question, Mr. Akinpelu (a farmer from the ABC from Ogbomoso) stood up and asked: “If 2SCALE funding must stop, how much would we need to pay to continue getting the coaching support?” He and others reasoned that they would like to pay for the coaching services, as long as it could be within their means. I quickly calculated and then I responded, “If you, as a group of about 2,000 farmers, are able to raise five million Naira (about € 13,600) per year, it may be enough to provide regular coaching support by 10 coaches with some backup from me as their trainer.”
As if something had triggered a latent potential in the group, the participants started to come up with ideas on how to raise the needed amount within the internal cost structure of the maize partnership. The participants demonstrated their long experience of farmers’ cooperative fundraising as they kept coming up with terms as “dividends on patronage”, “dividends on shares” and “demand dividends”. I probed for more explanation. So one of the farmers, Akinpelu, gave an example: “There are up to 2,000 maize farmers in the partnership and each of these requires 5 bags of fertilizer per year. The farmers could pool this demand through the POs in their clusters such that the 10,000 bags of fertiliser could be purchased in bulk - at a reduced price. Paying 4,000 instead of 5,000 Naira per bag would reduce the final cost of each bag by 1,000 Naira: the clusters could decide to keep N500 of this, and let the members have it at 4,500 Naira per bag. This still would be a saving for farmers – and would also raise five million Naira to finance coaching services.” This same model can also be applied to other goods and services for which demand and supply can be pooled at ABC level; for example, tractor services, credits/loans, insurance, transport, etc. If all the dividends raised were pooled every year, the money that would be raised could be more than enough to contract competent coaches at cluster levels through a competitive bidding process.
As the exchange of ideas continued, it was clear that a lot of coaching support on coordination at cluster and regional levels would still be necessary to achieve the sums for this idea to work. But it was very heart-warming for me to witness cluster members voicing how much they valued the coaching services and that they would be willing to find a way to pay for the services themselves.
Even when the project ends, milk will continue to flow (Dairy-Nigeria partnership)
FrieslandCampina WAMCO (FCW) is a leading milk processing company, which intends to reducing the import of raw material through local sourcing from Fulani cattle herders. FCW has therefore established milk collection centres targeting Fulani milk producers in the area. Milk collection is a completely new business for the Fulani, who previously only produced for their own consumption and local sale of cheese. And even this sale was women’s business; Fulani men - the owners of the cows - had never been interested in the milk or its products. This changed with the 2SCALE project. Cows are now milked early in the morning, after which the women pool and pour the milk into specially designed and calibrated cans. They take care to keep to the required quality standards and have the milk cans ready for delivery to the collection centre by 9 am at the latest, as agreed.
Most of the agribusiness coaches for this dairy partnership are “external” people; they are not directly engaged in the dairy business. Instead, they are from a company called SPPS Limited that was contracted by 2SCALE to offer coaching services supported by an ICRA agribusiness trainer in order to establish dairy clusters, improve production and quality, and link Fulani herders to transporters, feed and veterinary drug suppliers, etc. In 2016, these ‘external’ coaches were suddenly confronted with the problem that they could not renew their 2SCALE contracts, which affected their earnings.
With some help of a community livestock worker called Salihu, a young Fulani that works in the clusters as veterinary drug supplier, the coaches discussed their situation with the dairy vendors.
Even though they themselves are not Fulani, they had built up competence and trust with them. This became a powerful asset as they looked for opportunities to become part of the milk business. As most of the women milk vendors prefer having their milk collected at the camp and not make the trip to deliver it to the collection centres themselves, they agreed that the coaches could collect and transport their milk to the milk collection centres using their personal cars. The coaches also began supplying dry season supplementary feeding materials to community livestock workers, who further distribute it to the farmers, who need it to ensure their cows are properly fed.
It has now been about half a year since the coaches initiated this additional transportation service. Over this time, enough trust was built up for the coaches to get the milk from the women on credit. The coaches pay the women for their milk once they have delivered it and get paid by FCW. The coaches now collect on average 200 litres of milk per day from about 10 women milk vendors and the credit has run as high as 100,000 Naira (about € 270). By becoming part-time input providers and milk transporters, they can remain associated with the cluster and at the same time continue their coaching services when needed by the cluster. The Fulani women on the other hand feel secure in the knowledge that when the 2SCALE project phases out, FCW will continue to get their milk supply.
Please find all the field stories in this booklet. Are you interested to learn more about the business support model of ICRA as developed in 2SCALE? Read all about it in 2SCALE’s thematic paper: “Strengthening Business Support Services for Agribusiness Partnerships”. This was the last blog in our ‘Not by technology and money alone’ series. Missed one? Read more on how capacity strengthening supports:
Blog #1 - Business changes at management level of POs and food processing SMEs
Blog #2 - Collaboration in agribusiness clusters
Blog #3 - Better access to finance
Blog #4 - Improved market relations for youth and women agripreneurs
Blog #5 - Loyalty in long-term farmer-firm business relationships
Footnotes:1 2SCALE (Towards Sustainable Clusters in Agribusiness through Learning in Entrepreneurship) is a major agribusiness incubator programme implemented since 2012. The programme promotes inclusive agribusiness partnerships in nine African countries and is implemented through an international consortium, led by the International Fertiliser Development Centre (IFDC) together with the Base-of-the-Pyramid Innovation Centre (BoPInc) and ICRA, an international centre for developing facilitation skills in agriculture.