Value Chain Development

Agricultural value chain development

SPARK’s agricultural value chain development programmes central objective is to support the capacity of local authorities and CSOs in the creation of jobs and growth in the agricultural sector, and the formulation of inclusive agricultural development policies. The objective will contribute to restore stability and enhance human and food security, but also develops peace dividend value chains by integrating an agricultural value chain approach with pro-poor employment creation in a conflict sensitive way.

The programme aims to support cooperatives and farmers as entrepreneurs, looking at their produce in the context of the overall value chain, and thereby improving the supply chain for existing businesses both local and international.

Building farmer entrepreneurship and supporting rural business incubation starts with mapping the value chains to identify the geographical concentration points, the opportunities, and especially the capacity gaps. The value chains are identified through a selection criteria that includes issues such as those with the greatest potential for job creation and existing and future demand.

Based on the analysis of the value chain, specific focused activities including training, coaching, access to finance and technical assistance is deployed to specific businesses along the value chain. This is done on both levels of direct service delivery to the farmers and cooperatives, and to local support organisations to create a sustainable best practice support service. The support may also lie in the field of matchmaking with local and international businesses within the supply chain or providers of specialist technical know-how. In these markets, cooperatives are often both important and often a prerequisite for value chain development in terms of lobbying for their rights as well as strengthening the farmers in their negotiation towards buyers and inputs suppliers.

The result of such programmes is a strengthened capacity of producers and cooperatives operating within various value chains and of improving the security of supply to processing businesses. This is both valuable for these buyers, but also increases the access to finance for the farmers, individually and more so through their cooperatives.

SME development along the Supply Chains of lead firms / Local Content Development

This SPARK service brings together local entrepreneurs and suppliers with international companies in order to stimulate cooperation and eventually growth of local businesses.

There is a particular context to this service. International companies are increasingly present in least-developed and post-conflict regions as investors in industrial and agricultural projects. Some of the world’s largest corporations have established multi-billion dollar mining, oil exploration, and agribusiness projects throughout West Africa, but primarily in post-conflict states including Liberia and Sierra Leone. By their nature, these extractive projects involve highly-technical operations, and for decades the negative phenomenon of the ‘island investment’ – where a project is almost entirely disconnected from the local economy – has been identified as minimizing the potential economic benefits of these projects.

To confront this phenomenon, government and non-governmental actors have advocated for increased ‘local content’ programmes and goals in their dealings with these industrial multinationals. More recently, countries around the world have pushed for and legally-required minimum local content thresholds as a matter of law.

This service is not just about a simple match between local businesses and international companies, but it strengthens the local entrepreneur’s ability to orient himself toward the supply chain business opportunities, it increases the chances of winning a contract and of successfully completing a contractual relationship with an international entity.

SPARK Examples:

Agribusiness Creation Programme (ABC) in Burundi for Heineken:

In Burundi, the multinational Heineken was interested in sourcing white Sorghum locally. But in order to do so, producers needed to be oriented towards this crop.  With a guaranteed market for those farmers who produced white sorghum, SPARK worked on developing the value chain, bringing together key actors within the chain in a multi-stakeholder platform. Members of the platform included two micro finance institutions (MFIs) which SPARK supported in conjunction with Terrafina micro finance to develop financial products specifically targeted at Sorghum farmers, as well as a guarantee fund to enable the MFIs to reduce the risk of lending. The Mobile Business Incubator (Mobinc) provided business training for the sorghum farmers. This is one of the 4 value chains which the ABC project is supporting in Burundi and creating markets for local producers.

Agricultural Business Incubation Network (ABIN) project in Burundi

The ABIN project is setting up three rural incubators. The preliminary set up focuses on flexible and mobile incubators were training is built in with services. This programme focuses on a limited number of value chains in three provinces in Burundi (Cibitoke, Bubanza and Rumonge). These value chains are the basis of a system whereby various services and adapted technology are provided for the rural population. Around these services rural enterprises are developed who market their products on the local market and cater for the needs of the target population. ABIN is meant to identify potentially profitable agri-business products along the value chains which enable the beneficiaries to initiate small agri-businesses in turn generating income. From the start the rural incubators are set up to become autonomous entities.

Chevron in Liberia

Chevron Liberia is in an exploration phase for crude off shore oil. In the 5 years of exploration they decided to target their CSR towards SME development entirely. Their reasoning was that when they go from exploration into full-scale production they would like to be able to tap into a viable SME landscape. These SMEs can then supply Chevron with goods and services. The Chevron 10.5 million USD C-led programme was the result of this ambition. SPARK Liberia implemented an SME development programme with their funding, mainly focusing on Buchanan, where Chevron will have most of its operations. SPARK Liberia established an entrepreneurship centre in Buchanan at the GBCC (local college) and did a business plan competition. Also employability training and the new Microsoft Build Your Business (BYB) trainings were introduced.

Cooperatives Support Programme (CSP) in Rwanda

In Rwanda the CSP is working along the value chains of maize, beans, potatoes and horticulture, specifically focusing on producer associations grouped into cooperatives. Through an intense programme of training, coaching and mentoring the project aims to increase production, farmers incomes and jobs. The training is at two levels, farming as a business for individual farmers and training for the cooperative management level, on issues such as contract negotiation, marketing, financial management and access to finance. Each cooperative is assigned with a coach who works with them over a period of 18 months to help them put their training, and their specific objectives and goal for the cooperative, into practice.

Conflict Sensitivitive Value Chain Analaysis in South Sudan

SPARK selected two value chains to develop that of oil seeds in Bhar El Ghazal and horticulture & cereals for Equatoria regions. In depth studies of the two chains were conducted, which identified emerging entrepreneurs and clusters of producers, potential intervention areas, relevant stakeholders, and identified gaps in the chains. SPARK uses a conflict sensitive value chain approach in its analysis and implementation as SPARK is keen to avoid interventions that may fuel existing conflicts or create new ones. Understanding the existing conflicts and their effects on the chain helps guide SPARK in decision-making in terms of actor involvement and programme design.

Increased Production & Agro-Processing Development in South Sudan

Through its Business Support Centre, SPARK focuses on the creation of “chain champions” or actors within a specific value chain that have the ability to catalyse growth in the chain.  SPARK is supporting different types of agribusinesses, such as processors, producers, transporters, aggregators and wholesalers to increase their scale through coaching in business expansion and providing technical support in the introduction of improved techniques and technologies. SPARK assists emerging agribusinesses to tackle a number of constraints that hinder growth and expansion.  Businesses, cooperatives and associations with the most potential have been identified as champions.   SPARK has identified constraints of these entities and has developed and continues to develop tailored technical business and agricultural support packages to enable the champions to grow their business.

Multi-Stakeholder Platforms (MSP) – Improving Policy for Value Chains in South Sudan

Multi-Stakeholder Platforms (MSP) bring together value chain stakeholders on a quarterly basis to collectively discuss challenges and solutions related to their businesses on the chain.  The horticulture and cereals chain platforms are established in Yei and Morobo.  These platforms involve round table discussions where dialogue topics are selected for research and development to create beneficial policy solutions that will improve efficiency on the chain.  The research results are transformed to policy solutions and then promoted by the MSP to be adopted by the relevant local authorities. The MSP participants involve actors such as input suppliers, producers, transporters, wholesalers, retailers, government, Chamber of Commerce, relevant NGOs banks and others that impact that particular value chain.  This platform is also an opportunity for stakeholder to improve market linkages, build trust and communicate issues that negatively impact one another and to come to internal chain solutions for mutual benefit.

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