Producers’ organizations  in business:
Download
1 / 15

Producers’ organizations in business: - PowerPoint PPT Presentation


  • 94 Views
  • Uploaded on

Producers’ organizations in business: Trends and challenges. Roldan Muradian Agriterra / Center for International Development Studies (CIDIN). Radboud University Nijmegen.

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about ' Producers’ organizations in business: ' - nani


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript

Producers’ organizations in business:

Trends and challenges

Roldan Muradian

Agriterra / Center for International Development Studies (CIDIN).

Radboud University Nijmegen

Note: This is not an institutional presentation. Therefore, the statements presented do not necessarily reflect Agriterra’s institutional vision


Outline of the presentation

  • Global trends in the agri-business sector. Implications for small-scale farmers

  • 2. What is the role of producers’ organizations in coping with the new challenges?

  • 3. How are the development and private sectors coping? Is there hope for mainstreaming unusual business?


1.Global trends in the agri-business sector. Implications for small-holders

  • A turning point, due to market liberalization and rapid globalization, took place in the 1980s, setting a new stage in the transformation of the agri-food industry

  • 1950’s – 1980’s; pre liberalization/ globalization stage

  • Major role played by the state in steering rural development, allocating resources to the agricultural sectors and intervening in input provision, extension, commercialization, price setting, etc.

  • The advocacy capacity of POs towards the state was a key element in achieving better conditions for producers

  • Defensive approach: cooperatives are there to solve market failures (e.g. non-competitive markets)


  • 1980’s - Liberalization/globalization phase

  • Mutinationalization: global value chains, transnational corporations as importance players

  • Specialization/differentiation: convenience products, niche markets; quality as salient feature of products

  • Vertical coordination: tailored business relationships

  • Private grades and standards: certification schemes, products specifications

  • Supermarket revolution: emergernce of superpowerful supermarkets (from spot-markets to concentrated markets)

In the academic and development sectors:

Emergence of the value chain thinking (a new level and logic of intervention)


  • 2005 -Globalization of price instability, crisis and uncertainty

  • Short worldwide boom and bust cycles in the agricultural sector

  • A new phenomenon: Agriculture for feeding cars

  • High inflation in input prices

  • Food crisis, also hardy hitting small-scale producers


Implications for agricultural producers

  • A shift in power relations along the value chain, favoring downstream agents (traders, retailers)

  • The ability to meet private standards becomes a critical competitive tool

  • Quality, consistency, volume and product specifications become very important elements in the transaction with buyers

  • High degree of uncertainty in the business


Bargaining power and market relations


2.What is the role of producers’ organizations in coping with the new

challenges?

  • From the point of view of small producers: Collective action as a tool for meeting standards, achieving product differentiation and tailoring transactions , reducing risk, while also gaining bargaining power

  • b. From the point of buyers: Cooperatives may hold some competitive advantages derived from lower transaction costs (particularly in sectors dominated by small-scale producers)


  • What are the challenges?

  • A mindset change: From defensive measures to “collective entrepreneurship”

  • Unusual business: building innovative partnerships

  • A trade-off between entrepreneurship and inclusiveness?

  • To face the main barriers for innovation in agricultural cooperatives in developing countries


Example of unusual business:

  • Cafedirect:

  • 4th U.K. coffee company

  • US$ 47 annual sales

  • Founded by development NGOs

  • It grants to producers’ groups stock shares and representation in the company board

  • Commit 90% of the profits to the producers-owned NGO Twin Trading (specialized in supply chain management) . It has a constituency of 24 farmer cooperatives in eight countries.


3.How are the development and private sectors coping?

How usual unusual business will be?

  • Private sector

  • Corporate social responsibility is becoming a matter of competitiveness

  • New wave of CSR: bottom of the pyramid approach/ inclusive business. Is the private sector discovering poverty?

  • Will the crisis lead to re-think business models?

  • Emerging markets require new models

  • It is not only a business but also an ethical issue: is there scope for a more human capitalism?


  • Development sector

  • Pre-liberalization/globalization vision still prevalent (emphasis on advocacy/representation/empowerment/generic institutional strengthening) . Entrepreneurship, in general, still a neglected issue

  • Why is adaptation so slow? Why projects dealing with innovative partnerships and entrepreneurship still unusual?


Example of innovative models:

BRAC in Bangladesh (the world’s largest NGO in one of the poorest countries, to a large extent self-funded through economic activities)


What are the main barriers for innovation in the development sector?

  • …Basically a matter of lack of incentives

  • Overabundance of resources (too much, too easy money?).

  • Loose conditionality by donors

  • Execution (expenditure) becomes a goal in itself (the tyranny

  • of the project cycle)

  • Partnerships need time, donors want short term execution,

  • practitioners want the money from donors

  • Prevalent risk-aversion attitude: business involves risk,

  • practitioners prefer achievable goals


The future of international cooperation in the agricultural sector is about innovative business models

How usual unusual business will become?

... Donor policies have a major role to play

… the lead is not in Europe…the drivers of change are abroad (time to learn from them)


ad