Snv value chain

SNV Ethiopia’s

Value Chain Development Approach

Pro Poor Development through

Value Chain Development

LVC/PPD National Project

Inception Workshop

Addis Ababa, January 21, 2011

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RetailerFarmer

ProducerCoopInputs

SNV Ethiopia’s Value Chain Development ApproachRationale: Demand Driven Value Chain

Development

OpportunitiesMarket Intelligence

Reliable OutletsMarket IntelligenceEmbedded ServicesFinance facilities

Value Chain Development Approach

Processor ConsumerMarket

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SNV & Services Providers

Knowledge development& learning

SNV Ethiopia’s Value Chain Development Approach

Value Chain Development Approach

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1.Sector development

2.Business development

3.Knowledge developmentand learning

4.Business Development Services Provider strengthening

Sector development provides for opportunities, business development turns opportunities into

results, knowledge development and BDS provider development assures the sustainable

up-scaling of the approach

Key intervention areas:

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Value Chain Development Approach

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Creating opportunities through:

-Market access/studies;-Public-private dialogue;-Institutional changes;-Sector competiveness;-Sector research projects;-Win-win relationship building;-Financing sector projects.

Sector / Institutional development

Value Chain Development Approach

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MSP: Multi Stakeholder Platforms (Coordination Groups)

- Bottleneck definition and priority setting (ownership)

- Project implementers report to the CG on projectstatus/fund use (accountability)

- From the interaction from CG meetings producers andprocessors have agreed to form EMPPA, EHBPEA

- Starting point for apiculture and dairy board establishment (public-private dialogue forums)

- Research agenda setting

Sector / Institutional development: products

Value Chain Development Approach

Sector / Institutional development: products

MSP: Multi Stakeholder Platforms (Coordination Groups

- Input suppliers , producers and processors create B2B linkages

- Linking public institutions to private sector actors (EMDTI, HBRC, Regional Marketing Agencies)

- Public-Private dialogue resulting in policy/regulatory changes (Feed export ban, honey proclamation, collection centers)

- Input suppliers , producers and processors create B2B linkages

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MI: Market Intelligence

- Exchange visit to Kenya that resulted to the idea of Dairy Business Hub

- Researches on various issues (new product development, quality, EU market access, shoats rearing vs. fattening)

- Advise for packaging materials, technical advise on processing technology (set up and equipments)

- Trade fair participation leading to exports (2008 - 30t Europe, 10t Yemen; 2010 - 400t)

- Publications on bee flora and apiculture resources- With ECOPA awareness creation on hygienic milk

production and consumption

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Sector / Institutional development: products

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SAS: Sector Association Strengthening

- EMPPA, EBA and EHBPEA: support the establishment, strategic planning, business planning

EPPM: Effective Public Policy Management

- Support associations to lobby at government level - Commitment to the establishment of the dairy and apiculture board

- EU third country listing: MoARD in the lead- Honey proclamation- Introduction of transitional beehives besides modern beehives

Sector / Institutional development: products

Value Chain Development Approach

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VCF: Value Chain Financing (100%)

- CGs, trade fairs, research- Sector projects for sector associations and public sector- Upgrading of EMDTI laboratory

ATP: Appropriate Technology Promotion- Improved aluminum milk cans- Simple quality control equipment- Transitional beehive: Women having access to honey

production

Sector / Institutional development: products

Value Chain Development Approach

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Business development

Making use of opportunities through:

-Linking businesses to markets;-Linking businesses to producers;-Developing arrangements;-Promoting embedded services;-Testing and subsidizing

innovations;-Strengthening cooperatives;-Access to capital.

Value Chain Development Approach

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PGS: Producer Group Strengthening (cooperatives)

- Training producer groups reaching +1600 producers on hygienic milk production and handling via coops leading todecrease in rejection rate from 13% to 1%

- One dairy cooperative trained on Business and FinancialManagement

- Supporting 4 honey cooperative unions in fair trade certification (FLO)

- Via associations and cooperatives 2.000 out growers andtrainers trained in beekeeping skills and colonymultiplication impacting 19.000 beekeepers

- More formal outlets through out grower schemes- Women group producing protective clothing

Business development: products

Value Chain Development Approach

• B2B: Business-to-Business support

- Support the provision of embedded services (training, input provision): introduction of quality based payment leading to decrease in adulteration rates

- Provide for network opportunities (CG)- Linking over 1000 producers to processors (e.g. Sululta –

Tsega&Family)- Linking investors to cooperatives (Velocity Cap – Selale)- Via 8 honey processors 3.000 out growers and trainers

trained in beekeeping skills and organic honey production impacting 7.100 beekeepers resulting in added income up to US$ 150

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Business development: products

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PSS: Private Sector Actor Strengthening

- 6 Business plans (Honey and Dairy)- Technical training for processing staff- Direct advise to individual entrepreneurs- HCAAP/ISO certification (3 companies)- Product diversification (yogurt, propolis, royal jelly)- Traceability (2 companies)

VCF: Providing and facilitating investment funds forinnovations and up-scaling

- Financing innovations (80%-20%: e.g. Business Hub,Processing Improvements, Diversification)

- Financing up-scaling projects (>15) (20% - 80%) - Facilitating access to equity funds (2 processors)- Intermediate with donor agencies (Agriterra - Selale)

Business development: products

Value Chain Development Approach

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Knowledge development and learning

How to realize up scaling of the VCs- Program Level: up scaling of the

BOAM approach to RAIN, PSNP+,Niche Program

- Institutional/sector level:- Apiculture/Dairy Board

- B2B Value Chain Development- Quality Based Payment (Biftu) - Business Hub (Asela Model

Agricultural Enterprise- Honey export to the EU

Program

Sector B2B

Value Chain Development Approach

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BDS Provider development

Increasing the value chain development capacity in Ethiopia by- Using service providers (15+)- Sharing the VCD approach

- papers and cases,- participation in conferences- articles

- Strengthening capacities- public (e.g. EMDTI, HBRC),

private (e.g. Ffarm, YONAD) and NGOs

- Coaching of associations (e.g. EMPPA, EHBPEA)

Value Chain Development Approach

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• First assure markets, then increase production

• Focus on private sector as the engine for growth

• Combination of sector wide and B2B support

• Involvement of all key stakeholders (via MSP)

• Ownership: defining intervention priorities

• Build on private sector leaders

• Public sector focused on sector identified

priorities

• Combine capacity building with access to funds

• Quick wins (short term vs long term)

SNV Ethiopia’s Value Chain Development ApproachKey Success Factors

Value Chain Development Approach

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Recap:

Pro – Poor development through

value chain development

Demand/market driven value chain developmentSupporting the private sector as engine for growth

Sector development provides for opportunities, business development turns opportunities into results, knowledge development and service

provider development assures the sustainable up-scaling of the approach

Value Chain Development Approach