Agri-ProFocus Kenya

Action learning on Agri-business development

Second meeting

Quick system analysis to identify local development opportunities

Nairobi, 29 September 2011

Self education on quick system analysis: Objective

Combine tools to come to a fast, practical and easy to apply, but accurate way to identify opportunities worth support by development initiatives.

Learning objectives

• Get acquainted with an easy-to-apply tool for stakeholder interaction analysis

• Be conversant with easy-to-apply tool for chain analysis

• Practice gross revenue calculation of production

• Plan for using these tools in learning cases

Why a quick system analysis to identify local development opportunities?

Why an analysis?– Many initiatives fail as they start based on the wrong

assumptions– Choices must be made– Maximize impact per development dollar– The topic was chosen for self-education

Why quick?– Time and resources are always limited– Balance between analysis and intervention– Detailed data is overvalued

Why system analysis?– Reality is complex– Looking at the wider context provides better insight– Combine farming system, economic and social issues

When a quick system analysis to identify local development opportunities?

When a quick system analysis?

Engel (1997) distinguished roughly 3 phases:

A) Problem definition and system identification

B) Analysis of constraints and opportunities

C) Action planning

We will focus here on

B): analysis of constraints and opportunities.

Ways of looking at and analyzing the ‘system’

Name Focus

Farming System Agro-ecology and farming practices

Agricultural Knowledge and Innovation System (AKIS)

Knowledge and information flow between actors

Value chain Economic interactions between actors of an end-product

Innovation System Interaction between economic and support actors and policy environment

Methods to analyse constraints and opportunities

• PRA and RRA

• RAAKS

• Innovation system analysis

• Value chain analysis

• SWOT

• ….

• ….

Action learning on agri-business development: Set-Up

Proposed tools:

Matrix of interactions during a multi-stakeholder meeting (3 hours)

1. List stakeholders and their roles

2. Divide participants in stakeholder groups

3. Stakeholder groups identify a positive point and difficulties with the other stakeholders

4. Stakeholder groups rank the 4 most important problems

5. Matrix is constructed and presented by facilitator

6. List the main constraints

7. Joint ranking by voting

8. Brainstorm on opportunities for improvement in mixed groups

Action learning on agri-business development: Set-Up

Farmer Seed producer

Research Extension (public / NGO)

Processor Field broker

Transporter

Supermarket

Farmer

Seed producer

Research

Extension

Processor

Action learning on agri-business development: Set-Up

Action learning on agri-business development: Set-Up

Matrix of interactions: practice (90 min)

1. Divide the group in 2

2. Each group chooses a case of one of the participants for the purpose of simulation

3. Decide which stakeholders would be present during a stakeholder meeting

4. Divide yourselves to play the role of these stakeholders

5. Go through the 7 steps of the matrix of actor interactions

6. Evaluate the tool by discussing:

1. What you liked

2. What you want to do differently

3. What you want to include

Action learning on agri-business development: Set-Up

The tool is adapted from:

Biggs, S. & Matsaert, H. (2004). “ Strengthening Poverty Reduction Programmes Using An Actor Oriented Approach: Examples from Natural Resources Innovation Systems.” AgREN Network Paper No. 134. London: Overseas Development Institute. http://www.odi.org.uk/work/projects/agren/papers/agrenpaper_134.pdf

Proposed tools:

Multi-stakeholder meeting (2 hours)

Chain actor analysis

1. List chain actors

2. Construct the basic chain map (actor and operations)

3. Estimate the price increase per actor

4. Estimate the costs per actor

5. Identify and discuss opportunities

Chain actor analysis: tool

Example chain map

- Supply improvedgeneticmaterial

- Place beehives- attend beehives- fight varroa- extract honey- transport to

collection centre

- Collect honey- analyze humidity- filter- homogenize- fill in drums- classify- offer to trader

- send toMéxico D.F.

- sell to whole-sale traders

- process- pack in small

units (bottles) - distribute- sell

- consumeas food

SpecificInputs

Consumption

Production Collection Intermediarytrade

Wholesaleand retailmarketing

SpecificInputs

Consumption

Production Collection Intermediarytrade

Wholesaleand retailmarketing

Source: A. Springer-Heinze, GTZ

IndividualBeekeepers

Collectors

Beekeeperassociations

Cooperatives

Inter-mediaries

Honeytraders

Whole-salers

Retailers

Consu-mers

IndividualBeekeepers

Collectors

Beekeeperassociations

Cooperatives

Inter-mediaries

Honeytraders

Whole-salers

Retailers

Consu-mers

Practice: Chain actor analysis

1. Divide the group in 4

2. Each group chooses a specific chain from the participants

3. List chain actors

4. Construct the basic chain map (actor and operations)

5. Estimate the price increase per actor

6. Estimate the costs per actor (if possible)

7. Identify and discuss opportunities for improvement

8. Evaluate the tool

Chain actor analysis: exercise

Proposed tools:

Gross margins of production (individual)

1. Calculate variable costs of production

2. Calculate gross revenue

3. Calculate return on labour and investment

4. Discuss rationale of choices of producers and opportunities to increase gross margin

Calculating gross margin of production

Exercise in couples:

Practice calculating the gross margin for potato production in Kenya based on data provided (use separate description 2 hypothetical potato farmers)

1. Calculate variable costs of production

2. Calculate gross margin

3. Calculate return on labour and investment

4. Discuss rationale of choices of producers and opportunities to increase gross margin

Calculating gross margin of production: exercise

1. Plan how you can pilot the use these tools in your on-going case, or in related work

2. Plan for a multi-stakeholder meeting

3. Identify your buddy to support you

Plan for the use of these tools in your case during the next 6-month period