Washington, 13 January, 2015 Matthias Jager

1. Value chains for
Food & Nutrition Security
Washington, 13 January, 2015
Matthias Jager
www.ciat.cgiar.org
Since 1967 / Science to cultivate change

2. Agriculture has for the most part,
forgotten about nutrition
Agriculture research,
programs and policy have
not focused on maximizing
nutrition outputs from
farming systems
Increasing interest in
• Food systems approach
• Role of agricultural biodiversity

3. >7,000
120
30
Edible species used at
local level
Important at national
scale
90% of the caloric needs
Maize, wheat, rice: 60%
Crop diversity today

4. Sustainable Food Systems - APR14
Source: SCN News no. 40 2013

5. Treating and preventing Under and Overnutrition – from
pills to improved diet and livelihoods

6. Global burden of undernutrition caused 1 over 3 million child
deaths per year and stunting prevalence in children under 5
affected at least 165 million children (Black et al., 2013).
Overemphasis of agricultural research on energy dense staple
crops in combination with the limited support for nutrient-dense
non-staple grains and legumes, and the lack of attention to the
relatively higher prices of micronutrient-dense food such as fruits,
vegetables, and livestock products, has led to food supply policies
that perpetuate a cycle of under-nutrition in developing countries
(ISPC, 2014).
Strong donor interest to test “interventions along the entire
agricultural value chain to increase the availability of safe and
nutritious foods linking smallholder farmers and their associations
to markets through inclusive business models and reducing
post/harvest losses”.
Background

7. The nutrition-sensitive
value chain
• The products,
processes, people
and policies which
deliver valuable
nutrients to vulnerable
consumers
• Innovations and interventions at any point in the chain post
farm gate which address nutritional improvement in target
population groups where there is evidence that the focal foods
are consumed by the (rural and urban) poor

8. Sustainable Food Systems - APR14
Per Capita Food Losses and
Waste (kg/year)

9. Sustainable Food Systems - APR14

10. Sustainable Food Systems - APR14

11. Driving Dynamics of Urbanization
HEALTH
Urban nutritional “double burden”
• Under-nutrition
• Overweight & obesity
Urban food safety
Increased consumption of energy dense
cheap and processed food
Sustainable Food Systems - APR14

12. • African urbanization is accompanied by rapid growth
in urban incomes and by urban (and to a lesser extent
rural) diet diversification. These trends are similar to
those found in Asia, with Asia just somewhat ahead in
the same trends below.
• Urbanization combined with income increases and diet
diversification provides major opportunities as “motors
of growth” for rural areas of Africa. In Asia this major
trend has been leveraged to meet the growth and
poverty alleviation targets in rural areas.
Background

14. The aim is to increase the production and consumption of more
diverse, safe and nutrient-dense foods for improved food security,
nutrition and income of smallholder farmers, peri-urban and urban
consumers (focusing on the 1000 days target groups and other
vulnerable populations).
the central need to leverage urbanization and diet diversification
to promote rural-urban supply chains and rural growth as solutions
to rural poverty (focusing on women and youth).
A multidisciplinary research team in partnership with national and
international development organizations and partner institutions
will apply a holistic, demand driven, impact oriented action
research approach to assess sustainable food availability, food
access, food use, food quality, food safety and food utilization,
giving particular concern to gender equality, inclusive business
relationships and sustainability of agricultural production.
Objectives

15. Sustainable Food Systems - APR14
……. Sustainable and efficiently
performing food value chains to
decrease food losses, contamination,
nutrient leakages and environmental
impacts along the chain, and
improve access to affordable,
nutrient dense and safe quality food
especially in urban and peri-urban
areas through inclusive business
models……….

16. Short/Long term strategy
Short term:
• Closing the knowledge gap: Assessment of supply and
demand constraints along the different stages of the
value chain to access and utilization of nutrient dense, safe
and diverse foods by vulnerable urban and peri-urban
consumers (incl. nutrient leakages and physical losses,
willingness to pay, consumer preferences, distribution etc.).
Long term:
• Develop and test solutions to upgrade target value
chains in order to increase the availability of affordable,
safe and nutrient-dense food for target populations

17. CIAT’s strategic initiative on Sustainable Food systems
2016 UN International Year of Pulses
The Pan-Africa Bean Research Alliance (PABRA) was
established by the International Center for Tropical
Agriculture (CIAT) in 1996.
By increasing the competitiveness of bean markets,
PABRA aims at providing consumers with better products
and contribute to the economic growth of 29 African
member countries working with more than 350 partners.
Entry points

18. Immediate priorities/countries
• Crop priority:
• 1. beans
• 2.broader food basket (context specific,
addressing specific micro-nutrient deficits)
• Countries:
• East Africa bean corridor (Kenya, Ethiopia,
Uganda, Tanzania)
• Central America: Nicaragua, Honduras

19. PABRA – Bean corridors

20. • BMZ proposal on Value chains for nutrition
• Deadline: 31 March 2015. 1.2 M Euro
• Final product: Nutrient dense bean based composite flour
• Target consumer groups and numbers: Urban, peri-urban and
rural households at the BoP, with the focus on vulnerable groups:
Pregnant and lactating mothers, Children: 6-59 months
• 100.000 consumers after 3 years.
• Potential: 5 million Uganda, 8 million Kenya cosnumers
• Potential Eastern and southern Africa: 50 million
• 50 farmer associations in Central and Western Uganda, 7.000
farmer member, 5000 farmers and 5 associations under the
umbrella of Kenaff, 5 counties in the Western Kenyan bean corridor
• SMEs:East African basic foods, Nutreal (Uganda), Lasting solutions,
starwi (Kenya)
• KALRO, NARO, various universities in Uganda, Kenya and Germany
Workplan 2015

21. • 2015: Implementation of Ford project: “Informal markets
for poverty reduction and food security: Exploring
policy options in Nicaragua and Honduras”
• Partners: Lutheran World Relief, Swisscontact
• Food basket approach: Beans, Cheese, Tomatoes
• (a) understand the existing rural-urban linkages between small
producers and poor urban consumers; (b) identify leverage
points where public policies for informal market channels can
serve to increase benefits both for rural producers and urban
consumers; (c) assess the potential of building more inclusive
business models among informal market actors. (d) engage with
key national and municipal government actors and development
donors to promote the testing and evaluation of promising
public policy and business model interventions.
Workplan 2015

22. • BMZ/GIZ Germany: One World No Hunger.
• 9 African countries, India and Cambodia).
• 1 Billion Euro/Year, 100M for multilateral
cooperation
• Green innovation centers: Value chains,
income generation
• Food and nutrition security
• Inclusive business models
Workplan 2015

23. 23

24. • IDRC, DFATD Canada:
• developing, testing and applying ways to scale up
food security and nutrition innovations.
• Deadline March 2015. 1.5 M CAD
• Identify additional bilateral funding opportunities
• FAO, Promoting quinoa in 14 African countries
Workplan 2015

26. Enabling environment
(public / donor policies)
Willing buyers
(private sector policies)
Capable farmers
(skills, capacity &
organization)
Science for impact: Linking Farmers to Markets
New business models for
sustained trading
relationships

27. How do I package
the results of the
previous exercises
into a prototype
cycle?
How to develop a prototype
Key tool #4
The Prototype Cycle
27

28. The double-facing value proposition
Key tool #2
The Business Model Canvas

29. 29

30. 30

31. Key questions
Key tool #3
The New Business Model principles
1. Chain-wide
collaboration
_______________
Do actors share the
same goals?
Do actors exchange
information regularly?
Are there structures in
place to motivate
collaboration or
shared problem
solving?
Is there one or more
“champions” who will
lead the process of co-
innovation?
Do all actors
understand and
acknowledge the
interdependence of
the trading
relationship?
2. Effective market
linkages
_______________
Are trading relations
stable?
Are trading relations
profitable?
Do actors take
advantage of market
opportunities?
Do actors respond
quickly enough to the
changing needs of
clients?
3. Fair and
transparent
governance
_______________
Are sale/purchase
volumes and prices
communicated
clearly?
Are quality standards
clear and consistent
across the chain?
Are risks understood
and shared
proportionately
along the chain?
Are trading
relationships based
on formal contracts
or clear informal
agreements?
4. Equitable
access to
services
_______________
Do producers have
access to technical
support services
provided by the
buyer or an indirect
actor?
Do producers have
timely access to
market information
provided by the
buyer or an indirect
actor?
Do producers have
access to financial
services provided by
the buyer or an
indirect actor?
5. Inclusive
innovation
_______________
Are innovation
processes carried out
collaboratively?
Who participates and
why?
If innovation is
evident, who gains
from the results?
Are there profit-
sharing mechanisms in
place?
Are small-scale
producers encouraged
to participate in
inclusive innovation?
6. Measurement of
outcomes
_______________
Have indicators been
established that will
measure the success
of the business
relationship?
Are the results of the
business relationship
measured frequently?
Are there feedback
loops in place to
guarantee effective
chain-wide
management and
decision-making?
31

32. Key tool #3
The New Business Model principles
Principle 1: Chain-wide collaboration
Strongly
agree
Strongly
disagree N/A Why?
1 We frequently exchange information formally* with our provider. ⑤ ④ ③ ② ① ⓪ ⃝
2 We frequently exchange information informally* with our provider. ⑤ ④ ③ ② ① ⓪ ⃝
3 We are aware of the effects our decisions have on our provider. ⑤ ④ ③ ② ① ⓪ ⃝
4 Our commercial goals* are aligned with those of our provider. ⑤ ④ ③ ② ① ⓪ ⃝
5 Our social goals * are aligned with those of our provider. ⑤ ④ ③ ② ① ⓪ ⃝
6 Our environmental goals are aligned with those of our provider. ⑤ ④ ③ ② ① ⓪ ⃝
7 We work closely with our provider to resolve problems. ⑤ ④ ③ ② ① ⓪ ⃝
8
We are able to respond quickly to problems that may occur to do with
our provider.
⑤ ④ ③ ② ① ⓪ ⃝
9
We recognise and value the interdependence between ourselves and our
provider.
⑤ ④ ③ ② ① ⓪ ⃝
10 Our activities and roles complement well those of our provider. ⑤ ④ ③ ② ① ⓪ ⃝
11
Incentives* (financial and non-financial) exist to enhance collaborative
behaviour with our provider.
⑤ ④ ③ ② ① ⓪ ⃝
12
Champions have been identified to lead the collaboration process with
our provider.
⑤ ④ ③ ② ① ⓪ ⃝
13
We use information and communication technology (ICT)* to enhance
collaboration with our provider.
⑤ ④ ③ ② ① ⓪ ⃝
Total points =
Average score = Total points ÷ (13 – Number of criteria marked N/A) =
______________________
______________________
Scorecard for buyers (cont’d)
32

33. Case example: REOPA and Colryt, Peru
Herramienta clave #3
Los principios para modelos de negocio incluyentes
Supermarket (Belgium)Importer (Belgium)
Processor
(Peru)
Producer
Organization
(Peru)
Principle # 1: Chain-wide collaboration
Currently established:
• NOLIKO heads up collaboration
• Clear roles among actors
• Common objective to add value to
product
• Focus on problem-solving
To improve in the future:
• Contribute to REOPA’s stable income
• Work to share social goals with
Gandules
• Improve regularity of information flow
Colruyt, a Belgian supermarket chain, purchases asparagus from REOPA, a Peruvian smallholder farmer organization. REOPA receives support
from the Belgian NGO Veco Andino, which also facilitated the application of LINK Methodology with other supply chain actors Glandules (canned
asparagus) and Scano Noliko (imports asparagus to Belgium).
0.0
1.0
2.0
3.0
4.0
REOPA Gandules SAC Scana Noliko Colruyt
Inclusive
Innovation
Chain-wide
collaboration
Effective Market
Linkages
Measurement of
resutls
Equitable access
to services
Fair & Transparent
Governance
Note: Veco Andino did not apply Principle 4: Equitable access to
services

34. Origins
• Link’s heart “the new business model principles” initially arose from expert
discussions between CIAT, IIED and the Sustainable Foodlab and were tested in a
24-case study carried out in Latin America, Asia and Africa and thereupon distilled
into the current six themes.
• The base on which these principles built up on are drawn from Alexander
Osterwalder’s Business Model Generation which has been adapted to rural and
agricultural purposes.
• LINK is a Prototype itself and currently in its third revision (since 2012), thus
constantly evolving constructing upon new insights and lessons learnt.

35. What is LINK’s value proposition?
• Nailing down inclusive business: Despite its
increasing popularity there is a lack of practical and
concrete approaches on how to operationalize and
monitor inclusive business. The diversity of
conceptual frameworks further complicates this
issue.
• Provide a methodology attractive to both producer
organizations and private sector partners by simple
and accessible language and novel business tools.
• Offer concrete entry points for private sector actors
to make supplier relationships more inclusive.
• Facilitate exchange and mutual understanding
between business partners.
Inclusive business:
Commercial
relationship
between a private
company and a
group (formal or
informal) of
producers whereby
both the buyer and
seller generate
social, economic and
environmental value
in order to sustain
long-term profitable
interdependence.

36. LINK’s (simplified) Theory of Change
LINK
Methodology
Output
Outcome(s)
Uptake by NGOs,
public sector
actors and
companies.
Intended Impacts
Trading
relationships with:
• Increased stability
• Mutual satisfaction
• Durability
• Resilience
• Frequent and effective
communication
• Transparent governance
• Joint innovation
• Stable and profitable returns
Increased mutual understanding
(PO: business orientation,
Buyer: Smallholder farmer
context)

37. Lessons learnt
• Theory: Less is more
• Practice: More is more
• Positive uptake from NGOs (i.e. Veco, CRS,
Swisscontact, CATIE, IICA, Practical Action, Prisma) and
companies (i.e. Unilever, Walmart, Colruyt, )
• For communities, much confusion is generated by the
multitude of different definitions and concept around
inclusive business and the variety of approaches
promoted by development actors. Needs streamlining.
• The LINK facilitator needs a certain level of expertise
and experience in participatory facilitation and business
approaches
• The management of the facilitating NGO needs to be
‘on board’
CIAT provides
training/guidance to 14
case studies that are
currently underway in
Latin America
Partial implementation of
selected tools of LINK
Methodology in 13 cases
in Colombia is completed
Other cases are/were
being implemented in
Indonesia (Veco), Ethiopia
Kenya and Uganda (Ford
Foundation)