Farmer-based Organizations and How to Promote Them

Farmer Based Organisations (FBO)
and how to promote them
Bonn, 30.05.2018
Webinar Series on Agricultural Value Chains
Organized by
Karina Brenneis (Sector project Agricultural Trade and Value Chains)
Dr. Andreas Springer-Heinze (FMB)
Alfons Eiligmann (IDC Consultancy)
Dr. Eberhard Krain (SNRD Working Group Agribusiness and Inclusive Value Chain Development)

2
Two statements:
 “Most development organizations have an automatic focus on the promotion of
agricultural cooperatives without assessing carefully whether this may work or
not.”
 “It took us 30 years to develop well-performing cooperatives in Nicaragua.
However, I think there is no other way to ensure that farmers not always lose
out to traders. We just have to promote cooperatives.”
Question: Under which conditions is a cooperative strategy successful,
what is necessary to be done and what are the biggest risks?

• Rural business is first priority,
• Engaged in collective business activities,
• The organization is producer-owned and controlled
The organization can also engage in social and political activities.
Farmer Based Organisations (FBOs)
See Oxfam: „Producer Organisations: A Guide to Developing Collective Rural Enterprises“
Key features of a FBO: *
*

Advantages of horizontal cooperation in a FBO
Economies of scale and lower costs
 Economies of scale in production, processing, marketing
 Sharing resources and equipment
 Better prices for supplies and improved sales prices
 Easier access to supplies, information and services
Improved business models
 Access to buyers and ability to comply with buyer requirements
 Possibility to specialize in particular business activities
 Balancing different capacities and competences within the cooperative
Countervailing market power
 Better bargaining power negotiating terms with buyers and suppliers
Social benefits
 Social exchange and learning
 Reducing uncertainty and reassuring decision-making

Cooperating to gain commercial advantages
and engage in contract farming
Input
providers
Buying
enterprise
Members
of the
group
Farmer
group
Final Markets
coordinated
business
activities
Farmers and microenterprises no longer
operate independently
 Informal (village) farmer groups are
(pre)cooperatives through which farmers
coordinate bulking of produce and selling
transactions.
Issues: Unstable, informal structure with undefined
governance and weak management capacity,
strong dependence on buyers

Cooperating to build a farmer-owned business
Input
providers
Processors,
Traders
Members
of the
cooperative
Cooperative
enterprise
Final Consumers
BoardManagers
supervise
report
buy from/sell to
share profits
The cooperative grows and takes on additional
activities, e,g, storage or processing
 The cooperative creates a formal farmer-
owned enterprise that hires managers and staff
to operate professionally.
Issues: Formality and professionalism enables flexible biz
linkages and growth, but risk of corruption if control
mechanisms don´t work and board stays in the same hands.

Cooperating to exercise political influence
As the cooperative movement develops:
 Associations and cooperatives start
playing a political role to defend the interests
of their members.
Input
provider
Processor,
Trader
Members
of the
association
Cooperative
Enterprise
Final Consumers
Stakeholder
roundtables
Board
represents &
advocates
interests of
members in… Federation of
cooperatives
Issues: improves control over governance of individual
cooperatives, but only works effectively in advanced stages
of economic development.

 Principle: A net benefit from cooperating!!
 Economies of scale by cooperating should be feasible
 Tangible benefits and visible success in relatively short time
 A clear requirement from the buyer side is helpful
 Coherence with existing social structures and traditions is important
 Members should have common interests, similar resources and needs
Prerequisites for the success of cooperatives
 Do the functions of the FBO meet the real needs of farmers?
 Do the needs arise from the farmers themselves?
 Does the FBO represent the interests of all members?
 Is forming an FBO the simplest solution to respond to needs?
 Are the felt needs strong enough to support sufficient commitment?
 Is the organization easy to understand and to manage?
Critical questions
Adapted from ACDI/VOCA: „The Future Belongs To The Organized! Seven Steps to
Organizing a Smallholder Farmers’ Association”
*
*

Criteria to assess the viability of a cooperative
 Business and financial criteria: Business model, regular linkages or
mid-term contracts with buyers, financial stability with satisfying cash
flow
 Functional business operations: Professional management, well-
defined processes and internal control mechanisms in place
 Governance: Governance bodies are functional, regular meetings
are held, responsible and stable leadership, statutes are applied
correctly, members attend meetings and participate

Supporting formal Farmer Based Organisations
Support of market
orientation
Support of technical and
business performance
Support of organization
development and social
coherence
 Facilitation of linkages
with buyers
 Assistance for
obtaining market
information
 Assistance for
obtaining product
certifications
 Professional training in
technical + managerial
skills
 Facilitating the access
to service providers
and financial services
 Assistance in the
development of input
procurement, logistics
(sorting, grading and
bulking) and value-
adding activities
 Legal advice on the
formalization of
cooperative enterprises
 Organizational advice
 Assistance with internal
rules for membership,
communication and
decision making
 Development of
services for members
Remark: Cooperatives should not be promoted in an isolated way. They
should be embedded in decentralized cooperative multi-layer control,
regulation and support structures

Mise en œuvre par :
WEBINAR “Strengthening the role of farmer
based organizations in value chains”
30.05.2018
Experiences and perspectives from Benin
Programme "Promotion of Agriculture" (ProAgri3)
Presented by: Bastian Domke
29/06/2018
Cashew Shea Rice Soy

ProAgri29/06/2018
En partenariat avec:
MINISTERE
DE L’AGRICULTURE,
DE L’ELEVAGE ET DE LA PECHE
REPUBLIQUE DU BENIN
ProAgri3 - A very brief introduction
Objective: The performance of selected agricultural value chains within the 4
priority value chains (Cashew, Shea, Rice, Soy) has improved.
Guiding principle of our work in Benin: Support active members (producers
& processors) of farmer based organizations.
Farmer business organizations in Benin have relatively low membership
numbers
Importance to develop capacities of FBO clearly reflected in ProAgri´s
interventions planning and monitoring system
Basic services such as technical training or the facilitation of government-
funded tools and other inputs are provided for every farmer within ProAgri´s
intervention regions.

ProAgri29/06/2018
MINISTERE
DE L’AGRICULTURE,
REPUBLIQUE DU BENIN
ProAgri3 - main activities
Micro
• Training of active members of FBO
on improved production, processing
and commercialisation techniques
• Scaling-up of Farmer Business
School, Value Links and Contract
Farming trainings for FBO´s active
membership
• Facilitation of access to inputs,
financing and machinery for FBO
members
Meso
• Organising trainings
aimed at OD of FBO
• Advising VC actors on
how to auto-organize
• Advising VC actors on
development of targeted
services for their
membership
• Organising public-private
dialgoue platforms on
local, regional and
national level
Macro
• Advising the Ministery of Agriculture
on institutional reforms and
developing of product chain
development strategies.
• Advising the Ministery of Agriculture
on training tools and methods for VC
development

ProAgri29/06/2018
MINISTERE
DE L’AGRICULTURE,
REPUBLIQUE DU BENIN
Rules and regulations regarding farmer based organizations in
Benin
Governing body: OHADA (Organization for the Harmonization of Business Law in
Africa)
Relevant legal documents: AuSCOOP, « Uniform Act on Cooperatives », Entry into
force: May 15, 2011
Article 1
“Any cooperative, union or federation of cooperatives, whose registered office is
located in the territory of one of the States Parties to the Treaty on the Harmonization
of Business Law in Africa, hereinafter referred to as “States Parties”, shall be governed
by the provisions of this Uniform Act.
Any confederation of cooperatives which opts for a cooperative form shall also be
governed by the provisions of this Uniform Act.
Notwithstanding the provisions of Articles1 and 6 of the Uniform Act on Commercial
Companies and Economic Interest Grouping, cooperatives, which engage in
commercial activities, shall be governed by the provisions of this Uniform Act.”

ProAgri29/06/2018
MINISTERE
DE L’AGRICULTURE,
REPUBLIQUE DU BENIN
What can farmer based organizations offer their members?
• Supplying inputs
• Supplying tools and machinery
• Facilitating financing
• Improve bargaining capacities
• Market access
• Technical training
• Lobbying
• Higher income/profits

ProAgri29/06/2018
MINISTERE
DE L’AGRICULTURE,
REPUBLIQUE DU BENIN
Assessment of farmer based organizations for ProAgri
At the outset:
 SWOT analysis of existing farmer based organizations.
 Effort to improve organizational capacities and organization
of the value chain itself
 Problematic governance in various guises
 Few relevant services offered to members
 High dependency level on external funding
 Correspondingly low capacity to raise funds through the
organization itself.

ProAgri29/06/2018
MINISTERE
DE L’AGRICULTURE,
REPUBLIQUE DU BENIN
ProAgri3 - Identified needs of farmer based
organizations:
• Be representative
• Be financially stable
• Entrepreneurial spirit and actions
• Formalizing of FBO
• Common goal - common actions
• Services to members

ProAgri29/06/2018
MINISTERE
DE L’AGRICULTURE,
REPUBLIQUE DU BENIN
Umbrella & farmer based organizations supported by ProAgri3
FENAPAB
URPA
BA
UCPA N’Dali
CVPA
CVPA
UCPA Nikki
CVPA
CVPA
UCPA Pèrèrè
CVPA
CVPA
UCPA
Tchaourou
CVPA
CVPA
URPA
ZC
UCPA Dassa
CVPA
CVPA
UCPA Glazoué
CVPA
CVPA
UCPA Ouèssè
CVPA
CVPA
UCPA Savè
CVPA
CVPA
AKB
Union Communale des
Producteurs de Karité
CV/GF
CV/GF
Union Communale des
CV/GF
CV/GF
Union Communale des
CV/GF
CV/GF
ABS
Union Communale de
producteurs de Soja
UCPS
UCPS
Union Communale de
producteurs de Soja
UCPS
UCPS
Union Communale de
producteurs de Soja
UCPS
UCPS
Shea Cashew
URPR
Union Communale de
producteurs de Riz
UCPR
UCPR
Union Communale de
producteurs de Riz
UCPR
UCPR
Union Communale de
producteurs de Riz
UCPR
UCPR
Soy
Rice

ProAgri29/06/2018
MINISTERE
DE L’AGRICULTURE,
REPUBLIQUE DU BENIN
Maréborou 17 Prod Takou 17 Prod Pari 7 Prod Boukousséra 75 Prod Lakoko 17 Agbadjo 7 Ibiyèmi 8 Vèdji 7
Ouénou 17 Prod Monnon 6 Prod Berekoudo 23 Prod Sanson 21 Prod Adougou 21 Gobé 15 Lagbo 8 Tchanmissi 5
Banhoun Gueou 12 Prod Ouénou 15 Prod Pèrèré Gourou 19 Prod Tchalla 28 Prod Ouèssè - Centre 11 Djangbé 26 Affizoungo2 9 Ferme Ranti 9
Sinison 16 Prod Séréwondirou 15 Prod Tissérou 16 Prod Tchatchou Peulh 30 Prod Kpassa 11 Dani 18 Affizoungo1 8 N'Gbèga Ahogbe 8
Sirarou 20 Prod Gbaoussi 1 15 Prod Kabadou 17 Prod Temidire 28 Prod Djègbé 45 Agbaigodo 13 Camaté 7 Dovi-Somè 20
Tamarou 16 Prod Tontarou 15 Prod Kpebié 16 Prod Worogui Goura 15 Prod KIlibo Adjougou 18 Oké owo 2 20 Allawénonsa1 9 Agbagoulè 4
Warikpa 34 Prod Koni 15 Prod Nassy 22 Prod Woukpaou 21 Prod KIlibo Olata 23 Oké- owo1 18 Tankossi 10 Attinkpayé 8
Wèrèkè 16 Prod Gore 15 Prod Ourarou 18 Prod Gararou 21 Prod Idouya 16 Diho 22 Allawénonsa2 8 Hounkpogon 40
Bahoukpo 137 Prod Tepa 8 Prod Pane 19 Prod Koubou 15 prod Laminou 9 Ouoghi 19 Zaffé 12 Kpakpa-Igbo 17
Komiguéa 31 Prod Gbaoussi 2 6 Prod Soubado 17 Prod Dagbara Gourou 23 prod Ogoutèdo 20 Montèwo 22 Affécia 9 Loulè 7
Tamarou 15 Prod Sinagourou 6 Prod Worokpo 15 Prod Deemon 15 Prod Kemon 13 Tchoui 16 Kpakpazoumè 10 Banigbé 7
Marégourou 7 Prod Sonsonré 15 Prod Bohirou 19 Prod Goro 30 Prod Odougba 23 Okounfo 18 Gomé 55 Bétécoucou 5
Suanin 17 Prod Gourou 15 Prod Gommey 15 Prod Goro Gah 18 Prod Vossa 16 Sandéhou 19 Ogrin-koti 14 Igoho 5
Sonnoumon 18 Prod Sika Bansi 15 Prod Bougnakou 23 Prod Guinirou 22 Prod Tchédjannangnon 21 Ayédèro 19 Akouègba 19 Gbonou 8
Wobacarou 21 Prod Boukanere 16 Prod Nassy Gando 17 Prod Kasouala 20 Prod Attakpa 23 Oké olou 2 10 Adourékoma 34 Moumoudji 5
Toukossari 21 Prod Fombawi 18 Prod Kotoubarou 16 Prod Issalè-Baï 17 Atchakpa 14 Sowiandji 8 Gankpetin 9
Sérékali 36 Prod Soumon 27Prod Amonnin 28 Madengbé 11 Lèma 7
Biro 17 Prod Tchatchou Bariba 19 Prod Attata 12 Assanté 10 Togon 8
Borone 21 Prod Dokoundoho 9 Tchatchégou 22 Djigbé 7
Alafiarou 15 Prod Kokoro 14 Kabolé 7 Zankoumandon 6
Zogba Trékou 20 Djamandji 12 Paouignan 9
Agboro kombon 60 Adjokan 11
Sourouléré 38 Agao 5
Agondokpo 13
URPA-ZC
FENAPAB
Organization
Communal Union of
cashew producers of
Dassa
Communal Union of
cashew producers of
Glazoué
Communal Union of
cashew producers of
Savè
Communal Union of
cashew producers of
Ouèssè
UCPA Glazoué UCPA DassaUCPA Ouèssè UCPA Savè
National Federation of Cashew Producers of Benin
National
Umbrella
Village
cooperative
of Cashew
nut
producers
Communal
Union
Regional
Union
Communal Union of
cashew producers of
N'Dali
Communal Union of
cashew producers of
Nikki
Communal Union of cashew
producers of Pèrèrè
Communal Union of
cashew producers of
Tchaourou
Regional Union of Cashew producers - Borgou Alibori
region
Regional Union of Cashew producers - Zou Collines
region
UCPA N'Dali UCPA Nikki UCPA Pèrèrè UCPATchaourou
URPA-BA
Hierarchical breakdown of farmer based organizations –
Cashew producer organizations

ProAgri29/06/2018
MINISTERE
DE L’AGRICULTURE,
REPUBLIQUE DU BENIN
ProAgri3 – Our work with producers and processors
 ProAgri3, after participative planning, supports farmer based
organizations from « Bottom-up » with high quality interventions
1) Facilitating the participatory diagnostics of a FBO
2) Organizational development
3) Capacity Development
4) Trainings
5) Modular trainings according to identified and expressed needs
6) Formalisation of organisations
7) Correct application of AUSCOOP principles at all levels
8) Income Generation
9) Facilitating public-private dialogue

ProAgri29/06/2018
MINISTERE
DE L’AGRICULTURE,
REPUBLIQUE DU BENIN
GIZ ProAgri and farmer based organizations – 24 training
modules
 Development of a strategy to accompany and help grass roots organizations
at the base of all umbrella organizations
 Development of 24 training modules aimed at grass-roots organizations and
their umbrella organizations
 Development, adaptation and roll-out of 12 tools/spreadsheets for
administrative, financial and accounting management
 Drafting of 18 basic documents (by-laws, statutes)
 Training of 6 Master-Trainers, 6 Farmer´s organization trainers, 23
technicians at umbrella organization level, 8 agricultural counseling services
trainers
 Establishment of 4 outline agreements with the relevant umbrella
organizations for ProAgri´s 4 value chains (FENAPAB, AKB, ABS et UNIRIZ-
C)

29/06/2018
24 Training modules for farmer based
organizations
BLOCK I:
Basics
Training
BLOCK II:
Advanced
training
BLOCK III:
Management
Training
BLOCK IV:
Specific
Training
A1 :
Organisatio
nal
diagnostics
A2:
AUSCOOP
A3: What is
a group
A4: What is
a
cooperative
A5: How to form
our cooperative
A6: How to
prepare and run
a meeting
A7: Financial
management of
our cooperative
A8: How to
define the goals
and objectives of
our cooperative
A9: Core values
and principles of
our cooperative
A10: How to manage
our cooperative
A11: How to control
the management of
our cooperative
A12: How to manage
our supply
A13: How to manage
our stock
A14: How to
commercialize our
product
A15: How to manage
our transformation
unit
A16: How to calculate
costs
A17: How to
foster
leadership
within
cooperatives
A18: How to
draft the
statutes of
our
cooperative
B1:
Diagnostic of
our
cooperative
B2: What is a
union of
cooperatives
B3: Values
and
principles of
our union of
cooperatives
B4: How to set
up a union of
cooperatives /
umbrella
organization
B5: How to
draft the
statutes for an
umbrella
organization
B6: Planning,
monitoring
and
evaluation of
our actions
BLOCK V:
Constitution
of a umbrella
organization
BLOCK VI:
Follow-Up
& Coaching

ProAgri29/06/2018
MINISTERE
DE L’AGRICULTURE,
REPUBLIQUE DU BENIN
The modules themselves: training materials

ProAgri29/06/2018
MINISTERE
DE L’AGRICULTURE,
REPUBLIQUE DU BENIN
The modules themselves: Management tools
 12 tools/spreadsheets for administrative, financial and accounting
management
1) Member registry template
2) Programme planning template
3) Meeting minutes template
4) Management committee meeting
minutes template
5) Annual General Meeting minutes
template
6) Board control meeting template
7) Cash book template
8) Bank record template
9) Input credit management template
10) Seasonal credit management template
11) Sales registry template
12) Cost-benefit analysis tool

ProAgri29/06/2018
MINISTERE
DE L’AGRICULTURE,
REPUBLIQUE DU BENIN
ProAgri3 – FO trainers requirements
Pool of trainers
Must have worked
with ProAgri3
previously and
have passed an
assessment
Must be able to work
well with women and
men´s groups and
must speak relevant
local languages
fluently
BAC+2 degree (B.SC
equivalent) and high
level of proficiency in
facilitation
Highly skilled trainers
necessary to work with
very diverse target
groups and
organizations
Some requirements for trainers:

ProAgri29/06/2018
MINISTERE
DE L’AGRICULTURE,
REPUBLIQUE DU BENIN
ProAgri3 – FO Training of Trainers in 3 waves - continued
1st wave:
6 trainers
Independent consultants
meeting above-stated
requirements
2nd wave:
14 trainers
1st wave also
effectively became
Trainer of Trainers
(ToT)
3rd wave:
23 trainers
- Larger trainer pool
for better sustainability
purposes
- Employees of the
umbrella organizations
as trainers

ProAgri29/06/2018
MINISTERE
DE L’AGRICULTURE,
REPUBLIQUE DU BENIN
ProAgri3 – How did we do it? Roles and Responsibilities
Responsibilities of ProAgri Responsibilities of umbrella
organizations
Developing training materials and
other tools
Development and roll-out of training
plans/schedules of committee
members and common members
Organizational and institutional
development support for the umbrella
organizations of farmer´s organization
Governance and management of
cooperatives
Supporting agents of the rural
consultancy services (formerly:
CARDER, currently: ATDA)
Growth of financial contributions of
members, mobilisation of equity
capital (« fonds propres »)
Accompanying grassroots
organizations and umbrella
organizations
Development of services for members

ProAgri29/06/2018
MINISTERE
DE L’AGRICULTURE,
REPUBLIQUE DU BENIN
Who has been trained? Training of target group organizations
• 40 village groups
of soy cheese
(tofu) processors
• 7 communal
unions
• 41 village groups of
Rice parboilers
• 6 communal unions
• 3 regional/national
umbrella
organizations
• 20 women groups of Shea nut
processors, according to
AUSCOOP, now registered
cooperatives
• Training and registration of 4
Communal Unions
• Development of 100 „AVEC“
(Village credit and savings
association.
• 120 now legally registered
village cooperatives have
followed all trainings.
• 8 communal unions have
been trained on
institutional and formal
aspects
Cashew Shea
SoyRice
Successful training of the following farmer based organizations

ProAgri29/06/2018
MINISTERE
DE L’AGRICULTURE,
REPUBLIQUE DU BENIN
Results and (eventually) impact of support to FBO - I
Very positive feedback from target group:
Cashew:
 Organizational level a lot higher; shift towards facilitation of
commercialization for members
 Highly improved mobilization of financial resources from within the
organizations (“fonds propres”)
 Improved access to microcredits from MFIs as a result of better bankability
 2017: 300.000€ for 36 cooperatives (783 members)
Shea:
 Roles and responsibilities clarified, institutionalized and evenly shared.
 Shift towards AKB as facilitator of commercialization for members
 Commercial transactions improved as evidenced by easier access to credit
 2017: 72.000€ for 27 cooperatives (700 members)

ProAgri29/06/2018
MINISTERE
DE L’AGRICULTURE,
REPUBLIQUE DU BENIN
Results and (eventually) impact of support to FBO - II
Positive feedback from target group:
Soy:
 ABS has profited enormously from the
groundwork involved in getting the core
membership on the ground organized neatly,
with much stronger regional and communal
unions
 2017 61.000€ credit for 16 cooperatives (289
members)

ProAgri29/06/2018
MINISTERE
DE L’AGRICULTURE,
REPUBLIQUE DU BENIN
Results and (eventually) impact of support to FBO - III
Pooled selling = successful commercialization method
 Only feasible if organization is strong enough to ensure the
smooth running
 Has been made possible in 3 value chains (4th starting in
2018) thanks to the increased organizational capacities of
the farmer based organizations
 New, sought-after service makes FBO attractive to existing
and potential new members

ProAgri29/06/2018
MINISTERE
DE L’AGRICULTURE,
REPUBLIQUE DU BENIN
What´s next for Farmer Business Organizations and ProAgri?
 ProAgri3 is currently developing a method to coach farmer based
organizations beyond the trainings, focusing on local clusters
 Light coaching and monitoring to see how training contents are
applied
 The coaching and accompanying part of our FBO will be scaled-up
 Training modules are available in French language, could be
translated into English or other languages.

ProAgri29/06/2018
MINISTERE
DE L’AGRICULTURE,
REPUBLIQUE DU BENIN
Training and coaching module „Business orientation of FBO“
 Objective: strategic orientation for developing sustainable, revenue-
generating FBOs through capacity development
 A joint project of SV « Agricultural trade and value chains », ProAgri and
many other GIZ projects
 The « logical » next step for FBO needing to increase their revenue &
provide attractive services to members
 Target group: Well-organized, « mature » FBO
 Development of sustainable, profitable business models
 Pilot phase in Benin: From June to October 2018, the 4 modules will be
rolled out by ProAgri for the cashew producer umbrella organization FENAPAB

ProAgri29/06/2018
MINISTERE
DE L’AGRICULTURE,
REPUBLIQUE DU BENIN
Training and coaching module „Business orientation of FBO“

ProAgri29/06/2018
MINISTERE
DE L’AGRICULTURE,
REPUBLIQUE DU BENIN
Thank you very much for your attention!
Merci beaucoup pour votre aimable attention!
ProAgri – Promotion de l’Agriculture
Deutsche Gesellschaft für
Internationale Zusammenarbeit (GIZ) GmbH
1132 Tri Postal
Cotonou, Bénin
E Bastian.domke@giz.de
T + 229 21 30 70 08
I www.giz.de

Farmer-based Organizations and How to Promote Them

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