Towards Strategic Partnerships: a Producer Organizations’ Perspective

Towards Strategic Partnerships: a Producer Organizations’ Perspective Ellen Mangnus & Bertus Wennink Development Policy & Practice Royal Tropical Institute (KIT), Amsterdam Progreso Network Expert Meeting, Amsterdam, September 14th, 2009

Contents • Producer organizations • Collaboration, partnerships and alliances • Capacity strengthening of producer organizations • Critical issues • Statements Amsterdam, The Netherlands www.kit.nl

Producer organizations : a great diversity • Some features they have in common: • Rooted in rural areas • Member-based organizations; controlled by the members • Undertaking collective action that responds to members’ shared interests • Many differences: • According to origin, status, members, functions (political, social, economic and technical) and levels of operation • In practice: • Often ‘hybrid’ and/or organizations ‘in search’ of their utility and identity • Pursuing several aims and offering various services at once • Integrating multi-tier organizations and networks Amsterdam, The Netherlands www.kit.nl

Farmers at grassroots level Producer organization Local/national authorities, public/private service providers & private enterprises Producer organizations: intermediaries between farmers and other stakeholders On behalf of its members, it organizes and regulates relations between members and other stakeholders in rural sectors and areas Amsterdam, The Netherlands www.kit.nl

The interest of producer organizations to seek collaboration with others Amsterdam, The Netherlands www.kit.nl

Collaboration between producer organizations and stakeholders Trends observed: producer organizations are solicited by stakeholders and they seek effective influence; from voice to vote, from stake to share Amsterdam, The Netherlands www.kit.nl

From collaboration to partnerships ‘Usual Business’ ‘Unusual Business’ Amsterdam, The Netherlands www.kit.nl

Partnerships between producer organizations and stakeholders Practice observed: formal partnerships are established at different levels of multi-tier producer organizations Amsterdam, The Netherlands www.kit.nl

Partnerships between producer organizations and private enterprises Source: Kenkel & Park 2007 Trends observed: producer organizations search for farmer-led models; e.g. to add value, attract capital and increase market power Amsterdam, The Netherlands www.kit.nl

Value chain POs Producer organizations in a multi-stakeholder, competitive environment Private enterprises (adding value) Providers of services & goods (production factors) Local authorities (enabling environment) (Adapted from Schrader APF/IPER 2009) Alliances are needed for continuous innovation (competitiveness) Amsterdam, The Netherlands www.kit.nl

Capacity strengthening of producer organizations by partners (1) • Capacity strengthening of producer organizations is often part-and-parcel of partnerships (mutual benefit) and alliances • Producer organizations are not always in the ‘driver’s seat’ (beneficiary who demands # client who pays) • It is driven by the partners’ interests: • Private enterprises (e.g. processors, traders)  on-time supply of quantity & quality products • Public sector service providers (e.g. R&D, training)  aggregation of demand & dissemination of knowledge • Private service providers (e.g. POs, specialized NGOs)  according to their core business and funder’s agenda Amsterdam, The Netherlands www.kit.nl

Capacity building by International & national POs Specialized NGOs Agri-agencies R&D Private enterprises BDS Capacity strengthening of producer organizations by partners (2) Amsterdam, The Netherlands www.kit.nl

Capacity strengthening of producer organizations by private enterprises Amsterdam, The Netherlands www.kit.nl

Critical issues: conflicting interests Amsterdam, The Netherlands www.kit.nl

Critical issues for producer organizations: engaging in alliances and partnerships • Engaging in partnerships requires specific capacities: • Strategic thinking; i.e. dealing with stakeholders, defining members’ interest, the way forward and the risks for the PO. • Initiation and lead by the producer organization (e.g. funding modalities for capacity strengthening). • Assessment of functions/ services of the producer organization; e.g. whether to ‘internalize’ or ‘externalize’ them. • Engaging means quality and non-interest facilitation for • enhancing linkages (business) and interaction (innovation). Amsterdam, The Netherlands www.kit.nl

Critical issues: sustaining partnerships • Sustaining partnerships asks for capacities to: • Create and maintain ‘trust’, i.e. a relationship of reliance. It is essential in reducing transaction costs. • Build up a sound financial base. This is crucial for equality partnerships. • Maintain performance. If benefits & services are good, members (transparency & accountability) as well as (business) partners remain on board. • Innovate through learning-by-interaction. This is vital for enhancing competitiveness of smallholder agriculture. Amsterdam, The Netherlands www.kit.nl

Statements • Partnerships and alliances with producer organizations: • are strategic when they are in line with the members’ interests and in the short term beneficial to them (quick wins); • are innovative when they allow for adapting to changing contexts (continuous interaction and learning with partners); • become ‘unusual business’ when producer organizations take and/or share (financial) risks. Amsterdam, The Netherlands www.kit.nl

Thank you for your attention Amsterdam, The Netherlands www.kit.nl

Towards Strategic Partnerships: a Producer Organizations’ Perspective