Agric collabos: The devil is in details
ENCOURAGING Government departments, non-governmental organisations and the private sector to collaborate in the agriculture sector is one of the most sensible recommendations. In fact, collaboration is the underlying spirit behind Private-Public-Partnerships (PPPs) being promoted by policy makers and development agencies.
Unfortunately, the most sensible ideas are very difficult to implement in practice, especially in agriculture and rural development.
Over the past few years, eMKambo has participated in collaborative efforts between government departments, NGOs, private companies and donors interested in agriculture. This articles teases out some lessons from that experience.
Although many NGOs still prefer working in isolation or with other NGOs rather than with private companies, there is some bit of interest among some to truthfully collaborate with private companies in Zimbabwean agriculture.
Where NGOs have sought to work with private companies, the intention has been to harness new business models and approaches that make smallholder agriculture sustainable through assisting farmers to generate more income and revenue streams.
Development agencies are also looking for new ways of defining and measuring success. By looking beyond development impact, private players bring new ways of measuring success and failure through agribusiness models.
ICT-driven private players also bring expertise in rapidly testing and rolling out innovative solutions at scale.
Difficulties in aligning development objectives with commercial objectives
A critical stumbling block between NGOs and private agricultural companies in Zimbabwe has revolved around bottlenecks in aligning their different objectives.
Where some NGOs focus on individual districts, private companies, especially those with a market orientation, focus on wider agricultural ecosystems.
Such differences have been a source of misalignment. A long term view and recognition of the need to innovate or die forces private companies to be interested in initiatives that cover a wide range of farming communities and value chains.
To that end, private players try to catalyse transformation through understanding all kinds of agricultural markets while NGOs tend to be interested in a few commodities.
Another big challenge that feeds into misalignment of objectives between NGOs and private companies relates to different levels of ambition. NGOs can plan with a two to three year timeframe while private companies embrace five to ten year plans.
On the other hand, some financial institutions may not want to bring their core business into the collaborative effort, preferring to involve their Corporate Social Responsibility (CSR) units only. Such arrangements do not speak to win-win collaboration.
In some cases, some value chain actors expect financial institutions to take a longer-term view of returns than short-term interventions like those pursued by NGOs.
The fact that some NGOs prefer shortterm interventions often influences financial institutions to do the same, reinforcing a mistaken view that agriculture is too risky to be in it for the long haul.
However, such connivance works against authentic agricultural transformation given that paradigms take long to change.
There is also evidence showing that collaborative relationships between Government departments, development agencies and the private sector are still cosmetic in Zimbabwean agriculture.
There is still little understanding of how each works in practice including internal structures and processes which, ultimately affect collaboration.
Private companies find it difficult to understand typical grant contracts that are part of how development agencies function.
There have not been successful engagement between business and development actors where each acknowledges benefits the other brings to the relationship.
Private businesses that have tried to be upfront in presenting their value propositions have been frustrated by development agencies’ tendency to make the private sector partners fit into the donor thinking mindset.
Different ways of looking at opportunities and risks
Long-term strategic alliances have also been hampered by different ways of thinking about opportunities and risks between development agencies and private companies. It is important for potential partners to walk in each other’s shoes.
That will enable deeper mutual understanding between development practitioners and businesses. While the private sector is interested in profitability and consumer appreciation, Government and development partners lack knowledge on structuring commercial transactions.
Institutional arrangements in Government and NGOs also tend to discourage innovation but reinforce working within rigidity and prescribed structures and mandates.
Yet collaborating with the private sector will enable development agencies to design programmes that help smallholder farmers to become commercially minded and accumulate resilience necessary to move out of subsistence.
In the absence of serious collaboration, most projects by NGOs continue to offer temporary solutions because they lack commercial incentives that drive sustainability.
Despite having less experience of the local context than local businesses who have built knowledge over time, most NGOs believe they know better and try to get rid of ‘middle men’ who should be partners in promoting sustainable agriculture.
There has also been a recent tendency by development organizations to subcontract some agricultural-related activities to external executing agents such as business consulting companies. Such scenarios suggest that development organisations are running their own private sector programmes.
To be really sustainable, donor funding must mitigate against the risk of distorting the efficient functioning of local markets by crowding out domestic private companies and stifling competition.
By helping to ensure a transparent playing field for companies seeking to make their supply chains more stable and inclusive, policy makers can enhance the functioning of the market.
It is important to ensure diverse core businesses are harnessed into inclusive business initiatives. Donors should ask themselves whether they are more interested in the commercial sustainability of smallholder agriculture or harnessing existing core competencies among value chain actors.
One of the key ways of building trust with partners is demonstrating industry knowledge and understanding of their business and pain points.
Sometimes it is critical to inspire companies that have the required skill but lack the will to participate in transformative change.
Towards a social entrepreneurship model
Inclusive business models that brings together government, development partners and the private sector can demonstrate the power of collaboration in the agriculture sector. Building such models requires social capital investment towards subsidising services that are required by the excluded groups.
Giving poor farmers poor information means they will continue making poor decisions that keep them poor. Availing high quality knowledge to farmers cannot happen overnight. Long term partnerships are required not short-term 6 months relationships which are too brief to realistically learn from.
For instance, it takes at least three years to start seeing the impact of knowledge platforms. A social entrepreneurship model will go a long way in sustaining market-driven agriculture development.
It can ensure noticeable transformation from subsistence to semi-subsistence, semi-commercial to full commercial and ultimately to export participation.
The 2017 farming season is in full swing but it is not clear who is doing what and what commodities will be flowing to the market when and in what quantities.
Development partners continue working in clusters, living out the private sector (who ultimately should buy commodities being produced) and government which should make plans in terms of what to import and what infrastructure to provide for commodities.
Private, Public Partnerships (PPP) largely remain an empty slogan, difficult to practice due to these habits. If properly implemented to the letter, PPPs could avoid double dipping and ensure effective service delivery.
Partners should know what farmers have been trained on to avoid wasting resources providing information which farmers already know.
Due to fragmentation of knowledge pathways, there are many cases where development partners and banks fund parts of the value chain without understanding effects of such funding on the entire chain and ecosystem. If they support production, what happens to the market?
Right now there is no movement in the market due to absence of funding. Smart banks would be busy supporting traders so that they buy commodities from farmers. Financing production without looking at the market creates huge problems.
Charles Dhewa is a proactive knowledge management specialist and chief executive officer of Knowledge Transfer Africa (Pvt) (www.knowledgetransafrica.com) whose flagship eMKambo (www. emkambo.co.zw) has a presence in more than 20 agricultural markets in Zimbabwe. He can be contacted on: charles@knowledgetransafrica.com); Mobile: +263 774 430 309 / 772 137 717/ 712 737 430.