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OPPO Workbook Annex 10: Guidelines OPPO Tool 10 - Principles for Inclusive Business – Assessment of Supplier-Buyer Relations


Guidelines OPPO Tool 10Principles for Inclusive Business – Assessment

of Supplier-Buyer Relations

ANNEX 10 of the OPPO MANUAL


About CTA

The Technical Centre for Agricultural and Rural Cooperation (CTA) is a joint international institution of the African, Caribbean and Pacific (ACP) Group of States and the European Union (EU). CTA operates under the framework of the Cotonou Agreement and is funded by the EU.

For more information on CTA, visit www.cta.int

About WCDI

Headquartered at the heart of the Dutch agricultural sector in the Netherlands, the Wageningen Centre of Development Innovation offers a unique interaction between capacity development and project implementation. Our aim is to bring knowledge into action. Therefore, we offer a range of services, all of which are designed to help our partners and clients make progress towards sustainable and inclusive development. www.wur.nl/en/Research-Results/Research-Institutes/centre-for-development-innovation.htm

About IFAD

The International Fund for Agricultural Development (IFAD), a specialised agency of the United Nations, was established as an international financial institution in 1977 as one of the major outcomes of the 1974 World Food Conference.

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http://www.wur.nl/en/Research-Results/Research-Institutes/centre-for-development-innovation.htm

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Table of Contents

Guidelines Additional OPPO Tool 10 – Principles for Inclusive Business – Assessment of Supplier-Buyer Relations..............................................................41. Chain-wide collaboration...............................................................................62. Effective market linkages..............................................................................63. Fair and transparent governance..................................................................64. Equitable access to services.........................................................................85. Inclusive innovation......................................................................................86. Measurement of outcomes...........................................................................9

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Guidelines Additional OPPO Tool 10 – Principles for Inclusive Business – Assessment of Supplier-Buyer Relations

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Assessing inclusive business model principles in farmer-company relationIn agribusiness, it takes two to trade: a supplier provides and a buyer sources. For farmer-inclusive business development, farmer-company relations are important. To map and reflect on the business case, and especially the ‘farmer-

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firm’ relation, an assessment of the business case can be made by sellers (farmers, farmers’ organisation) and buyers (trading / processing companies). Both score the level of agreement with statements that relate to the six principles for farmer-inclusive business. The scores of the sellers and buyers can be compared and discussed. The statements for the sellers and the buyers are presented below. The statements refer to the same subjects, but the phrasing is adapted for the cases of the sellers and the buyers.

1. Chain-wide collaboration

No Statements for sellers (farmers/FO) Statements for buyers (companies)

1.1 We frequently exchange information with our customer

We frequently exchange information with our provider

1.2 We are aware of the effects our decisions have on our customer

We are aware of the effects our decisions have on our provider

1.3 Our commercial goals are aligned with those of our customer

Our commercial goals are aligned with those of our provider

1.4 Our social goals are aligned with those of our customer

Our social goals are aligned with those of our provider

1.5 Our environmental goals are aligned with those of our customer

Our environmental goals are aligned with those of our provider

1.6 We work closely with our customer to resolve problems

We work closely with our provider to resolve problems

1.7 We recognize and value the interdependence between ourselves and our customer

We recognize and value the interdependence between ourselves and our provider

1.8 Our activities and roles complement those of our customer

Our activities and roles complement those of our provider

1.9Incentives (financial and non-financial) exist to enhance collaborative behaviour with our customer

Incentives (financial and non-financial) exist to enhance collaborative behaviour with our provider

1.10

We use information and communication technology (ICT) to enhance collaboration with our customer

We use information and communication technology (ICT) to enhance collaboration with our provider

2. Effective market linkages

No Statements for sellers (farmers/FO) Statements for buyers (companies)2.1 Our product offer is stable for our customer The product supply from our provider is stable 2.2 Our trading relationship with our customer is

profitable Our trading relationship with our provider is profitable

2.3 Our customer provides social value We deliver social value to our provider2.4 Our customer helps us to conserve

environmental resources We help our provider to conserve environmental resources

2.5 We generate a stable income from the sale of our products to our customer

Our provider generates a stable income from our purchase of their products

2.6 We have the capacity to identify market opportunities and tendencies

We promote our provider’s creation of new business

2.7 We frequently review potential market opportunities with our customer

We frequently review potential market opportunities with our provider

2.8 We react rapidly to changes in our customer’s needs

We react rapidly to changes in our provider’s needs

2.9 Our customer is familiar with our production system

We are familiar with our providers’ production system

2.10

Our customer is familiar with our other economic activities

We are familiar with the other economic activities of our provider

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3. Fair and transparent governance


3.1 We know the quality standards required by our customer

We communicate our quality standards clearly to our provider

3.2 The quality standard we need to meet for our customer are consistent

The quality standards we require from our provider are consistent

3.3 We understand how our customer determines the pricing for our product

We help our provider to understand how we determine the pricing for their product

3.4 We know and understand our customers’ trading terms and conditions

We communicate our trading terms and conditions clearly to our provider

3.5 We understand the text of the contract we have with our buyer

The text of the contract we have with our provider is clear to them

3.6 We comply with the formal contract we have with our buyer

We comply with the formal contract we have with our provider

3.7 We comply with the informal agreements we have with our buyer

We comply with the informal agreements we have with our buyer

3.8 We share production risks equitably with our buyer

We share production risks equitably with our provider

3.9 We share market risks equitably with our buyer

We share market risks equitably with our provider

3.10

The products we sell to our customer are traceable

We help our provider to ensure that their products are traceable

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4. Equitable access to services


4.1 Our buyer directly provides technical assistance for the production process

We give technical assistance for the production process of our provider

4.2 Our buyer helps us (directly or indirectly) to access inputs for production

We help our provider (directly or indirectly) to access inputs for production

4.3 Our buyer directly provides technical assistance for post-harvest operations

We give technical assistance for post-harvest operations

4.4Our buyer helps us (directly or indirectly) to access inputs and physical assets needed for post-harvest operations

We help our provider (directly or indirectly) to access inputs and physical assets needed for post-harvest operations

4.5Our buyer helps us indirectly to access appropriate training services (for production process and/or post-harvest operations)

We help our provider indirectly to access appropriate training services (for production process and/or post-harvest operations)

4.6 Our buyer helps us (directly or indirectly) to access appropriate financial resources

We help our provider (directly or indirectly) to access appropriate financial resources

4.7 Our buyer helps us (directly or indirectly) to access up-to-date market information

We help our provider (directly or indirectly) to access up-to-date market information

4.8 Our buyer helps us (directly or indirectly) to access appropriate insurance

We help our provider (directly or indirectly) to access appropriate insurance

4.9The services that are provided by our customer satisfy our needs

We are able to satisfy our provider’s needs through the services we provide (directly or indirectly)

4.10

Without the relation with our buyer we could not have had the services mentioned above

Without our support, our provider would not have had the services mentioned above

5. Inclusive innovation


5.1 Our customer is interested in our suggestions for improving production

We are interested in the suggestions of our provider for improving production

5.2 Our customer is interested in our suggestions for improving post-harvest operations

We are interested in the suggestions of our provider for improving post-harvest operations

5.3 We develop innovations jointly with our customer

We develop innovations jointly with our provider

5.4 Innovation is an ongoing activity in our relationship with our customer

Innovation is an ongoing activity in our relationship with our provider

5.5 The innovations we develop respond clearly to our customer’s needs

We help our provider to develop innovations that respond directly to our needs

5.6 We share the returns (both tangible and intangible) from innovations

We share the returns (both tangible and intangible) from innovations with our provider

5.7 Innovations enable us to offer a differentiated value proposition

The innovations we foster with our provider enable us to offer a differentiated value proposition

5.8 Incentives form part of our motivation to participate in innovation processes

We offer incentives to motivate our provider’s participation in innovation processes

5.9 Our customer takes our needs into consideration when developing innovations

We take our provider’s perspectives and needs into consideration when developing innovations

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6. Measurement of outcomes


6.1We know and understand the indicators which define the success of our trading relationship with our customer

We know the indicators which define the success of our trading relationship with our provider

6.2 Evaluation and feedback process are regular and consistent

Evaluation and feedback process are regular and consistent

6.3 The evaluation process is simple and cost efficient

The evaluation process is simple and cost efficient

6.4 Results from evaluation and/or feedback form the basis for decision-making

Results from evaluation and/or feedback form the basis for decision-making

6.5 The results of measurements rapidly lead to action

The results of measurements rapidly lead to action

6.6 We understand clearly the purpose of measuring information

We ensure that our provider clearly understands the purpose of evaluation and/or feedback processes

6.7 The evaluation and feedback processes are jointly designed and tested with our customer

The evaluation and feedback processes are jointly designed and tested with our provider

6.8 We play an active role in deciding what information to collect

We allow our provider to play an active role in deciding what information to collect

6.9 We exchange the generated information with our customer

We exchange the generated information with our provider

6.10

We discuss the generated information with our customer

We discuss the generated information with our provider

Assessing the new (inclusive) business model principlesThe statements are reproduced in two tools that are separately provided:

Statement list, Word document both for sellers (suppliers, farmers) and for buyers (companies),

Excel file for entering scores and making graphs.

EXERCISE – Assessment of inclusive business principles Approach the farmers of your business case and ask if they would like to

discuss the relation they have with their buyer(s) and fill out a form (scoring statements).

Think of how to select farmers for participating in the survey and discussion. Board members? Management of FO? Randomly selected farmers? The number of respondents should allow to claim that you have representative sample.

Ask the buyer who sources from the farmers the same: would the company be willing to discuss the relation they have with the suppliers (farmers) and fill out a form (scoring statements). Also think which participants to ask from the side of the company.

Collect the scoring forms and enter the scores in the Excel tool. Make a debriefing report with graphs, showing the scores of the sellers

(farmers) and the buyers (company) on the same subjects. Invite a delegation of the farmers and the company for the debriefing session Compare the results and reflect what can be done to make the relation more

inclusive and mutually beneficial.

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