THE ROLE OF CORPORATES IN SUPPORT OF AGRICULTURE AND FOOD SECURITY THROUGH PUBLIC-

PRIVATE PARTNERSHIPS

A SEMINAR PAPER PRESENTED AT ICRAF

ByLawrence Kiguro

Associate Quality Assurance DirectorLivelihoods and Resiliency

World Vision Kenya11th March, 2015

Presentation Outline

• Justification/ Importance or Why the Topic)

• Hypothesis of the Paper;

• Theory base of the Paper;

• What are Public Private Partnerships (PPPs);

• General Model for Implementation of PPPs;

• Partnerships in Agricultural Research and Innovation

• Experiences drawn from Syngenta Foundation;

• World Vision Kenya Plans and Experiences;

• Some Recommended PPPs

• Challenges in PPP;

• List of References•

Justification/ Importance or Why the Topic

• 1.) Hunger: Still A global shame, Far fromreaching millennium development goalnumber 1: to halve extreme poverty andhunger by 2015:

• On September 14, 2010, the Food and AgricultureOrganization of the United Nations (FAO) published itsestimates concerning the number of people suffering fromhunger in 2010 that was estimated to be 925 millionworldwide with 239 million being from sub-Saharan Africa;

• This 2010 figure corresponded to 13.5% of the worldpopulation, while the 2015 objective (millenniumdevelopment goal (MDG) number 1) was 8%;

• FAO concluded that we were still far from achievingMDG 1 that is, halving the number of hungry peopleworldwide by 2015.

Justification/Importance of the Topic/..2

• 2.) Climate change and global warming areconsidered major threats to agriculture andfood production;

• In 2007, the United Nations predicted that 'zones struck by drought insub-Saharan Africa might increase from 60 million to 90 million hectaresby 2060…’ and that 'the number of people suffering from malnutritionmight increase up to 600 million by 2080’;

• On 1st February 2008, the journal Science, published forecasts byStanford University, California, which predicted that South Africa couldlose more than 30% of its maize production due to climate change;

• Also a study published on June 3, 2011 by the Consultative Group onInternational Agricultural Research (CGIAR) and based on acomprehensive mapping work concluded that regions where foodinsecurity was highest were also those where climate change wasexpected to drastically change farming activities.

• These regions are mainly located in Africa and South Asia and in lessthan 40 years, the agricultural seasons of these regions will be shorter,warmer and drier, jeopardizing the life of hundreds of millions of peoplewho are already poor or very poor

Justification/Importance of the Topic/..3

3.) Inadequate food supply• Demand side (Growing Population) - On the

demand side, the trends include the continuing additionof 70 million people per year to the Earth’s populationand the desire of some 4 billion people to move up thefood chain and consume high protein rich foods (livestockproducts).

• Supply side (Fixed amount of Land) - On thesupply side, there is not much new land to be broughtunder the cultivation unless it comes from clearingforests but with heavy environmental costs.

• Also in many countries, prime cropland is being lost toboth industrial and residential construction, roads,highways, and parking lots for the fast-growingautomobiles.

Justification/Importance of the Topic/..4

4.) Low Yields by Small holder FarmersSmallholder farmers in developing countries face some of the world'smost difficult agricultural challenges as they strive to grow food. Thesechallenges include erratic and unreliable rainfall as a result of changingweather patterns due to climate change, poor soils, poor quality seedsamong other inputs, limited access to farmer friendly credit facilitiesand poor access to modern agricultural technologies.This results in low yields and although there are other contributingfactors, their low yields are a root cause of the poverty, hunger, andmalnutrition that afflicts more than a fifth of the world's people;

5.) High Post Harvest Loses by Small holder Farmers (30 –40%)Most of the world's chronically hungry people live in rural areas anddepend heavily on agriculture for their livelihood. However despite thehard work and ingenuity of smallholder farmers, about 30-40% of theirharvests are lost to pests and diseases damage that they are unable tocontrol.

HypothesisThis paper is based on the Hypothesisthat:-1.) Corporates can offer expertise, knowledge,skills and resources in support of agriculture andfood security;

2.) Corporates can improve the efficiency in themanagement of food security through publicprivate partnership;

3.) Corporates can reduce public capitalinvestment in support of agriculture and foodsecurity.

Theory base of the Paper/1

• THEORY NUMBER ONE:-• That the global agricultural community has a long

history of sharing knowledge, expertise,enthusiasm, and ingenuity with smallholder farmersfor a common cause such as introduction ofinorganic fertilizers, hybrid seeds, pesticides andartificial insemination (AI) just to mention a few. Sotogether with small scale farmers, innovativesolutions can be discovered and developed to beused by smallholder farmers to grow more andbetter food and fiber, care for the land, enhancetheir economic future, as well as protect andpreserve the environment for future generations

Theory base of the Paper/2• THEORY NUMBER TWO: -

• That smallholder farmers are eager forchange—for new choices, new knowledge,and a chance to help solve their ownagricultural problems. By sharing theirknowledge of the land, local growingconditions and cultural preferences withtheir partners, smallholder farmers also canhelp in ensuring that new technologies andproducts are adopted, adapted, practical,and effective to meet their needs.

What Are Public-Private Partnerships?• Definition

• Public–private partnerships (PPP) are collaborativemechanisms in which public organizations and private entitiesshare resources, knowledge, and risks in order to achievemore efficiency in the production and delivery of productsand services;

• PPPs engage complementary strengths to achieve morethan any one partner could do alone;

• Public-private partnerships in agriculture are rapidly gainingmomentum as they are vital for progress in agriculture in thepursuit for sustainable food security especially in SouthAmerica;

• Many organizations/Sectors are advocating for the creation ofPPPs. However, the potential of PPPs in addressing agriculturalsupply challenges and food security remains largely untapped;

Importance of PPPs• Public-private partnerships, or PPP, involve “a contract between a public-

sector authority and a private party, in which the private party provides apublic service and assumes substantial financial, technical and operationalrisk in the undertaking”. It combines the efficiency of private firms/Sectorwith the “trustworthiness” related to a public enterprise. This approachaddresses the following issues:-

• Reduces public capital investment;

• Improves efficiency due to strong profit incentive by the private entity;

• Increases accountability as the private entity is more accountable;

• Leads to expedited project completion by grouping multipleresponsibilities;

• Specialized expertise from both the government and the private sector;

• Shared risks/responsibilities;

• Government can still step in when private entities are misbehaving;

General Model for Implementation of PPPs

• Identifying and negotiating a common interest;• Agreeing on how to Finance the common

interest;• Assigning roles and responsibilities including

regulatory/contractual and legal issues;• Preparing an operational design/scope based on

the above;• Operationalization of the partnership;• Evaluating and terminating partnerships (if

applicable);

Illustration

Process of Implementation of Public Private Partnerships

Partnerships in Agricultural Research and Innovation

• What are they?

• Collaborative mechanisms in which actors in agriculture research fields(e.g. ICRAF, KARLO, KEFRI, Universities….) and in the private sector shareresources and risks and generate innovation for the development of theagricultural sector, including crops, livestock, forestry, and fisheriessectors. Possible partners include research institutes, universities, andextension agencies in the public sector, NGOs involved in Agriculture &Food Security, Farmers/producers’ associations, corporates and individualproducers in the private sector.

• The aim of PPP is to use complementary assets/resources to the maximumadvantage for the benefit of the farmer and the food security sector.

• However, partners must agree on the objectives, roles, responsibilities,and incentives. They also need to jointly protect and benefit fromintellectual property, and work towards a unified vision of enhanced farmproductivity.

Importance of Partnerships in Agricultural Research and Innovation

• Public–private partnerships are a new way of carrying out Researchand Development (R&D) especially in Latin America’s agriculturalsector. These partnerships spur innovation for agriculturaldevelopment and have various advantages over other institutionalarrangements fostering R&D. Specifically, they:-

• 1. Reduce the costs and risks entailed in research by the public;• 2. Improve the quality and relevancy of research results due to

synergies among the partners, and ensure greater adoption by usergroups;

• 3. Lead to the accumulation of complementary abilities, knowledgeand skills;

• 4. Lead to higher competitiveness and better market positioning asa result of improved competencies; and

• 5. Promote development and poverty reduction by providingresources to address food security issues;

Experiences drawn from Syngenta Foundation/1

• Syngenta works in a partnership with CIMMYT to improve diseaseresistance in wheat . Syngenta scientists in France and the US workdirectly with colleagues at the International Maize and WheatImprovement Center - CIMMYT in Mexico. They then make theirdata/findings available to researchers in the public and privatesectors;

• In India, thousands of smallholders benefit from improved access toknowledge and technology, delivered through diversified extensionstrategies. The PPPs providing advisory services involve thegovernment, universities, NGOs, and commercial partners. Thespread of knowledge is achieved through farmer workshops, village-level interactions and technology demonstrations in the farmers’own fields. Major scale-up of these projects is now underway;

Experiences drawn from Syngenta Foundation/2

• The Foundation’s partnerships also include an index basedinsurance initiative in Kenya that begun in 2009. This initiativeaims to develop agricultural micro-insurance that will helpsmallholders mitigate weather risks, thereby enabling them toinvest in fertilizer and other productivity-enhancing inputs;

• Another crucial focus of PPPs by Syngenta is improvedsmallholder access to markets for their produce. An exampleis the integrated supply chain for high-quality vegetables inthe Peruvian Andes. The partners here include an NGO andArcos Dorados, which run McDonald’s operations in LatinAmerica;

WVK Plans and Experiences with PPP

• Goal: World Vision Kenya plans to leverage thein-kind and cash resources of the governmentand the private sector to advance child well-being aspirations in key WVK program areas

• Objectives:– Position WVK to increase resources through fundingfrom the Government and other multi-lateral donors;

– Strengthen programmatic interventions with a focuson innovation, sustainability, and transformational;results that align to national priorities and strategies

– Position WVK to acquire local resources throughPrivate donors;

Partnership Principles1

The following guiding principles are implemented for win-win partnerships and were drawn from the Global Humanitarian Platform and The Partnering Initiative.

Principles Rationale

Equity

Leads to mutual respect between partners because they recognize

the value and contribution that each party brings and its

importance in the relationship.

TransparencyLeads to trust between partners, providing the foundation to

strengthen the relationship, deliver measurable, accountable

results, and potentially lead to further opportunities for

collaboration.

Mutual benefit

Leads to sustainability as all partners (including those that

represent the community) recognize the value add from the

outputs of the relationship and endeavor to maintain these

results.

Result-oriented

approach

Recognizes that effective humanitarian action must be reality-

based and action-oriented with tangible measurable results

achieved for beneficiaries.

Mutual

Responsibility/

Accountability

Humanitarian organizations have an ethical obligation to each

other to accomplish their tasks responsibly, with integrity and in a

relevant and appropriate way and must only commit to activities

when they have the means, competencies, skills, and capacity to

deliver on their commitments.

Complementarity

Maximizes the benefits that derive from diversity by building upon

WV Kenya’s comparative advantages and complementing these

with capabilities from partners.

Strategy-led

Ensures that partnering activities are aligned with the strategies

and mission of the partner organizations.

Empowering communities

Focusing on the greater well-being of children

Tackling the causes of poverty

Reflecting our values

Schematic Summary of Benefits/value that businesses can provide to WV programs, directly or indirectly

WV Kenya’s public-private partnershipsprovide synergy andvalue-drivenperspectives todevelop sustainablesolutions to addressissues. Private sectorpartnering benefitsinclude:-

INTERDEPENDENCE

INNOVATION

INFLUENCE

IMPACT

Information

Products &

Services

Technical

Expertise

Logistics /

Storage

ICT

Solutions /

Innovation

Financial

Access

What can

private sector

bring to WV

Kenya? •Training/Capacity Building

•Business Management•Marketing/PR

•Health

•Agriculture Techniques and QA

•M-PESA / IKO-PESA

•M-Health•KACE

•Suppliers

•Labor organizations•Kenyan National Federation of

Agricultural Producers

•Transportation for raw materials

(e.g. wheat, fruits, milk)•Storage centers for raw

materials (e.g. wheat, fruits, milk)

•Quick access to

funds•Leverage private

sector funds to

match donor funding

•Mobile phones

•Healthy food products•Medical supplies

•IT

•Energy sources and supplies

•Market analysis and forecasting

•Statistics/legal framework•Business trends and opportunities

Relationships

The Partnering CycleAdopted by WorldVision Kenya

WV has adopted theconceptual frameworkproposed by ThePartnering Initiative as“best practice”. WVKenya will continue touse this framework toachieve its partnershipgoals and objectives.The partnering cycle issimilar in steps andstages to WV’s LEAPframework.

Copyright: The Partnering Initiative

Partnerships being pursued by WVK in Agriculture and Food Security/1

• 1. Wanji Food Industries• Purchase raw materials from farmers/farmer groups and

associations;

• Capacitate farmers in agriculture techniques and providetechnical assistance to a) increase agricultural productivity,b) increase agricultural output, and c) improve quality ofproducts;

• Provide free and/or subsidized food and products

• Provide income generating opportunities to WV constituentsto act as sales representatives;

• Provide and leverage nutritional content and subject matterexpertise;

Partnerships being pursued by WVK in Agriculture and Food Security/2

• Grain-Pro thro’ KPMC• Provide hermetic storage units and technical assistance

in post harvest management;

• Enable and promote market-oriented agriculture bylinking farmers to buyers

• Facilitate financial support by leveraging the rawmaterials in the storage units to receive loans ascollateral

Partnerships being pursued by WVK in Agriculture and Food Security/3

• Kenya Agriculture Commodity Exchange• Provide reliable and timely marketing information and

intelligence to farmers

• Enable and promote market-oriented agriculture

• Micro-Ensure (An Insurance Company)• Provide weather index crop and livestock insurance to

the farmers

• Mitigate financial and welfare risks to farmers

Other Prospective Partnerships by WVK in Agriculture and Food Security/4

• Other Partnerships that we are pursuing through development of MOUs tho’ some are not yet finalized:-

• 1. Ministry of Agriculture, Livestock and Fisheries (MoALF);• 2. Ministry of Environment, Water and Natural Resources

MEWNR); • 3. Kenya Agricultural Research Organization (KARO);• 4. University of Nairobi (UoN);• 5. Jomo Kenyatta University of Agriculture and Technology (JKUAT)• 6. Syngenta Foundation;• 7. Genetic Farm Technologies (Tissue culture);• 8. Seed Companies including Kenya Seed, Freshco, Western Seed

and Pioneer;• 9. Beekeeping Value chains actors; Kerio Valley Development

Authority (KVDA) and The HIVE Ltd;

Specific Recommendations on Some Possible PPPs• The following are some of possible quick win opportunities for PPPs that

can be undertaken immediately in Kenya as perceived by the author:-• A partnership between Kenya Agriculture and Livestock Research

Organization (KALRO) and Kenya Breweries on Barley Research can be avery productive partnership that would benefit Kenya Breweriesimmensely and the country at large using experts from KARLO;

• Another possible partnership is one between the National Cereals andProduce Board (NCPB) and Grain Millers Association in order to makeNCPB a more enterprising venture which will also be more reliable andhence useful to the farmers while at the same time ensuring the grainmillers reliable supplies of grains;

• DELMONTE the main producers and packers of Pineapples in Kenya canform a PPP with some Pineapple farming groups from Coast and Nyanza tomake small scale farming a more commercial venture for small scalefarmers while at the same time boasting the supply of Pineapples toDelmonte;

• BIDCO the manufacturer of various household products imports some oftheir raw materials such as sunflower seeds from as far as Malawi whilethe potential to produce the same in Kenya is huge. BIDCO can also makeanother PPP with small scale farmers for the production of the same.

The Challenges of Public-Private Partnerships in Agriculture and the Rural Sector in general

• Gaps as private service providers are prepared to do business purely on commercial grounds versus what governments may consider necessary from the broader development and poverty reduction perspectives;

•

• Investors may shy away due lack of legal and policy framework;•

• Financial viability is desirable but not a sufficient condition for the success of PPP ‐‐‐‐ risk identification and its mitigation among stakeholders needs to be addressed during projects development;

•

• PPPs do not fit in all areas – therefore careful assessment is required, with country led initiatives;

•

• Rigorous Value Chain Analysis is a prerequisite for appropriate investment;•

• Value for Money (VFM) analysis must be demonstrated, and private entity must genuinely assume some degree of risk;

Finally………………..

• To express my great appreciation to ICRAF Management through the office of the Partnerships & Impact Directorate (P&ID) and ICRAF Eastern & Southern Africa (ESAF) for the opportunity to come and make this presentation.

• Thank you all for listening to me and may you be greatly blessed