Download - Kick starting productivity, david rosenberg
Scaling Productivity Improvement Seas of Change Conference
David Rosenberg
Ecom Group Sustainability Advisor
April 2012
• Ecom
• Strategic intent
• How to get productivity gains
• Business models
• Keys and limits
• Optimism
Ecom Agroindustrial Corp, Ltd.
• Family-owned, 6th generation
• Coffee, cotton, cocoa, sugar
• 30+ countries
• “Origin integrated”
= physical trader, first buyer
= buying and primary processing in origin
= risk management
Strategic intent of
inclusive business model
Profitability throughout supply chain higher yields,
better quality,
lower costs
higher farmer income
Preferred buyer from better farmers
Preferred supplier = differentiated products, solutions
New barriers to entry for competitors
= sustainability of our own business
Productivity
Increasing yields, quality, farmer income – Create more and better product, profitable farmers
Similar approaches world-wide – Farmer engagement, organization
– Training certification to UTZ, Rainforest, … ….
– Access to inputs, finance
– Better genetics, technologies
Unconventional partnerships – NGO’s, Banks, Clients
Why Certification?
Why Certification?
Demand-driven
‘Organizing principle’
- Organize un-organized farmers
- Improve farming practices
- Buyers reward farmers for good practices
- Communicate throughout the whole supply chain
First step to capture farmers’ attention
Certifying poverty or driving productivity??
“Sustainable Management Services”
• Within company, separate business unit or NGO
• Farmer Training
Agronomy and business practices
+ Weather and price data
+ Access to inputs, equipment, services
• Keys:
– Year-round up-country presence
– Link agronomy, finance, procurement
– Develop in-house expertise
– Transparency
Farmer training model
• Keys:
– Frequent farmer contact
– Maximum possible responsibility
at farmer organization
• Limitations
– 50 farmers per trainer
– Training methods, low tech
– “Telephone game”
= declining quality of message
– High cost of reaching farmers
– Who is responsible for what?
SMS Field
Manager
SMS Production
Officers
Smallholders
Quality teams
Auditor
SMS
Promoter
Farmers
Achieving productivity gains
Training
Inputs
Genetics
Finance
Business skills
Farmer Field School
= 50 farmers per trainer
Expensive, needs finance
Expensive,
needs multi-year finance
+ investment R&D
Risky, needs risk-sharing
Some data
• Kenya
85,000 coffee farmers via our trainers
165,000 farmers sell through SMS
• Uganda 31,000
• Tanzania 5,000
• Mexico 8,000
• Ivory Coast
11,000 cocoa farmers, 20 cooperatives,
• Latest Total: about 175,000 farmers
SMS Training in Kenya
Innovation in Kenya
Composting Biodigester
Ecom-IFC-Nespresso Central America
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
Farmers Reached - IFC-Ecom projects, Jun-07 to Dec-13
Actuals Targets
-
2.00
4.00
6.00
8.00
10.00
12.00
14.00
16.00
Sales Revenue Generated (million US$) - IFC-Ecom projects, Jun-07 to Dec-13
Actuals Targets
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
Sustainably Used Land (hectares) - IFC-Ecom projects, Jun-07 to Dec-13
Actuals Targets
-
5,000
10,000
15,000
20,000
Farmers Certified - IFC-Ecom projects, Jun-07 to Dec-13
Actuals Targets
Genetics: breeding partnership with CIRAD
Ecom Tajik Agronomy Team
Seed innovation
Challenges to productivity
• Which sustainable ag model to scale?!
• Expensive to reach farmers
– Who pays?
– Who does?
– How can we innovate? Radio, phones, ipads?
• How to build human capital
– Expensive and scarce
– Easy to steal New business model
• Difficult countries
– High risk Risk sharing ?
• Measuring productivity
Reasons for optimism
• Business training
• Training women
• “Sum of parts” approach
– Multiple income streams
– Integrated farming
• Technology getting cheaper
– Phones, hand-helds
– Information systems