African Agribusiness Incubation Network (AAIN) conference. Nairobi 29 September 2015PAEPARD side event: Involving SMEs in multi-stakeholder research partnerships

1. Constraints for SME participation

2. Research gaps3. Innovative funding trends

Why does ARD research continues to fail

to link with the SME sector?

Most businesses focus on managing their operations. They are not necessarily focused on how to improve their competitiveness through innovation

Many businesses have limited ability to develop good proposals. Developing concept notes and grant proposals and assembling the required documentation entails transaction costs (time, resources).

The challenges of working with smallholders in out grower schemes limits the private sector’s interest in submitting proposals

Limited experience and mistrust make the private sector reluctant to engage with NGOs or government-“driven” research activities and thereby prevent actors outside the private sector from entering into collaborative arrangements

The private agri-sector may find it very difficult (or reluctant) to provide time and cash to match the grant

Research gaps:1.Research into processing, storage, food preparation and other food interventions post-farm Example: EC/FP7 AFTER: African Traditional Food Revisited by Research ; DANIDA/UniBRAIN incubators; Soy milk Benin2.Mechanization and renewable energy3.Healthier packaged food Example: Pack4Food

Renewable Energy research needsIrrigation: Diesel pumping systems fueled with biofuel, micro-hydro, solar PV, windAgro-processing: Biodiesel pumps, micro-hydro, microgrids, solar dryersMechanical energy: Biodiesel pumps, micro-hydroCooking: Cleaner biomass cookstoves, biogas, solar cookersCooling/refrigeration: Larger-scale solar PV and wind, biodiesel, and micro- and picohydro stations (power generation of under 5 kW); biodiesel engines

1. Value chain based funding2. National research calls3. Export funding4. EC-SME equity funds (int)5. NGO-SME equity funds (int)6. International research funding (int)7. Investment funds(int)8. Matching funds (int)

“The growing global demand for agricultural innovation makes it vital

to assess the characteristics that separate effective from ineffective

innovation fund mechanisms”

DESIGNING AND IMPLEMENTING AGRICULTURAL INNOVATION FUNDS:

Lessons from Competitive Research and Matching Grant Projects© 2010 The International Bank for Reconstruction and

Development/ The World Bank

Some countries have managed to put in place structures or platforms to encourage operational use of research results by producers and took a serious option for solving the problem of financing the system.

Public funding (donors or national subsidies) can complement participants’ fees: a % of the increased global turn-over of a value chain, on charged services

In Ivory Coast 18 value chains work with the Fonds Interprofessionnels de la Recherche et du Conseil Agricole  (FIRCA) and 13 to 14 are collecting fees. The value chain actors identify the projects which FIRCA finances in the field of applied research, agricultural advice, technical training and the reinforcement of capacities.Examples: hevea , palm oil, coffee, cacao, pigs,  poultry, fruit-citrus

In Burkina Faso, the Ministry of Research Science and Innovation created in January 2011 the National Fund for Research and Innovation for Development (FONRID).orientation of research towards demand and national priorities; improving the quality of scientific research;the promotion of invention and innovation;diversification of the scientific, technical and financial partnership.

In Senegal, In Senegal the Fonds National de Recherches Agricoles et Agro-alimentaires (FNRAA) offers competitive funds for research addressing the real needs of producers & private sector. FNRAA is a mechanism for funding public agricultural research since it involves innovative farmer organizations directly via the Conseil National de Concertation et de Coopération des Ruraux in its decision-making and evaluation. It allows research orientation to the demands made by the producers and agribusiness needs.

The Delegation of the European Union to Uganda launched in 2015 a SME Development Fund (Equity Fund) It will be open to all sectors of agribusiness, including livestock.Invest in commercially viable enterprises with strong growth potential that empower smallholder farmers in Uganda to increase their revenue, livelihoodFund size: USD 30 million (at first closing) – EU will invest EUR 10 millionInvestment period: 5 yearsThe EU/Uganda aims at targeting at least 25-30 companies with the first closing of the fund.

EDAIF Ghana: Export Development Agricultural Investment Fund (2000, amended 2011) Development and promotion of agriculture, relating to agro-processing and agro-processing industry;Provision of credit, refinancing and credit guarantee through designated financial institutions to persons in the agriculture and agro-processing sectors of the economy;Appraisals and studies necessary to determine areas of the agriculture and agro-processing sectors that need intervention; andMonitoring and evaluation of the interventions.

The set up of this fund was informed by a study on the commercial beef industry.

The overall objective of this study was to contribute towards obtaining an insight into the beef value chain in order to design interventions that lead to commercial sustainable solutions that contribute to better performance through a public-private partnership with focuson small and medium enterprises.

ICCO Cooperation, an international Dutch development organization launched in May 2015 its Agri-Business Innovation Challenge 

The purpose is to kick-start and boost the business of innovative agri-entrepreneurs in Uganda.

There will be cash prizes up to EUR 20,000 for the three most promising businesses to roll out their business models, and a chance to qualify for investment by the ICCO Investment Fund.

GlobE - Global Food Security. Federal Ministry of Education and Research of Germany Reduction of Post Harvest Losses and Value Addition

in East African Food Value Chains (University of Kassel): pastoral meat value chains

Trans disciplinary research: Stakeholder processes, knowledge integration and collaborative learning

Two Dutch Funding instruments on food security challenges Netherlands Organisation for Scientific Research the Global Challenges Programme the Applied Research Fund : involvement of

practitioners

Rabobank Foundation supportsAfrican exporters of fruits and vegetables can benefit from slow capitalfarmers to combine forces by forming cooperativesthe purchasing power, the sales position and obtain financing to develop farming and export operations. It allows to commission research according to FO and private sector priorities

22 June, 2015. Utrecht. Rabobank. Conference "The Future of Farming

and Food security in Africa".

Entrepreneurs 4 entrepreneurs (Belgium)Drink yoghurt Laki Laki in Kenia Farm in Thika, factory in Juja Nutritious breakfast (tourism) and orphanage.Request: 25,000 Euro for business plan development REEL FRUIT (Nigeria)Vitamin rich food snacks. Mechanized food processing. Request: 80,000 EuroGeoffman Chili (Uganda): Chili pepper for food, pharmacology, pepper-spray. The trees prevent erosion. Request: 50,000 Euro