producer organizations - some worldfish experiences

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Producer Organizations - some WorldFish experiences Michael Phillips, Malcolm Beveridge and Wayne Rogers Producer Organization workshop 25 th September 2012, Cairo, Egypt

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Page 1: Producer Organizations - some WorldFish Experiences

Producer Organizations- some WorldFish experiences

Michael Phillips, Malcolm Beveridge and Wayne Rogers

Producer Organization workshop25th September 2012, Cairo, Egypt

Page 2: Producer Organizations - some WorldFish Experiences

Overview

• Background• Case studies• Lessons

• The presentation is based largely on Asian experiences

Page 3: Producer Organizations - some WorldFish Experiences

Definitions and characteristics

• Several definitions of producer organizations, but key characteristics

– Membership based organizations

– Provide services to members– Access to these services is a

key reason to become a member

• These characteristics distinguish producer organizations from NGOs and “traditional’ organizations

Page 4: Producer Organizations - some WorldFish Experiences

.. organizations may operate at different levels

• Local level– farmers clubs, self-help groups

• “Mid” level– farmers associations, federations

of farmer clubs• “Higher” level

– National or regional federations, unions, associations

Page 5: Producer Organizations - some WorldFish Experiences

.. the case for producer organizations

• collective/scale efficiencies for farmers an industry

• increased bargaining power• lower production costs• improved access to input and

services– e.g technical, credit, bulk

purchase/discounts; • empowerment of farmers,

particularly smaller producers

• increased voice and influence

Page 6: Producer Organizations - some WorldFish Experiences

.. but they also have costs and challenges

• takes time • needs trust• needs investment• transaction costs can be high• participation and benefit

sharing• free riders• sustainability (beyond projects)

Page 7: Producer Organizations - some WorldFish Experiences

Some experiences

Page 8: Producer Organizations - some WorldFish Experiences

Partnership • Excellence • Growth

India – crowded coastal aquaculture

Page 9: Producer Organizations - some WorldFish Experiences

Background

• India is a significant producer of aquaculture products– produces $10b of shrimp and fish– 70-80 % small-scale farms < 2 hectares

• Underforming in early 2000• Response from 2000 – onwards

• project investment in better farm management and society development

• govt invested “umbrella” society -NaCSA in 2007

Page 10: Producer Organizations - some WorldFish Experiences

Investments in small-scale farmers

• Better Management Practices (BMP):– pilot of 10 farms in 2002– extensive roll out post 2002

• Organizational improvements– societies and clusters in

common waterways

Page 11: Producer Organizations - some WorldFish Experiences

.. more activities

• improving field extension services– village based, with close

contact with farmers– communication and

education campaign

• improving connections to value chain players– hatchery operators, feed

manufacturers, lastly markets

Page 12: Producer Organizations - some WorldFish Experiences
Page 13: Producer Organizations - some WorldFish Experiences

Success relied on local farmer societies

• 20-30 people– common water supply

management– access to technical

services– credit (Bank)– bulk purchase of seed

and feed– synchronized shrimp

stocking

Page 14: Producer Organizations - some WorldFish Experiences

Outcomes – improved pond yields

• Kg/farmer increased by 376%• Total production increased from 37 tons p.a. to 870 tons p.a.

250

800

379 308

913

1,192

37 4 22 40

672870

147

558

130

736 730

-

200

400

600

800

1,000

1,200

1,400

Baseline (2001 survey) 2002 2003 2004 2005 2006

Total production p.a kg/farmer

Total production p.a. tons

Total number of farmers

Page 15: Producer Organizations - some WorldFish Experiences

Outcomes – improved farmer incomes

• Increase in net profit per farmer from $278 p.a. to $2,648 p.a.• Profit margins increased from 25% to 40%

1,113

3,556

2,107

1,368

5,072

6,621

278

889 843

342

2,029

2,648

250

800 379 308

913 1,192

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Baseline (2001 survey)

2002 2003 2004 2005 2006

Revenue per farmer p.a.

Profit per farmer p.a.

Production kg/farmer

Page 16: Producer Organizations - some WorldFish Experiences

Outcomes – excellent project returns• Strong returns - $272k investment generated net

profits of $3.52m

163,542 17,778

122,222 177,778

3,733,333

4,833,333

40,886

4,444 48,889 44,444

1,493,333

1,933,333

8100028,000 43,000 39,000

50,000 31,000 -

300,000

600,000

900,000

1,200,000

1,500,000

1,800,000

2,100,000

2,400,000

2,700,000

3,000,000

3,300,000

3,600,000

3,900,000

4,200,000

4,500,000

4,800,000

5,100,000

Baseline (2001 survey)

2002 2003 2004 2005 2006

Revenue generated - total $8,884,444

Net profit generated - total $3,524,444

Investments - total $272,000

Page 17: Producer Organizations - some WorldFish Experiences

Indian societies - lessons learned

• There can be significant impacts for small-scale farmers, but:– it takes time for solid results

slow change in knowledge, attitude and practice among farmers

– good and reliable services at grass-root brings the real change

– “lead farmers” important– engage with stakeholders along value

chain– direct financial/in-kind support to

farmers brought negative results.

Page 18: Producer Organizations - some WorldFish Experiences

Farmer cooperative in Aceh, Indonesia

03

14

11

74

72

71

02

01

73

06

04

05

07

08

09 10

12

13

15

1617

Page 19: Producer Organizations - some WorldFish Experiences

Recent history

– Internal conflict – mid 90s till 2004

– Earthquake and tsunami in December 2004

– Responses Humanitarian Infrastructure

rehabilitation Improved management

and rebuilding farmer organizations

Page 20: Producer Organizations - some WorldFish Experiences

Investments in management and farmer organizations

• “Better management practices”

• Organization re-building Farmer groups Clusters Local services Moving towards a formal

membership-based cooperative

• Communications

Page 21: Producer Organizations - some WorldFish Experiences

Groups and cluster approach

• Village level groups • Watershed clusters Cluster: Petuah Neuheun

(5-10 Kelompok) -

Village: Kontak Petambak

Kelompok (10-20 Farmer/Group)

~2500 Farmers

Page 22: Producer Organizations - some WorldFish Experiences

Outcomes - participation

2008Cluster level

4 Clusters

34 Village

260 farmers

184 Ha

22 tonnes

2009Districts

84 Villages

1150 farmers

1027 Ha

105 ton shrimp

35 ton fish

2007Village level

11 villages

47 farmers

22 Ha

3 tonnes

47Post-Tsunami Rehabilit

ation

2010Districts

100 Villages

2656 farmers

2250 Ha

250 tonnes Shrimp

100 ton fish

2005-06Rehabilitation of Damaged farms and restart of farming

• Core farmer group increased from 47 in 2007, to 2,639 in 2010• Additional 19,500 farmers received indirect benefits

Page 23: Producer Organizations - some WorldFish Experiences

Economics provides a strong incentive for better management

Page 24: Producer Organizations - some WorldFish Experiences

Informal groups to a formal cooperative

• Farmer groups as members • “Technical team” merged into

and paid for by cooperative.• Cooperative services:

– Enterprise credit– Technical and market

services– Secures quality seed and

quality/cheaper feed inputs for members through bulk purchase and contracts

– Market access

Page 25: Producer Organizations - some WorldFish Experiences

.. the Aceh cooperative business model

• Financed through:– Membership fee– Microfinance

commission– Seed commission

(small)– Feed commission– Marketing and trade

– Trading provides the biggest return but is most demanding

Page 26: Producer Organizations - some WorldFish Experiences

Major lessons from Aceh• Simple technical improvements

deliver benefits. These are best delivered through local groups

• Investments in organizational development and local services pay off

• Takes time – “patient capital”• Partners of different skills• Market access can make a difference

long-term, but needs skills an time • Cooperative business model but best

income through vertical integration

Page 27: Producer Organizations - some WorldFish Experiences

FEAP - an example of an “apex” federation

• “FEAP is the united voice of the European aquaculture production industry, being the federation of national aquaculture associations that represent professional fish farming in Europe.”

http://www.feap.info/intro.asp

Page 28: Producer Organizations - some WorldFish Experiences

FEAP - activities

• Advisory role– to the European Commission and the

European Parliament as well as other aquaculture stakeholder organization

• Research and innovation investments• Annual award

– individuals who have made an outstanding contribution to excellence in European aquaculture

• Participation and promotion– actions and discussions on aquaculture

Page 29: Producer Organizations - some WorldFish Experiences

Lessons

• There are many examples globally where producer organizations have made importance contributions to the development of aquaculture

• What is success?• What are success factors?

Page 30: Producer Organizations - some WorldFish Experiences

What is a successful producer organization?

– achieves the objectives agreed upon by members

– retains or expands membership

– makes progress towards financial and managerial self-reliance and sustainability, inspiring members to maintain their participation in the organization

– improves self-esteem, and the economic and social well-being of members

Page 31: Producer Organizations - some WorldFish Experiences

Internal factors that influence success..

– Common and clearly agree objectives

– Technical and managerial capacity– Demand-driven and beneficial

service delivery– Sound governance and

management– Strong leadership– Group cohesion– Business model– This all takes time!

Page 32: Producer Organizations - some WorldFish Experiences

External factors that influence success

– External partnerships (govt, NGO’s, donors)

– Private sector relations

– Enabling institutional environment

Page 33: Producer Organizations - some WorldFish Experiences

[email protected]

WorldFish and CGIAR Research Program on Livestock and Fish

www.worldfishcenter.org

Acknowledgements – Swiss Agency for Development and Cooperation (SDC),

Resource Legacy Fund, GIZ and FAO/Allfish

Page 34: Producer Organizations - some WorldFish Experiences

WorldFish resources

VideosFarming Waters, Changing Lives: https://vimeo.com/40206928Investing in hope: Rusli's story:http://www.worldfishcenter.org/feature/fish-farms-help-post-tsunami-

acehnese-communities

PublicationsKasam et al (2010) - http://www.fao.org/docrep/014/i2275e/i2275e00.htm