Sustainable Participation of Small Holder

Producers in Commercial Value Chains

PROJECT NURTURE

Agribusiness Forum, Uganda

5th October 2010

Coca-Cola, Gates Foundation and TechnoServe established a

partnership to improve the lives of thousands of farmers and families

4-year pilot

54,000 farmers in

Kenya & Uganda

Mango & passion

fruit

Doubling small

producer fruit

incomes

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Project Overview

NURTURE

Summary

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Capitalize on growing market opportunity with strong

economic proposition for small-scale producers

Multiple routes to market / buyers (resilience)

>1 large-scale anchor buyer (↓ risk, stability)

Select project areas with greatest potential for

competitiveness & impact

Identify & address constraints across entire VC

Facilitate win-win relationships with partners that have skill,

will & resources to tackle constraints

Support farmers to organize into sustainable, self-governing

business groups

Select Best Practices Applied in Project Nurture

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Compelling market demand for domestic mango and passion fruit juice,

creating attractive long-term opportunity for small holder farmers

Note: * SSA = Sub-Saharan Africa; MNC = Multinational Corporation

Source: FAO, Euromonitor Fruit commodity projections, BMGF/Dalberg

• Market value of fresh and

processed fruit in SSA ~$11.5B

• Processed fruit consumption

growing ~6% annually in Africa

and globally

• Region has tremendous potential

to capitalize on this demand, but

many MNCs import juice

concentrate

• Due to lack of sufficient capacity

to process and poor

infrastructure. Estimated that

locally produced concentrate can

cost 33%-50% less than imports

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1

2

3

4

5

6

2.7

5.8

2.7

5.6

Fresh Fruit Processed Fruit

Projected consumption growth

Percent (CAGR ‘07-12)

AfricanGlobal

Value chain analysis indicates mango farmers can expect

a profit margin of ~50%

MANGO – Projected Four Year Totals(U.S. Dollars per Farmer)

K E N Y AU G A N D A

Key Drivers

• Multiple markets

(export, open air,

wholesale,

processors)

• Improve value

chain efficiency

• Improve

productivity

Demand

resilience, less

wastage

Post intervention Current

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Targeted regions chosen based on agronomic suitability,

poverty density, and number of farmers

New Mango and Passion Fruit PBG sites

Overlap in existing and future PBG sites

• Eastern • Eastern

• Central

• Rift Valley

Uganda Kenya • Agronomic conditions

and number of farmers

helps assure sufficient

volumes for

commercial production

& sustainability of

farmer-run enterprises

• Poverty density used to

ensure project reaches

largely farmers earning

<$2 / day

Intervention focus across the value chain to ensuring producers and

buyers achieve mutual success and project sustainability

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Input Suppliers

Farmers / Producers

Assemblers /Traders

Wholesaler / Processor

Retailers Customer

Seed dealers / nurseries

Fertilizer suppliers

Farm implement providers

Agricultural ext. officers

Export

Local Processing Companies

Fresh Fruit and Puree Domestic /

Export Market

Small scale farmers

Processing

Credit / Financing Institutions

TechnoServe is a facilitator / trainer across the value chain

Traders

Farmer Groups

(PBGs)

Additional TNS partners

Trainers:

Facilitators /

mobilizers:

Wholesalers

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Local markets

Project Nurture

BMGF

TNS

Govern-ment.

Coke

ECABU

• Financial

Services: Equity

Bank, Centenary

Bank

•Seed Propagation

& Research: KARI,

NaCCRI

• Farmer

mobilization &

training: AMA,

Farm Concern

International

• Agronomy: Real

IPM

• Various

Business units

within the

system

• Bottlers in each

country

Business Units

Partners• Subject matter experts

Facilitate win-win relationships with partners that have

skill, will and resources to tackle constraints

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Producer Business Group (PBG) model

PBGsSmallholders

Coca-Cola

Processors

Definition: PBGs are registered businesses owned by 50-100

small-scale farmers

• Coordinate bulk produce sales

• Provide crop productivity training

• Facilitate access to inputs, credit, and market information

• Enforce produce grading

TechnoServe’s Producer Business Group (PBG) model used

to organize & empower farmers, to create sustainability

Other market Channels

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Self-governing producer business groups act as ‘hub’ to

address multiple supply chain issues on a sustainable basis

Productivity

Improvements

Farmer

Organization

Market

Linkages

Supply Chain

ChallengesTechnoServe’s Approach

• Smallholders

fragmented, lack

market access

• Multiple market

intermediaries

limit farmer profit

• Processors unable

to source enough

quantities of high

quality fruit

• Smallholders

often lack

awareness about

market

opportunities

Train farmers in good agricultural

practices and business skills to:

− Improve marketable yields

− Improve fruit quality

Organize farmers into sustainable,

self-governing business groups to:

− Reduce intermediate linkages

− Create economies of scale for

resources

Manage supply needs through direct

market linkages to:

− Diversify production mix

− Produce forcommercial market

Contact Information

TechnoServe headquarters:

1800 M Street, NW, Suite 1066, South Tower

Washington, DC 20036

Tel: +1 202 785 4515

Fax: +1 202 785 4544

Email: technoserve@tns.org

For office locations around the world, check www.technoserve.org

Thank you!

Sunny

Processors

Reco Industries

• Kenyan-based fruit processors, focused on puree production

• Produces puree for sale to customers domestically and as exports

• Began full-scale commercial production of puree in 2009 (current

capability of 40MT of puree per day)

• Ugandan-based fruit processor, focused on puree / concentrate

production

Sunny Processors has indicated achieving sufficient supply at the quality and

volume required as the primary bottleneck to increasing capacity utilization

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Local processors are a critical piece of the value chain and

will be buying the fruit directly from the farmer groups