Tuesday, September 27, 2011

Should Development Agencies talk more about Business and less about Development? (43)

Post by Siobhan Kelly (FAO) and Cecile Berthaud (IFAD)
Photos by Gauri Salokhe (FAO)

Development practitioners and Share Fair participants came together to discuss experiences and challenges at today’s session on engaging with the Private Sector.

Direct engagement with the private sector to fight rural poverty (43)

A few key lessons emerged from the discussion on which private sector, what kind of support, and what role for governments and development agencies. Here is what the two of us could gather:
  • Farmers’ Organization and Integration into Value Chains. While organization of smallholders is key for their integration in value chains it can take many forms depending on the commodity and context such as formal farmer organizations, informal self-help groups and contract farming;

  • Support to Production versus Value Chain Development. Support to farmer groups should first ensure that farmers are good and efficient suppliers for their buyers and are making a profit on their core business before investing and diversifying resources in additional businesses further down the value chain;

  • Role of the Public Sector and Fairness. Government support is key for ensuring a favourable business enabling environment. However their involvement depends on local contexts and needs and trust from the private sector. Development agencies can effectively promote enabling policies if their support is linked to specific commodities, markets and interventions and avoids creating distortions;

  • Financing the Private Sector. There is a role for development agencies as there is a real issue of engaging banks to work with the private sector for pro-poor agricultural development in terms of long-term financing, reasonable interest rates and equity funding. There were other challenging issues discussed such as production models and prices.
The session ended up with participants using cards for a ‘triad’ brainstorming (with the persons sitting next to them in the room). The cards (below) nicely showed the whole spectrum of engagement with the private sector, from the policy environment to support to intermediaries and direct incentives to the private sector to work with small producers.

Direct engagement with the private sector to fight rural poverty (43)

Direct engagement with the private sector to fight rural poverty (43)

No comments:

Post a Comment