Regional cooperation and multistakeholder platforms as incentives for
investment in agricultural value chains
Francesco Rampa
Head of Programme: Food Security
ECDPM
COMESA Inaugural Agriculture Investment Forum, October
2014
Overarching objectives
• Create platforms for public-private (PP)
dialogue aimed at participatory regional value
chain (VC) development
• Bring together existing initiatives and lessons learnt
on VC development projects and current efforts
for CAADP-related PP dialogue
• Ensure both political and commercial buy-in: “be
specific !”
• Use a truly multi-stakeholder process by including
all the partners (government, businesses, farmers
organisations, etc.) to ensure smallholders also
benefit
ECDPM
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Why ‘another’ PP partnership?
Current PP initiatives generally lack:
• Policy reform follow-up
removing regulatory obstacles to VC growth and creating
space for farmers/businesses to monitor progress
• Medium-term financial and technical follow-up
especially for SMEs/farmers to participate in VCs (K & HR)
• Holistic/coordinated business facilitation
addressing the multiple challenges faced by rural
entrepreneurs (inputs, loans, rural infrastructure, business
skills, regulations & laws, taxation…)
• Proper political & market analysis
ECDPM
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Rationale for a PP dialogue platform
Improving PP dialogue to support development of agro-food
markets, increase public and private investment and foster
cooperation at the regional level is a priority for COMESA
member states (COMESA Summit, Kinshasa, February 2014)
• Facilitating regional dialogue platforms is part of the
COMESA CAADP work plan approved at the Summit
Plenty of talk about PP dialogue, but little action
• proof of concept needed, especially at the regional level
• need to elaborate an approach to bring ALL stakeholders
together and ensure structured, well-grounded dialogue
leads to actions
ECDPM
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Value of COMESA leading the facilitation of
sub-regional pilot PP dialogue platforms
• Dialogue pertains largely to cross-border trade and
investment issues: access to market key for investors
• Cooperation at sub-regional level (e.g. on SPS standards
and other NTBs) could yield positive spillovers for the rest
of the COMESA region
• Approach developed could also be disseminated to other
sub-regions in COMESA
• COMESA Secretariat has the necessary clout to bring all
key stakeholders to the table (CAADP Unit, Trade Unit,
Infrastr.Unit, etc with CBC, EAGC, EAFF, SACAU, Ch of
Commerce, Donors etc)
• COMESA CAADP Compact and Investment Plan provide
policy guidance and links, eg seeds harmonization protocol
ECDPM
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COMESA Technical Validation (Lusaka, October
2013), now Minister’s adoption (Kinshasa,
November 2014)
Intervention Area 2.2 of Reg. CAADP Compact
“Regional technical and financial assistance to
connect PPPs being established at national level,
including market analysis, communication strategy,
capacity-building, resource-mobilization etc through
PPP-Platforms for regional value chain development
(or concrete cross-border integration of national
value chains), ensuring follow-up both on required
policy reforms by public agencies and on the capital
to be invested by the private sector. ”
ECDPM
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Designing & Implementing RIPA-2…in
coming months, so COMESA needs all of us
Pilot PP dialogue platformS for specific sub-regional
areaS and with a sub-sectoral focus that: (i) clearly
falls under the mandate of COMESA (CAADP); (ii) will
yield significant benefits in terms of regional value
chain development; and (iii) pilots will generate a
positive dynamic of cooperation among countries to
lead to full implementation of RIPA-2
  and other RIPAs too !
ECDPM
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Pilots: what’s different?
• Provide a platform for continuous and comprehensive
policy and investment dialogue (including
trust/monitoring/contract enforcement) between VC
partners
• Take an open-ended approach in conducting such
dialogue, without pre-determining outcomes
• Leverage invest. for REGIONAL action: Biz & DPWG
• Effective coordination of all PP actors along VC with
clear tasks, inputs and responsibilities for all (with publ
bearing “cost of organiz/bureaucracy”)
• CAADP Umbrella & Methodology: inclusiveness &
”management capacities” & mutual accountability & CSA
• Focus on political and not only technical roadblocks to
VC development (eg. ESADA; “coordinate jurisdictions”)
• Focus on 2 VCs to start (dairy & horticulture) & 2-3
countries (K-U-R…Z-A-D); building on existing initiatives,
ECDPM
market potential, willing donors, CAADP NAIPs/priorities…Page 8
Pilot: in practice
• Clarify VC business model:
Minimum 1 buyer/processor eg in Uganda Kenya Rwanda
Minimum 1 BDSP to provide incentives for smallholders to
join VC (through clustering)
Tech transfer (FDIs?)…
• Effectively connect national actions/policies aimed at:
VC coordination and MIS
Food storage at local/national level & other infrastr (WRS)
Markets for inputs + services
Regulatory environment, incl contract enforcement & riskmitigation/sharing tools
• Regional dimension:
ECDPM
Economy of scale
Trade corridor (e.g. northern corridor)
Deliverable under COMESA CAADP Investment Plan
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Possible roles of COMESA Secretariat bodies
involved in the facilitation of the pilot platform
CAADP Unit
ACTESA
SPS Unit
Business
Council
Other IPPSD
units (CrossBorder Trade,
MSMEs)
Climate Change
Gender & Social
Affairs
Coordinates
support to the set
up and functioning
of the pilot
Convenes
stakeholders of the
pilot
Coordinates
provision of
capacity building
for policy planning,
implementation,
M&E, and learning
to pilot
stakeholders
ECDPM
Coordinates
provision of
information, data
and analyses to
pilot planners and
other pilot
stakeholders
Coordinates
COMESA-wide
SPS initiatives
relevant to the
pilot's objectives
Coordinates
provision of policy
analysis capacity
building to pilot
stakeholders
Coordinates
provision of
capacity building
for SPS policy
planning and
implementation
processes to pilot
stakeholders
Convenes private
sector
stakeholders of the
pilot
Advocates for
private investment
in line with the
pilot's objectives
Coordinates
provision of
capacity building
for business
planning and
operations to
private sector
stakeholders of the
pilot
Ensure that
relevant crosssectoral initiatives
effectively
contribute to the
pilot's objectives
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Promoting VC investment through a reg pilot
platform: e.g. dairy industry in East Africa
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ECDPM
East Africa region is the highest milk production zone on the African
continent (Kenya and Uganda are the largest producers in the region)
Demand for milk and milk products in the region is growing, but being
largely met by imports from outside the region (foreign retailers…)
The dairy industry remains a development priority for the producing
countries in the region (eg NAIPs)
Key objective is to increase milk production and create a favourable
environment for increased private sector investment and regional trade in
the dairy industry
Need for appropriate policies to support private sector development in the
dairy sector in the region - In Kenya policy interventions (promoting PPPs,
expansion in regional markets through value addition, etc.) are identified
as important tools for the development of the domestic dairy industry
CAADP viewed as instrumental to leveraging investments in the dairy
industry
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Obstacles to attracting investment in the East
African dairy industry
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Absence of adequate information to inform investment decisions
Conflicting and scarce data on milk projections
Non-tariff barriers to trade (e.g. SPS standards)
Similarity in products being traded
Absence of harmonized milk production standards
Weak enforcement of milk standards
Bottlenecks in the dairy value chain:
poor raw milk quality
on farm milk losses (spillage, lack of market, rejection)
limited utilisation of the cold chain
underutilised processing capacity
fluctuations in production
poor rural infrastructure
near monopolistic tendencies of large processors
ECDPM
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How a pilot platform can address these
obstacles and promote investment
Private sector investment in dairy requires a secure enabling environment
A reg pilot platform involving strong PP engagement can create that:
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ECDPM
coordinating matchmaking fairs between raw milk traders and processors
to address supply fluctuations by aggregating surplus production, bring
dairy smallholders into regional VCs and contribute to a more diversified
VC
stimulating dialogue on trade policy consistency, the rationalization of
investments and on a regional marketing strategy given the specific
comparative advantages of producer countries and regions
facilitating information and knowledge sharing on inter alia trade and
investment opportunities and market conditions and trends
providing a forum for dialogue on the implantation of production
standards at the regional level and incentivise national ministries to
implement policy reforms such as dairy product quality standards,
benefitting consumers
hosting a centralized and coordinated data bank on regional milk trends
to guiding private investment and public sector planning and spending Page 13
How a pilot platform can address these
obstacles and promote investment (cont.)
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ECDPM
providing guidance on the coordination of actors in regional VCs in order to develop
structured approaches for increased expansion into regional markets
exploring niche markets
promoting dialogue on product diversification, increased access to financing,
adoption of low costs technologies, capacity building through grant support,
business linkages, R&D and technology transfer
driving the harmonization of production standards
developing (through the investment framework?) a package of incentives for
regional investors to facilitate the development of a regional VC, and conduct a
study on the harmonization of incentives at the national level in order to channel
investment to where they are most needed
supporting the COMESA Business Council in developing guidelines on best practice
in the dairy industry
examining novel approaches to financing different VC activities
attracting donor funding for VC-related initiatives
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Pilot: Timeframe
Exploratory
mission:
Identify key
partners and
ensure
(political) buy-in
ECDPM
Develop the
Pilot concept
note
Expert meeting
to turn concept
note into a
business case
First multistakeholder
meetings (incl.
pledging
conference)
Implementation
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Tentative planning process for establishing the pilot platform
1. Consultative meeting with COMESA Secretariat
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agree on general objective and approach of the PP and establishment process
•
discuss the assignment of roles and responsibilities among units and programmes
•
pre-select public institutions, technical organisations and private sector participants to be
convened to the following sub-regional consultation
2. Stakeholder consultation at the sub-regional level facilitated by the COMESA CAADP Unit
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involve member states and technical partners to support the design and implementation of the PP
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Agree on sub-sectors/commodity of focus (proposals could be made on the basis of prior
consultations and of national and regional CAADP strategies)
3. Consultations with the secretariats of other RECs of the Tripartite (and possibly IGAD)
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solicit input, obtain buy-in and agree on the sub-regional area for PP
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on the basis of the discussions in Steps 1 and 2, the COMESA Secretariat could make a proposal
for the sub-region of focus
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Eastern Africa appears well suited for the PP given multiple on-going regional initiatives in this
sub-region
4. Validation of the plan for the PP by stakeholders
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Development partners could be invited to participate
5. Inception of the PP
Strengthen ownership of the PP project among COMESA Secretariat bodies and MS as it develops
ECDPM
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Pilot: the partners!
Crucial for the creation and success of the pilot: the right mix
of partners:
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Governments
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Ministries of agriculture, livestock development, cooperatives, etc., national regulatory bodies (Kenya
Dairy Board, Dairy Development Authority of Uganda)
COMESA institutions
PPs: Regional/national farmers organisations (EADRAC, ESADA, Kenya Dairy
Producers Association, etc.), BDSPs, investors, supermarkets, transport
associations, clearing and forwarding associations, manufacturers, chambers of
commerce, companies active in VC or CAADP Investment Plan
Like-minded donors? NL/FMO, EC, USA, UK + multilateral: GAFSP, AfDB, WB,
Trademark EA, AFTF, Africa Enterprise Fund, Eif, AFIM, etc..
Banks/credit providers: Rabobank, DFCU,…
Research and B2B facilitators: ECDPM, AgriPro Hubs, Grow Africa, Kilimo Trust,
ILRI, EADD,…
Did we forget anyone? Existing initiatives you could share
with us? Any other comment is key for the pilot!
ECDPM
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Thank you
www.ecdpm.org/foods
ecurity
fr@ecdpm.org
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