Presentation on theme: "APEC CONFERENCE Strengthening Public-Private Partnership to Reduce Food Losses in the Supply Chain “Advancing Post-Harvest Technologies and Management."— Presentation transcript:
1 APEC CONFERENCEStrengthening Public-Private Partnership to Reduce Food Losses in the Supply Chain“Advancing Post-Harvest Technologies and Management to Reduce Losses in Rice Value Chains”Alfred Schmidley Scientist, Business Model and Value Chain SpecialistInternational Rice Research Institute (IRRI)Westin Hotel, Chinese Taipei6 August 2013
2 Agenda Overview: Reducing PH losses Advancing PH technologies – an integrated approachImproved technologiesBusiness modelsMulti-channel extension and deliveryMulti-stakeholder platformsHistorical lessons and recommendations
3 International Rice Research Institute Los Baños, Philippines MissionReduce poverty and hunger,Improve the health of rice farmers and consumers,Ensure environmental sustainabilityThrough research (& delivery) partnershipsEstablished in 1960 by the Ford and Rockefeller Foundations
4 Yield breakthroughs in rice production Yields approx.1.5 t/haFamines predicted, slow growthTodayYields approx. 4 t/haFoundation for economic growth低脚乌尖“semi-dwarf”Modern HYVs: more grain, less biomass, shorter durationsTraditional rice: more biomass than grain, high duration
5 Average Postharvest Losses Manual threshing 1-5%Sun drying 3-5%Cutting, handling 1-5%Open storage 5-10%Village milling 20-30%Small retailersMachine threshing 1-5%Combine harvesting 1-5%Mechanical drying 1-2%Sealed storage 1-2%Commercial milling 5-30%Large retailersCropConsumptionPhysical losses 15-25% in traditional postharvest chain in SE AsiaPhysical losses in mechanized postharvest chainLoss kehilanganPostharvest losses kehilangan pasca panenQuality loss kehilangan kualitasQuantity loss kehilangan kuantitasTo Weigh menimbangThe weight beratQuality mutu, kualitasQuantity kuantitasQuality losses resulting in 10-30% loss in value
6 Benefits of Reducing PH losses Increased resource efficiencyDecreased pressures on land and the environmentIncreased food security for the poor – more rice in rice bowls.Increased affordability of rice and price stability.Increased income for farmersIncreased livelihood opportunities
7 Advancing PH technologies and best practices Improved technologies and optionsBusiness modelsMulti-channel extension & deliveryMulti-stakeholder platforms / Learning Alliances
9 Common reasons Why technology fails to be adopted... Top-down approach to dissemination rather than “bottom up” market building (e.g., public sector programs that give away free equipment)Lack of “buy-in” from end-users, insufficient knowledge about technology use and benefits.Technology not adapted to suit local needs (i.e., “one size fits all ”)Focus on component technologies alone (w/o recognition of other needs or a clearly defined “business case” for adoption.)Attempts to outscale technologies w/o regard for building sustainable local supply chains.
10 …equipment graveyards are monuments to lessons unheeded
11 Technology Adaptation Needs Locally producedCentrally producedFlat bed dryerLaser land levelingHermetic Super bagCharacteristicsSimple technologyComplex processesMajor Support NeedsTechnology transferIndustrial extensionMachinery testingDemonstrate benefitsCapacity building (users, manufacturers)Business models for usageCharacteristicsComplex parts (laser)Local content (bucket)Major Support NeedsDemonstrate agronomic benefitsEstablish supply chainIndustrial extensionBusiness models for usage and deliveryCharacteristicsMass producedVery simple or very complex (SB, combine)Major Support NeedsEstablish supply chainSupport services (training, after sales)RegulationsEconomic analysisThere is no “one size fits all”M.Gummert, 2012
12 Feeding the Technology Pipeline A.Salvatiera, 2012
14 Postharvest “system” Business models Rice markets Farmers DistributorRetail DealersService / RepairComponentSuppliersFabricatorOther “value creators”ResearchExtensionNGOs & community organizationsBanks/MFIs/financePolicy-makersImproved technology optionsBusiness modelsValue chains (postproduction and technology supply)Other cross sector value creatorsBusiness modelsRice marketsProductionHarvestingThreshingDryingStorageMillingFarmersService providersTradersMillers
15 Business Model Workshops: What is a business model? What for? How one can be used? Why?
16 A Tale of Two Dryers…Left: Defunct dryer Right: Functioning dryer Both dryers were installed about the same time supported by public sector donor monies. The left one now defunct was grouped-owned by a local farmers cooperative and remains unoperable and unused. The right one was taken over by a single farmer-entrepreneur who now owns and operates a thriving contract services business (based on a Learning Alliance supported Business Plan) As an unexpected outcome, two farmers trained to install and operate the now dyfunct dryer earn money by helping millers and others install theirs! (Source: A. Schmidley IRRI PH Project, 2011)
17 Multiple uses of a business plan Analyze my farm enterpriseEvaluate a new activity (technology or practice)Communicate one’s business to stakeholdersAttract resources and addt’l capital if neededGuide implementation, manage riskBUSINESS PLANforPADDY DRYING SERVICESMr. Koul SavoeunEntrepreneur & Cooperative HeadMobile:Balat Meaychey Agriculture Development CooperativeBalat Village, Norea Commune, Sangke DistrictBattambang ProvinceJan 2012Key learnings:MFIs: Need to offer flexible loan products and services to expand in this key target segment.Farmers: Important of cash flow in a seasonally fluctuating business.Research & extension: integrate actor resources & technical support minimizes risk & benefits of all parties.
18 Cambodia Highlights – Business Forums Identified areas for collaboration:Assist existing MFI clients with technical and other support to optimize efficiency and profitability of PH enterprise (& minimize risk).Train MFI staff about PH technologies & opportunities with business plans from actors.Learning activities to increase financial and market literacy so rural actors can manage loans and new enterprises.
19 A Business Model approach.... Treats farmers as private sector actors trying to maximize profits from farm enterprise activities.Looks at the end-user’s enterprise model to make a “business case” for adoption (not just “disseminating” technology).Translates technical benefits into a quantifiable “value proposition” for end-user purchase of technology. (No free or unsustainable giveaways beyond demo or piloting.)Addresses both “production” and “technology supply” value chains. (e.g., linking retailers to participatory trials and farmer demand for technologies.)Leverages shared learning and integration of actors. (e.g. Learning Alliance helps facilitate learning and outscaling activities with the private sector – though this is a work in progress!)19
21 Multi-channel extension and outreach: Hermetic Storage 5 t CocoonPrinciplesContainer with low oxygen permeabilityBiological activity inside reduces oxygen quicklyInsects die at low oxygen levelContainer prevents moisture absorption
22 Participatory trials and data collection: Farmers and local extension/outreach partners
23 Philippines highlight “As we can see (right), Super bags purchased for P100, times 6 bags is P600 for the first season. During my trial, I stored seed for 3 months, and my germination rate improved from 82% to 94% for Super bag stored seed. As a result I saved P1,224 in seed next planting. This is my profit and much more than cost of the Super bags which I can re-use w/o buying again next season, increasing my profit even more.”Marilyn Aranas, female farmerButuan, March 2012
24 4. Multi-stakeholder Platforms and & Learning Alliances
25 National Learning Alliances – a work in progress) Multi stakeholder platform including key public and private stakeholdersPlanActReflect and captureFlexible partnership allows new partners to get on boardLeverages co-fundingCaptures learning and makes it available to othersLA is cross-cutting (technologies, business models, extension/delivery, private sector)Source: R. Flor, T. Mendoza, IRRI, 2011
26 Outscaling & cross-country learning: Combine harvesting Vietnam: approx 8,000+ combines in the MekongCambodia PH Learning AllianceResponse to labor shortage and high harvesting costPhysical losses reduced from 4-10% to 1-2%Timeliness -> Better quality
27 Improved Postproduction Management = Reduced Losses, Reduced Risk and Reduced Cost Cambodia 2012Cambodia 2007Extreme labor shortageIncreased productionDelay in harvestingLossesBurned rice fields (2009)Labor cost of manual harvesting: US$ 160No combine harvestingPrey Veng Province, 2012Combine harvesting cost: US$(Manual harvesting cost: US$ )Losses reduced to 1-2%Improved qualityEmployment generation: Contractors,service providers, workshops2000 plus combine harvesters, all typesM.Gummert, 2012
28 Flat Bed Dryers: Key issues Local production (assist local workshops with technical support)Adaptations (up scaling)Performance testingFinancing (users)Operator trainingMulti-extension pathways neededPublic sector can play a key role here!M.Gummert, 2012
29 Will Project cycles limit sustainable development & delivery Will Project cycles limit sustainable development & delivery? Example: Processes for flat bed dryer development, CambodiaTesting of recirculating dryerBusiness model development for farmers groupProject installs 4t demo unit at farmers groupBlower testing trainingDryer manuf. training in Vietnam, technology transferProjectLinking with financing institutionsPromotionTraining for usersNew rice husk furnace2007200820092010201120122013Manufacturers increase capacity to 8-20t, problems with blowerEnd-users experiencingtechnical problems outscaling. Support?Local manufacturer starts productionLocal manufacturersLocal manufacturer develops next generation dryer(recirculating dryer)Other manufacturers copy, millers install dryersDryerusers13~20~200Farmers groupsCommercial useCommercial and contractM.Gummert, 2012
30 Summary & Recommendations Component technologies are needed but insufficient for sustainable adoption. (A better functioning “systems approach” is needed.)Each sector should stick to their respective mandates. Public sector giveaways don’t work. PPP’s should NOT be about govt going into business.Group ownership of equipment by farmers hasn’t worked. These tend to go hand-in-hand with public programs for free or heavily subsidized equipment. This distorts agro-machinery markets, retards sector development, and limits choices and options available to actors.Technology adaptation is important to suit local needs (i.e., “one size doesn’t fit all”). Technical support for local manufacturers is essential.
31 Summary & Recommendations (cont’d) 5. Local product champions are often linked to successful technology advancement (e.g., farmer leader, researcher, NGO) who stay involved or “stick with” the longer process.)6. Building sustainable supply chains are necessary for sustainable outscaling and delivery. “Push-and-pull” approaches work best.7. Multi-stakeholder platforms can facilitate learning, sharing lessons, and integration of actors around a range of needs. (technical adaptation, piloting business models, building supply chains, private sector engagement, and cross-country learning.Time needed for advancing technologies and sustainable adoption is around 10 years if history is any indication. Short-term (3-5 year) project cycles generally result in local actors/stakeholders “falling away” mid-stream or before commercially sustainable thresholds are crossed.