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Partnerships for enhancing Market-led Innovation processes

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Partnerships for enhancing Market-led Innovation processes

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    Partnerships for enhancing Market-led Innovation processes

    Experiences and Lessons from IPMS Ethiopia

     1211Ranjitha Puskur, Ponniah Anandajayasekeram, Kahsay Berhe and Dirk Hoekstra

     1 Improving Productivity and Market Success (IPMS) Project, ILRI, Addis Ababa 2 IFPRI/ISNAR ILRI, Addis Ababa

    Paper Presented at the ‘Innovation Africa Symposium’, Kampala,

    20-23 November 2006

    1 IPMS, ILRI, PO Box 5689, Addis Ababa, Ethiopia. Corresponding author, email: r.puskur@cgiar.org

Partnerships for enhancing Market-led Innovation processes Experiences and

    Lessons from IPMS Ethiopia

    Abstract

    The IPMS project proposes to ‘contribute to improved agricultural productivity and production through market-oriented agricultural development, as a means for achieving improved and sustainable livelihoods for the rural population’ in Ethiopia. To accomplish

    this goal the project supports development and (action) research on innovative technologies, processes and institutional arrangements in three focus areas i.e. i) knowledge management ii) innovation capacity building of public and private sector partners, farmers and pasoralists; iii) market oriented production technologies and input/output marketing and financing; contributing to evidence-based policy making to support innovation processes and capacity development.

    Adopting the Innovation systems perspective, the project acknowledges multiple sources of innovation and the critical role of institutions. The activities deploy the use of partnerships and linkages along the value chain to promote complementary investments in necessary areas and sectors to generate innovations and impact. Innovative approaches to production, NRM, technology adaptation and delivery, service delivery, marketing and, institutional change, linked to market demands and the capacity of the communities and its individual members to handle such innovations in a sustainable manner are being introduced and adapted in pilot sites. Learning from these experiences is an integral aspect to draw lessons for scaling up. This paper summarises the experience of IPMS in developing and nurturing innovative partnerships and lessons learnt, to date.

Key words:

    Ethiopia, Innovation system, partnerships, knowledge, linkages, market-orientation, process, technology, service delivery, institutions

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    Partnerships for enhancing Market-led Innovation processes

    Experiences and Lessons from IPMS Ethiopia

1. Introduction

    In Ethiopia, 84% of the estimated 70 million people live in rural areas and depend on griculture for their livelihoods. The sector contributes 41.4% of the Gross Domestic a

    Product of the country. The average cereal yields are low at 1244 kg/ha (World Bank 2006b). Livestock productivity is lower than most other countries in sub-Saharan Africa. The use of improved agricultural technologies is limited and mechanisation is negligible. As a result, average per capita income is estimated at USD 110 per annum, with about

     of the rural population living on income below the poverty line of one USD per day 45%

    (World Bank 2006b). Many rural families suffer from chronic food insecurity and are extremely vulnerable during periodic drought. Inefficient and inappropriate use of soil, water and vegetation contribute to degradation of Ethiopia’s natural resources (IPMS 2004).

    Ethiopia, which was a net exporter of grains and legumes about half a century ago, is now confronted with the challenge of keeping food production at pace with its population growth, preventing declining per capita food production, and reducing its dependence on food aid. Despite demonstrated potential to boost agricultural production, sustaining productivity increase has not been achieved (Gebremedhin et al. 2006). The agricultural

    imports still exceed exports resulting in a trade deficit of 43 million $ in 2004. The agricultural growth rates actually fell from 2% during 1990-99 to 0.9% during 2000-04. The crop production index in 2004 was 110 and that of livestock, 116 with food production per capita increasing to only 102, all from a base of 100 in 1999-01. Only 2.5% of the cultivated land is irrigated (World Bank 2006 b).

    Ethiopia adopted an Agricultural Development-led Industrialization (ADLI) strategy, which initially focused on food crops and NRM. More recently, the country has added market orientation to this strategy (Gebremedhin et al 2006). Increased availability and

    utilisation of appropriate technologies, an effective and efficient service delivery system and, sustained demand for the agricultural outputs are critical in such market-oriented agricultural development efforts. However, the infrastructural development is also rather limited which is a major bottleneck. Only 17% of the rural population lives within 2 km of an all season road and only 0.4% has access to electricity (World Bank 2006 b). However, Ethiopia is embarking on a huge rural electrification scheme currently (http://www.eepco.gov.et/).

    A number of key ingredients are necessary for achieving market orientation and also making this process inclusive. Innovation, defined here as putting available knowledge from multiple sources to economic use, is critical for this to happen. Partnerships are vital for innovation processes. This paper looks at the case of an on-going project in Ethiopia which has been designed to develop options in support of the government strategy on agriculture for accelerating the transformation. The project has been in operation only since 2005 and the lessons are just emerging. The role of partnerships for market-led

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    innovation in selected sectors for development of priority marketable commodities and the lessons learnt so far will be the focus of this paper.

2. The policy context and strategies for attaining market orientation

    The overall development strategy of Ethiopia is based on the expansion of a strong free market economic system with markets expected to lead production. Technology development and Extension, markets and the demand side development, Institutional competence and performance and, integrated and co-ordinated service delivery are some strategies which are crucial to making market orientation of agricultural sector a reality (Puskur and Hagmann 2006).

    The government strategy envisions that the technological interventions will be agro-ecology based and the major source will be adaptive research of existing technologies developed by the national and/or international research systems. As a long-term target, the strategy envisions the creation of educated farmer population, through primary education and the use of Farmer Training Centers (FTCs).

    In support of the market oriented strategy, the MoARD has embarked on developing a strategic plan for export market oriented crops (wheat, barley, tef, lentil, chickpea, faba and haricot beans, cotton, sesame, coffee and spices) and livestock (dairy, meat, poultry, apiculture, sericulture, fisheries, skins and hides) commodities. Reflecting the importance attached to agricultural marketing, the Government has embarked upon major institutional restructuring in order to strengthen agricultural production and marketing under the Ministry of Agriculture and Rural Development (MoARD). Initiatives include the appointment of the State Minister for Agricultural Marketing and reorganization of marketing responsibilities within the regional bureaus. The Government of Ethiopia (GoE) also established the Ethiopian Export Promotion Agency (EEPA), which is now a Department in the Ministry of Trade and Industry. In addition to the various Federal organizations that are mandated with agricultural marketing support services; some regional states have established regional level agricultural marketing support agencies. Several options are being promoted by the government to increase the farmer’s income from marketing and processing, including the formation of cooperatives and better access to market information. The role of the MoARD in facilitating the provision of information at the farm level is still to be developed.

    Even though the Government has market orientation as a goal for its agricultural sector, no specific strategies have been put in place or elucidated which will help the country and the sector attain that goal. Most past development efforts have been geared to increasing food production within an institutional framework which had a high degree of control by government institutions with no approach to actively include private sector and other players. The macro level policy, not supported by activities at the ground level, has not made much headway and it has remained a rhetoric.

    The country has witnessed several efforts in this direction from various quarters, despite this shortcoming. Ethiopian research in the past decade has become responsive to market

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    demands and has started developing/testing varieties which are suitable for the export market. The role of farmers in the generation of new technologies was duly recognized by researchers and the former have become major partners in technology development processes. However, mainstreaming of these ideas through the extension system left much room for improvement, especially since the package approaches introduced by the MoARD did not offer much scope for learning.

    In the last two years, a range of changes in the institutional and external environment have begun to take place. For example, rural extension services are on the threshold of a major shift in extension service delivery through the Farmer Training Centre (FTC) system. To equip the FTCs (one planned in each peasant association) with adequate skilled human resources, the government started the Agricultural Technical and Vocational Education and Training Institutes (TVETs) and the graduates are now populating the FTCs as development agents in each peasant association. This presents a huge opportunity but also poses a major challenge as these institutions also need to transform to be able to successfully implement an alternative, market-based approach to agricultural development. Rethinking the role of the extension services to support the goal of achieving market orientation is vital.

    A necessary and integral part of the technology introduction services is the provision of improved inputs/services such as seeds, seedlings, agro chemicals, drugs, veterinary services, heifers, artificial insemination, credit, production and processing tools. Most of these inputs were supplied through the agricultural offices linked to the packages. While this has contributed to the development of agriculture, several sources indicate that improved inputs/services are usually in short supply and delivery is often untimely. Government policy is now stimulating diversification of input/service provision, involving private sector (Gebremehin et al 2006, Azage et al 2006). This shall also

    require enhancing the capacity of the small input producers/suppliers.

    Though there have been several efforts on various fronts, they are not co-ordinated and have not led to perceptible impact. The challenge, therefore, is to develop a knowledge-based system which is capacitated and responsive to markets with linkages between different partners in development and improved development processes, including technology introduction, and input/output marketing to facilitate the development of marketable commodities.

    Recognising this and to support the government initiatives, the MoARD embarked on the ‘Improving Productivity and Market Success (IPMS)’ project for Ethiopian farmers, which is donor-supported and implemented by the International Livestock Research Institute (ILRI) on behalf of the MoARD. This Research for Development project is presently being implemented in eight woredas (equivalent of districts) in four regions in the country, which vary widely in their demographics and cultural contexts.

3. Piloting options for learning The IPMS project

    The IPMS project proposes to ‘contribute to improved agricultural productivity and

    production within functional market-oriented agricultural production systems, as a means

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    for achieving improved and sustainable livelihoods for the rural population’. This is aimed to be achieved through a multi-pronged strategy with activities that, a) strengthen innovative knowledge management systems, b) strengthen capacity of men and women farmers, pastoralists, CBOs, public and private agricultural institutions c) improve productivity and production through introduction of innovative technologies and service delivery systems d) develop strategies, policy, technology and, institutional options from research and lessons learned.

    The objectives of the project reflect its focus - generating knowledge on how to use knowledge from multiple sources better for translation into economic benefits for farmers, with capacity strengthening of both institutions and individuals as the major plank. The project intends to draw lessons (both context- and location- specific and also generic) for institutional, technology and policy options in various contexts from this experience.

    The project adopts the Innovation systems approach as its organizing principle. It essentially acknowledges that there are multiple sources of innovation which include the traditional sources (indigenous technical knowledge); modern actors (NARIs, IARCs, other RIs), private sector including agro-industrial firms and entrepreneurs (local, national and multinationals); civil society organizations (NGOS, farmers and consumer organizations, pressure groups); and those institutions (laws, regulations, beliefs, customs and norms) that affect the process by which the innovations are developed and delivered. The project focus is on analyzing how knowledge is exchanged and how institutional and technological change occurs in a given society by examining the roles and interactions of diverse agents involved in the research, development and delivery of innovations at all levels. Recognising the critical role of capacity strengthening, the project is striving to understand the appropriate strategies for capacity strengthening of different actors to increase the responsiveness and innovativeness of the system. The IPMS project deploys use of partnerships and networks in an Innovation Systems framework, along with promotion to encourage complementary investments in necessary areas and sectors to generate impact. New and/or innovative approaches to production, NRM, technology transfer, input supply, credit and output marketing are being introduced and adapted. Such innovations are linked to market demands and the capacity of the communities and its individual members to handle such innovations in a sustainable manner.

4. Interventions for market-led agricultural development

    The following steps were followed in identifying interventions to be taken up by IPMS to develop market-orientation.

    a. Initial consultations were held with partners from the Ministry of Agriculture at

    Federal and Regional levels and Institutes of the Ethiopian Agricultural Research

    System to identify potential woredas for the project operation and marketable

    commodities in each of these.

    b. An assessment of the biophysical situation of the woredas was taken up and two

    farming systems per woreda were delineated. A preliminary study of institutions

    engaged in marketing, input supply, rural finance, Extension and, Gender and

    HIV/AIDS service was undertaken. The state of NRM and environmental issues

    were also addressed in this study.

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    c. Priority commodities to be targeted for market-oriented development in the two

    farming systems (Table 1) were then identified in most PLWs through

    consultation with the Federal, Regional and Woreda stakeholders in each of the

    Pilot Learning Woredas (PLWs).

    d. A Participatory Rural Appraisal was employed to understand the production,

    input supply and marketing constraints with regard to each of the selected priority

    commodities. Potential interventions were identified to address these constraints

    along with a preliminary identification of partners who could help address the

    problems.

    e. These options were then discussed in a workshop with stakeholders which

    included farmers. They were then modified/refined/enhanced based on feedback

    received and accepted as directions for the project to implement.

    This exercise resulted in a specific set of interventions spanning key areas like technology development / introduction, input supply, marketing and, capacity building for each of the priority commodities in each of the woredas following a commodity value chain approach, based on the constraints to be released and the local context and potential partnerships. The range of commodities in the eight woredas for the different farming systems and the broad areas of intervention for these sets of commodities are presented in Table 1.

Table 1 Priority commodities and areas of intervention in IPMS PLWs

     PLW Farming Systems Priority commodities Broad areas of intervention

    Ada 1. Teff & Livestock Teff, Wheat, Chickpeas, Lentils, vegetables, Capacity building, marketing support (chickpeas), farmer-based

    beef, Shoat meat, poultry, honey input supply, introduction of new dairy technologies

     2. Teff & Dairy Teff, Wheat, Chickpeas, Lentils, vegetables, Capacity building, marketing support, farmer-based input

    fruits, milk, butter, beef, poultry supply system, introduction of new technologies

    Mieso 1. Crop & Livestock Sorghum, Sesame, groundnuts, haricot Capacity building, farmer-based input supply system,

    bean, chickpeas, Vernonia, hot pepper, introduction of new crops and varieties,

    vegetables, fruits, Dairy, beef, shoat meat,

    poultry

     2. Pastoral Shoats (goats) Capacity building

    Alaba 1. Teff, Haricot Bean Teff, Haricot bean, Vernonia, Vegetables, Capacity building, farmer-based input supply system,

    & Livestock butter, shoat (Sheep) meat, poultry, honey introduction of new crops, NRM, market facilitation

     2. Pepper & Hot pepper, wheat, Vernonia, Poultry, Capacity building, farmer-based input supply system,

    Livestock Goats, Butter, Honey introduction of new crops, NRM, market facilitation

    Dale 1. Coffee & Coffee, fruits, spices, milk, butter, poultry, Introduction of native coffee variety, marketing studies (fruit,

    Livestock small ruminant fattening dairy), Introduction of new crops (pineapple), farmer-based

    input supply system, NRM, alternative draught power,

    sustainable vet service delivery system

     2. Beans & Livestock Haricot bean, vegetables (onion), butter, Marketing studies, introduction of new crops and varieties

    milk, hide & skin, shoat meat, poultry (haricot bean), alternative draught power, Animal health,

    Fogera 1. Rice & Livestock Rice, chick peas, noug, vernonia, hot Capacity building, introduction of new varieties & irrigation

    pepper, vegetables, milk, butter, beef, hide systems, input supply (dairy, onion), market facilitation

    and skin, poultry, fish (onion), animal health, Production and marketing studies (fish)

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     2. Cereal & Hot pepper, vegetables, noug, dairy, beef, Capacity building, input supply (Rice seed),

    Livestock poultry, honey

    Metema 1. Cotton, Rice & Rice, sorghum, Sesame, vernonia, hot Introduction of new crops and varieties, alternative draught

    Livestock pepper, vegetables, fruits, cotton, milk, power and tillage systems, farmer-based input supply system,

    butter, beef, shoat meat, poultry capacity building

     2. Sesame, Cotton, Sesame, Cotton, hot pepper, fruits, butter, Introduction of new crops, varieties, Alternative draught power

    Sorghum & beef, shoat meat and tillage systems, farmer-based input supply system, capacity

    Livestock building

    Alamata 1. Cereal & Hot pepper, sorghum, teff, sesame, Capacity building, introduction of new crops (vernonia,

    Livestock vernonia, vegetables, fruits, milk, butter, sesame), feed resources management (urea treatment), natural

    beef, shoat meat, poultry, hide and skin resources (reclamation),

    Atsbi 1. Pulse and Faba bean, field peas, lentils, vegetables, Capacity building, introduction of new crops (forages, onion),

    Livestock highland fruits, milk, butter, hides/skins, NRM, Organisation of coops

    shoat meat, poultry, apiculture (queen

    rearing)

     2. Apiculture and Vegetables, fruits, butter, hides/skins, shoat Capacity building, introduction of new crops (forages, onion),

    livestock meat, poultry, honey NRM, Organisation of coops

5. Analysis of Partnerships

    To enable the interventions, various partnerships were forged in the PLWs for different

    commodities, based on the felt needs. To analyse the partnerships and innovation processes until now, this paper will focus on some specific cases which mainly address

    major areas of intervention as presented in Table 2.

    Table 2 Selected cases of commodities and areas of intervention for analysis S.No. Pilot Woreda Commodity Area for intervention Partners 231 Metema Banana Product/variety OoARD, Woreda cabinet, banana

    introduction growers, banana sucker suppliers,

    chemical suppliers, IPMS

    2 Fogera Onion seed Farmer-based seed supply OoARD, ARARI, BoARD inputs

    system development and department, farmers, outgrowers,

    policy IPMS

    3 Ada Dairy Marketing Ada Dairy co-op, Dairy producers

    group, OoARD, ILRI, EIAR,

    Genesis Farms, microfinance, IPMS

    4 Alamata Fattening Production and marketing OoARD, Woreda administration,

    Women’s Associations, Youth

    Associations, Abergele PLC,

    Microfinance, TARI, IPMS

    2 The line departments of the Ministry of Agriculture and Rural Development (MoARD) at the Federal level include the Bureaus of Ag and Rural Development (BoARD) at the Regional level and the Offices of Ag and Rural Development (OoARD) at the woreda level. 3 The Woreda cabinets are administrative and political bodies which are responsible for the woreda level administration. These include representatives from various line departments charged with development at the woreda level.

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These cases have been selected based on some criteria including:

    ; Reasonable duration/time elapsed after introducing interventions

    ; Representing different areas of intervention

    ; Representing crops and livestock

    ; Involving a broader stakeholder spectrum

    A brief description of the intervention and the nature of innovation are in order at this stage.

    Metema Banana: A specific variety of banana (Cavendish dwarf) is in demand in the local markets within the and outside of the district and the supply comes from areas in the South of Ethiopia. The agro-ecology was found to be suitable for production of this variety. However, technical know-how and genetic material were not locally available. This required facilitation to access inputs in the form of suckers, training in production and management and, linkage creation for marketing.

    Fogera onion: Onion is a crop with expanding markets and fetches high prices in Fogera and nearby areas. Fogera plains with their irrigation potential offer a huge advantage for vegetable production. Farmers responded to the market signals and have been intending to expand their onion production after harvesting rice. However, obtaining good quality planting material (seed and bulbs) in time and in required quantities has been difficult due to limitations in the OoARD’s input supply system. The farmers who were members of

    co-operatives had a marginal advantage with the union supplying some amount of seed. A rapid market assessment also revealed the huge market for onion seed locally and in the Region. A strategy was then formulated to develop a farmer-based onion seed supply system, with various actors coming together. This included training in onion seed production, marketing and seed business; accessing better varieties of onions and; creating market linkages.

    Ada Dairy: The dairy co-operative in Ada is the largest in the country. However, all its members are from the town in which it is located or from the peri-urban areas. Presently the cooperative has a plan to expand its operation which will require a substantial increase in the amount of milk supplied to the co-operative. There is a considerable amount of milk production with some crossbreds in rural areas around the town. The local markets could not absorb the milk produced by these dairy farmers, most of whom were women. They churned the milk to make butter and then sold it in nearby towns at any price that was offered. Their returns did not justify their labour and management investments. The women farmers said they regulated the amount of fodder they provided to their cows to control milk production to reduce the time they spent in churning the milk. Recognising this opportunity, interventions were initiated to organise these farmers and link them to the co-operative to make them members leading to establishment of local milk collection centers, training in modern dairy production and management to improve quality and quantity of production and, establishment of privately managed bull station to contribute to breed improvement and increased milk production in the area.

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    Alamata fattening: Abergele International Private Limited Company (AIPLC) established a holding area in Alamata, with some production facilities to contribute to its meat exporting activities. The PLC intends to capitalise on the high livestock population in Alamata and neighbouring woredas and seeks to develop contract farming. Realising this opportunity, a platform was created to facilitate this. This is the youngest intervention among the cases being studied, but appears very promising. The OoARD sees a huge opportunity for its farmers, in this food insecure woreda through livestock development. Strategies are being developed and implemented including mobilising farmers and facilitating groups for contract farming, training in modern fattening practices, feed resources development and management.

    The form of innovation in these cases and the triggers are summarised in Table 3.

Table 3 Type of innovation and Innovation triggers

     Metema Banana Fogera Onion Ada Dairy Alamata

    Fattening

    Form of Opportunity Opportunity Opportunity Opportunity

    innovation driven driven driven driven

    Phase of Emergence Emergence Emergence Nascent

    innovation

    Market triggers Local demand High prices for Expansion plans Establishment of

    for better onion, expanding of dairy a export-oriented

    varieties production and cooperative, private company

    high demand for high local

    seed demand from co-

    operative,

    increasing

    number of

    private

    processing plants

    Policy triggers None None None Government

    policy to support

    increased meat

    exports

    Knowledge Knowledge of Awareness of Presence of Awareness of

    triggers the variety in private seed strong dairy fattening

    other regions and production research and practices

    suitability of practices and experience

    agro-ecology systems in other

    areas

    Resource triggers None None Availability of Technical

    excess milk and support from

    expanding reach PLC

    of Dairy co-

    operative

    Context: factors Acquaintance Market Presence of Personal linkages

    interacting with with growers in availability biggest dairy co-with the staff of

    triggers other regions operative in the private company

    country, research

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