Innovative Practice

The Innovative Practice Series of the Regoverning Markets programme are 30 different case studies providing examples of specific innovation in connecting small-scale producers with dynamic markets at local or regional level.

Selection

Based on significant fieldwork activities, the variation of the following four factors was critical in selection of the case studies:

1. Stage of Restructuring - countries in different stages of market restructuring;
2. Procurement Systems that vary in their stage of development
3. Forms of Inclusion in chain development
4. Drivers for Inclusion - highlighting the role of different drivers for inclusion

Content

Across the case studies the following common questions are asked:

1. The innovation and its context: What are the main characteristics of the innovation and its immediate context, both at the level of the supply chain and of directly relevant meso and macro trends, policies and institutions?
2. Evolution: How did the innovation emerge over time and how did its evolution lead to greater inclusion of small-scale farmers and/or rural SMEs? What were the key incentives faced by small-scale farmers? What were the critical stages and the critical factors in the evolution of the innovation?
3. Evidence of inclusion: What are the costs and benefits of the innovation, and how are they distributed across different actors in the supply chain? What is the evidence of effectively greater inclusion of small farmers and/or rural SMEs, as a result of the innovation? What did the small farmers and/or rural SMEs gain or loose? Are these results sustainable?
4. Drivers: What explains the greater degree of inclusion? What were the key drivers in terms of policy principles, business models, collective action and support systems?
5. And now what...? What is the potential for upscaling or replication? What are the key challenges?

The studies highlight policy lessons and suggest working methods to guide public and private actors.

A brief description of each Innovative Practice study is given below along with a link to the executive summary and full report download.

Innovative practice in connecting small-scale producers with dynamic markets: synthesis report

 

 

 

 

Innovative Practice China: Case Studies of Carrefour's Quality Lines

Carrefour entered the Chinese market with an innovative demand: the adoption of quality lines. The quality line is the control and supervising line conducted on raw and fresh agri-food. The standards are set from planting, processing and circulating in order to guarantee the quality and safety of products. To better control production Carrefour gives training and assistance to farmers along with a strong coordination of quality standards. Because small scale farmers are difficult to control, Carrefour works mainly with large scale farmers.

 

Innovative Practice Kenya: Access to high value markets by smallholders of African indigenous Vegetables

The collective action by small-scale farmers in Githunguri area (Central Kenya) started in 2001 when FAO through Farmers' field schools organized farmers and provided capital that could support farmers in training on various enterprises or opportunities. The groups were formed as a bargaining platform for the poor small-scale farmers, who were being exploited by the brokers and traders in the local markets. Following poor performance in floriculture, the farmers in 2004 explored other avenues with the help of a development agency, Family Concern. As a result of all these efforts, the supply of the African indigenous vegetables to the major supply chains has increased dramatically.

Innovative Practice Hungary: Successful cooperatives in the Hungarian poultry sector

This case study is about an agricultural cooperative, AVIUM, and a poultry processing cooperative, AVIUM 2000 in the Besnyő village, Hungary. AVIUM agricultural cooperative is a "new type" purchase and marketing cooperative. It was founded in 1993 - after the new cooperative law came into force - to reduce costs and offer agricultural related services. AVIUM had the aim to concentrate the supply of live chicken and to organize the joint procurement of inputs. However, in the region of AVIUM small-medium sized processors were not present. To fill this market niche and to acquire the market security and profit surplus, five members of the agricultural cooperative established in 1999 AVIUM 2000 poultry processing cooperative.

 

Innovative Practice Guatemala: The experience of small producers in competitive markets - a case study of OPCION/Aj Ticonel

The alliance OPCION / AJ-TICONEL in Guatemala develops coaching activities in productive, commercial and organizational processes with the aim to generate increased economic returns and improved living conditions for smallholder farmers in extreme poor regions. The main activity consists in the commercialization (at both national and international level) of non-traditional vegetables. The innovation was developed through combined action of the NGO OPCION and the private business Aj Ticonel, both founded in 1999.

 

Innovative Practice Pakistan: A case study of mlk production and marketing by small and medium scale contract farmers of Haleeb Foods Ltd

Pakistan is the fourth largest milk producer in the world. About a third of the total milk produced by the rural families flows out to urban consumers and processing industries. In urban areas milk is available to common consumers in two ways: loose / unprocessed milk and packed / processed milk. Dairy companies such as Nestle and Haleeb are the main part of milk marketing structure. Haleeb Foods Limited (HFL) is a local company that is at the forefront of product and packaging innovation.

 

 

Innovative Practice South Africa: The inclusion and empowerment of farmers through partnerships - the case of Thandi fruit and wine

The case study of Thandi Fruit and Wine in South Africa shows that farmers were in need of support to meet the needs of the market. Vineyard and orchard skills were not enough to launch a successful farming operation. As a response, Thandi was built on a new business model based on empowerment through partnerships. It was started in 1996 by a farmer in the Elgin region of the Western Cape, Paul Clüver. The Thandi empowerment concept was based on an innovative business model. The fruit and wine were to be sold at the top end of the price ladder (as a brand) and in international markets. Although originated on empowerment farms, the products would have to stand or fall on the basis of their quality.

Innovative Practice Sri Lanka: Integrating small farmers into dynamic supply chains - case study of Ma's tropical fruit company

The traditional supply chain of spices in Sri Lanka consists mainly of small scale producers. Over 200,000 small scale growers are involved in spice cultivation where 70% of production comes from small holder farm units of less than 1 ha of land. Many of them are part time farmers with other sources of income. Only a small group of producers have commercial orientation and are willing to improve productivity. Because of this lack of investment, the supply chain has some fundamental problems that need to be dealt with: 1) purchasing is decentralized; 2) the quality of products is low; 3) there is a strong presence of middle-men in the chain. These limitations are affecting the competitiveness of smallholders who grow spices for the domestic and export markets.

Innovative Practice Hungary: Morakert Cooperative - a successful case of linking small farmers to markets for horticultural produce in Hungary

The case study is about Mórakert Purchasing and Service Cooperative, in Mórahalom town, Hungary. Approximately 75 per cent of the population of Mórahalom is involved in agriculture. The most important crops are vegetables, the basis of commodity production. The Mórakert cooperative is active in the vegetable and fruit sectors and it was the first officially acknowledged Producers' Organisation (PO) in Hungary. It works as a successful cooperative in terms of increasing annual turnover and membership. The members of Mórakert coop are organized small-scale farmers. The average land size of the members is 25 hectares, whilst 31% of them rent extra land. 88% of members use family labour, whilst 48% employ paid labour. On average, members joined the cooperative 4 years ago.

 

Innovative Practice Brazil: Brazil Access of family farmers to biodiesel markets 

The force of national, and increasingly, international interests linked to sugarcane importance and expansion seem to confirm the prediction made in Foreign Affairs magazine that the history of the industrial demand for agricultural products in developing countries benefits the largest producers. Nonetheless, parallel to the expansion of the alcohol plants, the Brazilian government has begun to implement a policy that supports the production of biodiesel. In contrast to the policy for the national supply of alcohol from sugarcane, the National Program for the Production and use of Biodiesel (PNPB) is clearly aimed at integrating family farmers into the production of biofuels and, as a result, contributing to their ability to generate income.

Innovative Practice China: Collective action by small-farm households in big markets- Ruoheng farmer watermelon cooperative

This paper chose the Ruoheng farmer watermelon cooperative to research, and analyses the institutional innovation that they have made to meet the challenges of large markets as a participant in the supply chain.

 

Innovative Practice Philippines: The case of NorminVeggies in the Philippines

This case discusses the strategies of a group of farmers called the Northern Mindanao Vegetable Producers' Association or NorminVeggies, who were able to successfully market their products by using a business model not previously used in the Philippine vegetable industry. Its organizational structure and marketing clusters enabled the farmers to be responsive to the constantly changing market.

 

 

Innovative Practice South Africa: New trends in supermarket procurement systems - The case of local procurement schemes from small-scale farmers by rural-based retail chain stores

In contrast to the centralized fresh produce procurement systems of South African ‘retailers relying on preferred commercial suppliers, this paper draws on an in-depth analysis of the innovative procurement schemes of two rural-based supermarket chain stores in the Limpopo Province to source fresh vegetables locally from small-scale farmers. The objective is to derive lessons to guide public and private sector actors in promoting greater participation of small-scale producers in dynamic supply chains, through the exposure of the key drivers and success factors affecting the inclusion of small-scale vegetable farmers.

 

Innovative Practice Philippines: Keys to Inclusion of Small-Scale Organic Rice Producers in Supermarkets - The Case of Upland Marketing Foundation Inc.

This study examines a case of successful linkage of small organic rice farmers to supermarkets. These small-scale farmers have tapped opportunities brought about by the changing markets in the Philippines where supermarkets continue to improve patronage from consumers who demand convenience as incomes improve and lifestyles change.  This was possible through the innovations and strategies made by Upland Marketing Foundation, Incorporated (UMFI) who acts as marketing consolidator for supermarkets buying from organized groups of organic rice farmers such as the Pecuaria Development Cooperative, Incorporated (PDCI). 

 

Innovative Practice Bulgaria:  Inclusion of small scale dairy farms in the supply chain in Bulgaria - a case study from the Plovdiv region

This paper presents a business model for an effective market inclusion of numerous small scale dairy farms from the Plovdiv region developed by a private entrepreneur. The "Dimitar Madzarov" Ltd dairy was set up in first years of the transition and successfully modernised up to the highest industry standards.  This enterprise has managed to adapt to the dynamic market and institutional environment, effectively governing relations with supplying farmers and downstream partners.