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Using sub-sector analysis for improving tree seed systems
Jens-Peter Barnekow Lillesø
Transforming
countriesUrbanizedcountries
Rural poor/total poor
Agriculture’s contributionto growth 1990 – 2005, %
3 CATEGORIES OF COUNTRIES
Agriculture-based
countries
Bringing developmentto the poor
PATHWAYS OUT OFPOVERTY
Farming -Labour - Migration
Enhance smallholdercompetitiveness.
Facilitate market entry
Improve marketaccess. Establish
efficient value chains
Increase employment inagriculture and the rural
non-farm economy
Improve livelihoods insubsistence agriculture andlow skill rural occupations
AGRICULTURE FOR DEVELOPMENT
World Development Report 2008
Price and marketing strategy
Value chainsSmallholder market entry
primaryproduction
processing
marketing
consumption
“Productive chains” integrate primary production with processing and marketing as links in a chain
“Value chain” implies generation of value added throughout the chain
The productive/value chain as a principal framework for the design and implementation of support programs
Productive chains and value chains
Value chainsSmallholder market entry
Chain and subsector:
The Subsector includes all productive/value chains involved in the production and marketing of one well-defined product or several closely related products
primaryproduction
processing
marketing
consumption
primaryproduction
processing
marketing
consumption
primaryproduction
processing
marketing
consumption
primaryproduction
processing
marketing
consumption
The Subsector also includes arrangements that govern their interaction and regular access to services, such as sectoral information, new technologies and products, as well as the definition and the management of quality standards
Value chainsSmallholder market entry
RoadsCreditInput supplyProcessingMarketingProducer organisations…..
Subsector analysis
The basic condition for success: competitiveness of the chain – the viability of the business in the long term, even without public subsidies
Without the intervention and support of the state and other support organizations - small and medium-sized producers rarely integrate into a value chain
PATHWAYS OUT OFPOVERTY
Farming -Labour - Migration
Enhance smallholdercompetitiveness.
Facilitate market entry
Improve marketaccess. Establish
efficient value chains
Increase employment inagriculture and the rural
non-farm economy
Improve livelihoods insubsistence agriculture andlow skill rural occupations
AGRICULTURE FOR DEVELOPMENT
World Development Report 2008
A tool for promoting smallholder value chains
Value chainsSmallholder market entry
So what about agroforestry?
An estimated 500 million to 1 billion smallholder farmers grow farm trees or manage remnant forests for subsistence
and income (Scherr, 2004)
Value chainsSmallholder market entry
Small family farms and plantations are the two contrasting systems of agricultural production (Hayami, 1996)
Small farms have the edge for less technologically advanced agriculture with low labour costs, but as an economy develops and wages and the use of capital intensive technology increase, then the advantage shifts to larger farms (IFPRI, 2007)
XxXxXxxXx
Smallholders Traders Retailers
Value chain of agroforestry products
Distributio
n
Procurement
Sources
Production speed and quality
Input supply chain
Two challenges:Output: Smallholders as efficient producers of qualityInput: How smallholders' access quality production machinery
Demand for input
Input supply and value chains in smallholder agroforestry
Cost efficiency of inputNumber of smallholders reached
Customers
© Lillesø & Moestrup ICRAF/FLD
X
X
X
X
X
X
X
X
x
X
X
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Smallholder market entryValue chainsInput supply chains
Smallholders Traders Retailers
Value chain of agroforestry products
Distributio
n
Procurement
Sources
Production speed and quality
Input supply chain
Two challenges:Output: Smallholders as efficient producers of qualityInput: How smallholders' access quality production machinery
Demand for input
Input supply and value chains in smallholder agroforestry
Cost efficiency of inputNumber of smallholders reached
Customers
© Lillesø & Moestrup ICRAF/FLD
Smallholder market entryValue chainsInput supply chains
Smallholders Traders Retailers
Value chain of agroforestry products
Overcoming constraints forsmallholders to participate in markets
Sub Sector review for smallholder agroforestry:Same approaches for Input supply chains and Value chains
Customers
© Lillesø & Moestrup ICRAF/FLD
Overcoming constraints forsmall-scale business to participate in markets
Smallholders'value chainsDistributionProcurement
Plantations
Support issues for small-scale entrepreneurs productionand distribution of quality
Tree seed input supply chains in smallholder agroforestry
Naturalforest
Vegetativepropagation
Farmlandsources
SeedOrchards
Species in sources
Owners of sourcesMarketing of sourcesDecentralised breedingAccessEconomy of scaleSS associationsBusiness skillsTechnical advisePlanting zone systemCertification/marketingCredit...
Organisationof collection
Organisation of collectionSeed dealer AssociationsTechnical informationDemand-supply informationTechnical capacityBusiness skillsMarketing of new speciesCustomer contactsCredit...
Distribution to nurseries
and direct users
Nursery associationsTechnical informationDemand-supply informationTechnical capacityBusiness skillsMarketing of new speciesCustomer contactsCredit...
Quality criteria seed:Quality declared seedTruth in labeling
Quality criteria sources:OECD rules counterproductiveand not applicable to mostseed source types
Plantations
Tree seed input supply chains in smallholder agroforestry
Naturalforest
Vegetativepropagation
Farmlandsources
SeedOrchards
Species in sources Quality criteria seed:Quality declared seedTruth in labeling
Quality criteria sources:OECD rules counterproductiveand not applicable to mostseed source types
Definitions of tree seed sources have been developed and applied in many countries, and standardised (slightly differently) by OECD, EU, FAO, DFSC, GTZ and others
These guidelines generally rank seed sources into unclassified and selected sources and for selected sources, into tested and untested reproductive material.
The definitions originate from industrial plantation forestry and the criteria used cannot be utilised for ‘Natural forest’ and ‘Farmland’ sources
´One size fits all´
Plantations
Tree seed input supply chains in smallholder agroforestry
Naturalforest
Vegetativepropagation
Farmlandsources
SeedOrchards
Species in sources Quality criteria seed:Quality declared seedTruth in labeling
Quality criteria sources:OECD rules counterproductiveand not applicable to mostseed source types
Currently used definitions disregard options for applying simple principles that can widen the genetic quality considerably and minimise the risk of inbreeding
Furthermore the terms 'selected' and 'unclassified' sources presuppose that central authorities have the capacity to establish, maintain, protect and evaluate improved sources of relevance to the consumers (smallholders), which is very rarely the case
´One size fits all´
Common sense criteria <-> strict criteria that cannot be applied.
Plantations
Tree seed input supply chains in smallholder agroforestry
Naturalforest
Vegetativepropagation
Farmlandsources
SeedOrchards
Species in sources Ownership
Except for ‘Natural Forest’, the other four types can equally well be handled by small enterprises
A major reason for the almost complete absence of seed orchards in agroforestry is that they are very costly to run on government land.
For small-scale entrepreneurs they are not costly, they are providing income
Natural forest is a special case – mobilising indigenous species has an economy of scale due to the large amount of seed collected for ensuring long term genetic quality
DistributionProcurement
Tree seed input supply chains in smallholder agroforestry
Organisationof collection
Distribution to nurseries
and direct users
Quality criteria seed:Quality declared seedTruth in labeling
Applying criteria that all seed should be tested for germination quality by selected authorities is a serious barrier to development of smallholder agroforestry (unless such a rule is ignored)
An appropriate solution (for many countries) is
‘Quality Declared Seed’,and‘Truth in Labeling’
with spot checks by authorities
In crop seed systems the challenge of seed testingcontrol vs reaching many farmers have been solved
DistributionProcurement
Tree seed input supply chains in smallholder agroforestry
Organisationof collection
Organisation of collectionSeed dealer AssociationsTechnical informationDemand-supply informationTechnical capacityBusiness skillsMarketing of new speciesCustomer contactsCredit...
Distribution to nurseries
and direct users
Nursery associationsTechnical informationDemand-supply informationTechnical capacityBusiness skillsMarketing of new speciesCustomer contactsCredit...
The challenges of the tree seed input supply chain are the same as in value chains – overcoming transaction costs for small-scale business
So instead of spending all efforts to provide seed to relatively few smallholders
Gvmnt and NGOs should spend their efforts in enabling small-scale entrepreneurs to provide quality to many smallholders
Smallholders'value chainsDistributionProcurement
Tree seed input supply chains in smallholder agroforestry
Vegetativepropagation
Farmlandsources
Species in sources Organisationof collection
NGOs
Distribution to NGO nurseries
NGOs
Distribution to NGO client farmers
NGOs
Smallholders'value chainsDistributionProcurement
Farmlandsources
Organisationof collection
Nursery
Distribution to own nursery
Nursery
Sale to farmers
Seed and seedlings free of chargeExpensive administrative costsLimited impactQuality not knownOnly during NGO project period
Business on own initiativeSeedling sales undermined by NGOsLow administrative costsPotentially large impactQuality not knownNo support from NGOs and Gvmnt
A typical example from Eastern and Southern Africa, Nepal ... ?
In many countries there are two types of input supply chains,
The Aid funded channel through NGOs, and The private initiative channel of small-scale seed vendors and nurseries
ClientfarmersDistributionProcurement
Vegetativepropagation
Farmlandsources
Species in sources Organisationof collection
NGOs
Distribution to NGO nurseries
NGOs
Distribution to NGO client farmers
NGOs
Own use andcustomersDistributionProcurement
Farmlandsources
Organisationof collection
Nursery
Distribution to own nursery
Nursery
Sale to farmers
Seed and seedlings free of chargeExpensive administrative costsLimited impactQuality not knownOnly during NGO project period
Business on own initiativeSeedling sales undermined by NGOsLow administrative costsPotentially large impactQuality not knownNo support from NGOs and Gvmnt
MalawiNurseries
MalawiNGOs
THE BIG 3
3 competing tree seed suppliers toNGO ccccccc Land Resource Center
National Tree SeedCentreICRAF
Weak connection to markets
No support fromNGOs or governmentin enterprise developmentor proper sourcing
Malawi exampleCurrent nursery input supply chains
Smallholders'value chainsDistributionProcurement
Farmlandsources
Organisationof collection
Nursery
Distribution toown nursery
Nursery
Sale to farmers
MalawiNurseries
MalawiNGOs
Weak connection to marketsSupport by '2 Big' SeedCentresNormative support :appropriate sourcing+ establishment of improved sources
ICRAFAgroforestry research information
NaturalForest
Breeding SeedOrchards
Small enterprisesources
MalawiNGOs
Enterprise support
Support to farmers' value chains
Malawi exampleMore efficient use of Aid moneyLarger impact
72 seed sources around Mt. Kenya - models used
Model typeModel
No
Count
CCC - Centralised government/large NGO model 1 21
CCC/ - Centralised government/large NGO modelCDD - Centralised seed sources, decentralised
enterprise model
1 & 3 2
CCC/ - Centralised government/large NGO modelCDC - Contract worker model
1 & 4 1
CDD - Centralised seed sources, decentralised enterprise model
3 1
CDC - Contract worker model 4 2
CDC/ - Contract worker modelCDD - Centralised seed sources, decentralised
enterprise model
4 & 3 4
DDD - Decentralised seed sources, decentralised enterprise model
5 31
DCC - Outgrower model, procurement done by distributor
6 1
DDC - Outgrower model, procurement done by producer
6 1
DDC/ - Outgrower model, procurement done by producer
DDD - Decentralised seed sources, decentralised enterprise model
6 & 5 1
DCC - Outgrower model, procurement done by distributor
7 3
Not producing None 4
28 donor models 8 mixed models32 enterprise models
Part of a study of 230 sources
In the same areaaround Mt. Kenya a nursery survey showed that 95% of nurseries’ procurement was from farmland
They apparently had no knowledge or access to the 230 sources