Akello, B.

Aliguma, L.

Bernet, T.

Devaux, A.

Horton, D.

Lemaga, B.

Magala, D.

Mayanja, S.

Sekitto, I.

Thiele, Graham

Velasco, C.

CGSpace

110Chapter 11Multi-actor collaboration in value chains: anavenue to innovation?Sarah Mayanja, Andre Devaux, Berga Lemaga, Damalie Magala, Douglas Horton,Beatrice Akello, Lucy Aliguma, Thomas Bernet, Immaculate Sekitto, Graham Thieleand Claudio VelascoKey Message: Innovation along the whole chain requires that dif ferent stakeholders(public, private, NGO) come together, take risks and jointly implement new ideas. Thereis a complex dance to be danced between competition and cooperation. Trust and socialnetworks need to be built up alongside technical knowledge and skills.The chapter also touches on gender and inclusion, and the challenges that power difer -entials create in terms of facilitating a multi-stakeholder process for innovation. To ensurethat innovations reaches less powerful groups (e.g. women, the poor), innovation processesmust be explicitly guided to involve them and to ensure that the less advantaged are notrestricted to support roles, but can instead participate in decision-making processes. Everybody who tasted TomCris’s potato crisps loved them: they were fresh, crunchy and great tasting.Thomas and other small-scale processors in Uganda were able to sell their potato crisps in the localmarket. In the supermarkets, however, it was a different story. Very few people bought local crisps,opting instead for imported brands. Thomas could not figure out why his brand wasn’t competitive.That’s where the participatory market chain approach (PMCA) came in: an approach created by theInternational Potato Center (CIP) to develop value chains for the benefit of all actors along the chain.It generates benefits through value addition, improved information flows and collective action.The potato sector in UgandaPotatoes are becoming an increasingly important cash and food crop in Uganda and produc -tion has grown considerably over the past ten years. The potato is a nutritious food securitycrop, and is a buffer to increasing food (cereal) prices. The estimated 700,000 t produced in 20072670.Bw.Bk.dev.'Dyn of rural' 20c.def_Dynamic  24-11-14  13:21  Pagina 110is sufficient for local consumption and also has the potential to meet export needs. Increasedproduction in recent years has resulted from urbanization, changing eating habits, and increaseddemand from rapidly expanding fast-food restaurants. In addition, improved political stability,introduction of new varieties and expansion into new areas has also stimulated greater productionand market demand. These developments have contributed to poverty reduction and commer cial - ization in many rural communities that, until now, have had few avenues for income generation.Despite the importance of potato, improved technologies in the production-to-consumptioncontinuum, and governmental efforts to commercialize agriculture, small farmers have yetto see their incomes rise substantially. Additionally, the sector has been poorly organizedand characterized by inefficient supply chains, which has greatly hampered the developmentof high value market chains that are capable of generating significant benefits for actors alongthe chain. The participatory market chain approach (PMCA) offers an opportunity to developmarket chains in ways that mitigate these constraints.Introducing the participatory market chain approachThe PMCA was developed by the Papa Andina Regional Initiative of the International PotatoCenter (CIP) to improve the competitiveness of potato market chains and small potato producersin the Andean region of South America. Following its success, Papa Andina partnered withthe Regional Potato and Sweet Potato Improvement Network in Eastern and Central Africa,along with several local research organizations, to introduce the approach to Uganda.PMCA is a novel approach for generating technological, commercial and institutional inno -vations along market chains by increasing trust, confidence and linkages among market chainactors and improving market access for small-scale farmers (Bernet et al., 2006). The approachhelps to structure participatory processes that involve different market chain actors. Theseprocesses aim to stimulate joint innovations based on shared ideas and trust. The approachhas three generic steps, each with defined objectives that culminate in a deeper under stand -ing of the market chain: identifying, analyzing and implementing joint business opportunities.As illustrated in Figure 4, a research organization initiates the PMCA by selecting the marketchains on which to work, identifying potential research partners, and carrying out marketresearch.Creating functional multi-stakeholder platforms for innovationApplying the PMCA to the potato sector in Uganda began with a core team of four strongcollaborating lead institutes4: two NGOs, one private research firm and one research centre.The core team was supported by other partner institutes5 from both the public and privatesector. The key role of the core team was to facilitate the process of improving actor relation -111Multi-actor collaboration in value chains: an avenue to innovation?4 AT Uganda (an NGO), IITA/Foodnet (a CGIAR centre), The Ssemwanga Centre (a private research firm), and Africa 2000 Network-Uganda (an NGO).5 Partner institutes: the Regional Potato and Sweetpotato Improvement Network in Eastern and Central Africa (PRAPACE), International Potato Centre(CIP), National Agricultural Advisory Services (NAADS) and National Agricultural Research Organization (NARO).2670.Bw.Bk.dev.'Dyn of rural' 20c.def_Dynamic  24-11-14  13:21  Pagina 111Figure 4: Structure and objectives of the three phases of PMCA (Bernet et al., 2006)ships in a way that would spur innovations for improved sector performance. Most teammembers were women, as was the lead facilitator. During Phase 1, the team carried out a rapid study of the sub-sector to find out how it wasorganized, which opportunities could be explored, and also to evoke the market chain actors’interest in working together. The actors interviewed included farmers, traders, fast foodoutlet owners, hoteliers, supermarkets, and researchers, among others. A final event was thenheld where the market chain actors were invited to learn about the results of the study. Theyagreed to form a potato group, which was further divided into two thematic groups: 1) tablepotatoes (referred to as quality ware potatoes); and 2) potato crisps.In Phase 2, the two thematic groups identified and analyzed potential joint business oppor -tunities, after which the ‘best bet’ was selected for further action. This was done throughranking and conducting rapid market surveys, as well as focus group research with prospectiveclients to test the acceptability and rate the proposed innovations. In this phase, a ‘povertyfilter method’ that helps identify the greatest probabilities of pro-poor impact (Bernet et al.,2006), was used to ensure that the opportunities identified would be pro-poor.The meetings and research activities increased interaction between market chain actors,which allowed trust to be built up between actors who would otherwise compete (Box 12).They gained useful information and knowledge on a range of aspects about Ugandanresearch and development organizations, the commodities they were working on, productionand post-harvest technologies, market concepts and innovation processes. Box 12. The importance of mutual trust in multi-stakeholder processesIn Phase 2, stakeholders for each theme usually met at hotels, which quickly became monotonous. In a bid to spurvariety and hands-on learning, the market chain actors were asked to suggest alternative meeting points, and onesuggested the premises of the leading processor, Thomas. Thomas didn’t like this idea so he stopped coming to themeetings; instead, he kept sending one of his employees. But since Thomas had been instrumental in guiding thediscussions, in his absence the process lost its luster. The facilitators had to lure Thomas back. With the philosophy that‘two heads are better than one’, the facilitators wooed him back. Thomas was keen on joint exploration of businessideas, but would not host the meeting on his premises. Perplexed by his reticence to host, the facilitators probed Tho- mas to explain. It turned out that most of the processors in the group had ‘stolen’ his former employees or clients!112Dynamics of Rural InnovationInterestTrustCollaborationLeadershipFacilitationBackstopping2670.Bw.Bk.dev.'Dyn of rural' 20c.def_Dynamic  24-11-14  13:21  Pagina 112113Multi-actor collaboration in value chains: an avenue to innovation?When business ideas and innovations had taken shape, the market chain actors weresupported in developing simple business plans detailing how the innovation would be‘brought to life’. At the end of Phase 2, a final event showcased the proposed business plansand was an opportune moment to integrate new actors into the process to complement theworking groups with the necessary knowledge and capabilities. Due to funding constraints, Phase 3 had a delayed start and a lot of reorganization of thegroup was required to adapt to changes in the people (both facilitators and market chainactors) engaging: some had left, some new members had joined. The group forged aheadand took the decision to merge the two thematic groups. Steering of the process, which untilthen had been the role of the core team, was slowly handed over to the market chain actors,and leaders emerged. Working groups were created to undertake core activities (e.g. additionalmarket studies, sourcing for packaging materials, and mechanized sealers) and reported tothe entire group on progress achieved. The groups were comprised mainly of women marketchain actors who worked with dedication and always prepared brief reports for feedback.Though women were at the centre of the implementation of activities, leadership roles weretaken on by men, mainly because of their financial ability, but perhaps also as a result ofsocietal influence.The entire group always decided jointly on next steps. Other key activities undertaken inthis phase included market concept development, shelf life tests and key meetings betweenproducer groups and processors; when needed, required skills were outsourced. For example,a graphic designer designed potato crisp labels, and a researcher provided options as towhich potato varieties should be scaled up for crisp production. The process was never linear:a lot of back and forth was needed to come up with a desirable course of action or outcome. The defining moment in Phase 3 came when the processors needed to invest in commer -cializing the prototypes for new packaging materials, label designs and sealing techniques.Thomas volunteered and invested his resources to act as a test case, and the group ideas weretried out on his products with reasonable commercial success. After all that hard work, results2670.Bw.Bk.dev.'Dyn of rural' 20c.def_Dynamic  24-11-14  13:21  Pagina 113were ready for showcasing in a larger, public event. Representatives from research bodies,key ministries, public and private sector companies, the press and donor agencies were invited,and innovations from three different commodity groups (potato, sweet potato and vegetables)were officially launched.Results of applying PMCA to the potato value chainBy applying the PMCA to the potato chain the packaging, sealing and branding of crispsmade by TomCris all improved. This led to improved segmentation of the market and successin the niche market. The processor registered a modest increase in sales. Additionally, there wasa noticeable improvement in the organization of the supply of potatoes to crisp manufac -turers. Three producer groups now consistently supply good quality potatoes to the crispproducers.PMCA brought together actors from different backgrounds where there had previously beenmistrust. Working together they implemented joint activities that led to the innovations. Asa result, valuable capacities for innovation also developed: in terms of knowledge, attitudes,skills, empowerment and social capital. Another positive outcome was that the applicationand results of the PMCA stimulated considerable interest within Uganda research organi -zations, donor agencies and policy circles, and among market chain actors who had participatedor heard about it.Of the commercial, technological, and institutional innovations that were at various stages ofdevelopment when the PMCA exercise formally ended in September 2007, several weresuccessful, complete and ready to be commercialized. But innovation intrinsically has a limitedshelf life. In contrast, strengthening the capacity to innovate – through the development ofknowledge, attitudes, skills, and social capital – is likely to have greater social and economicimpacts in the long run. Capacity building is thus the most important PMCA result given thecontinuous and dynamic nature of innovation processes. Challenges and lessonsFeatures of the PMCA. PMCA is not intrinsically pro-poor; the approach can be used tostimulate and nurture innovation in any market chain and the benefits captured by anygroup. Therefore, to ensure that PMCA benefits poor farmers, the facilitators need to apply‘poverty filters’ or ‘lenses’ to help researchers identify strategies to give the poor a competitiveadvantage, such as improving their sale price per unit, increasing sales per season, andgaining access to more outlets. Another challenge relates to the fact that, although women played a prominent role infacilitating the process, men may benefit more. For example, men generally have moreresources to try out a new innovation. In this case study, most potato processors were women,and they worked hard to bring about innovation, but TomCris benefited the most. In future,more attention should be paid to ensuring that women and other disadvantaged groups aremore fully engaged in, and benefit from, the results of the PMCA.114Dynamics of Rural Innovation2670.Bw.Bk.dev.'Dyn of rural' 20c.def_Dynamic  24-11-14  13:21  Pagina 114As noted from the experience in Uganda, innovation does not end at the final event of Phase3. PMCA should therefore be viewed as a trigger for innovation processes that need to benurtured after the initial exercise is complete. Most of the results of the PMCA in Ugandawere at a pilot stage at the end of Phase 3. More recently, some innovations have expandedtheir share in the market and some new ‘copy-cat’ innovations have emerged. This illustratesthat mechanisms for scaling-up are not yet fully understood and implemented.Implementation. The biggest challenge was funding, which was secured phase-by-phase,leading to substantial delays and uncertainties in the process. Another challenge was thatthe teams found it difficult to put into practice some of the concepts and methods presentedin the PMCA User Guide; they would have benefited from supervision and more extensiveand practical training materials. Lastly, for the innovation process to come to fruition, marketchain actors had to invest in prototypes – the new, un-tested products. However, many werenot prepared to take the risk, perhaps because they could not foresee a commercial benefit.As a result, some innovation processes progressed slowly and participants who might havemade significant contributions instead dropped out.Lessons1. Successful innovation requires that researchers and development professionals work innew ways with diverse stakeholders, including not only small farmers but also marketagents and policy-makers. 2. PMCA requires capacity development to build up trust and social networks in order tochange attitudes and develop the much-needed social, as well as technical, knowledgeand skills. 3. Follow-up and support to potential innovators is needed after the initial intervention (inthis case the PMCA exercise) formally ends until innovations can survive independently. 4. Gender and equity issues merit special attention. Too often, women are seen as the ‘doers’and men as the financiers. 5. Transcontinental technology transfer is possible and can help avoid repetition of basic workthat has already been done elsewhere, but only when properly adapted to local conditions. ReferencesBernet, T., G. Thiele and T. Zschocke. (eds.). (2006). Participatory Market Chain Approach User Guide.International Potato Center, Papa Andina, Lima. http://cipotato.org/publications/pdf/003296.pdf115Multi-actor collaboration in value chains: an avenue to innovation?2670.Bw.Bk.dev.'Dyn of rural' 20c.def_Dynamic  24-11-14  13:21  Pagina 115

Multi-actor collaboration in value chains: An avenue to innovation?

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Multi-actor collaboration in value chains: An avenue to innovation?

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