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![Page 1: Creating a Local Competitive Advantage for Agriculture in Lukhanji Results of the PACA Exercise 17 - 24 November 2003.](https://reader036.fdocuments.us/reader036/viewer/2022062500/56649e105503460f94afb9f8/html5/thumbnails/1.jpg)
Creating a Local Creating a Local Competitive Advantage for Competitive Advantage for Agriculture in Lukhanji Agriculture in Lukhanji
Results of the PACA Exercise17 - 24 November 2003
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Part 1: IntroductionPart 1: Introduction
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What is Participatory Appraisal of What is Participatory Appraisal of Competitive Advantage (PACACompetitive Advantage (PACA®®
)?)?
Participatory
Appraisal of
Competitive Advantage
Involve local stakeholders Motivate local stakeholders to take an
active role in an LED initiative Transfer know-how to local stakeholders
and businesses
Do a quick scan of the local economy Assess and refocus ongoing local
economic development activities
Identify strengths, skills, talents and opportunities
Identify business and LED opportunities
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What is the objective of PACA?What is the objective of PACA?
Identify, with a rapid appraisal, the main strengths and weaknesses of the local economy and its main sectors (duration: 1 - 2 weeks)
Identify options for practical activities to strengthen the competitiveness of firms -- Criteria:– feasible with local resources– quickly implimentable (starting next week)– quick, visible results (with 3 - 6 months)
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What have we been doing? What have we been doing?
Kick-off workshop on 14 November 2003 From 15 to 18 November 2003:
– Seven mini-workshops with between 10 and 40 participants
– Ten interviews
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Part 2: DiagnosisPart 2: Diagnosis
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Main findingMain finding
Agricultural development in Lukhanji has not moved forward as quickly as it should do– even though the funds and the economic
opportunities are there The main problems are
– lack of commitment• by beneficiaries• by support structures
= vicious cycle
– fragmentation among support structures
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The current structure of The current structure of agricultural development in agricultural development in LukhanjiLukhanji
Land Agric
Water Labour District
Local ...Zweledinga
Vukani
Engojini
Shiloh
Nyana
Tylden
Bold Point
Macbride
Kei
Delindlhala
Merino
Agriculturalprocessors
Distributionchannels
Whitefarmer
Whitefarmer
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The current structure of The current structure of agricultural development in agricultural development in LukhanjiLukhanji Government:
– Top-down approach– Little coordination between departments
and province-district-local– Looking at “beneficiaries”, not at
“customers”– No management of expectations– Beneficiaries find it hard to understand
who in government is responsible for what / can provide what
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Emerging farmers, irrigation Emerging farmers, irrigation projectsprojects
Commitment to development Incomplete business plans No clear perception of viable products and
distribution channels.
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What about livestock farming?What about livestock farming?
Livestock farming is predominantly a wealth-building activity
only some farmers have made the transition to full commercial cattle farming
mostly, the livestock is the savings account livestock is sold if the owner needs cash livestock farming is predominantly not a
commercial activity among emerging farmers– with the large number of cattle, access to
funds is not a bottleneck for development!
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Commercial farmers, Commercial farmers, Agricultural businessAgricultural business
Commercial farmers: Informal support to
emerging farmers / irrigation schemes exists
Explicit willingness to help No coordination of support Established farmers are
most busy when emerging farmers need most support!
There must be a benefit for both sides!
Agricultural business
(processors, sellers): Looking for reliable
suppliers Markets for
products are available
Reliable and consistent supply is the bottleneck.
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Current agricultural development Current agricultural development approach in Lukhanji: A value approach in Lukhanji: A value chain perspectivechain perspective
Production(if it actuallytakes place) ?Inputs
????
Processing?
Value-added?
Distribution?
Business plans andemerging farmers’ statements are vague
about products and distribution!
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Future agricultural development Future agricultural development approach in Lukhanji: A value approach in Lukhanji: A value chain perspectivechain perspective
Conventionalproduction
Inputs
High-valueproduction(tunnels)
Inputs
Organicproduction
Inputs
Direct salesWholesale
RetailValue-added,e.g. cutting +
packaging
Direct salesWholesale
Value-added:processing
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Future agricultural development Future agricultural development approach in Lukhanji: How to get approach in Lukhanji: How to get there?there?
Conventionalproduction
Inputs
High-valueproduction(tunnels)
Inputs
Organicproduction
Inputs Value-added,e.g. cutting +
packaging
Direct salesWholesale
Direct salesWholesale
Value-added:processing
Retail
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Main success factors of emerging Main success factors of emerging agriculture in Lukhanjiagriculture in Lukhanji
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Main success factors of emerging Main success factors of emerging agriculture in Lukhanjiagriculture in Lukhanji
Access to markets Working capital Skills Market information Access to product inputs.
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The conventional approach to The conventional approach to address these challengesaddress these challenges
Access to markets
Working capital
Skills
Market information
Access to product inputs
Government must organise market access
Government / development finance institutions must provide working capital
Dept of Labour must provide training
Government must set up an information system
Seeds and implements must be provided by Dept of Agriculture
How long do you want to wait for
this to happen?
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Our alternative: Our alternative: An unconventional approachAn unconventional approach
Find underserved marketsthat your product can serve
Never plantwhat you haven’t
soldApproach customer
Get confirmed order
Obtain working capital Approach bank or public
finance institution
Joint venture with commercial farmer: capital + know-how -- land + labour
State clear demand foragricultural extension
Get inputs
Now plant and care!
Who willchampion
this?
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The desirable structure of The desirable structure of agricultural development in agricultural development in LukhanjiLukhanji
Land Agric
Water
Labour
DistrictLocal
...
Zweledinga
Vukani
Engojini
Shiloh
Nyana
Bold Point
Tylden
Macbride
Kei
Delindlhala
Mhlungisi
Distributionchannels
Comm.farmer
Comm.farmer
Comm.farmer
Agriculturalprocessors
Farmers’Assns.
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Why have networking between Why have networking between irrigation schemes, agricultural irrigation schemes, agricultural projects, emerging farmers?projects, emerging farmers? Capacities of government agencies are
limited, demand exceeds supply of support New producers need to source additional
supporters– Know how is available in all projects and
schemes• pooling it helps everybody
– Commercial farmers state an explicit interest to support new farmers
• they must also gain from giving support
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Summary of diagnosisSummary of diagnosis
We need a different, much more business- and opportunity-driven approach to
agricultural development in Lukhanji!
We need much more interaction, based on partnership, between the various players
to share know-how to avoid duplication and fragmentation
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Part 3: ProposalsPart 3: Proposals
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Proposal 1 for local municipalityProposal 1 for local municipality
Monthly meeting of LED officer with other support agencies and government departments– update on evolution of promotion and
support activities.
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Proposal 2 for local municipalityProposal 2 for local municipality
Establish a telephone hotline for information on government support– entry point to coordinate inputs from
government departments and parastatals.
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Proposal 3 for local municipalityProposal 3 for local municipality
LED Fora in wards:– move from LED Fora (with no clear focus
and objective) to LED Business Meetings• organise topical input (speakers)• provide for networking opportunity
amongst businesses• adequate place to flag business-
creation / start-up opportunities.
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Proposals for local GTZ facilitatorProposals for local GTZ facilitator
Workshop with irrigation schemes– stimulate exchange and joint learning
between irrigation schemes Build joint-venture relationships between
commercial and emerging farmers– create clear win-win for-profit
relationships.
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Proposals for government Proposals for government agenciesagencies
Change in terminology– ban the term “beneficiary”– introduce the term “customer”
• change the mindset from social assistance to business relationship with clear expectations and commitments on both sides
Dept. of Agriculture: Quickly assess the potential for berry production and other crops that may still be planted in this season
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Proposal 1 for irrigation schemesProposal 1 for irrigation schemes
Irrigation schemes are irritation schemes– Change name to Agribusiness Start-ups.
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Proposal 2 for Agribusiness Start-Proposal 2 for Agribusiness Start-ups (formerly: irrigation schemes)ups (formerly: irrigation schemes)
Define your demand for support much more specifically– narrow down your product range– prepare a proper business plan yourself
• know what you want to achieve -- and what you realistically can achieve
– increase your volume and quality to create a market presence
– identify the specific demand for know-how and inputs
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Proposal 3 for Agribusiness Start-Proposal 3 for Agribusiness Start-ups (formerly: irrigation schemes)ups (formerly: irrigation schemes)
Reassess the viability of pivot irrigation– in favour of low-tech manual systems
• pivot irrigation is not very efficient • pivot irrigation is costly to maintain.
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Proposal 4 for Agribusiness Start-Proposal 4 for Agribusiness Start-ups (formerly: irrigation schemes)ups (formerly: irrigation schemes)
Develop a vision of step-by-step upgrading– phase 1: simple products for local
markets, surplus for canning– phase 2: value-added -- packaging for
commercial markets– phase 3: organic production for high-
value local and export markets.
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Proposal 1 for local championsProposal 1 for local champions
Tunnel and shade-cloth opportunity -- Business model: – Joint-venture between commercial farmer
and members of a local community– More, better quality product– Longer growing seasons– Better utilisation of limited space– More effective use of water and nutrients– Income shared between both sides.
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An example An example
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Proposal 2 for local championsProposal 2 for local champions
Market franchise opportunity -- Business model:
– Franchise with established processors and mature business model
• vegetables
• fruit
– Brand potential with national chains
– Networking and sharing of information
– Better price and market leverage Colin Mitchell willing to guide a champion
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An exampleAn example
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Proposal 3 for local championsProposal 3 for local champions
Connect production and processing opportunity -- Business model: – André Myburg is looking for specific inputs
for his canning operation– Broker to link André and producers
• identify surplus production, not necessarily of A grade, but with scale
• promote consistent, reliable production• assist producers• charge an outcome-based fee
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André Myburg’s canning André Myburg’s canning operationoperation
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Proposal 4 for local championsProposal 4 for local champions
Weekly farmers’ market opportunity -- Business model:– fee-based model for organiser of market
• responsible to manage and advertise it– local producers sell home-industry and
niche agricultural products, not basic staples.
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Proposal 5 for local championsProposal 5 for local champions
Incubation potential (e.g. on Harrison Farm) -- Business model: – Commercial farmer provides training and
guidance to emerging farmers– Profit on crop shared– Emerging farmer allocated own land in
the following season– Cycle continues – Farmer supported by Depts. of
Agriculture and of Labour
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Next steps Next steps
Way-forward workshop with Champions: – Tuesday, 10:00, Sports centre
PACA follow-up workshops– to assess results and energise the
process– end of January
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PACA TeamPACA Team
external:
Jörg Meyer-Stamer
Colin Mitchell
Conrad Jardine
local:
Tienie Terblanche
Beau Mtati
[email protected] [email protected] [email protected]
072 / 207 1729 083 / 960 6752