Francesco Rampa Head of Programme : Food Security ECDPM

Francesco RampaHead of Programme: Food Security

ECDPM

COMESA Inaugural Agriculture Investment Forum, October 2014

Regional cooperation and multi-stakeholder platforms as

incentives for investment in agricultural value chains

• Create platforms for public-private (PP) dialogue aimed at participatory regional value chain (VC) development

• Bring together existing initiatives and lessons learnt on VC development projects and current efforts for CAADP-related PP dialogue

• Ensure both political and commercial buy-in: “be specific !”

• Use a truly multi-stakeholder process by including all the partners (government, businesses, farmers organisations, etc.) to ensure smallholders also benefit

Overarching objectives

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Current PP initiatives generally lack:• Policy reform follow-up

removing regulatory obstacles to VC growth and creating space for farmers/businesses to monitor progress

• Medium-term financial and technical follow-upespecially for SMEs/farmers to participate in VCs (K & HR)

• Holistic/coordinated business facilitationaddressing the multiple challenges faced by rural entrepreneurs (inputs, loans, rural infrastructure, business skills, regulations & laws, taxation…)

• Proper political & market analysis

Why ‘another’ PP partnership?

ECDPM

Improving PP dialogue to support development of agro-food markets, increase public and private investment and foster cooperation at the regional level is a priority for COMESA member states (COMESA Summit, Kinshasa, February 2014) • Facilitating regional dialogue platforms is part of the

COMESA CAADP work plan approved at the Summit

Plenty of talk about PP dialogue, but little action• proof of concept needed, especially at the regional level• need to elaborate an approach to bring ALL stakeholders

together and ensure structured, well-grounded dialogue leads to actions

Rationale for a PP dialogue platform

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• Dialogue pertains largely to cross-border trade and investment issues: access to market key for investors

• Cooperation at sub-regional level (e.g. on SPS standards and other NTBs) could yield positive spillovers for the rest of the COMESA region

• Approach developed could also be disseminated to other sub-regions in COMESA

• COMESA Secretariat has the necessary clout to bring all key stakeholders to the table (CAADP Unit, Trade Unit, Infrastr.Unit, etc with CBC, EAGC, EAFF, SACAU, Ch of Commerce, Donors etc)

• COMESA CAADP Compact and Investment Plan provide policy guidance and links, eg seeds harmonization protocol

Value of COMESA leading the facilitation of sub-regional pilot PP dialogue platforms

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Intervention Area 2.2 of Reg. CAADP Compact

“Regional technical and financial assistance to connect PPPs being established at national level, including market analysis, communication strategy, capacity-building, resource-mobilization etc through PPP-Platforms for regional value chain development (or concrete cross-border integration of national value chains), ensuring follow-up both on required policy reforms by public agencies and on the capital to be invested by the private sector. ”

COMESA Technical Validation (Lusaka, October 2013), now Minister’s adoption (Kinshasa, November 2014)

ECDPM

Pilot PP dialogue platformS for specific sub-regional areaS and with a sub-sectoral focus that: (i) clearly falls under the mandate of COMESA (CAADP); (ii) will yield significant benefits in terms of regional value chain development; and (iii) pilots will generate a positive dynamic of cooperation among countries to lead to full implementation of RIPA-2

and other RIPAs too !

Designing & Implementing RIPA-2…in coming months, so COMESA needs all of us

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• Provide a platform for continuous and comprehensive policy and investment dialogue (including trust/monitoring/contract enforcement) between VC partners

• Take an open-ended approach in conducting such dialogue, without pre-determining outcomes

• Leverage invest. for REGIONAL action: Biz & DPWG • Effective coordination of all PP actors along VC with

clear tasks, inputs and responsibilities for all (with publ bearing “cost of organiz/bureaucracy”)

• CAADP Umbrella & Methodology: inclusiveness & ”management capacities” & mutual accountability & CSA

• Focus on political and not only technical roadblocks to VC development (eg. ESADA; “coordinate jurisdictions”)

• Focus on 2 VCs to start (dairy & horticulture) & 2-3 countries (K-U-R…Z-A-D); building on existing initiatives, market potential, willing donors, CAADP NAIPs/priorities…

Pilots: what’s different?

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• Clarify VC business model:Minimum 1 buyer/processor eg in Uganda Kenya RwandaMinimum 1 BDSP to provide incentives for smallholders to join VC (through clustering)Tech transfer (FDIs?)…

• Effectively connect national actions/policies aimed at:VC coordination and MISFood storage at local/national level & other infrastr (WRS)Markets for inputs + servicesRegulatory environment, incl contract enforcement & risk-mitigation/sharing tools

• Regional dimension:Economy of scaleTrade corridor (e.g. northern corridor)Deliverable under COMESA CAADP Investment Plan

Pilot: in practice

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CAADP Unit

Coordinates support to the set up and functioning

of the pilot

Convenes stakeholders of the

pilot

Coordinates provision of

capacity building for policy planning,

implementation, M&E, and learning

to pilot stakeholders

ACTESA


information, data and analyses to

pilot planners and other pilot

stakeholders

Coordinates provision of policy analysis capacity building to pilot stakeholders

SPS Unit

Coordinates COMESA-wide SPS initiatives relevant to the

pilot's objectives


capacity building for SPS policy planning and

implementation processes to pilot

stakeholders

Business Council

Convenes private sector

stakeholders of the pilot

Advocates for private investment

in line with the pilot's objectives


capacity building for business planning and operations to private sector

stakeholders of the pilot

Other IPPSD units (Cross-Border Trade,

MSMEs)Climate ChangeGender & Social

Affairs

Ensure that relevant cross-

sectoral initiatives effectively

contribute to the pilot's objectives

Possible roles of COMESA Secretariat bodies involved in the facilitation of the pilot platform

ECDPM

• East Africa region is the highest milk production zone on the African continent (Kenya and Uganda are the largest producers in the region)

• Demand for milk and milk products in the region is growing, but being largely met by imports from outside the region (foreign retailers…)

• The dairy industry remains a development priority for the producing countries in the region (eg NAIPs)

• Key objective is to increase milk production and create a favourable environment for increased private sector investment and regional trade in the dairy industry

• Need for appropriate policies to support private sector development in the dairy sector in the region - In Kenya policy interventions (promoting PPPs, expansion in regional markets through value addition, etc.) are identified as important tools for the development of the domestic dairy industry

• CAADP viewed as instrumental to leveraging investments in the dairy industry

Promoting VC investment through a reg pilot platform: e.g. dairy industry in East Africa

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• Absence of adequate information to inform investment decisions• Conflicting and scarce data on milk projections• Non-tariff barriers to trade (e.g. SPS standards)• Similarity in products being traded • Absence of harmonized milk production standards• Weak enforcement of milk standards• Bottlenecks in the dairy value chain:

poor raw milk quality on farm milk losses (spillage, lack of market, rejection)limited utilisation of the cold chainunderutilised processing capacityfluctuations in productionpoor rural infrastructurenear monopolistic tendencies of large processors

Obstacles to attracting investment in the East African dairy industry

ECDPM

Private sector investment in dairy requires a secure enabling environment

A reg pilot platform involving strong PP engagement can create that:

• coordinating matchmaking fairs between raw milk traders and processors to address supply fluctuations by aggregating surplus production, bring dairy smallholders into regional VCs and contribute to a more diversified VC

• stimulating dialogue on trade policy consistency, the rationalization of investments and on a regional marketing strategy given the specific comparative advantages of producer countries and regions

• facilitating information and knowledge sharing on inter alia trade and investment opportunities and market conditions and trends

• providing a forum for dialogue on the implantation of production standards at the regional level and incentivise national ministries to implement policy reforms such as dairy product quality standards, benefitting consumers

• hosting a centralized and coordinated data bank on regional milk trends to guiding private investment and public sector planning and spending

How a pilot platform can address these obstacles and promote investment

ECDPM

• providing guidance on the coordination of actors in regional VCs in order to develop structured approaches for increased expansion into regional markets

• exploring niche markets • promoting dialogue on product diversification, increased access to financing,

adoption of low costs technologies, capacity building through grant support, business linkages, R&D and technology transfer

• driving the harmonization of production standards • developing (through the investment framework?) a package of incentives for

regional investors to facilitate the development of a regional VC, and conduct a study on the harmonization of incentives at the national level in order to channel investment to where they are most needed

• supporting the COMESA Business Council in developing guidelines on best practice in the dairy industry

• examining novel approaches to financing different VC activities• attracting donor funding for VC-related initiatives

How a pilot platform can address these obstacles and promote investment (cont.)

ECDPM

Pilot: Timeframe

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Exploratory mission: Identify

key partners and ensure

(political) buy-in

Develop the Pilot concept

note

Expert meeting to turn concept

note into a business case

First multi-stakeholder

meetings (incl. pledging

conference)

Implementation

1. Consultative meeting with COMESA Secretariat• agree on general objective and approach of the PP and establishment process • discuss the assignment of roles and responsibilities among units and programmes• pre-select public institutions, technical organisations and private sector participants to be

convened to the following sub-regional consultation2. Stakeholder consultation at the sub-regional level facilitated by the COMESA CAADP Unit• involve member states and technical partners to support the design and implementation of the PP• Agree on sub-sectors/commodity of focus (proposals could be made on the basis of prior

consultations and of national and regional CAADP strategies)3. Consultations with the secretariats of other RECs of the Tripartite (and possibly IGAD)• solicit input, obtain buy-in and agree on the sub-regional area for PP• on the basis of the discussions in Steps 1 and 2, the COMESA Secretariat could make a proposal for

the sub-region of focus• Eastern Africa appears well suited for the PP given multiple on-going regional initiatives in this sub-

region4. Validation of the plan for the PP by stakeholders• Development partners could be invited to participate5. Inception of the PP

Strengthen ownership of the PP project among COMESA Secretariat bodies and MS as it develops

Tentative planning process for establishing the pilot platform

ECDPM

Crucial for the creation and success of the pilot: the right mix of partners:

- Governments- Ministries of agriculture, livestock development, cooperatives, etc., national regulatory bodies (Kenya

Dairy Board, Dairy Development Authority of Uganda)

- COMESA institutions- PPs: Regional/national farmers organisations (EADRAC, ESADA, Kenya Dairy

Producers Association, etc.), BDSPs, investors, supermarkets, transport associations, clearing and forwarding associations, manufacturers, chambers of commerce, companies active in VC or CAADP Investment Plan

- Like-minded donors? NL/FMO, EC, USA, UK + multilateral: GAFSP, AfDB, WB, Trademark EA, AFTF, Africa Enterprise Fund, Eif, AFIM, etc..

- Banks/credit providers: Rabobank, DFCU,…- Research and B2B facilitators: ECDPM, AgriPro Hubs, Grow Africa, Kilimo Trust,

ILRI, EADD,…

Did we forget anyone? Existing initiatives you could share with us? Any other comment is key for the pilot!

Pilot: the partners!

ECDPM

Thank you

www.ecdpm.org/foodsecurity

[email protected]

http://www.ecdpm.org/foodsecurity

http://www.ecdpm.org/foodsecurity

mailto:[email protected]

Francesco Rampa Head of Programme : Food Security ECDPM

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