Building Alliances to Enhance Food Security

1. Building Alliances to Enhance Food Security Simon Winter June 29, 2011

2. We have implemented alliances with USDA/FFP across Africa and Central America since 1998 El Salvador Honduras Kenya Mozambique Nicaragua Tanzania

3. An Increasing Range of Private Sector Players are Eager to Develop Food Security Alliances

4. 1. Mozambique Poultry Revitalization: Cargill, Moz Govt, USDA/FFP, local private partners • Develop competitive domestic poultry industry, based on 2005 analysis that frozen poultry was being dumped in Mozambique (from Brazil via mid-East) Objective • Capacity building for smallholders, large producers, government ministries • Development of local input industries • Bio-security and disease prevention planning and training • Matching grants for large producers and local feed input industry • Creation of national poultry association; national advertising campaign to promote nutritional and food safety benefits of eating domestic chicken • Policies revamped by government in agreement with private sector Scope Results • In 2004, there were 2 imported chickens for every 1 domestic chicken. Today, Mozambican broilers outnumber imports 3-to-1 • Poultry generated more than 90,000 jobs; 48,061 tons of domestic chicken consumed 2009 • Poultry industry generated approximately US$ 160 million for the entire value chain Partners • Cargill support for: industry strategic plan; bio-security plan; capacity building for national veterinary service • Government for animal health and trade policy • Local entrepreneurs, farmers

5. 2. Fortification/nutritious products: Partners in Food Solutions, USAID and the African Alliance for Improved Food Processing • General Mills founded PFS with core members DSM and Cargill to improve capabilities and commercial viability of local SME food processing companies to enhance quality and availability of nutritious and safe processed foods for poor, through technical and knowledge transfer in • Food formulation • Process development • Plant design and asset creation • Food quality, safety systems & certification • ‘Go-to-market’ operations, and business planning Objective • TNS is currently strengthening 6 processors In Tanzania • Expectation to work with ~ 15 Tanzanian firms over 2 years • Scoping for local opportunities in Kenya, Zambia, Ethiopia, and Malawi • Processor support started in Kenya, Zambia, Malawi in 2011 Scope • Root Capital (access to finance) and Insta-Pro (equipment, technical assistance) • Local organizations (private and public) that will be supported to transform food processing sector Other partners

6. 3. Mozambique Millennium Maize Mills: USDA/FFP, DSM and local private partners • Grow regional network of successful women-owned village grain mills providing nutritionally fortified food products, grain storage and marketing to improve family health, nutrition, food security and income Objective • Pilot improved technology and business models for hulling and milling • Fortification in milling – blending maize with oilseed cakes for human and animal consumption; develop new maize-based foods, processing of convenience foods with nutritional/fortification opportunities • Storage, trading • Expansion of mills into “hubs” for an array of private/public services (e.g., input/irrigation distribution, extension services, market access) • Leverage for nutritional/educational outreach (e.g., MCH, hand washing) Scope • DSM Nutritional Products Ltd on technology and fortification • Local entrepreneurs • NGOs focused on small scale fortification, nutritional education, renewable energy, messaging etc Other partners

7. Corporations are increasingly focusing on Creating Shared Value* • TNCs are concerned about diminished legitimacy of business despite years of corporate social responsibility • Shared Value: policies and practices to enhance competitiveness of companies while advancing social and economic conditions • Cuts across from markets/consumers to productivity in value chains to sectoral strengthening • Involves: • Understanding new market opportunities, especially among under-served • Redesign and innovation of products and services • Re-evaluating sharing of value creation across the value chain • Applying new technologies across sectors (eg mobile information, payments, logistics solutions in rural Africa) • Developing new sectoral and community institutions to foster collaboration *With thanks to Michael Porter and FSG

8. Lessons Learned from our Alliances Design • Do good homework on economics to ensure commitments can be maintained and sustainable • Align incentives across all players • Include local private sector and other local stakeholders • Be transparent in goals and objectives across partners – with strong logframes • Commit to rigorous M&E Implementation • Be inclusive in governance • Designate program managers in each partner • Create a community – spend time to build trust • Focus on performance – it matters • Include voice of participants • Things change – be flexible • Look to continuously improve • NGOs to be ready to exit once sustainability is evident

9. Recommendations to USDA, USAID (and USG) • Co-create the alliance – don’t mandate • Allow for multiple objectives of TNC partners (investment to philanthropy) • Ensure the “offer” is clear from PPP structure – too much time taken at high level is frustrating, without getting into specifics • Ensure the socio-economic value corresponds to the “pricing” of the intervention – use cost-benefit analysis, not rule of thumb • Blend need for accountability with need for TNCs to be successful • Promote and incentivise innovation • Foster community of practice of Alliance builders and implementers – so we can all do better over time

10. Back-up slides

11. Who We Are U.S.-based, nonprofit economic development organization Philosophy: Private enterprise can drive economic growth and positive social change; a hand up is better than a handout History: Founded in 1968 by businessman Ed Bullard, who pioneered the private-enterprise approach to solving poverty Staff: Talented business advisors, many of them former management consultants or industry experts Partners: Leverage the expertise of strategic corporate, non-profit and government partners Funding Sources: U.S. and foreign government agencies, multi-lateral organizations, corporations, foundations and individuals

12. The Results in 2010 TechnoServe assisted 2,770 businesses in more than a dozen industries These businesses earned $221 million in revenues and $41 million in profits They paid $12 million in wages to 40,300 employees They bought $119 million worth of products from 270,800 small-scale producers Nearly 1.5 million men, women and children people benefited from these income sources (based on five people per family)

13. Our Approach: Building Businesses and Industries The core elements of our approach include: Analyze the business opportunity Identify the entrepreneur Develop the business Refine and scale up to expand impact Identify a high-potential industry that can support scaleable, replicable businesses that benefit the rural poor, and the point(s) along the value chain where interventions can be most effective Find someone with business aptitude and the drive and determination necessary to succeed Provide the necessary technical and business development support to help the business reach its full potential Improve the business model based on experience and use it to launch or expand more businesses within the industry Improve the business environment Promote regulations and policies that improve the business climate

14. Our Approach: Entrepreneurship Development Business plan competitions (BPCs): Help fledgling entrepreneurs turn good ideas into workable businesses. Identify and encourage promising entrepreneurs, giving them business skills and seed money, and offering a forum for investors to find deserving projects. Entrepreneurship classes and camps: Teach the “ABCs” of business to youth and adults (especially women), helping them develop viable business plans. Also train and certify teachers to conduct such training. Local economic development (LED): Help entrepreneurial people build businesses within specific geographic regions – for example, in mining communities or poverty nodes We also run entrepreneurship development programs that promote a culture of entrepreneurship:

15. Our Services Developing Entrepreneurs Entrepreneurship training Business plan competitions Building Businesses Business needs and feasibility assessment Business planning Market linkages Capital raising Managerial and employee training Management consulting Technical advice Intensive operational support Farmer organization and support World-class business mentor linkages Building Industries Market and industry research Industry strategic planning Supply chain organization Industry association formation and support Policy analysis Advocacy support and training Improving the Business Environment Capital access Leadership development Developing local business service providers

16. Our Distinctive Expertise Agriculture & Agribusiness Notably Artemisia, cashew, coffee, cocoa, cotton, dairy, horticulture, livestock and feed, soy and tea Alternative energy Tourism

17. Impact Core Indicators: Track our clients’ business performance and how that translates into direct benefits for the rural poor (in terms of jobs, wages and markets for small-scale producers). Return on TechnoServe Investment (ROTI): Reflects our cost-effectiveness, in terms of impact per dollar spent. Social Impact: In-depth impact assessment studies. There are also important results we can’t measure, such as the self-assurance, pride and hope that come with success. We track and evaluate our impact through:

18. Contact Information TechnoServe Headquarters: 1120 19th St., NW, 8th Floor Washington, DC 20036 Tel: +1 202 785 4515 Fax: +1 202 785 4544 Email: technoserve@tns.org For office locations around the world, check www.technoserve.org