EU Development Cooperation models with the private sector - an - PowerPoint PPT Presentation

Brussels Policy Briefing no.39 The role of agribusiness and development partnerships in advancing African agriculture EU Development Cooperation models with the private sector - an overview - By Wilhelm Elfring Consultant to “EU -Working Group on Private Sector Development in Agriculture” (PSDA) 1

EU Development Cooperation models with the private sector: an overview 1. Background to PSDA 2. Some definitions and positions 3. Structuring criteria for cooperation with private sector 4. Results: Current portfolio EU and EU Partner States cooperating with private sector in agriculture 5. Outlook 2

EU Development Cooperation models with the private sector; an overview - 1: Background to PSDA • EU Heads of agriculture, rural development and food and nutrition security departments in development cooperation ('HARDs') establish an EU WG PSDA (Working Group on Private Sector Development in Agriculture). • PSDA is closely connected to other formal working groups e.g.: “EU Expert Group on Private Sector Development in Third Countries” 3

EU Development Cooperation models with the private sector; an overview - 1: Background to PSDA • Working group addresses three objectives: a) transparency in how and where the EU and the EU member states cooperate with the private sector, b) analyzing and grouping the different approaches c) recommending future orientation of cooperation with the private sector in agriculture • The presentation summarizes first results of objective A and B • Results are temporary • work in progress ! 4

EU Development Cooperation models with the private sector; an overview - 2: Some definitions and positions The agriculture sector in this context includes: • natural resources • nutrition linked • non-agricultural aspects of rural development Three dimensions in agricultural development: Development of agricultural in the context of rural development contains three dimensions: • agriculture as a commercial business • agriculture linked to a social component • managing the natural resources and national assets 5

EU Development Cooperation models with the private sector; an overview - 2: Some definitions and positions (non-binding -for structuring purpose only) private sector cooperation models in agriculture means: • At least THREE partners are actively involved within the cooperation: 1. EU/EU member states, 2. European, international, or local private sector; 3. farming community in partner states or target population; • “ Private sector” in this context means all commercial enterprises outside the primary agriculture production operating on local or national or regional or global level, being based in Europe or outside. 6

EU Development Cooperation models with the private sector; an overview - 3: Structuring Criteria (7) for cooperation with private sector 1. Current donor support modalities and instruments of aid delivery for cooperation with the private sector in general and in agriculture/natural resource specifically. 2. Basic forms of cooperation with private sector - the Donor Perspective 3. Objectives of development partnerships with the private sector – the Business Perspective 4. Public-private cooperation in value chain promotion (the vertical supply chain view - from farm to fork) 5. Financing value chains – Instruments and entry points 6. Development partnerships with the private sector and the inclusion of rural poor 7. Development partnerships with the private sector and impact orientation on rural households 7

EU Development Cooperation models with the private sector; an overview - 4:Results: Current portfolio EU and EU Partner states cooperating with private sector in agriculture Structuring Criteria I Current Donor Support Modalities and Instruments – four entry points for the cooperation with the private sector – financial/capital and non-financial mainly technical support. – Financial and non-financial support might be channeled directly or indirectly via a third party often service providers. – “controversial” notion on direct financial grants to reduce upfront risks of market entry or working in insecure environment – grant competition schemes are not really attractive for the private sector since the preparation absorbs tremendous resources 8

EU Development Cooperation models with the private sector; an overview - 4: Results: Criteria II Basic forms of cooperation with private sector - the Donor Perspective Increasing levels of investment/financial commitment II III IV V VI VII I Formal cooperation - formal Private sector contract Formal – coordination of multilateral Bilateral cooperation Informal cooperation Financing facility for partner of activities and values, cooperation loose cooperation (exchange of cooperation with (single company level) development aid and platform harmonization of merge of activities, sole implementer, but concepts, ideas, and private sector, joint joint financial norms and standards (group of companies without joint financial strategic objectives) financial involvement matching contribution involvement involvement or alliances); joint without joint financial by private sector involvement financial involvement D-BMGF- Compaci Strategic partnership EU- PIP Pesticide Program (cotton), UK-S, the practitioner MoUs between Nl Netherlands water Initiative Program Ginneries organize Grow Africa Initiative hub for inclusive multinational companies partnership D- develoPPP (D) with sustainable horticulture cotton farmers. business and donor agencies trade including 120 Ginneries implement partners technical program Multi stake holder NL- PPPfunds for social Small projects (<.03 Mio) EU-PAPA, Cameroun, D- German Food platform coordinated by entrepreneurship under develoPPP cooperation with Partnership FAO, tenure on land, Dutch Growth Fund implemented by agroindustries in coffee, 9 fisheries and forest (GGF) cocoa, dairy and cotton

EU Development Cooperation models with the private sector; an overview - 4:Results: Criteria III Objectives of development partnerships with the private sector – the Business Perspective Increasing levels of involvement by private sector in development topics II III IV V VI VII I Improving business environment Expansion of technical CSR measures of (technical- Capacity development Innovation and Targeting the base of and organizational, Information and individual companies organizational, of business partners market introduction the pyramid (BOP) financial capacities Experience Exchange or group of companies financial, legal incl. business (sharing risk of market with business concept (volume markets) (voluntary measure) creating new or fair intelligence entry) directly Financing value chains opportunities) D- Federal Ministry of EU-Den-D: Agriculture, Training D- Forum for Sustainable FIN - Equity participation World Cocoa Foundation EU-Danida Uganda, trade Centers- Model farms in EU Risk capital facility Palm Oil (FONAP) Finnfund in forms of UK- Ethical Trading harmonizing social and related SPS and quality Ukraine, Ethiopia, South Africa inclusion of private sector-NGOs- equity, loan and initiative (ETI) environmental standards management Morocco, Topic applied disadvantaged people donor mezzanine funding along the chain machinery and land use technologies EU Global Energy AFD PAGEF-RoC (Project UK- support to Global UK-S, the practitioner EU. DFID US-AID rural Efficiency and for sustainable D+NL.+? Senior expert F- Guarantee schemes to Alliance for improved hub for inclusive roads within SAGCOT Renewable Energy Fund management of tropical service African Banks nutrition GAIN – BOP business corridor. Tanzania (GEEREF) for risk capital forests) consumers 10 in rural electrification

EU Development Cooperation models with the private sector; an overview - 4:Results: Criteria IV: Public-private cooperation in value chain promotion (the vertical supply chain view - from farm to fork) I II III IV V VI VII VIII Value chain environment S – SIDA Challenge EU — Malawi, Farmers EU. Support tor fresh produce exporters, Kenya, market information center, F- direct support to Fund sustainable income diversification value addition private sector along the fishery partnership program value chain Thailand on tuna, tuna supply forecast EU-NL-D-IFDC, UK- Ethical Trading UK-S, the practitioner UK-S, the practitioner hub for inclusive business, EU-Danida Uganda, Burundi (PNSEB) initiative e.g shrimp hub for inclusive projects focusing on last mile distribution e.g, trade related SPS and subsidized fertilizer production Thailand business, Morocco clean cooking solutions quality management program project fortified food for children EU- sugar value chain in Belize; Congo, Ivory UK-GSMA mobile for EU- Banana value Coast, Kenya, Madagascar, Malawi, Mozambique development in nutrition chain in Cameroon, Tanzania, Zimbabwe focus sustainability and social – multiple countries Ivory Coast, Ghana, aspects DomRep , Suriname, Belize, focus sustainability and social aspects UK-Business Innovation facility, supporting AGORA supermarket suppliers in Bengladesh AFD Worldbank feeder road program Ivory Coast AFD Cambodia Camagra value chain WFP-NL-digital food 11