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Case study report
Cotton in Mali
2015
Commissioned by
1
About this project
This research forms part of a project funded by the IFC, the Dutch Ministry of Affairs, SECO and IDH the sustainable trade initiative in which
Aidenvironment, NewForesight and IIED sought to develop a holistic transformation model to scale sustainability in smallholder dominated
agricultural commodity sectors.
For more information about the project and to access other research reports in the series please visit: www.sectortransformation.com
About the organisations
Aidenvironment is an independent value-driven consultancy. It advises clients in realizing their ambitions in sustainable
market transformation in the most prominent commodity sectors. Aidenvironment is known for its in-depth knowledge,
reliable quality and good advisory skills, and is continuously asked to work for frontrunners in the private, public and
non-profit sector. For more information visit: www.aidenvironment.org
NewForesight facilitates sustainable market transformations. As a strategic consultancy NewForesight addresses the
global challenges of our time. NewForesight develops innovative strategies, unites stakeholders around a transformative
vision for their sector and drives implementation. For more information visit: www.newforesight.com
IIED is one of the world’s most influential international development and environment policy research organisations. We
build bridges between policy and practice, rich and poor communities, the government and private sector, and across
diverse interest groups. For more information visit: www.iied.org
Published by Aidenvironment, NewForesight and IIED (2015).
2
Please see www.sectortransformation.com to read our other
case studies and reports
The Sustainable Sector
Transformation Model
Sector Governance Models
Service Delivery Models
Role of Voluntary Sustainability
Standards
The Sustainable Sector
Transformation Model
Case study: Cocoa in Ghana
Case study: Cocoa in Ivory Coast
Case study: Coffee in Vietnam
Case study: Palm Oil in Indonesia
Phase I: Building a Roadmap to
Sustainability in Agro-commodity
Production
Case study: Cotton in Mali
3
Table of contents
Introduction
The Sustainable Sector Transformation Model
Case study– Cotton in Mali
Appendix – the Sustainable Sector Scorecard
4
This research aims to develop a transformation model for sustainability in smallholder dominated agricultural commodity sectors
The three phases of the research
Goal
Develop a transformation model & roadmap towards sustainable agrocommodity production in sectors dominated by smallholder farmers
2013
Phase I - Research
• Identify dynamics of market
transformation towards
sustainability for agricultural
commodities
• Identify the scope, size and
impact of voluntary
sustainability standards (VSS) in
this process and their possible
future role
2014
2015
Phase II - Shaping
Phase III - Implementation
• Develop a transformation
model towards sustainable
agro-commodity production
• Apply the model to specific
country-sector contexts to
ensure it has local impact
• Support the IFC in integrating
the strategy in its corporate
priority framework
• Implement the roadmap in five
country- sector contexts:
• Cocoa – Ghana
• Cocoa – Ivory Coast
• Coffee – Vietnam
• Cotton – Mali
• Palm Oil – Indonesia
• Explore cooperation with other
stakeholders
5
The success in scaling sustainability strongly depends on the degree
of sector organization and economic performance
Absorption capacity
for better practices
The sector shapes model
Pentagon is the desired
sector shape for realizing
sustainable agriculture
Flat pyramid
Hybrids
Pentagon
Economic Performance
© NewForesight
Type of competition
Inversed pyramid
Race to the bottom
Competing on quality
Competing on efficiency
Level of organization Very low
Low
High
Medium
Average farm size
Very small
Small
Medium
Very large
Economic
performance
Very low
Low – medium
High
Very high
Absorption capacity
for sustainability
Very low
Low – medium
High
Low – medium
Example of sector
Cocoa in Ivory Coast
Palm Oil in Thailand
Tea in Kenya
Soy in Brazil
6
Organizing the production base should be key priority and this
requires an understanding of the forces that shape a sector
The forces model
Enabling environment
• Access to capacity building, inputs & finance
• Policy/regulatory framework & enforcement
• Access to land, tenure & property rights
• General education and health care
• Infrastructure
• Organized effective civil society
Production characteristics
• GAPs (minimum requirements)
• Crop perishability
• Ability to mechanize production
• Barriers to enter /investments
• Possibility to add value upstream
Sector Shape
© NewForesight
Market characteristics
• Product Quality & safety requirements
• Visibility in end product
• Northern vs. Southern markets
• Power concentration in value chain
• Demand for sustainability impact
• Price volatility
Alternative livelihoods
• Alternative crops (within agricultural sector)
• Alternative occupations (also nonagricultural)
• Vocational diversification
• Migration (urbanization opportunities)
7
Flat pyramid shaped sectors have persistently high levels of
poverty and poor social and environmental performance
What happens?
Simplified sketch of the current situation
Finance
Extension
Extension Unorganized
Farmers
Inputs
© NewForesight
Traders
Brands
Standards, Premiums, Company programs
Characteristics
Consequences
• Production base is unorganized
• Competing on poverty
• Inexistent or ineffective service
• Low productivity
market (input, extension and
finance)
• Inexistent or ineffective products
market (dependency on trader)
• Uncoordinated support programs
• Farmers depend on external
financing
• Low product quality
• Low business skills
• Farming as “survival
mode”
• Not sustainable
How does this apply to four agricultural commodities?
Cocoa in Ghana
& Ivory Coast
Coffee in
Vietnam
Palm oil in
Indonesia
Cotton
in Mali
Economic
• Poverty
• High Yields
• Low yields
• Poverty
• Low yields
• Low quality
Social
• Child labor,
• Lack of alternative
• Poor labor conditions
• Child labor,
Environmental
• Chemical pollution
• Health & safety
livelihoods
• Health & safety
• Water depletion
• Deforestation
• Chemical pollution
• Overuse of chemicals
• Erosion
• Soil depletion
8
Yet, current processes aiming for full sector transformation fail to
reach a critical mass
Sector transformation explained: the S-Curve
Projects, Pilots &
Innovations
Competition:
Rise of VSS
Non competitive
collaboration
Level Playing field &
institutionalization
© NewForesight
Driving commitment
to sustainability
• Civil society
• Front runner companies
& donors
• Follower companies &
donors
• All, including
government
Producers adopting
sustainable practices
• Those involved in
specific, niche
projects.
• Late adopters, with
sector-based support
• All
Intervention
• Projects
Market demand
• Niche
• Non-competitive
investments
• Mainstream
• Regulation and noncompetitive investment
• License to operate
Coordination
• None
• Early adopters, with
existing sustainable
capacity
• Better organized and
capitalized farmers
• Standards and
certification
• Growing, but not yet
mainstream
• Competition
• Emerging alignment
and collaboration
• Full alignment
9
Voluntary sustainability standards (VSS) are an example of supply
chain driven instruments that promote sustainability
The value added by VSS
Key services of VSS
In response to public sector failure to
address sustainability, VSS added value by :
Platform for
dialogue
Sustainability
Standard
Key services
of VSS
Communication
& Marketing
Implementation
Support
Assurance
System
Traceability
Market shares of certified production (2013)
71%
29%
80%
82%
87%
20%
18%
13%
Coffee Cocoa
Tea
96%
Palm oil Cotton
• Creating consumer and industry awareness
on sustainability
• Providing a platform for dialogue and
governance
• Operationalizing the concept of sustainability
into concrete practices and norms
• Mobilizing market driven incentives for
sustainability
• Mobilizing investments in producer
organization and training
• Promoting transparency in supply chains
combined with assurance and traceability to
substantiate sustainability claims
98%
Soy
10
VSS face serious challenges to reach critical mass in sectors
dominated by unorganized smallholders
The challenges faced by VSS
Constraints in the VSS value cycle
Lack of demand in many sectors
Key barriers to reach the tipping point in
smallholder dominated sectors
Reaching unorganized farmers is
costly & a minimum level capabilities
and resources is required to adopt
comprehensive standards
Demand
Supply
Declining
competitive
advantage of
label use &
sustainability
not main
criterion for
consumer
purchases
Added
value
Credibility
of claims
Credibility impaired
due to impact and
assurance issues
Unsustainable
funding
model based
Implemenon profits
tation of
from
Western
best
practices industry and
donor money
Certified volumes
remain low in a
number of sectors
and certification is
not having the
desired impacts
Assurance
Impact
Limited impact
assessments and
mixed impact results
• Lack of demand for certified production
• Need to proof of impacts
• High costs and weak business case for
smallholders
Today’s challenges demand for
• A different perspective on sector
transformation
• New partnerships
• Complementary approaches, innovative
solutions and new business models
Issues with the quality of audits
11
Achieving a critical mass in sector transformation requires
investments that support farm quality and sector quality
Outcomes and requirements for achieving farm- & sector quality
Farm quality
Sector quality
Farm quality - outcomes
• Farmers (and their workers) earn a decent livelihood
• … are adaptive, resilient and innovating
• … produce at optimum productivity and product quality
levels
• … have positive social & environmental impact
Sector quality - outcomes
• Good product reputation on world market
• The sector is resilient in the face of market volatility and
climate change
• The sector has a net positive impact on natural capital and
quality of life in rural communities
Farm quality – system requirements
• Apply required knowledge (business & GAP)
• Optimize input use
• Viable farm size
• Sufficient negotiating power
• Respect social & environmental norms / laws
• Farmers are entrepreneurial and have the financial capacity
to manage risks and to invest in their farms
Sector quality – system requirements
• Is able to ensure access to quality technical assistance,
inputs and finance
• Is able to reward good performance (e.g. sustainability &
quality) and remove worst practices)
• Production base captures sufficient % of consumer value
and re-invests in the sector
• The sector manage or organize collective action on public
goods and natural capital
• Ensures a balanced voice and control between different
stakeholders
12
Whereas current models focus on either supply chain approaches or
sector approaches, reaching farm and sector quality requires both
Sector transformation models
Focus of sector transformation
Level of success per chosen focus
Supply chain
approach
Buyer driven
approaches such as
certification,
farmer support,
outgrower models
Low
Improvement of
Hard times
Farmers perform
poorly in a
dysfunctional
sector
Improvement of farm performance
High
Low
Focus on the sector approaches

Farm & sector
quality
Farming creates and
retains sufficient
value to invest
sector performance
Sector
approach
e.g. investments in
extension services,
input subsidies,
marketing boards
• Public services have often not been clientcentred and subject to political interference
• High cost of extension services and input
subsidies – create entrenched vested interests
• Marketing boards block traceability and do not
meet buyers’ needs for quality & integrity
Focus on the supply chain approaches
High

• Scale and scope of impact restricted by
demand
• Only reach low-hanging fruit
• Creates islands of sustainability
• Does not knit together farms, communities
and landscapes
Desired focus

 
• Holistic approach towards sector
transformation
• Focus on farm- & sector performance
• Focus on incremental improvement and
removal of worst practices
• Focus on sector capacity to re-invest in
sustainability
13
Table of contents
Introduction
The Sustainable Sector Transformation Model
Case study– Cotton in Mali
Appendix – the Sustainable Sector Scorecard
14
Two key principles guide the sector transformation model
Guiding principles of the proposed transformation model
I. Continuous improvement on farm quality
II. Sufficient value capture at production base
Manufacturing
Trade
Processing
• An intrinsic business case is in place for continuous
improvement on farm quality
• Mechanisms should be put in place that reward Farm
Quality (step wise) and remove worst practices
• A level playing field should exist for all farmers to get a fair
chance to upgrade their farm
National
public
sector
Production
15
The sector transformation model provides a comprehensive
framework along which strategies could be designed
The sustainable sector transformation model and its building blocks
I. Sector alignment & accountability
• Platform for sector dialogue, alignment
and coordination
• Shared vision and interest: FQ and SQ
• Joint strategy towards vision
III. Public sector governance
• Regulation and governance of
market
• Support mechanisms by the
government
• Alignment of investments,
technology packages and farmer
support measures
• Monitoring, assurance and learning
IV. Organization of
the production base
• Effective producer organization
for the service market
• Effective producer organization
for the product market
II. Strengthening of demand
• Market alignment and discipline
• Good buying practices
• Product traceability
V. Organization of
the service sector
• Technical assistance
• Input provision
• Financing
16
The required steps should follow a logical order to be most
effective
Organizing the building blocks
1
• The extent to which the
five building blocks need
to be strengthened is
context specific, but a
focus on only one or two
dimensions is bound to
lead to a failure to
completely transform
sectors .
• This transformation is
likely to be a process that
takes a number of years
• It follows some
consecutive steps in
order to be most
effective
• Whereas the first steps
can be described in
generic terms, follow up
steps will be dependent
on the specifics of the
sector
A group of stakeholders with a critical weight in the sector takes the initiative to transform the
sector. The initiating group should engage the other major actors and develop a shared vision on
farm- and sector quality and the implications for the organization of the production base and the
organization of the service sector.
2
The major actors align behind this vision, develop a strategy to realize the vision and agree on a
monitoring and assurance mechanism. Accountability is key and requires a strategy that is
measurable. Many of the failed transformation initiatives lack joint accountability.
3
4
The production base is reorganized effectively for the service- and product market. Vice versa the
service sector should cater effectively to the production base. This is not a matter of organizing
one before the other. It is about a stable symbiosis between service-and production sector, where
producers can pay for services that will further their continuous improvement cycle.
Implementing the vision/strategy will require a combination of public and market-oriented
measures, based on capacity and desire to implement change in the sector. If the dominant actor
is the government, then the initial focus of the transformation should be on improving public
sector governance. If the private sector is relatively concentrated and buying companies, traders
or service providers have leverage over producers, then the role of the private sector in realizing
the transformation will likely be stronger. Both always have to be involved in order to ensure
consistent messages and incentives towards farmers, whether via demand, service delivery or
policy. In line with this thinking, the public or private sector have an important role to build up a
professional service sector.
17
Table of contents
Introduction
The Sustainable Sector Transformation Model
Case study – Cotton in Mali
Appendix – the Sustainable Sector Scorecard
18
We have now finished the first draft presentations of the fives case
studies and will discuss these with the major stakeholders after the SC call
Overview of the five case studies
Cocoa
Cocoa
Coffee
Cotton
Palm Oil
Ivory Coast
Ghana
Vietnam
Mali
Indonesia
Jan Willem
Molenaar
(Aidenvironment)
Emma Blackmore
(IIED)
Joost Gorter
(NewForesight)
Laure Heilbron
(NewForesight)
Laure Heilbron
(NewForesight)
Sectors
Countries
Team
Laure Heilbron
(NewForesight)
Jan Willem
Molenaar
(Aidenvironment)
Jan Willem
Molenaar
(Aidenvironment)
Jonas Dalinger
(Aidenvironment)
In this presentation we will zoom in on the Cotton in Mali case Study
19
The cases studies have been analyzed by using a three-step approach:
sector profile, analysis per building block and roadmap development
Steps
1
Sector Profile
2
Sector analysis and
Recommendations
per building block
• Collection of sector background information
(structure, S-curve, forces, sector shape and
farm quality)
• Identification of current status per sub-building
block
• Description of desired status
• Appreciation of current status according to
Sustainable Sector Scorecard scored */ **/ ***
(higher is better ) (16 sub-building blocks see
appendix A for scoring framework)
• Identification of next steps per building block (5
building blocks)
• Consolidation of priority steps to obtain
sustainable market transformation
• Identification of business case
3
Roadmap
20
Table of contents
Introduction
The Sustainable Sector Transformation Model
Case study – Cotton in Mali
Sector profile
Gap analysis
Priority steps & business case
Appendix – the Sustainable Sector Scorecard
21
Cotton is Mali’s main cash crop, accounting for 22% of its total export
earnings and providing income to about 40% of the rural population
Palm oil in Indonesia
General profile
Size
(square kilometers)
Population size
(millions)
Median age
Economic profile
1,240,192¹
15,840¹
16¹
Rural population
67%¹
Labor force in
agriculture
70%¹
Sector profile
GDP (in $ billion)
10,9¹
Number of farmers
167.000²
GDP per capita (in $)
476¹
Total land size (ha)
540.000²
GDP per sector
Average crop plot size
3.1 ha²
863²
- Agriculture
39%¹
Average yield (kg/ha)
- Industry
24%¹
450.000²
- Services
37%¹
Total production volume
(tonnes)
Total value (in $ million)
642³
% of GDP
15⁴
% of national export value
22³
Sources: ¹CIA Factbook, ² Programme de developpement de la filiere du coton du Mali 2013-2018, IPC/CMDT 2013 (2012/13 figures),
³The Obervatory of Economic Complexity, ⁴http://www.maliweb.net
22
The cotton value chain is long with limited direct trade relationships
between brands/retail and producers
Value chain
• Long and complex value chain, making
traceability complex and costly
Retail
• Low industry concentration downstream
Garment processing
• Limited vertical integration downstream
Weaver, knitter and fabric
producer
Spinner
• In Mali, high concentration due to CMDT
monopoly in collecting, ginning and export
Textile processors
• Value chain structure and CMDT monopoly
does not favor direct trade relationships
between retail and producers
International cotton trader
20%
share
Exporter (CMDT)
Inputs
Ginner (CMDT)
Cooperative (UN-SCPC)
Smallholders
UN-SCPC
Price
setting
Membership
• All smallholders are organized in
cooperatives and member of UN-SCPC
• UN-SCPC has a 20% share in CMDT
• Cotton and fertilizer prices are set between
CMDT and UN-SCPC
23
Due to a high level of sector organization, the Malian cotton sector has
a relative low number of key stakeholders
Main stakeholders
Sector alignment & accountability
• L’Interprofession du coton du Mali (IPC-Mali) – Sector platform for dialogue and management with CMDT and UN-SPCS as main
members
• Better Cotton Initiative (BCI) - International multi-stakeholder sustainabiltiy initiative (collaborates in Mali with AProCA and CMDT)
• Fairtrade International & Organic - International certification initiatives active in Mali
• NGOs – Various scattered rural development activities
Public sector governance
Organization of production base
Strengthening of demand
• Ministry of Rural Development:
Responsible ministry for cotton
• Mission de Restructuration de Secteur
Coton : Responsible for privatisation
proces of CMDT
• L'Institut d'Economie Rurale (IER):
National research institute
• PAFICOT: AFDB funded cotton
development program
• UN-SCPC – National union representing
all cotton producers
• AProCA - African cotton producer
associaton representing UN-SCPC abroad
and BCI partner in Mali
• Mobium - Producer organization
implementing Fairtrade and Organic
certification
• Compagnie Malienne pour le
Développement des Textiles (CMDT) –
monopoly on seed collection and ginning
and export of cotton fiber (ownership:
78% Mali state, 20% UN-SCPC, 2%
GEOCOTON)
• International traders licensed by CMDT
• Brands & retail – imposing quality and
sustainability norms
Organization of service sector
• CMDT - provides TA to all producers and distributes inputs (via UNSPCS cooperatives) to all producers
• Input producing or trading companies – deliver inputs to CMDT
• FAO – program on integrated pest management
24
The cotton sector in Mali has reached a critical mass phase mainly due to an
external push. It still lacks national embedding to institutionalize sustainability.
The S Curve of market transformation
© NewForesight
Characteristics of current phase: critical mass
Characteristics of next phase: Institutionalization
Triggers for
change
• Some issues in the sector persist and threaten long-term
viability of sector
• Persistent issues are consistently tackled
Main change
agents
• Fairtrade & Organic: first movers but remains < 1% of
market
• BCI: 20% of Malian production is BCI licensed and plans to
scale up to 60% are on the way
• FAO: Piloting IPM and FFS concept
• CMDT: Increasing awareness and some investments on
sustainability issues
• CMDT, producers and government align strategy and investments
supported by international industry and donors
• BCI and FFS/IPM are fully embedded in CMDT’s standard practice
• Optional niche certification on demand
Who is against
change
• Despite CMDT awareness, it does not fully agree with
relevance and priority of proposed solutions by other
change agents, e.g. embedding of BCI and IPM is still weak
• CMDT may continue to struggle to balance between short-term
financial goals and mid to long-term sustainability ambition
• Unclear what the eventual privatization process of CMDT may imply
Driving forces
for the market
• Continued NGO campaigning and media pressure
• Reduced exposure to NGOs and media (for market)
• Longer term viability of the sector (for market and government)
• Healthier, wealthier and more entrepreneurial population (for
government)
Limitations &
barriers
• Lack of full alignment between change agents
• Insufficient resources to make required investments
• Economic viability of sector in global market (e.g. how to deal with
price volatility?)
25
Public sector regulation is a determining force in shaping the sector,
while the direct influence of the international market is relative low
The forces shaping the sector
The enabling environment
Production characteristics
• Perennial crop
• High need for nutrients and water and
susceptible for pests and diseases
• Low mechanization rate in Mali
• No irrigation is applied (but vulnerable to
climate change)
The enabling
environment
Production
characteristics
Market
characteristics
Alternative livelihoods
• Cotton is the main cash crop in Mali, little
alternative cash crops exist
• Mali is one of the poorest countries in the
world with limited off-farm livelihood
opportunities
• Cotton is a highly political crop due to
economic importance
• CMDT has monopoly on collection, ginning and
export, but uncertain privatization process
• Relatively strong extension service (CMDT)
• Pre-financed and subsidized input distribution
is centrally managed
• Poor access to basic services
© NewForesight
Alternative
livelihoods
Market characteristics
• 98% of cotton fiber is exported of which most
to Asia (>90%)
• Long supply chain, limited traceability, and
many indirect relationships
• Limited concentration downstream
• Regular NGO attention to sustainability
• Low demand for Organic or Fairtrade cotton
• Emerging demand for BCI cotton
26
The sector is fully organized, but the quality of organization can be
improved at production base and at sector level
The cotton sector in Mali is shaped as a pentagon
• CMDT organizes the seed collection, ginning and lint
export as well as extension and input distribution centrally
• All cotton is produced by smallholders (167.000) and they
are all organized in cooperatives (7.000). Capacity of most
cooperatives is weak.
• Cooperatives are part of the regional and national UN-SPCS
which partly owns CMDT (20% of capital). Their role at
sector level is increasing but, still considered weak.
© NewForesight
27
Despite the high degree of sector organization, cotton farmers are still
poor and practices undermine short and long-term sustainability
Farm quality
Farmers earn a decent
livelihood
Goals
Desired situation
• Many cotton farmers live below poverty line
• Cotton farmers are well above the poverty line
• Limited room for entrepreneurialism in CMDT topdown system
• Women are not involved in cotton production due
to pesticide use
• Entrepreneurialism is promoted by more participatory
extension methods and via professional service delivery by
cooperatives
• Cotton system is based upon crop rotation with
other crops (mainly subsistence)
• Vulnerability to climate change
• Increased profitability of rotational cropping system
• Production systems adapt to climate change
• Farmers have additional food and cash crops or of-farm income
• Irresponsible use of hazardous chemicals
• Hazardous tasks for children is common
• Respect of (inter)national norms and conventions on labor,
chemicals and environment and use of IPM
• Children go to school
Farmer produce at
optimum yield and quality
• Average yield is 850 kg/ha
• High fiber quality, but not consistently
• Potential yield is 1215 kg/ha (IPC, 2013)
• High quality is maintained consistently
Knowledge & application of
Good Agricultural Practices
(GAP)
• Farmers follow CMDT instructions of uniform
technology package across the country
• Current practices result in severe soil depletion
• GAPs are adapted to farm context
• Farmer can make own farm management decisions
• Fertilizer use sustains cotton production in long-term
• All farmers receive high quality input on credit, but
doses are uniform across country
• Lack of access to organic fertilizers
• Farmers use the right types and amount of inputs for their
particular context recovering soil health
• Organic fertilizers are available
• Average farm size is 10 ha, of which 1/3 can be
used for cotton (=national regulation)
• Farm size allow for a viable diversified cropping system with
increased intercropping synergies
• Negotiation power (relevant at sector level) is yet
insufficient, but increases
• Farmers, via UN-SCPC, negotiate on an equal basis with the
industry and government
• Limited willingness, no capacity unless on credit
provided by CMDT
• Farmer make well-informed investment decisions and have
access to external finance
Farmers are
entrepreneurial
Farmers are resilient
Farmers respect social &
environmental norms
Requirements
Current situation
Optimize input use
Viable farm size
Negotiation power
Willingness and financial
capacity to invest in their
farms
28
Table of contents
Introduction
The Sustainable Sector Transformation Model
Case study – Cotton in Mali
Sector profile
Gap analysis
Priority steps & business case
Appendix – the Sustainable
Sector Scorecard
29
The Malian cotton sector improves its sustainability performance, but
some fundamental weaknesses persist
Main conclusions of sector analysis
Sector alignment & accountability
• Sector-wide 5 year strategy exists, but falls short in obtaining short and long-term sustainability
• All farmers are registered and yields are monitored, other farmer quality aspects are increasingly monitored, but not yet used for sectorwide learning
Public sector governance
Organization of the production base
• The government has tight control over
the sector and provides farmers with
different safeguards and services
• Full production base is organized around
cotton, but not yet strong enough to
provide additional services to farmers
• Producer influence on sector governance
is limited, but growing
• At sector level, UN-SCPC has not yet
sufficient influence on CMDT and price
setting
Strengthening of market demand
• Market incentives for sustainable
practices are limited
Strengthening the service sector
• Sector-wide technology package lacks flexibility and falls short in terms of
sustainability ambition. Credible alternatives exist
• The sector has an increasing capacity to finance basic needs, but
additional finance is necessary to go beyond business as usual
30
Sector-wide 5 year strategy exists, but falls short in obtaining short and
long-term sustainability
I. Alignment & accountability – current and desired situation (1/2)
Score
Platform for
sector
dialogue,
alignment and
coordination
**
Shared vision
and interest:
on Farm
Quality and
Sector Quality
**
Joint strategy
towards vision,
including clear
KPIs
Alignment of
investments,
technology
packages and
farmer support
methods
Current situation
Desired situation
• IPC regroups the most relevant stakeholders: CMDT (national
• IPC is central platform for sector development and opens up
industry) and UN-SCPC (producers) and government (via
to other stakeholders (as observers)
CMDT)
• IPC is well managed and strong in facilitating sector dialogue
• IPC aims to facilitate dialogue, strategy development and
• UN-SCPC and CMDT have the capacity to use the platform as
negotiation
basis for strategy development
• Civil society and donors are not represented
• Common short/mid-term vision exists in sector strategic plan
• Long-term economic, social and environmental sustainability is
• Focus is too much on short term volume increase at cost of
basis of vision and pathway to get there. It is translated in a
sustainability and long-term economic viability of sector
step-wise improvement path (for example: BCI  IPM  soil
• CMDT organizes literacy courses, not on other social issues
fertility restoration ) and the identification of worst practices to
• Programs as BCI and IPM offer potentially step-wise approach
be excluded
to improve FQ, but not yet full buy-in from CMDT (CMDT
• Vision is supported by all key stakeholders
considers BCI still as a ‘niche’ and IPM as very costly)
**
• The sector-wide strategic plan includes clear objectives and
targets (on volumes, yield, quality, diversification, farmer
literacy, road infrastructure and processing capacity)
• Sector wide strategic plan reflects new vision and is adopted by
all relevant stakeholders
• It defines KPIs on farm quality and sector quality at sector and
individual stakeholder level
**
• Some dialogue exists between different donors and CMDT to
align investments / co-invest
• CMDT has uniform technology message and package (but it is
not adopted to local needs)
• Actors like BCI & FAO work propose alternative packages
(partly via CMDT system) but certain key people within CMDT
still have different views about the relevance of these
packages
• CMDT, Mali government and different donors structurally align
investments & co-invest
• All stakeholders agree upon key messages and technology
packages to promote. Technology packages take into account
local needs and step-wise approach defined in vision
31
All farmers are registered and yields are monitored, other farmer quality
aspects are increasingly monitored, but not yet used for sector-wide learning
I. Alignment & accountability – current and desired situation (2/2)
Score
Monitoring,
assurance &
learning
**
Current situation
Desired situation
• CMDT has records of all farmers (e.g. on surface
• Structural monitoring on key KPIs defined by the
and yield)
sector wide strategy
• BCI introduces more elaborate monitoring and
• Data is analyzed and lessons are fed back to CMDT,
assurance system (but not used at sector level)
farmers and other stakeholders (and farmers can
• Data from monitoring is not yet structurally used to benchmark their own performance against others)
provide input in sector strategy
• Additional assurance could be organized if the
market requires (and organized on a regional basis
• Fairtrade and Organic use external audits in
as with BCI)
assurance
32
Redefine vision and strategy to pursue long-term sustainability, further
align investments and intensify monitoring and learning
I. Alignment & accountability – Next steps
Sub building blocks
Platform for sector dialogue,
alignment and coordination
Next steps
• Strengthen IPC’s capacity to facilitate sector dialogue
• Strengthen UN-SCPC (& AProCA) on their role in the platform
• Open up IPC to other stakeholders (potentially observer status)
• Define business case of BCI, IPM and soil fertility restoration approaches at farm and sector
Shared vision and interest: on level
Farm Quality and Sector
• Define sector vision to reflect short and long-term sustainability of the sector and translate
Quality
this into concrete concepts farm and sector quality (e.g. BCI  IPM  soil fertility
restoration, school attendance, access to inputs, etc.)
Joint strategy towards vision,
including clear KPIs
• Based upon the vision and business case, revise sector strategy to introduce and scale
activities (e.g. BCI program or IPM) that ensure long-term sustainability and define KPIs at
sector level and per stakeholder
Alignment of investments,
technology packages and
farmer support methods
• Clarify investment needs for adoption for strategy and rally financers and donors behind it
Monitoring & assurance
• Set up a data collection and analysis system on KPIs on a wider set of farm metrics and use it
to improve the sector strategy and promote farmer performance (analyze options of
collaboration between CMDT, UN-SCPC, BCI, Fairtrade, Organic and other initiatives)
33
Market incentives for sustainable practices are limited
II. Strengthening market demand – current and desired situation
Score
Current situation
Desired situation
Market
alignment
and
discipline
*
• CMDT does not reward farmers for product quality
or sustainability, neither excludes producers for
certain worst practices (prices are equal to all)
• Relatively low demand for sustainable cotton on
international market ; some international buyers
willing to pay a small premium for BCI cotton on still
limited (but increasing) volumes
• CMDT’s export monopoly impedes direct importerproducer relationships, which is a constraint to the
Fairtrade system
• CMDT has no marketing strategy marketing for
sustainable cotton (e.g. BCI)
• CMDT uses farmer performance as basis for market
access and market incentives.
• CMDT has a clear marketing strategy on sustainable
cotton with good signals for the market
• International buyers demand for sustainability
performance and provide some rewards based upon
performance
• International buyers further co-invest in sector
improvement via non-competitive action (like with
BCI)
Buying
practices
***
• Farmers are paid in bank account after the input
loan is reimbursed via cooperative
• Farmers are paid in bank account after the input
loan is reimbursed via cooperative
***
• Traceability exists from farmer to gin
• Fairtrade or Organic require segregation from farm
to port and beyond and scaling requires additional • Continue existing CMDT product traceability model
investments.
• BCI allows both full Mass Balance or Segregated
• BCI requires physical segregation until the gin and
supply chains (from farm to port)
after which Mass Balance is allowed (resulting in
unnecessary costs at seed cotton transport and gin
level)
Product
traceability
34
Investigate options for differentiated pricing for different levels of
performance
II. Strengthening market demand - next steps
Sub building blocks
Market alignment and
discipline
Next steps
• CMDT investigates whether it can introduce a differentiated pricing for different levels of
performance
• International buyers demand more firmly for BCI cotton and co-invest in sector
improvement
• CMDT excludes farmers from their system that continue worst practices
Buying practices
Product traceability
• Focus on traceability rather than segregation, e.g. BCI introduces Mass Balance from farm
to gin
35
The government has tight control over the sector and provides farmers with
different safeguards and services. Producer influence on sector governance is
limited, but growing
III. Public sector governance – current and desired situation
Score
Regulation
where the
market fails
Support
mechanisms
by
government
Market
Governance
Current situation
Desired situation
**
• Weak enforcement of labor and environmental laws
• Lack of legal framework on GMO use
• Enforcement of labor and environmental laws
• Sound legal framework on GMO use
• Sound land use planning with regards to envisioned
cotton area expansion
**
• CMDT provides all farmers with inputs, instructions
• Government subsidizes fertilizers (144 $ US / ha);
probably necessary to make cotton viable, but no
incentives to increase efficiency
• Lack of road infrastructure & basic services
• Public research centre works a lot on cotton (largely
financed by CMDT)
• Governments invests in continuous improvement of
seed quality
• Government conducts regular soil testing
• Government invests in infrastructure and basic services
• Fertilizer subsidies are provided in such way that it
promotes fertilizer use efficiency (e.g. use of organic
fertilizers for soil restoration)
**
• CMDT has monopoly on ginning and export and
determines technology package, giving them tight
control over the sector. Producers partly own CMDT
giving them some power in its governance.
• Farm-gate price is set between CMDT and UN-SCPC
(within IPC) at beginning of season with possible
additional fee at end of season (fertilizer prices are also
set within IPC)
• UN-SCPC producers do influence price setting, but
perceived influence is still low, although increasing.
• Government pursues privatization of CMDT to reduce
financial risks and increase sector efficiency
• High transparency and producer influence over pricing
of seed cotton and fertilizers and CMDT governance
structure
• Communication of season seed price before planting
season
• CMDT has a sufficient large financial buffer to absorb
price fluctuations to maintain minimum price system
• If privatization takes place, the current advantages of
sector organization and control for FQ and SQ should
be maintained or improved
36
Maintain and improve safeguards in pricing and farmer support and
intensify public sector enforcement and support on social issues
III. Public sector government – Next steps
Sub building blocks
Regulation where the
market fails
Support mechanisms by
government
Market Governance
Next steps
• Enforce labor laws
• Develop legal framework on GMO use
• Reconsider fertilizer subsidy system to incentivize chemical fertilizer efficiency and
replacement by organic fertilizers
• Create soil fertility map and conduct regular soil testing
• Invest in improvement of seed quality
• Create awareness on worst practices (e.g. child labor) and attack root causes of these
issues (e.g. access to schooling)
• Ensure transparency in price setting negotiations
• Consider further increase of producer ownership and control over CMDT
37
Full production base is organized around cotton, but not yet strong enough to
provide additional services to farmers. At sector level, UN-SCPC has not yet
sufficient influence on CMDT and price setting
IV. Organizing the production base – current and desired situation
Score
Effective
producer
organization
for the
service
market
Effective
producer
organization
for the
product
market
Current situation
Desired situation
**
• All farmers are member of a cooperative, that via
• Cooperatives remain basis for distribution of preregional chapters are part of the national UN-SCPC
financed inputs
• Cooperatives provide members by CMDT distributed
• Cooperatives actively promote good performance
pre-financed inputs based upon joint liability on a group
according to step-wise approach and avoid worst
loan in kind for seeds, fertilizers and pesticides (on a per practices among members (at the penalty of loosing
ha of cotton basis). Whereas this creates peer pressure,
membership)
it may also fuel conflict within cooperatives.
• Cooperatives are strong and big enough to develop a
• Cooperatives are generally too small and too weak to
broader service package for their members (as well as on
develop additional services to members
other crops than cotton)
**
• Cooperatives are basis for collection of seed cotton for
which service they receive a fee (which is the main
source of income for the coops)
• At national level UN-SCPCs role in negotiating prices is
increasing, but relatively weak
• Cooperatives remain basis for seed cotton collection
• Cooperatives engage in marketing of other cash crops of
members
• UN-SCPC has strong and constructive influence on price
setting and is effective in representing its members
38
Invest in the consolidation and strengthening of cooperatives and
further professionalization of UN-SCPC
IV. Organizing the production base – next steps
Sub building blocks
Effective producer
organization for the service
market
Next steps
• Promote consolidation of cooperatives into larger units
• Strengthen UN-SCPC to support and/or coordinate cooperatives in additional service
provision to members (also non-cotton related)
Effective producer
• Strengthen UN-SCPC in its capacity to have a strong and constructive influence on price
organization for the product
setting
market
39
Sector-wide technology package lacks flexibility and falls short in terms
of sustainability ambition. Credible alternatives exist.
V. Organizing service sector – current and desired situation (1/2)
Score
Technical
assistance
Input
provision
**
**
Current situation
• CMDT organizes TA to all producers, irrespectively of
their performance. It is bundled with pre-financed
inputs
• CMDT technology package are uniform across the
country and do not allow for adaptation to context
(although it invests in the promotion of alternative pest
management practices)
• CMDT package are directive and do not promote
farmers to learn themselves what decisions to make
under different circumstances
• BCI system, working via CMDT, has a more flexible and
and participatory farmer extension approach
• FAO IPM program works via Farmer Field Schools, which
partly works via CMDT, is very participatory and allows
for maximum flexibility
• Emergence of specialized service providers (e.g. climate
assurance)
• Availability and distribution of pre-financed inputs
(cotton and to some farmers also non-cotton related
inputs) to all farmers which is repaid by a levy on cotton
seed payments
• Limited attention to sustainability impacts of inputs
prescribed and delivered by CMDT
• Lack of organic fertilizers or biological pest control
inputs (but investments in national production capacity
or import are on the way)
Desired situation
• CMDT applies a more flexible farmer support model,
allowing for context specific packages and driving
improved performance (BCI  IPM  soil fertility
restoration)
• CMDT applies a more participatory support approach to
make a farmer more capable in managing their farms
optimally. It is based upon the BCI model of learning
groups and demo plots or farmer field schools
• Specialized providers of additional services serve an
increasing number of farmers via CMDT or cooperatives
(includes social programs)
• Pre-finance and distribution of inputs to all farmers with
rewards for better performing farmers and
discouragement (potential exclusion) of non-performing
farmers
• Inputs provided (distributed via CMDT and UN-SCPC)
match sector sustainability ambitions at different levels,
especially on soil health, worker’s health and biodiversity
40
The sector has an increasing capacity to finance basic needs, but
additional finance is necessary to go beyond business as usual
V. Organizing service sector – current and desired situation (2/2)
Score
Financing
**
Current situation
Desired situation
• Basic inputs and TA are pre-financed by CMDT &
financial sector and repaid by producers.
• Government subsidizes fertilizers
• BCI program is financed by international industry and
donors, but funds lack to scale up quickly
• FAO funds IPM projects, but funds lack to scale up
• PAFICOT funds some infrastructure development
• CMDT finances some soil fertility restoration activities
(limited geographical scope)
• Pilot on climate insurance is in development
• The financial sector finances all basic operational costs,
repaid by producers and CMDT, with a decreasing need
for public subsidies over time
• The financial sector finances additional mid-term and
longer term investments (e.g. soil fertility restoration)
based upon a valid business case
• The financial sector provides additional financial
products such as crop and health insurance
• Donors and public sector provide guarantees or coinvestments to increase fundability of mid and long-term
investments
• In general, funding lacks to invest in the scaling of
• Donors and public sector (co-)fund initial investments,
practices that go beyond basic activities. For
such as scaling BCI and IPM and focus on social
investments in for example BCI, FFS, soil fertility
investments (e.g. infrastructure or gender & youth
restoration, infrastructure, gender and youth related
programs)
programs, additional funding seems to be required. The • Industry co-finances sector improvement via nonbusiness case of these investments is neither always
competitive alliances
clear.
41
Clarify business case and organize technical assistance, input provision
and finance around farm quality improvement
V. Organizing service sector – next steps
Sub building blocks
Next steps
Technical assistance
• Linked to business case of BCI, IPM and soil fertility restoration approaches scale more
flexible and participatory TA approaches within CMDT system (and by reliable partnerships
which provide training on key sustainability issues)
• Introduce service agreements with farmers which promote improvement and exclude worst
practices
Input provision
• Map soil fertility and adopt input recommendation to restore long-term fertility (introduce
more flexibility)
• Develop program around soil fertility restoration
• Invest in production/sourcing and distribution of organic fertilizers and biological pesticides
Financing
• Define finance mechanisms for mid and long-term investments (commercial , soft and
guarantees or subsidies)
• Attract financers for this model
• Set-up donor and public financed programs on social investments (working in complementary
with the sector)
42
Table of contents
Introduction
The Sustainable Sector Transformation Model
Case study – Cotton in Mali
Sector profile
Gap analysis
Priority steps & business case
Appendix – the Sustainable Sector Scorecard
43
The Malian cotton sector improves its sustainability performance, but
some fundamental weaknesses persist
Main conclusions of sector analysis
Sector alignment & accountability
• Sector-wide 5 year strategy exists, but falls short in obtaining short and long-term sustainability
• All farmers are registered and yields are monitored, other farmer quality aspects are increasingly monitored, but not yet used for sectorwide learning
Public sector governance
Organization of the production base
• The government has tight control over
the sector and provides farmers with
different safeguards and services
• Full production base is organized around
cotton, but not yet strong enough to
provide additional services to farmers
• Producer influence on sector governance
is limited, but growing
• At sector level, UN-SCPC has not yet
sufficient influence on CMDT and price
setting
Strengthening of market demand
• Market incentives for sustainable
practices are limited
Strengthening the service sector
• Sector-wide technology package lacks flexibility and falls short in terms of
sustainability ambition. Credible alternatives exist
• The sector has an increasing capacity to finance basic needs, but
additional finance is necessary to go beyond business as usual
44
Scaling sustainability requires a strong national buy-in to make the
proposed vision, strategy and approaches the national norm
Recommendations per building block for sector transformation
Define business case and create national buy-in
• Clarify business case of BCI, IPM, soil fertility restoration approaches as well as social programs
• Use business case to re-enforce national buy-in from CMDT and UN-SCPC (make BCI/IPM/ Soil fertility restoration the national norm) and
integrate this into the sector vision, strategy and KPIs Strengthen IPC, CMDT and UN-SCPC to ensure a balanced sector dialogue and
coordination
• Upgrade of CMDT sustainability data management system to include KPIs and to improve sector strategy and promote farmer
performance
Ensure transparency in sector
governance and promote social
performance
• Ensure transparency in price setting
between CMDT and UN-SCPC and
increase producer ownership in CMDT
• Intensify support and law enforcement
on social development
Organization of the production base
Creating market rewards
• Invest in the consolidation and
strengthening of cooperatives and further
professionalization of UN-SCPC
• Investigate options for differentiated
pricing for different levels of
performance
• CMDT develops a transparent marketing
policy for the commercialization of
cotton
Scale step-wise approach (BCI, IPM, soil fertility restoration) and social programs in the
whole sector
• Define finance needs for step-wise approach, determine finance mechanisms and attract financers
• Scale BCI, FFS investments to build a more flexibility and participation in CMDTs farmer support
approach and to ensure an efficiency in input supply
• Invest in production/sourcing and distribution of organic fertilizers and biological pesticides
• Set-up donor and public financed programs on social investments
45
Priority steps to further enhance the transformation of a fully
sustainable cotton sector in Mali
Priority steps
Service provision
Org.
of
Sector
Market
prod. governance demand
base
Allignment &
accountability
Clarify business case of BCI, IPM, soil fertility restoration approaches as well as social programs
Timelines
Who involved
Month 1-6
Use business case to re-enforce national buy-in from CMDT and UN-SCPC (make BCI/IPM/ Soil
fertility restoration the national norm) and integrate this into the sector vision, strategy and KPIs
Year 1
Strengthen IPC, CMDT and UN-SCPC to ensure a balanced sector dialogue and coordination
Year 1
Upgrade of CMDT sustainability data management system to include KPIs and to improve sector
strategy and promote farmer performance
Year 1
Investigate options for differentiated pricing for different levels of performance
Year 1
CMDT, UN-SCPC
CMDT develops a transparent marketing policy for the commercialization of cotton
Year 1
CMDT
Ensure transparency in price setting between CMDT and UN-SCPC and increase producer
ownership in CMDT
> Year 1
Various
ministries, CMDT,
UN-SCPC
Intensify support and law enforcement on social performance
> Year 1
Various ministries
Invest in the consolidation and strengthening of cooperatives and further professionalization of
UN-SCPC
Year 1-7
UN-SCPC
Year 1
Define finance needs for step-wise approach, determine finance mechanisms and attract financers
CMDT, UN-SCPC,
IPC, AproCA, BCI,
FAO
Scale BCI, FFS investments to build a more flexibility and participation in CMDTs farmer support
approach and to ensure an efficiency in input supply
Year 1-7
CMDT, UN-SCPC,
IPC, AproCA, BCI,
FAO, IFC
Invest in production/sourcing and distribution of organic fertilizers and biological pesticides
Year 1-5
CMDT
Set-up donor and public financed programs on social investments
Year 1-5
CMDT, UN-SCPC,
donors and gov.
46
Focus of scaling farm quality should be the introduction of a step-wise
approach bringing clear benefits to all 170k cotton farmers
Soil fertility
restoration
+
BCI/IPM via
demo plot
approach
Social
development
BCI standards
via learning
group
approach
Current
practice
47
There is a clear business case to invest in the whole sector
Yield
(kg/ha)
1,100
1,000
900
800
700
600
TBD
0
68
850
Baseline
BCI (yr1-2)
IPM (year 3-5)
TBD
1,800
1,600
Net annual
cotton farm 1,400
income
1,200
(US$ )
1,000
100%
Chemical 75%
pesticide use in
50%
% of baseline
25%
Soil fertility
restoration
75
202
1,443
1.443
1,443
1,443
Baseline
BCI (yr1-2)
IPM (year 3-5)*
Soil fertility
restoration
100%
45%
10%
10%
BCI (year 1-2)
IPM (year 3-5)
Soil fertility
restoration
0%
Baseline
Social
Performance
Child labor,
hazardous use
of pesticides
+PPE use
+Awareness
child labor
Baseline
BCI (year 1-2)
+ Reduced user
risks to pesticide
use
Interventions
A. 5 years intervention with 2 years BCI with learning
groups followed by 3 years of additional IPM support
• Benefits:
• +8% yield
• +19% net farm income
• 90% reduction in pesticide use (* not taking into
account farm labor costs for fabricating biopesticides)
• NPV : 1,227 US$ per farmer / 203 million US$ all farms
combined *
• For every US$ of investment, a farmer earns 9 US$
back in 5 years time and 22 US$ in 10 year
• Cost / farmer : 105 US$ in 5 years (awareness raising,
training, supervision and program coordination)
• Costs total sector : 18 million US$
• Estimated time to cover whole sector: 7 years
B. Soil fertility restoration where required (costs and
benefits to be determined)
C. Social programs where basic infrastructure is lacking
(costs and benefits to be determined)
+Access to schools
+women empowerment,
+engagement
Assumptions
• Cotton farm size of 3 Ha
• Time horizon for NPV is 10 years
• Discount rate is 15%
IPM (year 3-5)
Soil fertility
Social programs
restoration
Sources: BCI monitoring data and program costs budgets; average yield data by IPC; Settle W, Soumare´ M, Sarr M, Garba MH, Poisot A-S.
2014 Reducing pesticide risks to farming communities: cotton farmer field schools in Mali. Phil. Trans. R. Soc. B 369: 20120277.
http://dx.doi.org/10.1098/rstb.2012.0277
48
Table of contents
Introduction
The Sustainable Sector Transformation Model
Case study– Cotton in Mali
Appendix – the Sustainable Sector Scorecard
49
1. Sector alignment & accountability (1/2)
Sustainable Sector Scorecard
Description
*
**
***
• Representation of all major
Platform for
stakeholders in the sector
sector
• National buy-in and balanced
dialogue,
voice different stakeholders
alignment and
• Management at arm’s length
coordination
from government – though
with government as key
stakeholder
• Systems of checks & balances
• Clear roles & responsibilities
• Commitment of resources
• Strong leadership and
facilitation
•
With minimum & aspiration
Shared vision
levels.
and interest:
on Farm
Quality and
Sector Quality
No platform exists.
• A platform exists, but not all
• Platform exists which includes
crucial stakeholders
all major relevant
participate / several platforms
stakeholders.
exist in parallel.
• No actors in the sector
promote sustainability or only
very isolated activities.
Joint strategy • Including clearly defined
objectives and KPIs.
towards
vision,
• Includes a long-term vision
including clear
with sequenced milestones.
KPIs
KPIs need to be meaningful,
measurable.
• No strategy in place.
• Strong vision exists, but not
shared / sharing of weak
vision.
• Different actors promote
different concepts of FQ,
lower company commitments
undermine strong vision.
• Some strategy exist, but is
either weak or not joint
(different actors follow
different strategies to reach
their sustainability objectives
of different dimension.
• Yes, the sector is fully aligned
on a strong vision for FQ and
SQ.
• Clear, joint strategy of the
steps to be taken to reach FQ
and SQ and clear roles and
responsibilities as well as
commitments of different
stakeholders.
50
1. Sector alignment & accountability (2/2)
Sustainable Sector Scorecard
Description
• Investments made in the
Alignment of
sector are aligned across
investments,
stakeholder groups (around
technology
farm and sector quality and
packages and
farmer support how to achieve that), to
reduce duplication in effort
methods
and improve efficiency in
allocation of funds and
effectiveness of joint efforts.
Monitoring,
assurance and
learning
*
• No alignment of investments
in farmer support.
• Monitor to measure progress • No system in place to monitor
on FQ and SQ KPIs, to measure the implementation and
impacts and to facilitate sector success of a sector wider
wide learning.
strategy.
• Additional assurance could be
integrated if there is a demand
for it.
**
***
• Some actors align investments • All /most investments and
and support strategies .
support strategies are aligned.
• Scattered systems exist, but
not wide-spread or not
efficient enough.
• Primary focus on assurance
not on improvement of sector
strategy or farmer
performance.
• There is an efficient and
widespread monitoring system
in place (with additional
assurance options if required).
• Monitoring results are used to
promote learning at sector and
farm level
51
2. Strengthening of demand
Sustainable Sector Scorecard
Description
*
**
***
Market
alignment&
discipline
• Consistent enforcement of
• There is no agreement
• Some companies implement
vision on farm and sector
between companies on quality
quality purchasing and
quality by all market players in
purchasing and discrimination
discrimination of worst
rewarding best performers
of worst practices.
practices.
and excluding worst practices.
• There exist agreements
between the major companies
in certain landscapes/supply
sheds of companies on quality
purchasing and discrimination
of worst practices.
Implementation is monitored.
Buying
practices
• Companies compete to
become buyer of choice
through procurement
practices (reliability, payment
terms, transparency) that
reflect demand for
sustainability.
• Buying practices that do not
favor FQ.
• Some companies implement
• Buying practices adopted
buying practices favor FQ
sector-wide, and favor FQ on a
through reliability,
large scale.
transparency, capacity building
etc.
Product
traceability
• Ensuring products can be
traced back to the farm on
which they were grown.
• Requires tracking and
documentation of some kind
(and often for segregation to
be built into the system).
• Traceability systems not in
place or blocked by market
regulation.
• Traceability only in place for a • Traceability widely
limited number of niche
implemented in the sector or
chains.
replaced by monitoring based
systems
52
3. Public sector governance
Sustainable Sector Scorecard
Description
Regulation
• Where the market fails to
remove poorest quality and
worst practices.
*
**
• No, many cases where sector • Some good policies in place,
regulation falls short or is even but poor enforcement .
counterproductive to realize
market transformation.
• Support/subsidies to obtain
• Lack of services and
• Services and infrastructure
Support
inputs, research into
infrastructure (R&D, capacity
available only to elite farmers
mechanisms by
agricultural practices, crop
building, energy, water, roads,
or well served areas.
government
types, disease etc,
grades and standards, contract
infrastructure, basic services
oversight) put whole sector at
(water provision etc), credit
a competitive disadvantage.
and finance.
• Overall sector and farm quality • Counterproductive measures • Some good and some bad
Market
can be raised through
to regulate the market and
measures / lack of some
governance
regulation of supply, demand,
maintain sufficient value at the measures.
transaction systems, price and
producer base.
quality e.g.
• Via minimum prices
• Buffer stock management
• Marketing boards
• Auction systems
• Commodity exchanges
***
• In general the right regulation
exists and is effectively
enforced, removes
commodities produced worst
quality/illegal practice from
the market.
• Basic services and
infrastructure in place and
accessible to majority of
producers.
• Market governance is either
not needed or effective in
creating the right economic
environment, capture value at
the production base.
53
4. Organization of the production base
Sustainable Sector Scorecard
Description
Effective
Producer
organization
for service
market
• The organizational model that
enables efficient delivery of
high quality extension, inputs
and finance
Effective
producer
organisation
for product
market
• The organizational model that
allows for efficiency in supply
chains, rewarding of quality
and capturing sufficient value
at the production base to reinvest
*
**
***
• Producers are not organized in • While some effective
• Farmers are well organized
any way to ensure effective
organization models that allow and have access to
access to a high quality and
producers to access
competitive, high quality
competitive service market.
competitive service markets
service markets.
exist,
still
many
are
facing
• The service market is not
• Alternatively the service
monopolistic service markets
organized in a way to
market is organized in such a
or are trapped in trading
effectively serve a large
way to reach out to
relationships.
number of unorganized
unorganized farmers and
farmers.
provide them with high quality
services at a competitive price.
• Farmers have no choice where • Larger scale and/or better
• Most farmers are organized in
to sell their produce and their
capitalized farmers are
such a way that they can
lack of market power leaves
effectively organized to ensure access to a remunerative
little room to invest in their
access to a remunerative
product market which rewards
farms.
product market which rewards quality and leads to efficiency
quality and leads to efficiency
in the supply chain as well as
in the supply chain.
sufficient value captured at
the production base to invest
in farm quality.
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5. Organization of the service sector
Sustainable Sector Scorecard
Description
*
• Good quality extension
• Sector is not capable of
services are provided to
delivering basic TA.
producers to enable the
achievement of farm quality,
rewards good performance
and excludes worst practices.
• The deliverable model is
sustainable, accessible,
demand driven, participatory,
consistent, continuous ,
available, and bundled.
• Sector is not capable of
Input provision • Input provision supports
farmers in producing farm
delivering basic inputs or
quality. The deliverable model
inputs face quality and
is sustainable, accessible,
authenticity issues.
demand driven, consistent,
continuous available, bundled.
• Availability, accessibility and
• No formal provision of
Financing
relevance of short, mid and
affordable finance from value
long term credit to
chain, banks, warehouse
smallholders necessary to
receipts, producer
support investments in FQ.
organizations or microfinance
base.
Technical
assistance
**
***
• Sector delivers some TA, but
• Sector is able to deliver
not as driver for FQ or TA only
different levels of TA driving
reaches a very limited number
FQ and reaches out to a large
of farmers.
proportion of the farmers in
need for TA.
• Sector delivers some quality
input provision, but not as
driver for farm quality or the
services only are available to a
limited amount of farmers.
• Sector is able to
efficiently/competitively
deliver quality inputs in ways
that are adapted to
smallholder farms, driving FQ.
• Formal finance only available
to large farms with sufficient
collateral.
• The financial /private sector
provides finance in a
competitive and inclusive way,
with products adapted to the
smallholder majority.
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