CIAT and Heifer International recently expanded their collaboration on the LINK methodology to Asia. In line with Heifer’s new strategy, the common work focuses on value chain development and inclusion of farmers’ owned organizations into business-related activities. In 2016, with the support of CIAT Asia office, seven Heifer country offices have started to use LINK to support animal product value chains development.
A series of workshop seeking to build capacities
A first introductory workshop was conducted in Siem Reap, Cambodia, in June 2016, during which program managers of Heifer were trained on the LINK methodology. Back in their respective countries, participants trained their field staff and partners, and selected existing interventions suitable for using LINK. Most of the selected countries have been able to implement the three first tools of the method. Using participatory approaches and semi-structured interviews, Heifer staff and their partners mapped the value chains and characterized the business models of farmers, cooperatives and buyers involved in those chains. In a few cases they have been able to assess these business models against inclusion principles.
A backstopping workshop was organized early December 2016 in Nepal to review and adjust the first results from Heifer, as well as to provide recommendations and guidelines for further steps. The workshop was the opportunity to dive into the cases and provided space for peer reviews between Heifer countries. The first part of the workshop combined quick lectures from the facilitators on the essence of the LINK method as well as overview presentations from each participant highlighting work accomplished and main achievements to date. The second part of the workshop was dedicated to in-depth review of the cases. Participants were paired and proceed to review their cases as a peer-assist exercise.
The case of Bangladeshi goats
In Bangladesh demand for goat meat is steadily growing and domestic production is unable to match market demand, creating tremendous market opportunities for smallholder farmers. A young cooperative supported by Heifer has understood this and is now engaging to take advantage of these opportunities.
Most of the cooperatives members are small scale farmers with two to three goats and less than 400 square meters of land. With support from Heifer, the cooperative is using LINK to better understand and assess the market system in which engage and to frame their ideas in terms of business-related activities. The participatory value chain mapping highlighted that although they are small scale, farmers are pretty well connected to markets (through agents, as well as local and regional collectors), and seem to have a fairly strong bargaining power (due to this asymmetric market, where demand is far higher than supply).
Farmers get 75-80% of the goat meat retail price, enabling them get reasonable margins and making the business profitable. While downstream segments of the chain seem to function properly, upstream segments are far less efficient. Farmers struggle to access inputs and services (such as technical support, finance, and information), limiting their level of production and increasing operating costs.
Preliminary analysis of business models showed a high level of flexibility of value chain actors; transactions occur anywhere and at any time and are paid in cash. Prices vary according to the quality although no formal grading system is in place. Traders are numerous which strengthens farmers’ bargaining power. Low volumes lead to higher operational costs and impair the efficiency of the trading relationships. Traders’ margins are low and there is a strong demand from their side for bigger volumes, in order to match market demand and to generate economies of scale.
Based on these preliminary results, Heifer and the cooperative want to engage on increasing the level of production and developing more sustained business relationships. A prototype is being designed to achieve these objectives, focusing the cooperative on service delivery, including technical aspects (e.g. goat shed and disease control) as well as financial support. This prototype will be refined and implemented in the next few months, associated with a close monitoring of results – in order to be able to measure, adjust and adapt the prototype according to the changes brought by the intervention.
Similar processes are underway in the other South Asian and South East Asian countries, with support from CIAT researchers. Beyond capacity building of Heifer staff this learning cycle is also an opportunity for refining and adapting the LINK methodology to the Asian context. After this first round of implementation of LINK, participants were able to provide feedback on the method itself, and their comments, built on field experience, will be crucial to fine-tune LINK and make it suitable with the diverse reality of the ground in Asia.
In applying LINK, CIAT has played the roles of capacity building for different NGOs and support to private companies interested in inclusive sourcing and continuous improvement of the tool building on the lessons learned in field implementation with the support of CGIAR’s research program Policies, Institutions, and Markets (PIM).