CIAT’s Linking Farmers to Markets research team, with support from CGIAR’s Policies, Institutions and Markets Research Program (PIM), has given different uses to the LINK methodology over the past couple of years with the goal of constructing more inclusive and sustainable business models. As of today, in Latin America only, there are around 50 case experiences of application and adaptation of the LINK methodology as a development tool, evaluation tool, or business tool (when an entire organization adapts and adopts the methodology as corporate policy). And, there are a couple more globally.

Sharing the outcomes, challenges, and lessons learned of these case studies encourages more actors from different sectors to support inclusive businesses and this encourages ongoing projects to use the methodology. In 2015, we shared two successful cases in an Inclusive Business Model Forum in Nicaragua: Coosmprojin-Walmart and CACAONICA-Rittersport. This year, three more cases studies were shared with 150 participants at a forum organized by VECO Mesoamerica, the Honduras Learning Alliance, and FUNDER within the framework of the third edition of AGROMERCADOS HONDURAS, with the purpose of highlighting success factors that could contribute to scaling models and practices in agriculture.

The Inclusive Business Model Forum’s sessions, which took place on 20 May at San Pedro Sula-Honduras, included the following:

  1. A presentation on inclusive business models.
  2. A presentation on the LINK methodology.
  3. A panel session on inclusive business experiences in Honduras.

The Forum’s discussion panels focused on the need to improve and promote the business models so that the agricultural sector could take real advantages of existing and emerging business opportunities. Among the proposals put forward by participants were (a) the need to clarify the legal framework to facilitate and create incentives for inclusive businesses, (b) the need to define mechanisms to finance or co-invest in technological innovation, and (c) the need to generate more events to share experiences with the private sector.

The LINK methodology helped the actors from the following value chains to characterize (1) the value chain actors, (2) the business model, (3) the level of inclusiveness, and (4) the areas of the model that still need some work to become inclusive and sustainable. Below you can find summaries of the cases written by VECO Mesoamerica for the Forum.

1. A sweet commercial relationship: Honey’s case experience

The seller: Cooperativa Apícola Pionera de Honduras Limitada (COAPIHL). Funded by eight beekeepers in 1977. It now has 61 beekeepers (21% are women) and more than 130 associates.

Location: Siguatepeque, Honduras

Background: This is an interesting case of a successful inclusive business model between COAPIHL and Del Corral supermarkets within the framework of Heifer International and the Ford Foundation project “Mujeres Rurales en Camino hacia la Prosperidad.” COAPIHL needed a business plan and needed to identify how to formalize the relationship with its buyers.

COAPIHL improved its corporate image, linked to markets with formal contracts, diversified its range of honey-based products, and managed to create a regional collective learning dynamic, in which many other actors are involved and are working with the cooperative. It is not just Heifer International implementing LINK within the cooperative anymore.

The value chain (Key Tool 1)

During the value chain’s analysis, the following areas were identified as needing improvement: production, collection, processing, and commercialization.

The business model (Key Tool 2)

Some alternatives to improve the business model are the following:

For COAPIHL: include more women in the chain, reduce side-selling of honey, meet payments to partners, and solidify membership based on the new cooperative law and regulation.

For Del Corral: establish direct communications and get COAPIHL involved in marketing plans.

The new business model principles (Key Tool 3)

The following graphic shows how the level of inclusiveness changes. Compared with the baseline, the level of inclusiveness of this value chain improves.

The actors are now working on the commercial relation’s inclusiveness by taking action in the following:

  1. Access to services and training
  2. Communication between actors

The entire summary of the case is available in Spanish. It includes the characterization and evaluation of the value chain and the business model, shows which areas need more work to become inclusive and sustainable, and shows the results and measures taken to improve performance.

“Through the process and the backstopping of Heifer and CIAT, COAPIHL developed a much more dynamic business model. Also, this business model, which includes other investments within its prototype, has been recognized by other organizations that have committed to supporting COAPIHL with technical resources and human and financial capital.”

Jennifer Zapata

Regional Director for Mesoamerica, Heifer International

2. Where cocoa trees share the landscape with cattle and basic grains

The seller: La Asociación de Productores de Sistemas Agroforestales de Cacao Orgánico de Olancho (APROSACAO). This association has 332 associated producers and 140 productive hectares. Most of its members are certified organic but there are some in transition for certification and some have conventional production systems.

The Buyer: Chocolats Halba

Location: Catamacas-Olancho, Honduras. This is Honduras’s largest province. Its population is mainly engaged in livestock and grain production. Cocoa, which is produced under organic farming systems, is an interesting ecosystem-friendly alternative that generates new income for rural families.

Background: This is an interesting case of a successful inclusive business model between APROSACAO and Chocolats Halba, a private Swiss company, which manufactures and distributes “Project Honduras” chocolates in supermarkets across the country through the Coop Company.  This case is part of a project financed by FAO and implemented by VECO Mesoamerica and CIAT. In this case, both CIAT’s LINK methodology and FAO’s inclusive business model guidelines were used.

COAPIHL improved its corporate image, linked to markets with formal contracts, diversified its range of honey-based products, and managed to create a regional collective learning dynamic, in which many other actors are involved and are working with the cooperative. It is not just Heifer International implementing LINK within the cooperative anymore.

According to VECO Mesoamerica, thanks to a more inclusive business model and technical and financial support from VECO Mesoamerica, Helvetas, and Chocolats Halba, APROSACAO achieved the following results:

  • Honduran cocoa has gained recognition by being part of the “Project Honduras” chocolates sold in Switzerland.
  • Cocoa farming families generate US$169 additional income.
  • An additional $400 per ton is paid over international cocoa prices.
  • The operating profit margin is 25%.
  • Of the cocoa sold to Chocolats Halba, 85% meets premium quality standards.
  • Women are involved in the production of handmade chocolates and postharvest activities, while young people have set up an organic fertilizer plant.

Nevertheless, with the results of LINK and FAO’s inclusive business model guidelines, the actors decided to further improve the commercial relation’s inclusiveness by collaborating on

  1. The quality, quantity, and frequency of measurements, and
  2. Equitable access to training and consulting services.

The following graphic shows the analysis of perceived inclusion and the aspects identified for improvement.

Read the entire summary to learn more (Only Spanish version).

“We began to produce to see what was happening; then we saw there is a market. Working with Chocolats Halba gave us access to loans for infrastructure and quality training. Now, every fifteen days, we have income from sales and we also have bonuses for certifications.”

Santos Chirinos

member of APROSACAO

3. From common potatoes to more than 30 premium horticultural products

The seller: Consorcio Agrocomercial de Honduras. It is composed of eight smallholder organizations: HORTISA, PROVIASA, La Meseta, Tropical Yojoa, ECARAI, APROLFH, Vegetales Lencas, and VERYFRUP. A total of 752 farmers (28% women, 5% youth) cultivate a total of 1,070 acres with 35 vegetable products. Since 2008, thanks to the support of FUNDER and the “Recursos para Mi Tierra” program, they established a business partnership with Supermarkets La Colonia.

Background: This interesting case shows how the consortium and Supermarkets La Colonia are successfully implementing the inclusive business model to obtain a consistent supply of quality produce and improved access to technical assistance. This case is part of a project financed by FAO and executed and implemented by VECOMA with CIAT’s support. In this case, both CIAT’s LINK methodology and FAO’s inclusive business model guidelines were used.

The value chain (Key Tool 1)

The value chain’s analysis identified the following opportunities for improvement:

  • Strengthen the link with La Colonia and La Antorcha supermarkets to boost sales.
  • Formalize relationships through marketing agreements that allow effective programming and management of support services.
  • Look for new international and national markets for products that the consortium doesn’t buy from producers.
  • Strengthen harvest, postharvest, and transportation logistics.
  • Implement direct billing through the consortium.
  • Strengthen the participation of youth and women.

The business model (Key Tool 2)

The analysis of the business model showed that the consortium remained dependent on donor subsidies to cover full operating expenses, which is not sustainable.

The new business model principles (Key Tool 3)

The principles showed that, although governance is transparent, there is access to services, collaboration between actors is satisfactory, smallholders are linked to markets, and outcomes are measured, but women’s and youths’ participation still needs to become more inclusive.

The following results were possible thanks to implementing the inclusive business model.

Read the entire summary to learn more (only Spanish version).

“We started in 2008 just with potatoes and now we have a basket of 35 different products. Since they were smallholders, we had to scale up the production and arrange financing.”

Miguel Arita

Supermercados La Colonia

The authors of this blog:

Mark Lundy

Mark Lundy

Theme Leader, Linking Farmers to Markets (LFM) - Decision and Policy Analysis Research Area (DAPA)

Natalia Gutiérrez

Natalia Gutiérrez

Analista de comunicaciones, CIAT

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