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ValueLinks useful tool for identifying economic opportunities: the case of threatened forest landscape in Madagascar

ValueLinks useful tool for identifying economic opportunities: the case of threatened forest landscape in Madagascar

Saro essential oil and raffia fibre prove to have the best economic and forest regeneration potential in the Antanambao forest landscape (Boeny region): processing and exporting companies (also) invest in the production and regeneration of the raffia and essential oil plantations, although still at low rates.

These are the results of a study carried out by Fair & Sustainable Consulting (F&S) for the GIZ Sectoral Programme “International Forest Policy” (SV IWP) in Madagascar. The objectives of the study were :

(a) to select and analyse forest related value chains that have potential to generate revenue for the local population, and

(b) to evaluate the restoration potential of the Antanambao forest landscape that is under threat due to over-exploitation, insufficient replanting, uncontrolled bushfires and grazing.

Photo of final export product of raffia fibers (photo credit: S. Kappers)
Photo of distillation unit of Saro essential oil (photo credit: S. Kappers)

F&S analysed the high-end wood craft market, and the honey, raffia fiber, saro essential oil (Cinnamosma fragrans) and silverpalm seed (Bismarckia nobilis) value chains. The ValueLinks methodology activities consists of mapping actors and their commercial relationships, and an estimation of production costs, added value and revenues for the different value chain operators. The current land use and land interests were also analysed, and a proposal was made for the demarcation of the landscape based on water catchment areas and potentially conflicting land use. This land use analysis showed production – natural resource interdependencies, such as a raffia forest playing a key role in water conservation and water supply to rice fields.

Map with proposed restoration options in the Antanambao forest landscape

The team was led by F&S consultant Jochem Schneemann, with Sophieke Kappers and Gerald Randriambololona as team members.

Jochem : “The ValueLinks selection and analysis tools worked well; to our satisfaction we succeeded to produce fair estimates of the economic and natural resource conservation potential of each value chain in a qualitative and quantitative way. I think this was the first time it was done this way. Developing the infographic was again interesting as we really had to limit ourselves to the most essential information and message.”

GIZ published the full study and the French and English infographics (see also below), which can be downloaded here.

Infographic showing 4 value chains and their potential for landscape restoration and income generation (developed by Fair & Sustainable Consulting, funded by GIZ)

For more information, please contact Jochem Schneemann at jochem.schneemann@fairandsustainable.nl.

Five key questions in basic market research in rural Africa

Over the past year, I did a number of quick market studies in different countries in Africa. I experienced that it is relatively easy to get data, for example with a simple survey tool like KOBO. However, when analyzing the data I encountered a number of challenges that you may recognize.

Wholesale market of tomatoes in Muyinga, Burundi (photo by André Vording)

1 What is the product quality?

Comparing prices between markets A and B seems easy, but are we referring to the same product quality? Often quality is not  clearly defined, so it needs some investigation to find out which quality is referred to.  Also, quality over time is often different: an average tomato in the high season is often of better quality than in the low season.

2 What is the variety of the product? 

For instance, one can take the price of a generic product like potatoes. But one can also look into specific varieties Some varieties of e.g. potatoes, coffee or rice have a much better price than others.

3 What is the weight or volume measurement used?

Ideally, measurements would be in kilograms, however in rural Africa often other measures are used like bowls, buckets, or bags. The size of these measurements is likely to differ between places as well as the extent to which they are filled. This may also vary between the dry and wet season. For some crops, like coffee, it becomes even more complicated as one bag of red berries, dried coffee, washed coffee, green coffee and roasted coffee all have different weights, due to their different  moisture content.

4 At what time of the day do we visit the buyer?

While prices for farmers are likely to be stable during the day, traders often face changing prices during a market day. Prices tend to be higher at the beginning of the day and lower towards the closing of the market. This applies especially to wholesale markets for more perishable products, which traders do not want to take back to their warehouses.  

5. When comparing prices do we take into account (embedded) services provided by the buyer?

Especially the location of collection of the product (e.g. farm gate, warehouse, in town) and payment conditions (e.g. pre-finance, cash payment, delayed payment) will result in different offers even if the price offered is the same.    

So, it is good to keep these issues in mind when gathering price data or comparing prices. This will provide a better basis for calculating profitability in different parts of the value chain.

For more information, please contact andre.vording@fairandsustainable.nl

Gender lecture at Maastricht School of Management

On Thursday 11 July 2019, Fair & Sustainable consultant Jochem Schneemann delivered a guest lecture about the business case of gender interventions at the Maastricht School of Management (MSM). Participants were 30 professionals from 16 countries – who followed the 2-weeks MBA summer course in Global Value Chains and Sustainability. Jochem presented the results of a study last year in Ethiopia where his team assessed the costs and benefits of gender interventions in flower farms.

The study was commissioned by IDH – the Sustainable Trade Initiative, with project partners:  the Ethiopian Horticulture Producers and Exporters Association (EHPEA), the Floriculture Sustainability Initiative (FSI) and Business for Social Responsibility -BSR.
The gender interventions undertaken by the flower farms consisted of:
(1) Establishing gender committees
(2) Review of the Human Resources policy, including code of conduct on gender based violence, a grievance system and a chapter on gender equality
(3) Training of managers, staff and gender committee members on equal rights, gender sensitive management, role & responsibilities of the gender committee, hygiene and sanitation, nutrition and family planning.

One of the outstanding results of gender work in the Ethiopian flower sector was that workers paid more respect to each other, women got more confidence and felt more safe at the work floor. The figure below features the good gender and labour practices (on the left) that were identified at the selected flower farms, and business benefits (on the right).

The relationship between good practices and business benefits

After the presentation the participants discussed about questions, such as:

  • Do you see a gender gap in your sector/company? Can you explain?  Why is there (not) a gap?
  • What is the dominant thinking about gender (gap) in your organization or sector ?
  • What is being done to address gender in your sector? Is there a gender policy/are there gender interventions?  What is your opinion about it? 

It came out that in most organizations, men have the majority of positions at management level, that women often get paid less for the same position. Which is a global phenomenon. There was debate as to whether a quota or fixed percentage of men and women at management positions should be aimed for.

Jochem’s response: “Discussion showed that there are pro’s and con’s for a quota, but this often remains a long debate. More fundamental is that companies ensure a level playing field for all staff with regard to opportunities. This requires companies to identify the capacities and aspirations of their (female and male) employees, and making investments in women, so they can realise their ambition and reach the same level and positions as men.”

Consensus existed that business arguments would make the best chance to convince executives to commit and pay attention to gender equality. Overall, it was a lively debate and open exchange across a large diversity of backgrounds and nationalities. MSM has invited Jochem for another guest lecture on 11th of December 2019.

For more information: jochem.schneemann@fairandsustainable.nl.

F&S trains main actors in mango value chain in Guinea

From 20 to 24 June, Fair & Sustainable Consulting (F&S) gave a training in Kindia (Guinea) for all companies and organizations that are involved in the mango value chain. F&S was invited by the Belgian Development Agency (ENABEL) to give this training. The training is part of their Agricultural Entrepreneurship program,  that aims to improve the competitiveness of entrepreneurs in the mango sector in an inclusive and sustainable way.

During the training, main actors involved in the mango sector were trained to gain a common comprehension of ways to analyse and develop the mango sector. The thirty training participants were divided in three sub-groups who all focused on another market: exports of fresh mango to neighbouring countries, exports of fresh mango to the EU, and dried mango for the domestic market.

The three groups mapped and analysed their value chain, defined a vision for development of their chain, and identified priority actions to be implemented. At the end of the week each group made an action plan with sustainable solution for the development of the sector.

You can read more about these sessions in this article (in French) or contact Annelien Meerts at annelien.meerts@fairandsustainable.nl.

Impact via exports: a selection of export-oriented value chains in five African countries

Trade fosters economic growth and creates employment. Export increase and diversification is, therefore, an important strategy for various African countries to create sustainable and inclusive economic development (UNCTAD, 2018). CBI, the center for the promotion of imports from developing countries, supports small and medium enterprises (SMEs) in these countries to expand their exports to Europe.

CBI implements programs in sectors and value chains that have the potential for more exports and meet European market demand. They do not only look at opportunities in the European market but also at opportunities for reducing Corporate Social Responsibility (CSR) risks. CBI:

  • offers export coaching programs to make SMEs in developing countries export ready;
  • provides technical support to business support organizations in developing countries to increase the added value for their exporting members;
  • develops market information on potential export sectors in Europe;
  • informs and influence policymakers;
  • involves importers in Europe in the development and implementation of our programs.

As a consulting firm with a lot of experience in value chain selection, analysis and development, Fair & Sustainable was hired by CBI to conduct a value chain selection in five African countries: Egypt, Uganda, Kenya, Sierra Leone and Guinea.

Leading in this assignment was exploring a series of value chains with potential for more exports to Europe; linking products produced in the five African countries to the European market demand. This focus brings extra opportunities to make the selected value chains more inclusive and fair as a growing number of consumers in Europe, Africa’s main trade partner, buy organic and/or fair trade products.

Value chain selection

Our value chain selection approach comprised of two phases. First, a long list of 5-7 value chains per country was made by exploring matches between promising value chains with potential European market demand. This list was based on desk research (e.g. statistics, reports, policy papers) and interviews with (CBI) experts. Inclusion criteria for value chains were the development of European demand, export potential, current production and exports, whether the value chain is mentioned as a priority in the National Export Strategy. Moreover, as CBI only works with SME exporters, it was checked whether these were present in the selected value chains.

Second, the five countries were visited for one week each to gather additional information. In interviews and focus group discussions with private and public actors obstacles and opportunities in the value chain, CSR risks and potential cooperation partners (e.g. other donors, export promotion agencies, the Netherlands Embassy) were discussed. Cooperation partners are important for CBI. As they work with SMEs at the end of the value chain (export), they can add value to programs of other donors who often focus on the supply chain.

Based on the above results, Fair & Sustainable filled CBI’s scoring tool, an Excel file with 30 weighted items ranging from European demand, export potential, competitive advantages to possible cooperation partners for CBI, CSR opportunities and CSR risks. This generated the following shortlist of 1-3 value chains per country:

Egypt: apparel, home textiles, sustainable tourism

Uganda: tourism

Kenya: fresh fruit and vegetables (avocado), macadamia nuts, aquaculture (tilapia)

Sierra Leone: coffee, cashew nuts, tourism

Guinea: Fonio, coffee, cashew nuts

Business case development

Based on the value chain selection, Fair & Sustainable developed eight initial business cases ideas (iBCI) for a CBI program. For the selected value chains in Egypt, Uganda and Kenya.

In one meeting per value chain, Fair & Sustainable and CBI staff formulated ambitions and possible results for a CBI program in that chain. Again, finding the right product-market combinations for exports to the European market and opportunities to remove (CSR) obstacles were leading. In addition, external experts were interviewed to provide input as well.

CBI is currently in the process to decide which iBCIs proceed to the next stage. In this phase, an in-depth value chain analysis will be done on the value chain itself and the European market demand to revise the business case and find partners for the implementation of the proposed CBI program.

More information? Contact Annelien Meerts via annelien.meerts@fairandsustainable.nl

UNCTAD. (2018). Exports Diversification and Employment in Africa. UNCTAD. Retrieved from https://unctad.org/en/PublicationsLibrary/aldc2018d3_en.pdf