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Turning value chain challenges into business opportunities

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Solo Niu! Coconut Oil Value Chain Stakeholder Map, in Solomon Islands

© CTA

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Jana Dietershagen, CTA Technical officer for the project ‘Promoting Nutritious Food Systems in the Pacific Islands’, explains the importance of stakeholder and value chain mapping and how targeted capacity building approaches create ownership.

Mary Jane Hou Kaikari, certification officer of the Solomon Islands Virgin Coconut Oil Producers Association (SIVCOPA), was one of seven Pacific farmer leaders / key experts who received training in approaches and tools for Optimising the Performance of Producer Organisations (OPPO) offered by the Wageningen University and Research Centre for Development Innovation (WCDI), The Netherlands. The training was followed by technical backstopping from WCDI and CTA with support from the Pacific Islands Farmer Organization Network (PIFON), to enable the participants to apply the OPPO tools and lessons and conduct targeted training in their local context. PIFON also incorporated lessons learned from the regional OPPO activities and published a revised PIFON Value Chain Guide.

This technical support also helped participants to develop inclusive business models with the active engagement of their farmer members and other relevant stakeholders.

Since May 2019, the seven Pacific OPPO champions have collectively trained around 1,750 individuals in Fiji, Kiribati, the Marshall Islands, Samoa, Solomon Islands and Tonga, and supported upscaling of the approach across the Pacific through online webinars.

After endorsement of the OPPO approach, Kaikari has developed a new farmer-inclusive business model, to support her association to turn a current problem that was reducing export demand in the virgin coconut oil (VCO) market into an opportunity. As the international VCO market price dropped, the association is tapping into new opportunities in the local market. “Our association consists of 81 Direct Micro Expelling (DME) processing units in all nine Provinces of the Solomon Islands and 1,311 coconut suppliers [farmers]. DME allows rural produces to extract pure VCO. Our vision is to improve village livelihoods. We have been producing VCO for over 10 years; now, we want to increase our incomes by producing a range of value-added VCO products for domestic markets and use other parts of the nut that are otherwise being wasted in the oil-making process. By applying the OPPO tools, I have learnt to build up a new business model. At first, it was hard, but once I grasped the concepts, it was easy as the tools all link to each other,” details Kaikari.

The importance of value chain analysis and stakeholder mapping

Being aware of the challenges, weaknesses and strengths of a specific value chain can help identify income-generating opportunities. Thus, one of the first steps to arrive at a pitch-able, investor-ready and farmer-inclusive business model, is the collection of data and the analysis and mapping of priority value chains and stakeholder systems.

A complete value chain and stakeholder analysis enables understanding of: price fluctuations, consumer preferences, traders’ and processors’ requirements, market mechanisms, how best to negotiate and bargain, sensitivity around the efficiency and costs of production, quality management, timely supply, collaboration and coordination of chain activities and involvement in policy development and advocacy.

The final visualisation of the processes and actors involved gives an overall picture of the current situation and helps to clearly communicate, to a wide range of actors, the main options for improving positioning in the value chain and market systems. By participating in the analysis of value chains farmers and their organisations can better identify challenges, weaknesses, and strengths and to identify new income-generating opportunities.

In the case of Kaikari’s association, VCO can be promoted in the local market as a substitute to imported vegetable oil, emphasising the traditional as well as the internationally recognised health benefits. The key to the business model is that the DMEs are based on family units operated by farmers and family members, and with help from other villagers. Many of the coconut paddocks are family-owned with both men and women having equal rights to their management. Most of the farmers supplying the DMEs apply traditional, organic methods and are specialised, full-time producers. SIVCOPA farmers and processors ensure production best practices are followed to consistently meet the quality standards of the Asian and Pacific Coconut Community’s (APCC) certified graded oil. They are being trained to produce and package the new VCO products for the local market.

The bigger picture

All the business cases developed by the OPPO alumni aim to enhance governance, strengthen collaboration and improve trust among value chain actors, particularly between producers and buyers, producers and government, producers and financiers, and between producers themselves, in order to strengthen the priority, nutrition-sensitive, local value chains. The range of VC stakeholders is made visual in the seven value chain and stakeholder maps for each case that was supported through the ‘Promoting nutritious food systems in the Pacific Islands’ project.

“Having been exposed to the OPPO approach, I can now see myself as someone who can help my organisation to move forward in developing this commodity, and to bring our producers’ association to a level where it can manage its own affairs and have influence at the government level and with other stakeholders,” says Kaikari.

By facilitating opportunities for interactive knowledge-based training as well as blended-learning through technical backstopping – both on and offline – at the individual and organisational level, and supporting the creation of the enabling policy and institutional environment, the ‘Promoting nutritious food systems in the Pacific Islands’ project is strengthening agricultural innovation systems in Pacific Island States.

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