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Decision and Policy Analysis Research Area – DAPA

Designing inclusive business models in Central America

By: Érika Mosquera and Natalia Gutiérrez

Versión en español

Taller Modelos empresariales nuevos

Between the 23rd and 26th of September 2013, the workshop “New business models: building inclusive and sustainable trading relationships between buyers and small scale producers in Central America” was held in Nicaragua. An event that started a two years learning cycle with the member organizations of the Regional Learning Alliance of Central America, an initiative promoted by CIAT since 2003. The purpose of a Learning Alliance is to promote collaboration among international non-governmental organizations, research organizations and development organizations, to encourage practical joint action to exchange knowledge and contribute to the design of more effective development strategies, more appropriate policies and research processes that respond to the demands of the rural sector.

The concept of Learning Alliances emerged because of the limited collaboration between research and development which brings about difficulties in accessing information and knowledge on approaches and processes on inclusive rural development and as a consequence inhibits development efforts to be as effective as they could be.

The Alliance’s learning cycles are the mechanism through which members of the Alliance select the themes (or learning issues) that will guide their work and start a process of designing – testing – evaluating to allow quick adjustments during implementation in order to achieve results in a more efficient way. In these cycles, the members of the Alliance follow seven steps:

  1. Identify what to learn at the end of the process (the learning question).
  2. Review and recognize the knowledge that currently exists (internally and externally) to answer the learning question (existing good practice).
  3. Select methods and/or tools identified as good practices that will be used or adapted (prototype) to answer the learning question.
  4. Joint practical development of the prototype that will be applied in the field (through training and personalized counseling).
  5. Implement the developed prototype (through field application).
  6. Conduct writing workshops to reflect on what has been learned and share lessons learned with others(documentation and systematization of results); and
  7. Identify empirical evidence for the conceptual development and recognize political implications, which will lead to improved practices and knowledge (selection of learning experience).

These cycles are designed as a process of iterative learning, where learning occurs as actors move towards their goals. Since trying new things is inherently risky and involves failure as an option, these learning cycles are no guarantee for success, but a process that allows to “fail forward”.

Learning cycle

2013-1014 Learning Cycle

This cycle, funded by the Organization of the Petroleum Exporting Countries (OPEC), has two main objectives. On one hand it aims to improve the regional capacity in Central America to evaluate, design and optimize business models, so that they generate sustainable benefits for small-scale farmers. On the other hand, to test and adapt the LINK methodology to the regional needs of Central America, as well as building a set of empirical data, case studies and lessons learned relevant for the region, which connect with the key actors of rural development through the Central American Learning Alliance.

This work will be carried out with four development agencies that participate in the Alliance and who will develop eight pilots in two countries (Nicaragua and Honduras), including 2,718 smallholder farmers         (793 women and 1,925 men).

The expected results are:

  • Eight inclusive business models that contribute to the improvement of the livelihoods of the Smallholder farmers.
  • Increased development capacity among development partners.
  • A regionally adapted version of the LINK methodology.
  • A common data base and case studies that help improve development practice, influence the regional donor discourses and public policy briefs, and improve the understanding of the role of market linkages for poverty reduction in Central America and beyond.

To achieve this, the cycle will pass through three phases:

  1. The opening workshop where the first prototypes from the LINK methodology were built (workshop held in Nicaragua)
  2. The field application of the prototypes will be accompanied by CIAT and will include strategic documentation of evidence (key data records that corresponds to previously defined areas of advocacy).
  3.  The systematization of results in order to widely share insights.

Link methodology_toolThe 2013-2014 learning cycle is focused on the LINK methodology to assess the state of current business models between a seller (who may be a first, second or third tier producer organization, either association, cooperative or informal group) and a buyer (which can be an intermediary, retailer or wholesaler) and aims to jointly develop more inclusive business models leading to measurable changes for producers and buyers in Central America.

The opening workshop that was held in Managua, Nicaragua had the following points on its agenda:

  • Designing a theory of change and a joint monitoring framework for the participating partners.
  • Getting to know, the four tools that provide the LINK methodology in a practical way: the value chain map, the business model canvas, the principles for inclusive business models, and the prototype cycle.
  •  Identifying the specific cases that each partner will work on to develop and implement the prototype in the field.
  • Preparing work plans and follow-ups for the rest of the cycle. Reviewing the budget for the co-financing specific activities to provide additional support to partners.

The workshop was guided by CIAT‘s Linking Farmers to Markets team, and includes 12 representatives of four partner organizations of the Central American Learning Alliance: Catholic Relief Services (CRS) Nicaragua, VECO MA (Vredeseilanden Meso América), The Swiss Foundation for Development Cooperation (Swisscontact), and the Tropical Agricultural Research and Higher Education Centre (CATIE), which is currently the facilitator of the Alliance. Additionally, the workshop hosted representatives from CRS El Salvador, CRS Haiti and VECO Andean; and members of Peru’s Learning Alliance: the Netherlands Development Organization (SNV), Practical Action and the Sustainable Rural Development Program provided by the German Society for International Cooperation (GIZ, for its German acronym).

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