LFM-DAPA present at the Agri-PPP Expert meeting at FAO in Rome
Last week CIAT’s Linking Farmers to Markets team participated in the FAO expert meeting for Public-Private Partnerships (PPP) for Agribusiness Development in Rome, Italy. For the meeting, the Rural Infrastructure and Agro-Industries Division (AGS) of FAO gathered information and evidence on 70 cases of agri-business PPPs from 15 developing countries. In a series of several sessions, the participants discussed potential benefits and challenges of agri-PPPs, drawing upon the experience of PPPs in Central America and Southeast Asia.
The lessons learnt from the workshop are meant to be used to provide guidance to FAO member countries on how to effectively partner with the private sector to mobilize support for agribusiness development.
According to the FAO, agri-PPPs are “formalized partnerships between public institutions and private partners designed to address sustainable agricultural development objectives, where the public benefits anticipated from the partnerships are clearly defined, investment contributions and risks are shared, and active roles exist for all partners at various stages throughout the PPP project lifecycle.”
The AGS of FAO made important advances to the literature by identifying four different types of agri-PPPs: i) partnerships for value chain development (VCD); ii) innovation and technology transfer (ITT); iii) market infrastructure (MI); and iv) agribusiness development services (BDS). Furthermore, they present practical guidance for policy-makers trying to work with the private sector to provide public goods in agricultural development.
In the context of the meeting, the CIAT’s LFM shared its experience analysing Colombia’s Rural Productive Partnerships project (PAAP – according to its Spanish acronym). PAAP is a PPP implemented by the Colombian Ministry of Agriculture (MADR) that has helped around 50,000 rural households to formalize agribusiness contracts with more than 400 commercial buyers.
There are several ways in which the LFM’s study of PAAP complements the findings of AGS on agri-PPPs and addresses some of the issues identified for further research.
Firstly, LFM’s study on PAAP especially focuses on the suitability and the effectiveness of PAAP as an agri-PPP project for the inclusion of marginalized groups. In the Colombian context, marginalized groups are producers from ethnic minorities such as Afro-Colombians or indigenous populations, displaced populations and producers living in post-conflict zones. LFM’s study found that agri-PPP projects such as PAAP can work just as well for small-holder producers from marginalized groups as for other producers. Interestingly, this is true without PAAP having had to make any significant adjustments in its instruments to promote inclusion.
Despite these finding, this need not necessarily be true for all agri-PPPs and therefore, other types of agri-PPPs should be assessed on the same grounds as PAAP in order to ensure their inclusiveness with respect to marginalized groups.
Furthermore, in the workshop participants highlighted the pressing need to improve M&E of agri-PPPs and to use quantitative data for the assessment of partnership performance. LFM created an index using M&E data in order to measure the performance of the productive partnerships that were formed within PAAP. Using principal component analysis the degree of value creation was assessed based on three dimensions: competitiveness, efficiency in business management and sustainability. In addition, survival models were used to analyse the duration of agri-business contracts. These are novel ways of assessing M&E data from an agri-PPP and this method could be applied to evaluate other types of agri-PPPs.
Finally, another conclusion from the workshop was that agri-PPPs have a positive impact on the net income of beneficiaries through improved market access, increased productivity or improved product quality. The LFM study of PAAP provides quantitative evidence from a robust impact evaluation that supports this argument. Data from a household survey was analysed using propensity score matching and results show a statistically significant positive impact of the project on household’s income from sales of the product sold through PAAP. In some cases there is also a positive impact on overall household income. However, the study does not find any significant impact on poverty and food security levels. This might have to do with the way these indices are constructed, and with the fact that it takes time for the benefits from PPPs to materialize in welfare indicators of benefiting households.
The benefits of PPPs are well now and their implementation in the area of agribusiness is not new. However, to date, a formalization of the concept of agri-PPPs as well as a synthesis of their benefits and challenges was lacking. Compiling the experience of 70 cases of agri-PPPs, FAO’s AGS did a great job at filling this gap through its workshop and its publication that follows.
Future research could build upon LFM’s experience studying the impact and performance of agri-PPPs such as PAAP, and AGS’s expertise in practical guidance for the implementation of agri-PPPs. Questions that remain are, for example, to what extent agri-PPPs can contribute to long-run poverty reduction and to the process of rural transformation and the closing of the rural-urban divide.
Rafael Isidro Parra-Peña S., PhDc Economist – Policy Analyst – @ LFM-CIAT
Jana Bischler, Visiting Researcher @ LFM-CIAT, University of Oxford, UK