The Golden Fleece Increasing incomes through value chain integration: ComMarks Communal Wool Farmers - PowerPoint PPT Presentation

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The Golden Fleece Increasing incomes through value chain integration: ComMarks Communal Wool Farmers

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sheep already part of communal farmers' livelihood strategies ... farmers ... ensure emerging farmers understand and trust the formal marketing system ... – PowerPoint PPT presentation

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Title: The Golden Fleece Increasing incomes through value chain integration: ComMarks Communal Wool Farmers


1
The Golden Fleece Increasing incomes through
value chain integrationComMarks Communal Wool
Farmers Project
12 June 2009 Lucille Gavera
2
context why this intervention
  • agriculture plays a vital role in rural
    economies as part of livelihood strategy
  • structural changes in commercial wool farming
    over last 15 years presents opportunity for
    emerging communal wool farmers
  • commercial producers exiting sector, opening
    economic space various reasons
  • Emerging communal wool farmers
  • 200 000 farmers
  • 3 million sheep in EC, FS and Lesotho
  • represents 13 of regional flock but accounts
    for only 3 of wool production and 1 of formal
    marketing (auction)
  • margin between communal woolfarmer price and
    national average

3
constraints
  • technological
  • genetic, herd and health management,
    unsustainable farming practices, supply
    constraints
  • production organisation
  • pasture and stock management in communal areas
  • infrastructure
  • shearing sheds, dipping tanks, fencing, kraaling
  • market development and capacity
  • low shearing, classing, grading and sorting
    standards
  • market acces
  • low production efficiency - inadequate volumes
    of low quality, unsorted, non-graded,
    unpackaged wool - constrained access to formal
    market / low returns from spot market
  • limited access to market information, market
    operation, price volatility, cost of embedded
    services (e.g. brokerage fees)
  • institutional capacity
  • limited representation at industry level because
    of weak collaboration participation in
    formal networks

4
Intervention Map
  • Implementation Partner
  • Time-frame
  • Budget
  • Expected Impact
  • 10 000 communal woolfarmers incomes Incr
  • Price/Quality signals

5
intervention objectives and activities
  • objectives
  • integrate existing interventions
    (techno/infrastr/instit) with sharpened focus on
    market access and market development improvements
    The Missing Link
  • Short-term Goal Access to Formal Market
    (increase the income of wool producers in South
    Africas communal areas by developing commercial
    market arrangements favourable to sustainable
    wool production and thereby reduce poverty)
  • Medium-term Goal Exploitign Access ( improve
    communal wool producers competitiveness in the
    market evolve from communal farming practices
    and pricing, to commercial farming practices and
    pricing
  • activities to achieve our objectives
  • organisation of producers into effective wool
    associations
  • co-ordinated collective shearing and marketing
    economies of scale (lower transaction costs than
    individually trade with formal broker)
  • increased participation of brokers in the
    marketing of associations wool
  • encourage private sector service provision to
    emerging wool producers build both parties
    confidence
  • direct wool extension services focus towards
    marketing and business development aspects of
    wool production

6
envisaged outputs outcomes
  • envisaged outputs
  • increased overall production and value
  • improvement in wool quality and consistency, and
    delivery reliability
  • progress towards commercialisation (decrease gap
    between commercial communal prices
    achieved)
  • capacitation and empowerment skills development
    of growers shed managers
  • envisaged outcomes
  • increases in income and standards of living
  • improved capacity to participate and exploit
    (direct and indirect) opportunities in (final
    good) formal market
  • member-driven shed structures with own
    institutional capacity (rather than support
    programme-driven)
  • better shed representation in formal industry
    and improved organisational structure
  • wool farming best practices embedded in broader
    farming mix (genetics, animal health etc)
  • increased access to and independent
    interaction with formal input supply, financial
    and service markets

7
intervention sustainability and time frames
  • sustainability
  • sheep already part of communal farmers
    livelihood strategies
  • wool has formed basis of rural economies in
    extensive farming areas over long period
  • wool has potential to earn foreign currency for
    communities improve economies of remote rural
    areas in South Africa with few other employment
    alternatives beyond migration / where social
    grants generally main income source
  • sustained demand for wool (natural fibre
    interest and increased demand from China)
  • price objectively determined i.t.o. quality
    delivered
  • potential for significant improvements in price
    received as wool farmers narrow gap between
    communal and commercial prices received for wool
    average communal wool price received in 2007/08
    1,620c/kg vs national clip average of 3,239c/kg.
  • potential for significant improvement in income
    potential of communal farmers 07/08 SA
    production 48 million kg at value of R1.569bn
    07/08 EC communal production 2.8 million kg at
    value of R45.514m, so theoretical potential for
    improvement R46.5-million and this is only in
    the Eastern Cape what about KZN (another 43,000
    sheep in 2 pilot communal wool-producing areas)
    and the Free State?
  • potential impact on number of individuals living
    in poverty impact of this programme only been
    initiated to relative small number of communities
    (300 shearing sheds 5,900 members). Extension to
    more wool sheep farming communities (846 sheds in
    the EC alone about 16,600 members), multiplier
    effect (4) could improve lives of about 70,000
    people in the Eastern Cape alone.
  • NWGAs overarching Training and Development
    Programme enjoys wide industry support.
  • Agricultural development needs
    multi-institutional, multi-disciplinary approach
    good partnerships established with the ECDA,
    the NDoA, local government, the ARC, UP, Pfizer,
    Parasol, etc. crucial to achieve wool industrys
    goal i.t.o. the development of communal wool
    farming
  • make use of best available expertise
  • address constraints and challenges of communal
    wool farming in an integrated manner
  • NWGA able to bring the needs of communal wool
    farmers to the attention of government
    departments, financial institutions and wool
    brokers
  • Government uses the NWGA to support its
    development programmes.
  • development takes time
  • poverty relief and the empowerment of poor
    uneducated people in remote rural areas, as is
    the case with wool sheep farmers within the
    communal areas of the Eastern Cape, is a complex
    and continuous process
  • it is unrealistic to expect communities to
    adopt new technology or to change existing
    practices within a period of 3-5 years.

8
Agribusiness Linkages Project
  • objectives
  • overcome business linkage problems that hamper
    the competitiveness and sustainability of
    emerging farmers
  • improve market mechanisms by connecting big
    business with emerging, small-scale farmers in
    remote areas of the Eastern Cape and KZN
    where access to good quality, affordable inputs
    are often erratic or non-existent
  • ensure emerging farmers understand and trust the
    formal marketing system
  • improve yields and higher quality produce,
    thereby increasing emerging producers incomes
  • activities to achieve our objectives
  • agricultural and economic development
    facilitation technical expertise, support and
    advice to emerging producers on farming
    techniques, business principles, output usage and
    engaging in the formal market system
  • credit facilities, and the facilitation of a
    system of payment and setting up delivery systems
    (holding nurseries, buying groups and depots,
    poultry hatcheries)
  • infrastructure development

9
Agribusiness Linkages Project (2)
  • envisaged impact
  • direct, sustainable linkages between emerging,
    small-scale producers and major commercial input
    suppliers
  • improvement in the engagement with the formal
    market system (in terms of inputs) and vibrant
    local market interaction (output), whether
    formal or informal
  • a number of small-scale producers become input
    suppliers themselves
  • substantial increases in production and income
    generated from agricultural activities

10
Overarching successes way forward
  • Stepping up and stepping out
  • Disseminating and linking lessons learnt into
    the design of new projects
  • Bringing together local and international
    partners and stakeholders with a broad range
    of skills and expertise
  • Building local capacity and expertise
  • More effectively accessing local and world
    markets
  • Direct poverty alleviation impacts
  • Consolidating and solidifying current projects
  • In-depth evaluation of project successes and
    problems encountered so lessons learnt can be
    used effectively when ComMark intervention ends
  • Ensure sustainability after ComMark intervention
    ends
  • Developing embedded institutional mechanisms for
    long term growth
  • Increase provincial and local government
    interfaces
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