Final Session: Creating RRAC Project Concepts

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Building Development Oriented Rural Enterprises
Training and Project Development Workshop
Final Session Creating RRAC Project
Concepts
Workshop Presentation
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DOCUMENT OVERVIEW
OVERALL TASK MORNING SESSION AFTERNOON SESSION
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FINAL DAY ACTIVITY

• You will go into your regional groups, and
  develop a concept to build a DORE in your project
  areas
• You will use the RRAC process, as you practiced
  in session 6
• You will use the data/estimates about the
  production and marketing conditions in your
  project area that you prepared before coming here
  
• You will have a whole day- in the morning you
  will work on the basic shape of the business, and
  in the afternoon you will on organization

• A lot of the ideas and outputs that you produce
  will be very rough, especially in financial and
  technical areas
• This is okay, because we are developing a
  project concept
• If the concept is good, you can go back and do
  all of these exercises in more detail, using more
  information and consulting with technical experts

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FINAL DAY PROCESS
PM Provide an Organizational Context
AM Design a Viable Business

• Profile your project area so your colleagues
  understand the context for the new DORE
• Select a crop and a customer for your project
  area, and estimate what the buying and selling
  prices will be
• Design the handling process based on selection
  of crop and customer
• Estimate the budget and conduct a preliminary
  breakeven analysis to make sure the business is
  economically sustainable

• Create an organization chart for the business
• Make an organizational development plan
  (including community development)
• Make a business development plan (including list
  of service providers)
• Design a performance management framework

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ESTIMATING THE ADVANCED PURCHASE FUND
Parameters for Calculation

• In 2008, the DORE is going to purchase 550MT of
  apples from local farmers in Chak
• The apple harvest starts in September and lasts
  for 35 days
• The farmgate price of apples is 26 cents per
  kilo, or 260/MT
• The company will pay for the apples when they
  arrive at the collection centre
• After they arrive, it will take about 14 days to
  get the apples to a customer and receive payment

Estimate of Size of Advance Purchase Fund

• If the delivery is spread out evenly, MT15.7
  will arrive per day (MT550/35 days)
• The value of one days produce is 4085 (MT15.7
  260/MT)
• It will have to pay this money every day for 14
  days on the fifteenth the company will receive
  payment from customers, and some of the profit
  can be used to pay for the apples that day, and
  every other day after that
• So the advanced purchase fund has to be 57,200
  (14 4085) for apples

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DOCUMENT OVERVIEW
OVERALL TASK MORNING SESSION AFTERNOON SESSION
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PROFILE PROJECT AREA
Explain geography, climate, productive
conditions, road network, etc
Describe social and economic factors like income,
debt, education levels
Explain what is grown and how it is marketed
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SELECT CROP FOR COMMERCIALIZATION
If you have more than one possible crop for
commercialization, you can prioritize them using
a matrix
Market Acceptance
Quantity Produced
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RECORD THE PURCHASE AND SALE PRICES
For the purchase price, take the farmgate price
and add at least 10-20
The sale price will be the normal price paid by
the customer you have chosen
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DESIGN THE HANDLING PROCESS
Customer Requirement

• Good quality produce, cleaned and well-presented
• Consistent grading by size and colour
• Delivered in cardboard boxes
• Long shelf-life
• No need for formal certification (i.e. organic
  or GAP)

Once you have chosen the target customer, you can
summarize their requirements for quality,
grading, presentation, and so on
Once you know the requirements, you work
backwards to figure out how to get the produce in
the form that your target customer wants it
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DO A BREAKEVEN ANALYSIS
Use the worksheet for breakeven analysis to
estimate the level of purchases sales needed
Use the worksheet provided to do a quick and
dirty budget- dont worry too much about this-
you can check it later
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DOCUMENT OVERVIEW
OVERALL TASK MORNING SESSION AFTERNOON SESSION
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CREATE ORGANIZATION CHART
1. Choose the split between the Ultimate
Authority, Management Group and Day-To-Day Manager
2. Identify the main responsibilities of the
governance groups and who will be in each group
3. Choose the division of line management units
and assignment of responsibilities
Remember that the Line Management units might not
be headed by professional managers they might be
headed by special community committees
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MAKE ORGANIZATIONAL DEVELOPMENT PLAN
2. Write down who or what groups will play these
governance roles at the beginning of the project
1. Put the main groups involved in the
organization and management of the business here
3. Write down who or what groups will play these
governance roles at the end of the project,
taking into account community capacity,
willingness, etc
4. Write down how you will make transition from
one to the other, e.g. what training will be
given, when the handover will be made, etc.
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MAKE BUSINESS DEVELOPMENT PLAN
Base the timings on how long you think everything
will take, and the usual preferences that donors
have
In the first period, just include the essential
features- the things that the business cant
function without
In the second period, add the luxuries- the
things that change it from a basic business to a
well organized and managed one
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MAKE SERVICE PROVIDER STRATEGY
Area
Preferred Provider
Main sub-activities

• FAO specialists

• Introducing improved varieties
• Pest management training
• Improvement of storage

Agricultural Extension

• Independent consultant

• Advice on strategy
• Advice on Postharvest Process

Management Support

• EU

• Initial investment

Funding/ Investment

• Training on group effectiveness
• PAR

Community Development

• Solving field problems

Research
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SET OVERALL TARGETS
Methods to achieve target (mission)
To raise beneficiary production quality up to
levels required by the modern trade market
To use local production to supply high-value
customers with the produce they demand
Overall target (goal)
To promote the welfare of its beneficiaries by
profitably commercializing the agriculture in the
area
To build the capacity of beneficiaries to
participate at all levels of the business
To create economic value on behalf of the
beneficiaries
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APPLY STAKEHOLDER SYSTEM
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Thank You