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Value Initiative Program VIP

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Increase income, improve working conditions, and diminish ... 400 pieces of bangle per kg. Sold at around Rs. 20 per pair i.e. 4000/kg. Raw Lac. Manufacturer ... – PowerPoint PPT presentation

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Title: Value Initiative Program VIP


1
URBAN VALUE CHAIN DEVELOPMENT TOFU AND TEMPE
SECTOR IN GREATER JAKARTA
Value Initiative Program (VIP)
-MERCY CORPS INDONESIA-
2
Project Background
3
Indonesia
4
Greater Jakarta
5
Why in Urban Areas?
  • In 2007, the total population of Indonesia was
    232.9 million people, with approximately 40 of
    the population lives on less than 2/day.
  • 50 of the total population live in urban areas.
  • 40 of urban residents are employed in the
    informal sector.
  • Most tempe/tofu producers live in urban areas and
    are informal workers.
  • The tempe/tofu industry offers employment
    opportunities for individuals with limited formal
    education. It also offers an additional source of
    income for their extended families (remittances).

6
Urban Beneficiaries
  • Producers enthusiastically welcome innovations in
    tofu/tempe production.
  • Producers have a number of expansion
    opportunities.
  • Producers are risk averse. New products and
    techniques must first be demonstrated.
  • Producers quickly disseminate information through
    their social network.

7
Why VC Approach?
  • Tofu/tempe market contains constraints and
    potential opportunities.
  • Large number of actors along the entire value
    chain, from input suppliers and processors to
    producers and vendors.
  • High market demand for tofu/tempe products.

8
Value Chain Map
Input Supply
Processing
Preparation and Sales
Consumption
Wholesaling and retailing
Out door eaters
Large producers
Soybean wholesalers
Formal market
Food stalls
Medium sized producers
Wholesale Retail
Street vendors (cooked product)
Soybean Agents
Take home consumers
Wholesale Retail
Renter producers
Renter producers
Producer Group
Small producers
Cart vendors (Fresh Product)
Association of Soybean, Tempe and Tofu Producers
Consumer associations
Food and hygiene inspection org (BPOM)
Ministry of Small and Medium Enterprises,
Ministry of Trade and Industry, District
Governments, Commercial Banks, Microfinance
Institutions, Research Institute
9
VC Analyze

Tofu/Tempe Sector in Bekasi
Value Chain Analysis
Opportunities
Constraints

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Used cooking oil other toxic additives effect
human health
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Tofu/tempe is consumed by a large range of
consumers
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Linkage with formal markets


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Poor access to credit
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Negative environmental impact due to liquid waste
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Limited shelf life
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Demand driven in formal market for Good Health
Practice
W
Use of toxic additives
Cleaner production can reduce cost
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Inefficient production
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Liquid waste can be used for biogas
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Stove and biogas technology available

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Long term availability of traditional fuel
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10
Overal Causal Chain
11
Stove Causal Chain
12
Interventions
Improved stoves for street vendors
Technology Provider Ir. Syafriadi BPPT
Future Partner Ganjar Bimoli (cooking oil
company)
Fuel used cooking oil
13
Lessons Learned
  • Engaging with social networks are useful during
    the pilot process.
  • The tofu/tempe industry is male dominated, but
    women have a significant role in production
    decisions.
  • Equipment should be tested in the field before
    introducing it to beneficiaries and monitored
    thereafter.
  • Explaining value chain and market development
    approach with government partners was difficult.

14
Future Challenges
  • Access to finance
  • Assuring that lead producers will share their
    knowledge and access to markets with small
    producer (particularly in the formal market).
  • Getting local government representatives involved
    in the market (regulation).

15
TERIMA KASIH ! THANK YOU
16
Jaipur Jewelry Artisans Development (JJADE)
Project
  • The Value Initiative Program
  • ACCESS DEVELOPMENT SERVICES, INDIA

17
ACCESS Development Services, India
Livelihoods
Microfinance
A not-for-profit company, registered in 2006 A
team of 72 professionals in microfinance and
livelihoods development working through 18
different offices www.accessdev.org
18
(No Transcript)
19
Urban vs. Rural Value chains
  • Rural Value chains
  • Most of the livelihoods initiatives in rural
    areas
  • Rural economy is mostly based on natural
    resources
  • Subsistence a priority
  • Majority of products are farm-based
  • Strong social structures
  • Less intermediaries
  • Urban Value Chains
  • Mostly non-farm based (skills oriented)
  • Issues of migration
  • Diversified social structures and stakeholders
  • Multiple VC actor relations
  • Highly competitive
  • Low focus of the development community

20
Market Analysis
  • Gems and jewellery exports constitute 13 of
    Indias merchandise exports
  • Recorded export turnover of 2,566 million in
    September 2009 (compared to 2509 million in
    September, 2008)
  • Expected to return to high export-growth path of
    annual 25 by 2014
  • Gems and Jewellery Export Promotion Council
    (GJEPC) expects a 20 growth in the industry
    campaign to reach out to consumers
  • Besides US (40), India and China emerging as
    largest consuming markets by 2015
  • Jaipur - a historical hub for jewellery
    production with rich skills and craftsmanship

21
Constraints
  • Mostly led by large aggregators and businesses
  • Artisans have very low incomes
  • Largely a job order based industry
  • Global competition
  • Need for market diversification
  • Very limited inputs on product development
  • Demand for fashion jewellery growing

22
Introducing the project
  • Jaipur Jewellery Artisans Development Project
    (JJADE)
  • 20,000 artisans in urban locations in Jaipur,
    Rajasthan, India
  • Objectives of the Project
  • Strengthen the fashion jewelry value chain and
    make it competitive in national and global
    markets
  • Improve the working conditions of the artisans
    and improve their social well being

23

Semi-precious stones
Lac
Metal
Fashion jewelery
  • It has 3 sub-value chains
  • - Metal (65,000 artisans)
  • - Semi precious stone (1,35,000)
  • - Lacquer (also referred as Lac) (15000)

24
  • SEMI PRECIOUS STONES
  • From Mines to Markets

From Mines through chains of traders and
middlemen Mine workers _at_ Rs.50-80/ day Trdaers
buy _at_ Rs2- 3,000/kg
Graded and cut Labor Rs.15 per gram
recovered 20 loss of weight
Shaping, faceting and polishing Labor ranges
between Rs.11.5 to 15 /gm 40 loss of weight
Drilling and beading 8 loss of weight
Market
25
  • SEMI PRECIOUS STONES
  • From Mines to Markets

Constraints
Market opportunities
From Mines through chains of traders and
middlemen
At each stage the margins of brokers is 4 Net
wages range between Rs.40/ day to
Rs.70 Unskilled children earn as little as
Rs.10/ day Most of the transactions through
middlemen Delayed payments
High Skilled artisans One of the famous
processing hubs of stones Great demand for
semi-precious stones
Graded and cut
Shaping faceting and polishing
Drilling and beading
Market
26
B. METAL
Metal sheets provided by manufacturer
Metal sheets casted to rods
Rods pressed to sized sheets
Casting / Die Cutting
Stone setter
Finishing and polishing
Markets
27
B. METAL
Metal sheets
Constraints
Market opportunities
Metal sheets casted to rods
  • Skilled workers typically earn Rs.2000-3000/
    month
  • Most of labours are migrants and under bonded
    agreements
  • No social identity
  • Poor working conditions
  • Fledging industry
  • Easy availability of raw material
  • Good skills

Rods pressed to sheets
Casting / Die Cutting
Stone setting
Finishing and polishing
Markets
28
Raw Lac imported from other states through
traders and middlemen
C. LAC
Rs. 350 /kg
Provides raw lac.and stones Rs. 370 /kg
Manufacturer
Passes to household units
Coloring and melting of lac
Moulding and shaping
Stone setting and polishing
400 pieces of bangle per kg. Sold at around Rs.
20 per pair i.e. 4000/kg
Job work Rs. 250/kg
Finishing and marketing
29
C. LAC
Raw Lac
Constraints
Market opportunities
Manufacturer
  • Good potential for export market
  • Easy to work with
  • Practiced by skilled community called Manehars
  • Focused on the domestic market
  • The vast majority is on a job-work
  • Earn around Rs. 1200 to 1800 a month

Coloring and melting of lac
Moulding and shaping
Stone setting and polishing
Finishing and marketing
30
Constraints and Solutions
31
Solutions
Interventions
Outcome
More orders and market links
Improving markets Mainstream markets / Fair Trade
markets
Increased sales Better wages Improved income
Exploring fair-trade systems
Design inputs
Improving financial services in the value chain
Ability to acces finance and hence growth Low
dependency on informal systems
Finance
Production efficiency
Upgrading production efficiencies through
technological and skill up-gradation
Better skills
Efficient Production Better jobs
Improved information exchange
Equity in sharing of benefits Production
efficiencies
Better participation of artisans in the VC
Incorporating the best industry practices
Improved information Reduced costs
Reduced loss of margin along the chain
Schooling for working children
Better education and better employment choices
Education Facilities
Social Security
Social Identity and security
Social respect, better relations in Value chain
and entitlements
Market linked welfare solutions
32
Project Arch
33
Economic Interventions
Competitive Value chain and more equity in
sharing of margins in the VC
Increase in income
Reduced costs and better productivity and quality
Transparent and inclusive value chain
Access to finance by value chain actors
More orders volume and value
Ethical buyers linked to the industry
Fair trade markets
JJA, enterprises and artisans invest in new
good practices
Better delivery if design services by design
institutes/experts to enterprises
Enterprises and artisan groups are linked to
larger buyers and get better orders
Enterprises and JJA members practice and
certified as fair trade organizations
NGOs graduate as SEs and certified as Fair Trade
organization
MFIs and banks are more responsive and provide
customized products
Services of technology providers like JPDC
leveraged and quality of upgraded
JJA manages the IT platform for information
exchange and e-commerce
Artisans groups and Producer Company established
Improving Markets and Mainstreaming markets like
Fair Trade
Improving finances services in the value chain
Upgrading production efficiencies
Incorporating the Best Industry Practices
Creating awareness on Fair Trade and Ethical
Sourcing
Disseminating Best industry practices
Technology and skill up-gradation
Transformative finance
Demonstrate FT model
Design and product Development
Improving Export Market
Branding
IT platform
34
More orders and job works for the artisans by
improved participation in the VC.
Social Interventions
Improved working conditions
Better Social identity and security for artisans
Better employment opportunities, higher wages and
support enterprises
Improved physical working conditions
Access to education and life skill trainings for
working children
Social recognition in the VC
Linked with other govt. welfare programmmes
Insurance , social security and entitlements
CSR funds of industry and mandated govt. funds
dove -tailed to NGOs managing school
Middlemen as commission agents for ID cards and
Insurance
Ethical /Fair trade corporate buyers linked to
support schools
ID cards issued by industry association, Govt.
School /s adopted by JJA
Partner NGO as local Insurance agent
Schooling for working children
Social Security
Technology and skill up-gradation
Demonstrate a model school for working children
Transformative finance
Issuance of artisan ID cards
Providing Insurance coverage to artisans
Establish a Child Bank
35
Social Security
Improved working conditions
Increase in Income
Insurance by insurance service providers
36
Migrant artisans have no identity Small artisans
have no respect in the value chain Women are not
well recognized as artisans No entitlements
Migrant artisans have a social identity Small
artisans actively interact with other value chain
actors Access to entitlements Women are
recognized as artisans Economic benefits
37
Project Strategies
  • Linking the value chain actors to existing
    institutions and service providers
  • Facilitate convergence and collaboration with the
    government
  • Financial linkages banks and microfinance
    institutions
  • Support the artisans for graduating up the value
    chain through design, marketing and financial
    inputs etc.
  • Strengthen and develop entrepreneurs and social
    enterprises
  • Strengthen business models for local service
    providers
  • JAJ as critical partners to extend project
    learning to industry

38
Project Partners
  • Social restructuring
  • Schooling
  • Dissemination
  • Social Security
  • Graduate as SEs
  • Local service providers for social security
    products
  • Jan Kalyan Sahitya Manch Sansthan (JKSMS)
  • Bharat Gyan Vigyan Samiti (BGVS)
  • Rajasthan Abhyudaya Sansthan (RAS)
  • Jewelers Association, Jaipur(JAJ)
  • IT Interface
  • Markets
  • Dissemination to Industry
  • Our Other Alliances
  • Government
  • Gems and Jewellery Export Promotion Council
  • Arch Academy of Design
  • Pearl Academy of Design
  • Indian Institute of Crafts and Design
  • Jewellery Production Development Centre
  • Individual Consultants

39
Challenges
  • Global Economic Crisis Sustaining the Value
    Chain vs. Improving
  • JAJ as a critical partners the related risks
  • Abilities and interests of the partner NGOs
  • Complexities of the Value Chain
  • Need for timely research inputs

40
What we intend to learn?
  • Improving working condition linked to market
  • Appropriate model for schooling of working
    children
  • Capacities required to address the issues of VC
  • How can government be engaged more productively
  • Various enterprise and market models
  • Value Chain Financing

41
11,000 covered under awareness efforts 1,100
artisans identification cards 160 artisans
covered under Insurance 60 Groups formed
42
Fair Trade Sensitization of the
industry Enterprises and NGO member ready for
Fair trade certification
43
What we intend to see at Exit?
  • Increase in income of artisans
  • Better working conditions
  • Model school established and adopted by JAJ
  • Government agencies providing support to artisans
  • Better and competitive VC
  • Primary artisans having more share and
    participation in the VC
  • NGOs successfully transitioned as Social
    Enterprises
  • Value Chain Financing models in place

44
Thank you
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