Innovation in value chain

innovation in forestry territorial and value chain relationships innovation entrepreneurship and sustainable value chain in a dynamic environment
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Published Date:07-07-2017
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Article Innovation research in value chains By Henning Høgh Jensen et al. Please see the full list of cp-authors on page 18. In large parts of the Sub-Saharan sub-continent, smallholder agricultural production and food security has remained consi- 1 stently low . Natural resource management is in distress and most rural Africans remain poor and food insecure despite wi- despread macroeconomic, political and sector reforms. Most predictions are that these Africans will remain food inse- 2 cure in the foreseeable future . In this article, the authors pre- sent the novel ProGrOV project. a renewed optimism, which A paradigm that has is taking root in a number dominated agricultural of African countries, inclu- research for several decades ding Uganda, Kenya and is that Sub-Saharan African Tanzania, which have de- smallholders operate wi- monstrated high economic thin their production-pos- 4 growth rates . We do not sibility frontier. However, know the winners and the recently this perception has losers yet – just that they been challenged suggesting are there. Not all farmers that they produced close to will have the capacity to or on the frontier of the ca- join the market orientations 3 pacity of the agro-ecology . towards high-value com- Innovations are changing modities. They are simply the production-market not able to innovate. landscape much faster What is innovation? than expected and many What is innovation then? smallholders in East Africa Innovation is a buzz-word are undergoing a profound and there are a multitude transition from cereal-ba- of definitions. Within the sed subsistence farming to business management mixed-enterprise, market- literature, innovation is oriented agriculture. mostly seen as a tool used Certified organic agricul- by entrepreneurs to create ture is used as a case in the a resource that will give research project “ProGrOV” them an advantage over (Productivity and Growth 5 their competitors . Or more in Organic Value-Chains), a broadly, some see an inno- project that aims at strengt- vation in an idea, practice, hening the farmers’ ability or object that is new to the to supply the products that individual, a newness that the markets require. gives a value to the indivi- Renewed optimism in 6 & 7 an outcome, where the most Local innovation dual when implemented . African countries important final feature Local innovation can be So we can say that inno- A market-oriented agricul- may be involving change triggered by many factors. vation is linked to entre- ture has been promoted or a discontinuity with the It may be a farmer that preneurs and it represents by many agents of change. prevailing product/service explores new possibilities newness, it has a relation to And the change is hap- or market paradigm. to solve a problem. Or it invention or to its process pening. The last ten years may be a social way of of adoption. As such, inno- have been characterised by responding and adapting to vation is both a process and 2/2011 10Article Article Figure 2. Chain linked model showing flow paths of informa- Figure 1. Schematic representation of the value chain. 12 tion and cooperation . changes in access to natural extraction of surplus from to ensure that the recent op- The research concept that resources, assets, or mar- customers who have dif- portunities and challenges we develop kets. In this project we focus ferent willingness to pay for from a dynamic market will Traditionally, researchers of in particular on the later the various products. It also be appropriately adjusted by innovation in value-chains approach, where we exa- adds convenience since all the actors in the chain. refer to the general model of mine the high -value market products are packed neatly Kline and Rosenberg (Fig. Information flow and chain. into one little bag– ready to 2). However, as this is a re- interpretative skills This picture illustrates an be shopped and go search project based on far- This requires not only infor- innovation developed by ming, farming products and Limitations and barriers mation flow but also skills the entrepreneur AMFRI participation in developing along the chain to interpret the signals and Farm, a private company in countries, we have tried The basic characteristic of a react to them. The reacti- Uganda exporting organic to add some further ideas value-chain is that there is ons, for example, may be fruits, spices and fruit pulp on how to research value value addition at each step in the form of new product overseas. The plastic bag chains in this context. Sta- along the chain (Fig. 1). This innovation, which again contains just two typer of keholder participation and value-addition happens often requires innovations chilli peppers, a ginger tu- partnerships are cornersto- through the combination in the primary production. ber and lemongrass. Based nes in modern paradigms with other resources, e.g. For smallholder farmers this on this simple innovative of integrated agricultural manpower, tools, knowledge might be a significant chal- combination, the net profit research for development and skills, and often other lenge, especially in the ab- per unit weight of the spice (IAR4D) and such new para- raw materials. To enable this sence of significant back-up is larger than if sold in bulk. digms call for change in the value addition, there has or support from other chain The innovation – known way agricultural research is to be feedback information actors. There are different 9, 10, 11 in the marketing jargon as being conducted . from the market or retailers options to ensure that the “bundling” – is that one Our approach to research to the processers, the produ- value addition is actually bag fits into the dinner- value chains is schema- cers, etc. This kind of feed- beneficial to the weaker shopping of a busy city tically shown in the fol- back loops are well known agents in the chain, such as dweller who likes fresh lowing diagram (Fig 3). At from systems dynamics. In poorly organised smallhol- spices but does not fancy the bottom of the diagram 8 this context, the loops need der farmers . buying a whole lot of each are depicted the informa- spice.. This method of pri- tion feedback loops that cing and selling a variety of bring back translated news goods by “bundling” them (signals) regarding mar- into one package, allows the ket requirements, retailers Productivity and Growth in Organic Value-Chains (ProGrOV) Improving productivity and growth in existing organic value- chains in Uganda, Kenya and Tanzania. This is what the research project ProGrOV is about, by way of developing agro- ecological methods, governance and management of chains, and by capacity development regarding research focussed on organic and interdisciplinary approaches. The project is a collaboration between Universities in Uganda, Kenya, Tanzania and Denmark. It is funded by the Danish Mi- nistry of Foreign Affairs and coordinated by ICROFS. Read more at 11 2/2011Article requests, etc. These signals at satisfactory prices. Thus, Projecting the future of necessary to discuss the fe- may include price deter- when performing biologi- the present asibility of the intervention mining information like cal/agricultural research in Finally, when getting an with the farmers (i.e. would preferences for certain order to improve organic idea and translating it into they potentially be able to intrinsic quality attributes production at field and farm an innovation, the entre- find an duse equivalent (e.g. maturity, size/weight, level one needs to take these preneurs are projecting amounts of manure?). uniformity in colour, shelf intrinsic quality attributes what philosophers call Intervention incentives life. It could also be extrin- into account. “projecting the future in the for farmers sic quality attributes such as present”. By this they mean Interpreting the intrinsic The starting point for far- food safety, production met- that we do neither know quality attributes mers accepting or shunning hod and the values that are the future, nor consumers’ These intrinsic quality at- the intervention during the embedded in certified or- possible preferences – and tributes should be translated consultation will be avai- ganic, environmental issues we base our expectati- into quantifiable quality lability or lack of impro- or place of origin, which ons of consumers’ future criteria to be used for asses- ved breeds of dairy cattle may relate to the concept of behaviour on their current sing the crop and livestock amongst the farmers. One the “terroir”. In addition to behaviour. If that was true, production resulting from example is the large framed this complexity, a product there would have been no the innovations tested in Friesians that consume lar- may have different markets markets for PCs, liquid soap, ProGrOV. Thus, for example, ger quantities of fodder ne- that emphasise different Facebook, fashion clothes, an indication that the colour cessary for producing larger attributes. An example may not to speak of pineapples or of tomatoes is an important volumes of manure. Given be fruits that are needed at bananas in Danish grocery attribute for the buyers that intensive dairy-vege- different degrees of matu- stores. would then be translated table production systems rity by two apparently fairly into a scale of percent green Stakeholders test the increases the availability of similar markets in Europe. parts of a batch of toma- research questions organic fertiliser, which can Conversely, it can be a toes, which would then be The upper side of the be applied to the vegeta- product that is sold both at applied systematically to as- diagram (Fig. 3) represents ble garden to maintain the a local market, which has sess the tomatoes harvested the research process, which quality of the vegetable an emphasis on its role as a in crop experiments. is informed by the stake- yield as demanded by the traditional dish, and in an The information on the at- holders, i.e. the national consumers, there might be export market where it is tributes and their prioritiza- organic organisation, a strong enough incentive valued because of its exotic tion and thresholds etc. will farmers, private companies, for farmers to accept the flavour. come from interactions with and selected markets such intervention. An intensive The approach to quality in the chain agents e.g. buyers, as local supermarkets, etc. livestock- vegetable produc- ProGrOV research retailers, hotels, etc., in the The research questions and tion system helps to diver- From the above examples relevant PoGrOV studies, research findings are tested sify farmers’ earnings and of quality attributes, it which deals with the chains. in value-chain stakeholder empowers them to be less may be obvious that it is Thus, product quality in forums. The tests thus act as vulnerable against natural complicated to describe the ProGrOV project is a dissemination a forum for and economic shocks associ- such quality attributes in a relative and context de- reality check for the resear- ated with the single commo- way that makes them “re- pendant concept and does cher, as well as a forum dity approach in agricultu- searchable” (quantify and/ not postulate to be neither where the fine-tuning of re. Moreover, interventions or qualify, reproducible). For objective nor covering all the research is taking place on how to handle and use the purpose of the ProGrov aspects of (intrinsic) pro- and actions are taken to manure as soil amendments project, we have a priori duct quality. However, the adjust the research. The fora has room for improvements chosen to focus on organic interpretation of the intrin- obviously differ along the in organic agriculture of value chains with certain sic quality attributes will be value chain. Thus, if one east Africa since many extrinsic quality attributes in terms of reproducible and assumes that a certain input farmers do not distribute attached. However, there are quantifiable indicators to be of livestock manure could this resource efficienlty and still important intrinsic qua- used by the researchers and improve the amount and sometimes use it in herbal lity attributes which organic communicated as part of quality of vegetables, then concoctions with tephrosia, products need to fulfil in results. before testing this inter- paw paw leaves and Me- order to gain market access vention experimentally it is xican marigold to produce 2/2011 12Article Article Figure 3. Schematic representation of innovation research in primary value chains involving relevant stakeholders. organic insecticides. Further reading 1 Kumwenda AS (1998) Soil Fertility Research for Maize-based Farming Systems in Malawi and Zimbabwe. Value-chain research can In: Soil Fertility Research for Maize-based Farming Systems in Malawi and Zimbabwe (eds.: Waddington SR, help the whole chain Murwira HK, Kumwenda JDT and Tagwira F. Proceedings of the Soil Fert Net Results and Planning Workshop, Value-chain research can be 7-11 July 1997, Mutara, Zimbabwe. CIMMIT. pp. 263-269. said to provide a tool or an 2 Pinstrup-Andersen P and Pandya-Lorch R (2001) Meeting food needs in the 21st century. How many and who interdisciplinary research will be a risk? In: Who will be fed in the 21st century. Challenges for Science and Policy (eds.: K Weibe, N Bal- approach in its own right lenger and P Pinstrup-Andersen). IFPRI, Washington. to help researchers, entre- 3 Barrett CB, Place F, Aboud A and Brown DR (2002) The challenge of stimulating adoption of improved preneurs, and stakeholders natural resource management practices in African agriculture. In: Natural Resource Management in African at each part of the value Agriculture (eds.: CB Barrett, F Place and AA Aboud). CABI International, Wallingford. pp 1-21. chain, and from multiple disciplines, to identify 4 Radelet S (2010) Emerging Africa. How 17 Countries are Leading the Way. Center for Global Development, relevant research questions Washington. that can contribute to the 5 Drucker P (1985) Innovation and Entrepreneurship. Heinemann, London, page 27. whole chain (Fig. 3). This re- search approach is a further 6 Rogers E and Shoemaker F (1971) Communication of Innovation. Free Press, New York, page 19 development of the general 7 Urabe K (1988) Innovation and the Japanese management style. In: Innovation and Management. Internatio- concepts described in the nal Comparisons (eds.: K. Urabe, J Child & T Kagono). de Gruyter, Berlin, page3. academic literature (Fig. 2) and emerged at a recent 8 Bolwig S, Ponte S, Risgaard L, du Toit A and Halberg N (2010) Integrating Poverty and Environmental Con- workshop in Uganda where cerns into Value Chain Analysis: A Conceptual Framework. Development Policy Review 28, 173-94. all project participants were 9 Aagaard-Hansen J, Larsen CES, Halberg B, Hjortsø CN, Gausset Q and Kabirizi J (2007) Main-streaming gathered to initiate the participatory and cross-disciplinary approaches in animal science research in developing countries. African project. As a first draft, it Journal of Agricultural Research 2, 119-130. will be fine-tuned, changed and properly described in 10 Høgh-Jensen H, Oelofse M and Egelyng H (2010) New challenges in underprivileged regions calls for people- centred research for development. Society and Natural Resources 23, 908-915. the coming years. We would be happy for feedback from 11 P. C. Sanginga, C. A. Chitsike, J. Njuki, Kaaria S., and R. Kanzikwere (2007). Enhanced learning from anybody interested in this multi-stakeholder partnerships: Lessons from the enabling rural innovation in Africa programme. Natural research or research ap- Resources Forum 31:273-285. proach. 12 Kline SJ and Rosenberg N (1986) An overview of innovation. In: The Positive Sum Strategy (eds.: R Landau and N Rosenberg). National Academy Press, Washington DC, pp. 275-305. Co-authors of this article Method Kilasara Uganda/Makere University Kallunde P. Sibuga Fred Kabi Jordan Gama (TOAM) James M. Ssebuliba Jonny Mugisha Denmark/Aarhus University and Copenhagen Charity Namuwoza (NOGAMU) University Paul Rye Kledal Kenya/University of Nairobi Mette Vaarst Jonathan Nzuma Lene Sigsgaard Raphael Wahome Kostas Karantininis Richard N. Onwonga Niels Halberg Eustace Kiarii (KOAN) Lise Andreasen Tanzania/Sokoine University Henning Hoegh Jensen Evelyne A. Lazaro 13 2/2011