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					                     Consortia concepts in agriculture R&D
The consortia concept is particularly useful for analysing highly specific and highly
interdependent chains such as fruit, vegetable, and dairy sectors, export crops and other
high-value and/or niche market products (e.g. production of honey or raw materials for
pharmaceutical products). In these cases, innovations are specific to the commodity
sector and the chain analysis helps find the right entry points promoting these
innovations.

Systems perspectives on agricultural services

The country is rapidly transforming into a predominantly service economy by an upsurge
of services that meet human needs, generate employment covering the large unorganized
segment of the economy, raise incomes and increase purchasing power. Good part of the
services and industrial production depend on agriculture for inputs and often sets pace for
overall economy growth.

Services to the agricultural sector are extraordinarily heterogeneous, ranging from more
product-oriented services (e.g. input supply) to more process-oriented services (e.g.
agricultural extension). The services can be disaggregated into at least three components:
financing the service; the delivery of the service; and the regulation of the service. The
character of services in the agricultural sector are predominantly of public goods. The
actors within the agricultural service system comprise of service providers and the service
users or beneficiaries. The functional relationship of such a service system includes the
components of service provision (financing, delivery, assurance), the interaction of and
between actors and services, and the governance of services (mode and mechanisms).

Most of the basic services farmers require are influenced by each other. For example, the
efficient functioning of agricultural research depends upon agricultural extension, seed
supply and agricultural marketing. Therefore, intervention in one service must take into
consideration the prevailing conditions in a number of other services. As bulk of these are
services are under both public and private sectors, partnerships provision involving
different service providers is systemic.

Poor service is a feature that customers complain about - and rural development services
are no exception, especially public-sector services such as agricultural extension. The
involvement of the private sector in agricultural service provision could be improved by
supporting service providers (e.g. input suppliers, traders, distributors, processors, farmer
groups, etc.) in professional service management, which is important for the development
of effective production and marketing chains.

The role of the R&D system

Owing to farmers ingrained trust in research and academic institutions, the later would be
in a perfect position to create an alliance consisting of producer associations, processors,
retailers, consumer associations, investors, conservation organizations, community


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leaders, and others. They can foster conversations about marketing opportunities that
enable farmers to retain more value on their products and services.

The value chain approach

A value chain is made up of a group of economic agents from inputs suppliers to
producers and processors to exporters and buyers – engaged in the activities required to
bring a single agriculture or livestock product from its conception to its end use. In other
words, it is a chain of economic agents collaborating to
                                                                         Farmer
achieve a more rewarding position in the market place.
Value chain approach provides substantial increase
of value addition through agribusiness relative to
primary products supply.                                             Consolidator

Value chain key concepts
                                                                      Wholesaler
The value chain approach analyses the flows of
resources, materials and information within the chain of
activities that go towards the production of particular             Semi-wholesaler
products. It pays particular attention to linkages between
different agents/actors; how their activities are
coordinated; the needs of final users. Some key concepts                Retailer
of value chain approach are described below.

Upgrading and innovation: Upgrading may involve changes in the nature and mix of
activities and in the distribution of intra-chain activities in terms of both technological
capability and market access. Upgrading may refer to process upgrading or product or
functional upgrading or chain upgrading (moving to a new chain). Complementary efforts
at the local and national levels are needed to stimulate both.

Coordination and alignment: Coordination is aimed to streamline flow and capacity
utilization. Increased information flows, monitoring, transportation and logistical
technology, and economies of scale enable alignment. Lack of mutual trust by chain
participants, awareness of the benefits of tightly aligned chains, knowledge about use of
the enabling technologies, willingness to accept a collaborative business approach and
commitment to invest in infrastructure are illustrative barriers to alignment.

Entry barriers: Entry barriers (also called rents) are surplus returns arising from design,
production, marketing coordination and recycling, which arise due to possession of
scarce attributes that are not accessible to others. The circumstances that create
differential access for one firm or chain leading to rent may become an entry barrier to
other firms and chains. The combination of rents, entry barriers and coordination of inter-
link activities are the main determinants of the distributional outcomes arising from
participation in chains




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Governance : Governance describes dynamic distribution of power, learning and benefits
among firms in a value chain Governance refers to the inter-firm relationships and
institutional mechanisms through which non-market co-ordination of activities in the
chain is achieved. The governance form is characterized by vertical integration. This
coordination is referred to as value chain governance. In agriculture, the buyers,
processors and sometimes input suppliers may act as lead firms. The dominant form of
governance is managerial control, flowing from managers to subordinates, or from
headquarters to subsidiaries and affiliates. Some actors in the chain have power over the
others; power asymmetry is central to value chain governance.

Chain management

The market supply of agricultural products is the culmination of a chain of service
activities ranging from input supply and farm services to processing, quality control and
product marketing. In service management, the supply chain concept is particularly
relevant for identifying potential innovations and designing commodity-specific support
services. Another important application is quality assurance for food products. The
agricultural supply chain concept links all functions and entities that contribute to the
market delivery of a particular agricultural commodity, and presents them as a sequence
of steps. There are basically four steps in any supply chain:

   Pre-production services: services related to the acquisition of information and
    knowledge (e.g. agricultural research and extension), the acquisition of agricultural
    inputs (e.g. seed, fertiliser, etc., and the acquisition of agricultural production factors
    (e.g. land, water, capital, etc.)

   Farm production services: services related to the application and management of
    agricultural inputs (e.g. veterinary services, plant protection) and the application and
    management of agricultural production factors (e.g. land preparation, organisation of
    labour, etc.)

   Post-production services: services related to operations from harvesting agricultural
    products to the point of the final consumption (e.g. processing, transport, storage,
    marketing etc.)

   Consumption (final step in the supply chain): related services as seen by the final
    user of the product (e.g. information about quality standards, prices, etc.).

Chain system boundary

For each commodity or group of commodities the chain model spans all functions from
upstream research on a product to the final consumer. Supply chain analysis is a social
system approach, as the functions are performed by farmers, business firms and
consumers. These actors are closely interrelated, constantly exchanging goods, services,
and information. All interactions refer to the product-specific commodity in question and
thus the commodity defines the boundary of the system.



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Public-private partnerships (PPP) in agriculture

PPP are arrangements between the government and the private sector (both formal and informal)
with the main objective of securing investment and greater efficiency in the delivery of local
infrastructure, community facilities and support services. PPP are increasingly becoming
common world over due to public sector cash constraints, risk sharing, pooling of the strengths
of each partner, and cost savings brought about by economies of scale, innovative technologies,
more flexible procurement and reduce overheads. PPP approach was a signal of the
government’s intent to reduce its presence in the economy, decreasing the level and scope of
public spending and allowing market forces to govern economic activities.

Non-governmental organisations (NGOs), cooperatives, farmers' organisations, producer
associations, and other private-collective associations of rural people can provide access
to agricultural services. Such efforts improve smallholder access to better market
opportunities, intensification of agricultural production and marketing. Cooperation often
works best where farmer groups are linked to input and output markets.

Research consortia

RCs are a group of institutions, including a range of partners from public, private and
civil society organisations, formed to carryout a particular research theme. Consortia
should demonstrate that they have access to a variety of specialist skills. Whilst one
institution will be in the lead in any RC, the key collaborating partners in the consortium
should be involved throughout, starting with research design, and including
implementation, outreach and synthesis.

Forms of collaboration

Some of the partnerships occur through contracts; others involve the public sector
creating the enabling environment; whilst a third type provides a role for NGOs/ CSOs as
market facilitators between farmers and small scale entrepreneurs and larger scale
ventures and the public sector. Some of the relationships are formal while others are
statements of intent and purpose.

R&D interventions in consortia-based research

Consortia approach allow business to be smooth, speedy and yet make more profits.
Efficient solution requires more commitment from actors than financial support. Some
possible R&D interventions in value chain research are :

   Benchmarking and assessment -Analysing efficiency of different parties in the
    value chain. Typical benchmarking criteria include cost competitiveness, quality, lead
    times to satisfy customers and capacity to make frequent changes.




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   Local services- This may either be the introduction of entirely novel services, such as
    product certification or export promotion, or the reorientation of traditional research,
    extension and input supply organisations to deal with new demands created by the
    development of the chain. In either case, supply chain analysis helps articulate
    demand and identify new tasks.

   Promotion of agricultural innovations - High-value commercial products require
    constant technical improvements. This is a consequence of changing market demand
    and consumption patterns where strong competition prevails. Research should
    continue to identify new research topics by observing the evolution of supply chains
    and partnerships support for technology transfer.

   Good agricultural practices - GAPs for plant protection, standards, verification,
    certification systems, quality management and control. Food safety programmes
    regularly use the supply chain concept to check on the factors relevant for the final
    product quality all the way along the chain.

   IT applications - Access to information and statistics, market information,
    commodity exchanges, futures markets. In a supply chain, information consists of
    data and analysis regarding inventory, transportation, facilities and customers
    throughout the supply chain.

   Capacity building. Training lays foundation to ensure that the interaction of and
    between actors and services is crucial for the improved organisation of agricultural
    services. The capacity building would tend to ensure that research, education and
    training efforts of the NARS have to be oriented towards demand-driven and
    utilitarian mode in order to effect a transition from output (productivity) to outcome
    (impact) delivery.




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