Community enterprise doesn't have to be a burden |
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Managing for value: a management model for accessing markets for agro-based industrial products |
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Communities are learning to harness the financial, social and employment benefits from small and medium-sized enterprises without taking on the burden of day-to-day management and marketing. The key is partnership between the community (the principal shareholder) and an entrepreneur (the professional manager) under the guidance of a management board. The board is chaired by an NGO with non-financial interest in the growth of the enterprise. By bringing in professionals, the system helps communities to overcome deficiencies in marketing planning and strategy. It has been validated in several farming communities in Ghana, principally among women whose livelihood levels are very low. Project Ref: CPH22:
Research Programmes: CROP POST-HARVEST PROGRAMME Relevant Research Projects: R8432
The output under consideration is a management model designed to combine Community Ownership with Professional Management hence the acronym COProM. It is aimed at addressing those factors that impact negatively on the profitability of community-owned small to medium-scale enterprises (SMEs) and which can be traced to lapses in business management structures and practices. The object of the model is to ensure that communities derive the financial, employment and social development benefits resulting from the establishment of SMEs within their communities without necessarily being saddled with the day to day management of the enterprise and the marketing of products. The model is a marriage of some aspects of a secondary level cooperative and those of a limited liability company. It primarily involves a partnership between a proven, seasoned business enterprise/entrepreneur and the community - (the entrepreneur being the Professional Manager and the Community being the majority shareholder) - under the policy guidance of a management board chaired by a non-governmental organization with a non-financial interest in the growth of the particular SME. Other private stakeholders could participate as shareholders; and governmental agencies with community development interests could also be appointed to serve on the board. Other key components of the model include the establishment of a management team, a clear definition of the roles and benefits of stakeholders, the establishment and implementation of a shareholding policy and a procedure for brokering partnerships. The problems the model seeks to address include:
The main commodity of focus in the R8432 project was cassava but the model could be applied to any community-owned enterprise involved in any other commodity area. The output under consideration is a management model and the problems it addresses as outlined above are not commodity-specific. Once problems of profitability are identified which can be traced to management lapses irrespective of the commodity or product area the model can be applied.
Other outputs with which this output could possibly be clustered may include:
One of the management lapses being addressed by this output is the lack of a marketing plan and an aggressive marketing strategy. If the above outputs being proposed for clustering with the current output have proven information on procedures for improving farmer access to markets and well-tested tools for collecting market information that can enhance farmers' access to viable markets then clustering these outputs together can add significant value to the output currently under discussion. How the outputs were validated: This output was promoted to two NGO's - the Association of Progressive Entrepreneurs in Development (APED), and Global Non-Traditional Exporters and Producers Association (GNTEPA) - for testing, validation and adoption. APED took up the challenge of testing the model at the Watro (Enso Nyame Ye) processing plant with the R8432 Project team taking the responsibility of brokering the partnerships between the various stakeholders and interested groups. The project did not last long enough to enable the team to broker the partnership effectively and therefore testing could not proceed far. The point to note here is that no matter how good a system is, if it is a new introduction, it requires the involvement of the originators of the system in the initial kick off and implementation of the system at least in this case for the first few enterprises in which the system would be implemented. Thus even though the system was very much lauded by the Brong Ahafo Office of APED and the interest to test it was and is still very high, limitations in funding for the project team to facilitate the initial take-off of the system - after the project had officially ended - prevented the agencies to which the system was promoted from going ahead with plans towards the adoption of the system. The Project Team is still seeking alternative sources of funding to facilitate the brokering of partnerships to set the stage for an effective testing, validation and adoption of the model. If the validation goes ahead it will be applied to the farming community, the majority of whom are women with a mean annual per capita income level of $67.00.Where the Outputs were Validated: The targets for validation of the outputs were:
In both target communities there is one cassava enterprise each which have been built for the community by donor agencies and are therefore technically owned by the community, but which have very serious management problems. The implementation of the system in these communities can provide useful lessons for future promotion and adoption. Who are the Users? The COProM concept document is currently under study for adoption by the Association of Progressive entrepreneurs for development (APED). Copies of the COProM manual have been forwarded to the coordinators of the IFAD-funded root and tuber programmes in Ghana, Nigeria, Benin, and Cameroun for study and possible adoption. The programmes in Nigeria, Benin and Cameroun are on-going whilst the Ghana project is scheduled to take off in early 2007. The Ghana programme (RTIMP) has 'Processing and Marketing' as its focus and the efficient management of SMEs would play a key role in addressing these two objectives, hence the promotion of the system to the programme. Where the outputs have been used: The concept document is currently being seriously considered for use in Watro, Atebubu, and at Eshiem in the Brong Ahafo and Central Regions of Ghana respectively, where two community-owned cassava SMEs are located. Scale of Current Use: Current scale of usage is low due to the funding issues mentioned above, but interest has been expressed by several large regional programmes so potential exists for much wider adoption. Policy and Institutional Structures, and Key Components for Success: There are a number of regional and national initiatives, structures and programmes on cassava that provide a good platform for promotion of this output. These include:
The key success factors in terms of capacity strengthening would include:
However, as mentioned earlier the COProM concept is not commodity specific and hence should be considered as having potential applicability for any agro-business initiative involving either farmers' organisations or processor groups. Direct and Indirect Environmental Benefits: Outputs:
None Adverse Environmental Impacts: Efficient management would result in higher levels of production with an attendant generation of more waste (peels and pressed liquor) which if not properly managed can have adverse environmental impacts. However there are efficient waste management systems that can be put in place to reduce the negative impacts. Cassava peels can be used for:
Pressed cassava liquor could be re-directed into settling tanks where the starch is settled and collected whilst the liquid is pumped into a soak-away. Coping with the Effects of Climate Change, or Risk from Natural Disasters: This output would improve the incomes of poor people and with improved incomes their ability to cope with the effects of climate change (dryness in the harmmatan season, erosion during rainy seasons etc), and those of natural disasters (rain storms ripping off roofs, bush fires destroying crops etc). With good income a regular source of employment under a COProM-managed processing plant, their resilience to disasters and climatic changes would be increased. Relevant Research Projects,
with links to the
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For relevant research projects, with links to further information Geographical regions included: Ghana,  Target Audiences for this content:Crop farmers, Processors, Traders, |
