Contents: 1. Background 2. The Commercialization of

Smallholder Agriculture (CASH) Vision

3. The Context Assumptions 4. The Chosen Market Niche

CARE’s Capability Analysis

5. The M&E Framework 6. The Business Model 7. The Strategic Directions 8. Appendices (delegate list,

meeting agenda, vision map, capability matrix, Strategy Map

This document records the decisions and choices of a team of CARE managers who gathered in Nairobi in September 2003. The purpose of the meeting was to design a strategy for the commercialization of smallholder agriculture. The meeting resulted in a vision that states that CARE will lead in smallholder agriculture with a viable and just model. This model will be driven by a commercial framework,using market contracts, empowerivulnerable farmers, supporting a narro

ng

wrange of products, and penetrating both local and export markets.

CARE Kenya A strategy for the Commercialization of Small Holder Agriculture in Kenya

Panafric, Nairobi, Kenya 10-11 September 2003 R F Ward & Woki Munyui Nairobi 12 September 2003

CARE Kenya – Strategy for the commercialization of smallholder agriculture (CASH) in Kenya

TThhee MMeeeettiinngg oobbjjeeccttiivveess:: 11..DDeeffiinnee tthhee ppuubblliicc vvaalluuee CCAARREE wwiillll aadddd tthhrroouugghh CCAASSHH 22..RReevviieeww aanndd mmaattcchh CCAARREE’’ss ccaappaabbiilliittyy ttoo ddeelliivveerr tthhee ddeessiirreeddppuubblliicc vvaalluuee 33..AAlliiggnn CCAARREE’’ss CCAASSHH wwiitthh tthhee aauutthhoorriizziinngg eennvviirroonnmmeenntt,, tthhee ddoonnoorrss,, tthhee ggoovveerrnnmmeenntt,, CCII,,pprriivvaattee sseeccttoorr aanndd ssmmaallllhhoollddeerr ffaarrmmeerrss.. 44..DDeessiiggnn aa ssttrraatteeggyy ttoo cclloossee tthhee ggaapp bbeettwweeeenn wwhheerree ‘‘wwee aarree nnooww’’ aanndd ‘‘wwhheerree wwee wwaanntt ttoo bbee’’..

10-11 September 2003 Nairobi.

♦

♦ ♦

Background CARE Kenya developed a long-range strategic plan in 2000, which built on current development trends in Kenya, motivations for change in CARE International, and CARE Kenya’s experience and comparative advantage. CARE Kenya established four sectoral priorities, namely HIV/AIDS; Civil society engagement; Commercialization of smallholder agriculture and Disaster relief and mitigation. The HIV/AIDS and Civil society initiatives account for 3% of current committed funding and 12% of future projected funding. Disaster relief accounts for 65% of current and 59% of future committed while Smallholder agriculture for 31% of current and 29% of future committed funding. However at a recent review, the mission resolved to increase the proportion of the smallholder agriculture portfolio through a new commercialization initiative.

Workshop Objectives & Process1 A team of fourteen CARE Managers gathered in Nairobi. (Appendix 1.0 CARE Planning Team). The purpose of the meeting was to come up with a strategy for the commercial agriculture sector. In order to achieve this purpose, the participants considered three key issues:

What CARE wants to achieve with commercialization of smallholder agriculture. The context of Kenya CARE’s capability

In order to achieve the workshop objective, the process attempted to address the following questions

1. What is going on in the external environment? 2. What is the internal capacity to address this? 3. Where does CARE want to be five years from now –

statement of purpose? 4. What are the constraining factors and the supporting

factors ? 5. What strategies can be put in place to overcome

resisting factors? 6. How can we design programs that are unique, thereby offering comparative advantage? 7. How can we be “strategic” about our intervention?

1 From a briefing by Stuart Worsley

Nuru 2000 Strategic Directions 1.Participate in the Kenyan policy arena to influence the development and implementation of poverty reduction policies – directly as CARE Kenya, and by building capacities of local institutions and communities. 2.Establish income generation and economic skills development capacity through new and existing programs that will raise the sustainable economic conditions of participating households to above the regional poverty levels. 3.Change the organizational framework of CARE Kenya to better address poverty and instill a culture of innovation internally.

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Why focus on Agriculture Commercialization? 2

Agriculture is the main contributor to Kenya’s GDP (accounting for 25% of GDP) and provides 62% of overall employment. Therefore agriculture is critical to Kenya’s economy and future development. 80% of Kenyans are either farmers or make their living from agriculture. Most farmers in Kenya are poor. CARE’s mission is about poverty reduction. The agricultural sector offers the best opportunities to create sustainable and growing income streams for the poor, but the window of opportunity is closing (market access into the northern hemisphere is tightening e.g. EU, AGOA). “.. So if CARE’s mission is about poverty reduction, and most farmers are poor, if we are not having something to say about agriculture, are we relevant?” What are the problems in Agriculture?3 Poor governance in key institutions has characterized Kenya’s agricultural industry (co-ops, AFC, ADC). Lack of willingness, capacity and an environment that was not conducive to investment inhibited the private sector from assuming the functions by the state run institutions post-liberalization; locally there is a lack of markets and marketing systems are weak. Farmers have struggled with poor access to credit and inputs, insecurity and high taxation. HIV/AIDS is resulting in low productivity. There has been little public funding into the sector resulting in poor infrastructure. Inappropriate technology is sometimes a restraining force and extension services are weak due to a lack of funds. Why Commercialization? Commercialization is about markets, but access to local and export markets for the poor is not just difficult already, but becoming more sophisticated (European Union, AGOA, and Kenyan food consumption trends show a shift towards supermarket chains). Incomes need to grow sufficiently for farmers to be able to deal with shocks. It is unlikely that this can happen in a subsistence regime. It is unclear where investment in Kenya is going to come from. The Government of Kenya has very limited funding capability. Donors are in a “wait and see” mode, and the commercial sector will look after investment in its own sectors. The CARE CASH Vision The purpose of a vision statement is to create a shared direction, a collective aspiration and a target for CARE’s development efforts. The vision for the CASH strategy was defined as follows: 2 From a presentation by Dennis O’Brien

23 From the Government of Kenya’s Economic Recovery Strategy Document, June 2003.

“CARE leads with a just and viable small holder commercialization model. This model improves livelihood security, farmer incomes, and access to support services. It makes significant contribution to ensuring the markets work for the poor and empowers and secures farmer ownership.” While this vision describes an intention to establish a best practice model for smallholder development in agriculture, using a set of commercial incentives, it does not compromise CARE’s global intent to help the poor achieve a better life. However, it was stressed that this strategy must be sensitive to women’s rights, avoid promoting disparities between men and women accessing markets, and clearly define “commercialization”.

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It was also recognized that any strategy that focuses on private sector engagement must deliberately focus on achieving impact and effect in the public sphere.

The changing context: •Globalization – market opportunities, unfair competition, big quality and supply demands •Funding – decrease in traditional sources, but increasedopportunities for alliances with private, public, faith-based organizations •New government – conducive environment for investment, political stability, less corruption, but increased insecurity and delivery costs •HIV AIDS – big increase in impact on beneficiaries, staff and cost of delivery

Environmental Context/ Change With the strategic intent clearly defined, the following assumptions have been made about the changing context in Kenya and globally. The strategies should help position CARE and CASH to take advantage of the opportunities presented by these changes and position effectively for potential threats. 1. Globalization comes with the liberalization of markets

which provides an opportunity for market access for small farmers i.e. European Union markets, Middle East market for meat and vegetables, local supermarkets. However, the first world will continue to protect their markets. Subsidies to agricultural production in developed countries results in the ‘flooding’ of imported goods into Kenyan markets making it difficult for farmers to sell their products. There will be a powerful effect on global and local markets as a result of tough product-quality assurance standards and trade tariffs set by international markets, which will act as a hurdle to Kenyan exports.

2. Funding: Traditional sources of funding will change with less funding going to INGO’s, but increased funding to private/public institutions and faith based organizations from sources like the US government. Donor investment decisions are unclear and delayed. (“Wait and see”, yet “ We now have a ‘new’ government in Kenya ‘we’ have always wanted”).

3. New Government: The new government’s policy environment supports investment in the smallholder agriculture sector. The current political environment is triggering openness and investment locally. It also provides less space for corruption. The Government’s policy will be driven towards “Private Public partnership” which may support the smallholder. There will be a positive micro-economic environment with interest and inflation stability and loan capital will be available. However some uncertainty may arise from declining security situation in the country which will increase costs of doing business and may trigger short-term economic decline

4. HIV/AIDS: The impact of HIV/AIDS will increase, reducing farming skills, leading to low productivity and at the same time increasing the use of income on medical costs

5. Changing lifestyle and changing markets in Kenya: People are moving to urban areas and are purchasing more processed products from supermarket chains and less from traditional produce markets.

6. The potential for growth in the Kenyan agriculture industry will continue to offer good opportunities for livelihood improvement and employment as the country has an agricultural economy.

CASH Niche Operating with poor farmers in current CARE areas Focused on horticulture cotton and livestock Using a mix of new and traditional investors, bi-lateral donors and the private sector. Teaming-up with both local and export b

The CARE CASH Market Niche The Agricultural sector is a significant producer of wealth and supports a significant proportion of the Kenyan people’s livelihoods. Within the agriculture sector are several sub sectors. The purpose of the market segmentation process is to help identify niches where CARE can make the most impact. It should define which sub-sectors within agriculture CASH should focus on, what geographical areas CASH should operate in, what level of competition exists in the market and which investors are interested. In summary, the CARE CASH niche can be described as follows:

uyers.

1. Geography-Areas of operation will be focused on those that CARE currently operates in (i.e. Eastern, Western, Nyanza and North Eastern province).

2. The sub-sector will include, primarily horticulture, and livestock (meat), and cotton.

3. CASH’s target beneficiaries will include poor, smallholder crop farmers and livestock pastoralists and selected rural input suppliers/service providers.

4. Specific Investors will be targeted including, private companies (like commercial banks and private donors), the Government of Kenya and Donors4 (including bilateral and multilateral institutions)

5. Buyers in both the domestic and export markets will be targeted possibly including companies (like Homegrown, VEGPRO, and supermarkets chains).

A number of issues arose from the definition of the CASH Niche. In an attempt to clarify the targeted smallholder farmer the following definition was agreed. The target beneficiaries will be full-time farmers owning less than 5 hectares of land, with a daily income of less than US$ 2. These farmers should derive over 75 % of their income from agriculture. Criteria for selecting these farmers will include those with: a reputation for hard work and entrepreneurship; at a high risk of, or experiencing livelihood insecurity; business acumen with

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4 CIDA, IFAD, AUSAID, USAID, DfID, NORAD, Rockefeller, FORD will be targeted.

motivation to change to commercialized agriculture, and, a willingness to invest but because of lack of assets, risky for regular creditors. CARE’s Capability and Capacity – an inward review This capability analysis aimed at identifying gaps that may hinder CASH’s achievement of the vision5. The analysis considered CARE’s knowledge and maturity to enable it to make the right decisions, and the units inherent strengths and weaknesses.

Closing the capability gaps: •Right people •Commercialization/business skills •Adapt systems (I.e. procurement, accounting) •Collaboration with business/institutional players (acquire skills, clear obstacles) •Build new business model with CARE’s unique programming principles •Market/sub-sector research

1. CARE has vast experience in agriculture with rural communities (extension approach), but is weak on commercial (agriculture) skills. This could be resolved with recruitment from the private sector, using other CI members, training existing staff, and outsourcing through strategic partnerships.

2. CARE has very detailed operating systems that pass compliance tests with clients and donors. However these systems are not responsive to the commercial environment. Examples include slower ‘not for profit’ procurement systems, financial systems that are not as responsive to ‘for profit’ commercial needs, and inappropriate human resource systems (e.g. pay scales, effective performance management, etc). This will require CASH to develop systems that are able to meet business objectives but able to satisfy our other ‘client’s’ (Donor and CI) requirements.

3. CARE has strong programming principles, like RBA, Gender & Diversity, HHLS, etc. CASH will retain these good principles throughout the design and implementation.

4. The mission has a successful smallholder commercial model on the ground (REAP). However, in terms of commercial standards this model is still managed in an, ‘NGO manner’ that is inefficient for business and there are issues to deal with around governance of the smallholder business units. CASH needs to identify ‘business’ principles and systems to develop scale up and to develop similar models.

5. CARE has globally developed successful interventions and expertise. However there is insufficient networking. CARE Kenya will share the lessons from the CASH interventions and learn from others within CARE International.

6. CARE has done extensive research and has a broad knowledge-resource database. This information is seldom market oriented, does not answer the business questions and is weak on business & production plans. CASH should carry out market sub-sector studies, collect market intelligence and build a new commercialization knowledge ‘library’.

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5 “To achieve a viable model, making markets work for the poor, improving access to services, empowering the communities and increasing incomes/livelihoods.”

The monitoring and evaluation framework – measuring progress towards the vision In an attempt to clarify the methodology for tracking the progress of the CASH intervention, an M&E framework was designed. It was assumed that CARE is going to commercialize its agricultural development approach and that the generic model will be a shift from current subsistence agriculture support. The M&E indicators take into account the CASH Vision, the target participants, the risks, required flexibility, and CARE’s programming principles6

Livelihood Indicators7

The range of indicators traditionally used by CARE as part of its livelihood security model were identified as relevant to this intervention, namely, access to food, water, education, participation, shelter and health. To track income impact on the livelihood it would be useful to use the model in the diagram8, mapping the interaction of production, exchange (or trade), asset management and consumption

Income Indicators To track smallholder business income findividual farmers income farm group p

Access to effective support These indicators would include access tservices, access to quality and quantity (transparency, accountability and partic

Making markets work for th There was a sense that these indicators rather than the poor benefiting the mark

6 Promote:empowerment of the poor;partneresults and oppose: discrimination & violen7 Frankenburger Model 1995 8 Drinkwater Model 1995

9 Including Balance sheets, Profit and loss arepayment schedules.

Tracking Income Improvement through the livelihood model

HouseholdProduction Exchangeor trade

Consumption

Assets(Human ,Physical &

Financial)

inancial statements9 would be used while to track ayment records would be used.

services

o credit at market interest rates, access to quality external farm inputs e.g. fertilizers, empowerment and ownership ipation).

e poor

should track the extent that markets benefited the poor ets.

rship with others, accountability & responsibility; sustainable ce.

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ccounts, Gross margin reports, Fixed asset schedules and loan

This would be measured by CARE’s progress towards positive changes in advocacy issues, the value of contracts signed to be supplied by smallholders and the volumes supplied by the smallholders.

CARES’ Viable CASH Model The CASH vision aspires to CARE leading in the third sector, as an actor in Kenya’s civil society with a unique smallholder model. This model should also be viable and sustainable. This would could be done by demonstrating the number of new participants into the model, the number of sustainable commercial units three years after the CARE phase out, the number of farmers receiving a fair income and social benefits, and the number of similar CARE-style units outside CARE’s program and replicated or adapted by the private sector, other CARE missions and NGO. The CASH Business Model The CASH Business model describes how CARE’s intervention will work and specifies CARE’s role. The model has been designed with the CARE CASH Vision in mind, within Definition of commercialized agriculture

“Agricultural production that is based upon markets; primarily for sale and not only to generate a profit but also to secure a livelihood.”

the changing context described above, in response to the capability analysis and the M&E indicators.

The CASH Business Model• Guaranteed markets &

forward market contracts • Just and accountable

professional management • Farmer-owned business

legal entities • Profit incentives • Non-subsidized, cost

recovering investments • Bulk-buying benefits • Strategic business

partnerships • Farmers, who are poor, but

motivated, and prepared to make investments

To provide clarity a definition of Commercialized Agriculture the team agreed on the following definition for CARE’s context. This notion will include agricultural production that is: market responsive; based upon forward market contracts (guaranteed sales); primarily for sale and not only to generate a profit, but also to secure a livelihood.

Basic Principles The CARE CASH model would be characterized by the following principles. Forward market contracts would be secured with buyers. The farming value chain would be professionally managed. The Farmer-Owned businesses would be independent legal entities entering into legally binding contracts. The model would be non-subsidized (full cost recovery) and would attempt to avoid creating market distortions. Economies of scale would be achieved through bulk purchase of services and supplies. CARE managers will provide Business Development Services to the model. CARE will monitor and evaluate the social impact of the intervention and the results will feed back into the business model. CARE will transfer social responsibility to the farmers, encouraging transparency, accountability, participation, and principled business practice.

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The Proposed CASH Business Model Production Market Units Intelligence & R&D Inputs Process Quality Business plan Asset investment Transport Quantity Production Plan support branding Services services Time, salary and price Sales Compliance Issues

Management Team

Market Contracts

Farmer Organization

Production Planning

Production Marketing

M&E Team

EU,GAP,MRL CASH Strategic Focus Based on the above analysis, the CASH intent (Vision), the assumptions about a changing context, the challenges of CARE’s capability gaps, monitoring and evaluation requirements and the business model, a set of strategic directions was designed to help create focus. These directions will guide activities in launching and implementing the business model, they will guide the investment of time, and money and energy and they will provide a useful flight path for the CASH program.

Strategic Direction 1 – Understanding the markets Establish Systems and structures that can provide accurate and timely information about agricultural markets. This will include carrying out Sub-sector Analyses on potential commercial agricultural opportunities, establish a database of market prices, required standards (quality and other compliance), key actors and target places. It will involve the collection and updating of market data on a regular basis and building systems to disseminate market information.

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Strategic Direction 2 - Capacity & Capability Six Strategic

Directions

1. Understanding the markets

2. Capacity & Capability

3. Effective farmer organizations

4. Project alignment & learning

5. Monitoring and Evaluation

6. Strategic Alliances

CARE’s management team will execute the business model to meet production targets and market requirements in a socially responsible way. This will involve assessing CARE’s current operating and management systems (e.g. financial, procurement, administrative, business planning, performance management, group formation & training), making improvements and adjustments to suit the business environment and develop skills that align with the business and social requirements of the model.

Strategic Direction 3 – Effective farmer organizations

Farmers are assisted to create legal entities, capable of operating and managing production units servicing forward contracts. This direction will involve conducting an assessment of successes and failures of group mobilization and client selection experiences of Jamaa Wazima, Dak Achana & REAP, similar businesses in the private sector, and across other CARE missions. CASH will develop client profiles aligned with the business model (e.g. income level, current livelihood/economic activity, etc) and develop a process to identify clients (e.g. barazas, field days, focused group discussions, individual interviews, etc).

Strategic Direction 4 - Project alignment & learning Existing projects will be aligned to fit the CASH strategy. This could involve reviewing current project contracts, sensitizing staff and community stakeholders (about the CARE CASH model and future operations) and redesigning projects as part of a clear implementation plan. Where projects cannot be redesigned they will be phased out at the end of their contract periods.

Strategic Direction 5 - Monitoring and Evaluation Building a Monitoring and Evaluation System to track the impact and progress of the CASH model. Activities will include developing an M & E framework10/plan that satisfies both business and social objectives of the CASH model. In addition, CARE will develop a monitoring and evaluation capacity and M & E tools. CARE must remain true to its poverty reduction mandate and continue to acquire an in-depth understanding of the effect of its interventions on the poor. At the same time CARE needs to ensure the business model is competitive in, sustainable by and does not distort the market. CARE will therefore secure resources to build and maintain the M&E capacity from interested social investors, separating the costs of this function from the business end of the model.

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10 Impact assessment methodology

Strategic Direction 6 – Strategic Alliances Develop formal relations with established and active producers, service providers and buyers. CARE will identify and categorize important market players, define the types of relationship with selected players (roles and responsibilities) and negotiate and sign formal agreements with selected partners and networks. This strategy will also involve the monitoring of the performance of the partnerships and networks, using agreed indicators, to establish real results. Next Steps – the implementation The CASH strategy has a more immediate rollout plan, with key activities and timelines, summarized in the Table below. RFW – “CA

Next Steps: 1. Workshop report – 12-09-03 2. Implementation plan with persons

responsible identified and resources required quantified which senior management approves – 30-09-03

3. Disseminated to staff and CI – 31-10-03 4. Disseminate to Donors - Raising funds. 5. Government ‘buy-in’ 6. Modifying structures, JD’s and roles.

RE Kenya CASH Strategy September 2003” – Word 2000 – 12-09-03

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Appendix 1.0 The CARE Planning Team

Serial No.

Name Organization Title Contact

1 Dennis O’Brien

CARE Kenya Country Director Dennis@care.or.ke

2 Stuart Worsley

CARE Kenya Assistant Country Director – Program

stuart@care.or.ke

3 George Odo Commercial Agriculture Sector – CARE Kenya

Commercialized Smallholder Agriculture Sector Manager

odo@care.or.ke

4 Wanjiku Kiereini

Commercial Agriculture Sector – CARE Kenya

Programme Officer wanjiku@care.or.ke

5 Daniel Maxwell

CARE RMU Deputy Regional Director

Maxwell@care.or.ke

6 Eirik Jarl Trondsen

CARE RMU Program Manager - CARE Norway

Eirik@care.or.ke

7 Greg Umaya DAK ACHANA – CARE Kenya

Dak Achana Program Coordinator

Greg@ksm.care.or.ke

8 Wainaina Kinyanjui

CARE Kenya Local Area Project Supervisor for Refugee Assistance Project (RAP)

Kinyanjui@ddb.care.or.ke

9 Peter Muthee REAP – CARE Kenya

REAP Project Manager

peterm@care.or.ke

10 Njoroge Maina

TASK – CARE Kenya

TASK Project Manager

nmaina@ksm.care.or.ke

11 Rob F. Ward Zimbabwe Facilitator rob@qpartnership.co.zw

12 Mathew Onduru

JAMAA WAZIMA – CARE Kenya

Jamaa Wazima Project Manager

Mathew@ksm.care.or.ke

13 Philip Makutsa

Nyanza Healthy Water – CARE Kenya

NHW Project Manager

Makutsa@ksm.care.or.ke

14 Fred Apopa CARE Kenya Jamaa Wazima Field Officer Agriculture

jamaa@ksm.care.or.ke

15 Woki Munyui

WERK Rapporteur wokimunyui@yahoo.com

16 Allison Burden

CARE RMU Regional Food Security Adviser

AllisonB@care.or.ke

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Appendix 2.0 Strategy Workshop Agenda Commercial Agriculture Sector Strategy Workshop 10-11September 2003 Day Time Theme Details Acc 0 Pre-work11 • Pre-workshop reading: Previous

documentation i.e. CARE Kenya Strategy Paper, Kenyan agricultural market trends from sub-sector reports, CARE’s experience in commercial agriculture (case-studies)

All

1 0830 Workshop

Introduction • The workshop team - introductions • The workshop processes • Workshop objectives • Background to CARE Kenya and its

programming, the LRSP directions (“Nuru”) and the future “visible impact and shift in approach”.

• The workshop process

Odo Rob Stuart Dennis

0900 Vision for the sector

• What should CARE’s vision for the agricultural sector be?

• What indicators would help us track our progress towards this vision?

Rob and All

1030 Tea/Coffee 1130 The shift in the

agricultural environment

• Kenya country priorities (PRSP and DDPs) and the socio economic trends.

• Overview of the Agricultural Sector • Current donor trends • Market trends and opportunities

1230 Lunch 1330 CARE’s

Capability • CARE’s comparative advantage in this

market • CARE’s comparative disadvantage and

gap closure requirements (either through partnerships or development)

1500 Tea/Coffee 1530 CARE’s niche • Recommended sector principles,

generic framework for commercial agriculture projects

• Recommended sub-sectors and markets

1700 Closure Day 2

0830 Recap • Break-through on Day 2 Rob/All

0900 The business model and the monitoring and evaluation

• The business model to deliver the CASH vision

• The M&E framework which will be used to measure progress towards the vision

Sub-groups

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11 Briefs on CARE Kenya Country Strategy 2000-2005, USAID Kenya Integrated Strategy, IFAD Regional Strategy for Eastern and Southern Africa, AUSAID – Africa Framework for 2003-2007, NORAD Strategy for 2000-2005, CARE Canada Strategy, Promoting sustainable rural development through agriculture – CIDA, CARE USA Economic Development Strategy and summaries of sub-sectors (Horticulture, livestock, rice, and cotton).

Day Time Theme Details Acc framework

1030 Tea/Coffee • 1100 Strategic focus for

Commercialisation of Smallholder Agriculture

• Key strategies and program priorities for the next three years

• Clustering, naming and ranking • Champions/drivers (who makes it

happen?

Rob/All

1230 Lunch • 1330 Implementation

Plan • What needs to be done in the next

three years to ensure the strategies take root and the vision is achieved?

• Who does what when and with what resources? Recommended skills and structures? Recommended M&E approach

Sub-groups

1500 Tea/Coffee • 1530 Implementation

Plan • Plenary feedback and modifications • Final plans saved

Sub-groups

1600 What next? • What happens after the workshop (bridging plan)

• Who do we need to tell what?

Rob/All

1700 Closure • Thanks Dennis

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Appendix 3.0 The CASH Vision Map

Cluster I: Access to effective support services ♦

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Facilitate access to credit facilities Consistent and reliable public facilities Support to services in rural areas

Cluster III: Increased/Improved livelihood security and in particular farmer incomes ♦ ♦

♦ ture

♦ ♦

♦ ♦

♦

♦

Sustainable rural household incomes Beneficiaries livelihoods above average poverty levels Reduce poverty by raising income from agriculSustainable income for the poor Facilitate the small holder to increase income Increased incomes Increase small holder incomes above $per month Sustainable impact on poverty throughcommercialized agriculture Enough income to protect family well

Cluster V: CARE Leads with a viable and just model

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Five agricultural companies with social responsibility created and sold to their employees CARE leads the way to a more socially and environmentally conscious management style in the agricultural sector Commercially viable model

Cluster IV: Empowerment and Ownership ♦ ♦

♦

♦ ♦ ♦ ♦ ♦ ♦

♦

Dignify rural farming People will be less vulnerable to shocks Pastoral areas /people will be more integrated into the economy Pastoral participation and power Increased investment Reduced dependency Communities in charge Reduced dependency Power to make market rules Support rural farmers to contribute to national development

Cluster II: Making markets work for poor small farmers ♦ ♦

♦ ♦ ♦

Provide access to markets Support Rural farmers to contribute to national wealth Market access to poor farmers Improved marketing Making markets work for poor small farmers

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Appendix 4.0 An Analysis of CARE’s strengths, weaknesses and strategies to close the gaps

Strengths Weaknesses Strategy to close the Gaps 1. Human resource - Vast experience in agriculture with rural communities (extension approach)

Weak on commercial (agriculture) skills

• Recruit from the private sector

• Tap from the other CI members

• Train the staff in commercialization

• Outsource through partnerships

2. Very detailed operating systems that pass compliance tests.

Not responsive to the commercial environment. E.g. slow procurement, ‘not for profit’ Financial systems, HR (e.g. pay scales, less effective performance management)

Develop systems that are able to meet business objectives but able to satisfy our other ‘client’s’ (Donor and CI) requirements

3. Strong Programming principles for CARE like RBA, Gender, etc

Not business focused • Use the expertise within the organization if not present within the sector

• Train the staff • Outsource through

partnerships/collaborations 4. Successful smallholder commercial model on the ground

Model still delivered in an inefficient NGO manner (with all due respect to the REAP project)

Identify ‘business’ principles and systems to develop similar models and scale up

5. Successful interventions and expertise in CARE

Not enough networking Pilot different interventions

6. CARE has a wide resource data base and research

Information is not market oriented – does not answer the business questions – Business plans, production plans, etc

Carry out market sub sector studies and build the ‘library’

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Appendix 5.0 The CASH Strategic Focus [SLT are issues with strategic long-term importance to achieving the vision. OU are the issues that are associated with short-term operational urgency].

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I: MONITORING AND EVALUATION (SLT= 10) ♦

♦

♦

♦

Identification of M&E tools for empowerment M&E of both business and social requirements Identify resources to set up M&E capacity Assess potential social and environmental harm of project

III: CAPACITY & CAPABILITY BUSINESS & SOCIAL (SLT 2; OU=8)♦ ♦

♦

♦

♦

Organize and select farmers Develop CARE capacity to use participatory community development approaches (put community in charge Address identified capacity and capability gaps Develop business like systems for central management teams with social component A Fair business model

II: PROJECT ALIGNMENT & LEARNING (SLT 4, OU=6) ♦ ♦

♦ ♦

♦ ♦

Adjust projects to CASH Blending existing experiences into business driven approaches Redesign/phase out existing projects to “fit”Shift in approach with existing agricultural groups programming Learning East/West/plus West East Develop transition strategies / plans for Nyanza agricultural projects

IV: UNDERSTANDING MARKETS (SLT 6; OU=9) ♦ ♦ ♦ ♦

♦

♦ ♦

Develop market information systems Market information Analyze, identify specific crops Conduct sub-sector studies (for selected ‘crops’) Analysis of sub-sectoral choices of crops and livestock production to inform the final sector to work in Market Survey Selected sub sector analysis/ research Embrace globalization ♦

V: FARMER ORGANISATION (SLT 10; OU= 6) ♦ ♦

♦ ♦ ♦

♦

♦

♦

A business model Building organizational capacity to manage a company (ITS & OPS) Empowerment Organize and select farmers Develop group/company formation methodology Building the capacity of farmer organizations to govern production units Developing company governance models that ensure private and social objectives Explore different ways of organizing farmers to commercialization

VI: STRATEGIC ALLIANCES (SLT=7) ♦ ♦

♦

Alliance building in markets/ tradeWorking in partnership with others involved Seeking partnerships with organizations working in commercialized agriculture

Appendix 6.0 The CASH Strategic and operational focus

Strategic long-term importance vs. Short-term operational urgency

M onitoring & evaluation

Strategic importance

Ope

ratio

nal u

rgen

cy

P roject alignment & learning

Capacity & capability, business & social

Understanding markets

Farmer organization

Strategic alliances

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Appendix 7.0 The CASH AOP

CARE CASH ANNUAL OPERATING PLAN for FY04

Strategic Direction 1: Understanding the markets

Quarter Objective

Activities Indicators1 2 3 4

Responsibility AssistanceRequired

Resources Required

1. This will include carrying out Sub-sector Analyses on potential commercial agricultural opportunities,

SSA for Horticulture, Cotton and Livestock

X X SSM PO

2. Establish a database of market prices, required standards (quality and other compliance), key actors and target places.

CASH market database operational on the CARE website

X X CASH PO,REAP SPO

SSM, REAP PM, MIS

Objective: Establish Systems and structures that can provide accurate and timely information about agricultural markets.

3. Collection and updating of market data on a regular basis and building systems to disseminate market information.

Market data accessible and integrated with database

X X CASH PO,REAP SPO

SSM, REAP PM, MIS

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Strategic Direction 2: Capacity and capability

Quarter Objective

Activities Indicators1 2 3 4

Responsibility AssistanceRequired

Resources Required

1. Assessing of CARE’s current operating and management systems (e.g. financial, procurement, administrative, business planning, performance management, group formation & training), making recommendations for improvements and adjustments to suit the business environment

Approved systems review report with recommendations

X X SSM ConsultantsACD-P & LT

2. Implement/adopt CASH systems in all projects

All CASH projects using generic ‘commercial-like’ systems

X SSM CASH PMs

Objective: CARE’s management team will execute the business model to meet production targets and market requirements in a socially responsible way.

3. Identify, develop and enlist skills that align with the business and social requirements of the model.

‘New look’ CASH team retrained or recruited

X X SSM ACD-P & HRM

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Strategic Direction 3: Effective Farmer organizations

Quarter Objective

Activities Indicators1 2 3 4

Responsibility AssistanceRequired

Resources Required

1. Conducting an assessment of successes and failures of group mobilization and client selection experiences of Jamaa Wazima, Dak Achana & REAP, similar businesses in the private sector, and across other CARE missions.

Reports on lessons learned for each project under CASH and experiences from other Country Offices

X ACD-P CASH PMs,M&E Pos, SSM

2. CASH will develop client profiles aligned with the business model (e.g. income level, current livelihood/economic activity, etc) and process to identify clients (e.g. barazas, field days, focused group discussions, individual interviews, etc).

Defined & well documented client profile and identification process for CASH

X ACD-P CASH PMs,M&E Pos, SSM

Objective: Farmers are assisted to create legal entities, capable of operating and managing production units servicing forward contracts

3. Develop a process to build the capacity of the clients for implementation

Defined & well documented client development process for CASH

X X ACD-P, CASH PMs, M&E Pos, SSM

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Strategic Direction 4: Project alignment and learning

Quarter Objective

Activities Indicators1 2 3 4

Responsibility AssistanceRequired

Resources Required

1. Sensitizing staff, donors, community & stakeholders about the CARE CASH model and future operations

X X CD, ACD-P,SSM & PMs

X X CASH PO

2. Reviewing current project contracts and redesign to fit strategy

X SSM CASH PMs,ACD-P

Objective: Existing projects will be aligned to fit the CASH strategy

3. Prepare phase out strategy for the end of contracts for those that cannot be redesigned.

X SSM CASH PMs,ACD-P

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Strategic Direction 5: Monitoring and Evaluation

Quarter Objective

Activities Indicators1 2 3 4

Responsibility AssistanceRequired

Resources Required

1. Preparing a M & E framework12/plan that satisfies both business and social objectives of the CASH model.

X ACD-P, M&E POs, SSM

2. Develop a monitoring and evaluation capacity and M & E tools.

X ACD-P, M&E POs, SSM

3. Monitoring of the performance using agreed indicators

X ACD-P, M&E POs, SSM

Objective: Develop a Monitoring and Evaluation System to track the impact and progress of the CASH model

4. To secure resources to build and maintain the M&E capacity from interested social investors - separating the costs of this function from the business end of the model.

X X ACD-P, M&E POs, SSM

12 Impact assessment methodology

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Strategic Direction 6: Building strategic alliances

Quarter Objective

Activities Indicators1 2 3 4

Responsibility AssistanceRequired

Resources Required

1. Identify and categorize important market players, define the types of relationship with selected players (roles and responsibilities)

X X SSMX X CD, CASHPO & REAP SPO

2. Negotiate and sign formal agreements with selected partners and networks.

X X SSMX X CD, CASHPO & REAP SPO

Objective: Develop formal relations with established and active producers, service providers and buyers.

3. Monitoring of the performance of the partnerships and networks, using agreed indicators

X SSM ACD-P

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