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«Partnerships Resource Centre/SDC-Maastricht School of Management Project # 594 May 2011 —Ž–‹ –ƒ‡Š‘Ž†‡” Žƒ–ˆ‘” ...»

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Partnerships Resource Centre/SDC-Maastricht School of Management

Project # 594

May 2011

—Ž–‹ –ƒ‡Š‘Ž†‡” Žƒ–ˆ‘” ‘–”‹„—–‹‘

–‘ ƒŽ—‡ Šƒ‹ ‡˜‡Ž‘’‡–

Š‡ ‹‡ƒ’’Ž‡ ƒŽ—‡ Šƒ‹ ‹ –Š‹‘’‹ƒ

Sarah Drost, Maastricht School of Management

Jeroen van Wijk, Maastricht School of Management

Final Case Study Report

Table of Contents




1. Introduction

1.1 Research objective and aims

1.2 Theoretical background

1.3 Methodology

1.4 Outline of this report

2. Context of the case study

2.1 The Pineapple subsector

2.2 The Pineapple Coordination Group

3. Pineapple Coordination Group Dynamics

3.1 Basic Collaboration Requirements

3.1.1 Level of engagement

3.1.2 Jointness

3.1.3 Transparency

3.1.4 Goal alignment

3.2 Embeddedness

3.3 Involvement

4. Institutional change

4.1 Access to knowledge

4.2 Access to capital

4.3 Access to markets

4.4 Access to organisation

5. The future of the pineapple CG

6. Conclusions

7. Limitations

8. References

9. Appendices

Appendix 1: Theoretical model

Appendix 2: Roles of various stakeholders

Appendix 3: Interview schedule/ List of Interviewees

Appendix 4: Questionnaire

Appendix 5: Course ratio pineapple CG

Appendix 6: Betweenness centrality pineapple CG

2|Page Abstract

This report investigates the dynamics of a multi-stakeholder platform (named:

coordination group, or CG) for stakeholders of the pineapple value chains in Ethiopia.

The CG was initiated by the Dutch development organisation SNV in 2005 as part of a broader programme to improve market access for farmers and small- and mediumsized pineapple companies. To examine the MSP, both its internal, organisational dynamics and its external dynamics, i.e. the changes brought about in key areas of the institutional business environment, were analysed. A mixed-method design was used for the data collection and -analysis, including in-depth interviews with 13 key representative pineapple stakeholders participating in the CG meetings, document analysis, and a social network analysis. The dominant impression is that the CG generated some very useful effects in terms of bridging some traditional divides and offering opportunities for networking and knowledge dissemination. Yet, it seems the CG predominantly laid out the groundwork, with the edifice of a competitive, quality-aware pineapple export sector still to be built. Major causes of the somewhat slow progress have been the broad scope of the CG that has been addressing three different pineapple chains, the overrepresentation of the public sector that tended to slow down change processes, the CG’s national focus that keeps foreign buyers hidden from side, and the development of the CG into a competitor network to a small group of “monopolist” chain actors. On the other hand, changing business institutions that facilitate trust-building in the production base, that improve farmers’ access to capital and technology, and that make markets more predictable for chain actors is quite a challenge. Inserting an agricultural sector into the global economy takes time.

3|Page Acknowledgments The authors acknowledge first of all the invaluable support by Fenta Abate of the Addis Ababa University in Ethiopia during the interview phase in Ethiopia. Also the contribution of Jakomijn van Wijk of the Sustainable Development Centre of Maastricht School of Management and Ralph Besselink of Tien Vazen Consultancy was indispensable in the questionnaire preparation and database analysis. The researchers have benefited greatly from the discussions with Marc Steen and Piet Visser of SNV BOAM Ethiopia during the research design process. The field research in Ethiopia was also efficiently facilitated by SNV BOAM staff and value chain advisors. Finally, we thank all interviewees, who kindly provided us with their insights and who made this case study possible.

4|Page Abbreviations AACCSA Addis Ababa Chamber of Commerce Sectoral Association B2B Business to Business BCaD Consulting Management Business Creation and Development Services BDS Business Development Services BOAM Business Organisations and their Access to Markets (programme) BoARD Bureau of Agriculture and Rural Development BoFED Bureau of Finance and Economic Development CG Coordination Group DSA Daily Subsistence Allowance ECOPIA Ecological Products of Ethiopia ETFRUIT Ethiopian Fruit and Vegetable Marketing Share Company FBO Farmer Based Organisation GAP Good Agricultural Practice JARC Jimma Agricultural Research Centre MFI Micro Finance Institute MoA Ministry of Agriculture MoTI Ministry of Trade and Industry MoU Memorandum of Understanding MSEDA Micro and Small Enterprise Development Agency MSM Maastricht School of Management MSP Multi-Stakeholder Platform NGO Non-Governmental Organisation PLC Private Limited Company PrC Partnerships Resource Centre QSAE Quality Standard Authority of Ethiopia R&D Research & Development RTA Round Table Africa SARI Southern Agricultural Research Institute SDC Sustainable Development Center SIP Strategic Intervention Plan SME Small and Medium Enterprises SNNPRS Southern Nations, Nationalities, and People's Region State SNV Netherlands Development Organisation TC Tissue Culture VC Value Chain VCD Value Chain Development VCF Value Chain Financing Exchange Rate

Exchange rate of January 24, 2011:

1 Euro(s) = 22.59 Ethiopian Birr (ETB) 5|Page

1. Introduction Multi-stakeholder platforms1 (MSPs) are increasingly recognized by researchers and practitioners as promising mechanisms for stimulating economies in developing countries. The so-called chain platforms can help to bring actors, operating directly or indirectly in the chain, together and realise common objectives through dialogue and cooperation (Vermeulen et al., 2008). An increasing number of non-governmental organisations (NGOs) and private enterprises are participating in such platforms, however systematic research on their effectiveness and impact is scarce. Therefore, Maastricht School of Management (MSM) / Partnerships Resource Centre (PrC) and SNV BOAM-Ethiopia have embarked on a collaborative effort to evaluate a number of MSPs which SNV BOAM initiated with the aim of developing value chains for the Ethiopian honey and beeswax, dairy, oil seeds and pineapple sector. SNV2 is a nonprofit, international development organisation, with extensive hands-on experience in their value chain approach. MSM’s Sustainable Development Center3 stands for expertise on sustainable economic development in emerging markets. MSM is partner in the Partnerships Resource Centre4, an open centre where academics, practitioners and students can create, retrieve and share knowledge on cross sector partnerships for sustainable development.

1.1 Research objective and aims This pineapple case study assesses the effects of the multi-stakeholder platform that was established by SNV BOAM to improve access to (quality) markets for stakeholders in the pineapple value chain in Ethiopia. The core of SNV BOAM’s approach is to bring primary and secondary value chain actors and other stakeholders together to find solutions for identified bottlenecks in the value chain. These actors join forces in the so-called Coordinating Groups (CGs), which have a multistakeholder nature5.

The overall objective of the study is to gain insight and generate knowledge on how, and under which conditions multi-stakeholder platforms contribute to the development of value chains, with a focus on SNV BOAM’s programme (agriculture, horticulture) value chains in Ethiopia. Critical success factors and main bottlenecks of MSPs for value chain development in Ethiopia are to be identified. In terms of contribution the synthesis report of the overall study has three aims. First, the study should contribute to the learning process of MSP members and other local Ethiopian stakeholders through verification of results and knowledge dissemination. Second, the synthesis report should end with recommendations on how SNV BOAM can improve its multi-stakeholder processes to increase their contribution to value chain development. Finally, the study should contribute to the academic debate on how value chain partnerships can facilitate sustainable competitiveness in developing countries. This pineapple case study provides input for all three aims, however, reports only on the first aim.

1 Comprising of dialogues, policy making, and implementation, the term ‘multi-stakeholder’ is often attached to, platforms, processes, and partnerships (Warner, 2006). In this research we refer to multi-stakeholder platforms when discussing MSPs.

2 SNV BOAM Ethiopia: www.SNV BOAMworld.org/en/countries/ethiopia/Pages/default.aspx 3 MSM - SDC: www.msm.nl/1/1/uk/research/sustainable_development_center/ 4 PrC: www.erim.eur.nl/ERIM/Research/Centres/SCOPE/Partnerships_Resource_Centre/About 5 Website SNV BOAM & Annual Report 2008 6|Page

1.2 Theoretical background

–  –  –

Institutional theory, social network theory and collaboration literature has been explored to gain insight and generate knowledge on how, and under which conditions partnerships (including MSPs) can contribute to changing institutional business environments to facilitate the inclusion of small and medium agribusiness players into value chains. The effects of the MSPs are examined in terms of their a) internal dynamics (basic collaboration, embeddedness and involvement) including a social network analysis, and b) external dynamics (the changes in key areas of the institutional business environment). The theoretical model is visualized in appendix 1.

(a) Internal dynamics From the collaboration literature, the level of engagement of partners, formalized goal alignment, shared (decision making) processes and activities, and transparency are among the main basic requirements for successful collaboration (Kolk et al.

2008). A high level of engagement of stakeholders, proper goal alignment, formalisation, risk- and resource-sharing, trust and transparency, shared learning, and joint decision making are critical factors for successful multi-stakeholder platforms, particularly when these deal with more ambitious and complex issues (Ansell & Gash 2008; Springer-Heinze 2007, Bitzer et al. 2010, Kolk et al. 2008).

Collaboration presents the highest strategic level of engagement and implies that the partners share risks, resources and rewards (Austin 2007). This also entails a formalisation of governance structures, including contractual arrangements to specify objectives, activities and responsibilities. Moreover, the relationship between actors refers to the range of actors actually participating in the partnership. The value of partnerships lies in the potential to create win-win situations if all stakeholders are willing and able to contribute to the achievement of goals (Bitzer et al. 2010a). Trust, risk- and resource-sharing and transparency are indispensable in here, as well as notions on power distributions in the value chain MSPs.

In a four-year study of the collaborative activities of as small NGO in Palestine, Lawrence et al. (2002) found that inter-organisational collaboration leads to the development of new institutions (new practices, technologies and rules).

Collaborations that are both highly embedded and have highly involved partners, are the most likely to generate “proto-institutions”. New rules, technologies and practices arise and are diffused beyond the boundaries of the specific MSP contexts, 7|Page and adopted by other organisations in the field: they become proto-institutions.

These proto-institutions “represent important first steps in the process of institution creation, thus potentially forming the basis for broader, field-level change” (Lawrence et al. 2002: 283). They may become new institutions if they diffuse sufficiently.

Embeddedness describes the degree to which a collaboration is enmeshed in interorganisational relationships (Dacin et al. 1999; Granovetter 1985). Highly embedded collaborations involve (1) interactions with third parties, (2) representation arrangements, and (3) multidirectional information flows (Lawrence et al. 2002). In order to examine whether the pineapple CG has brought about changes in institutional fields we investigate not only the relations among collaborating MSP members, but also how the collaboration embeds them in the wider institutional field.

Involvement focuses on the way in which participating organisations relate to each other. According to Lawrence et al. (2002), high levels of involvement entail “deep interactions among participants, partnership arrangements, and bilateral information flows”. A high level of involvement among participants is necessary for institution creation. The internal dimension of partnerships is also explored in terms of the intensity of actor involvement. If the involvement of an actor is vital for the functioning of the partnership, from design to monitoring, we speak of a high degree of involvement. A medium degree of involvement occurs when an actor only participates during the implementation stages and fulfils particular tasks. If an actor only participates sporadically or not at all, we can speak of ‘no involvement’ (Bitzer et al. 2010b).

The internal dynamics are verified and complemented with a social network analysis. The network approach “allows researchers to capture the interactions of any individual unit within the larger field of activity to which the unit belongs” (Kilduff & Tsai, 2003: 13). A social network analysis describes network characteristics and concepts such as embeddedness, social capital, and network centrality. Moreover, a social network analysis has the ability to address important aspects of the social structure of a network: the sources and distribution of power (Hanneman & Riddle 2005). In the MSP research, the network analysis enabled the

researchers to gain insight on:

• The main (core) organisations, stakeholder groups and sectors participating and brokering in the MSPs (betweenness centrality);

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