Public–private partnerships for agribusiness development

1 public private partnershipsfor agribusiness developmentA review of international experiencesPublic private partnerships for agribusiness development A review of international experiencesFAOP ublic private partnerships for agribusiness developmentA review of international experiencesFOOD AND AGRICULTURE ORGANIZATION OF THE UNITED NATIONSRome, 2016 Marlo RankinEva G lvez NogalesPilar SantacolomaNomathemba MhlangaCostanza RizzoThe designations employed and the presentation of material in this information product do not imply the expression of any opinion whatsoever on the part of the Food and Agriculture Organization of the United Nations (FAO) concerning the legal or development status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. The mention of specific companies or products of manufacturers, whether or not these have been patented, does not imply that these have been endorsed or recommended by FAO in preference to others of a similar nature that are not views expressed in this information product are those of the author(s) and do not necessarily reflect the views or policies of 978-92-5-109252-1 FAO, 2016 FAO encourages the use, reproduction and dissemination of material in this information product.

2 Except where otherwise indicated, material may be copied, downloaded and printed for private study, research and teaching purposes, or for use in non-commercial products or services, provided that appropriate acknowledgement of FAO as the source and copyright holder is given and that FAO s endorsement of users views, products or services is not implied in any requests for translation and adaptation rights, and for resale and other commercial use rights should be made via or addressed to information products are available on the FAO website ( ) and can be purchased through citationFAO. 2016. public private partnerships for agribusiness development A review of international experiences, by Rankin, M., G lvez Nogales, E., Santacoloma, P., Mhlanga, N. & Rizzo, C. Rome, ItalyCover photographs FAO/Dan White FAO/Nemanja KnezeviciiiContentsAcknowledgements viiexecutive summAry viiiABstrAct xivABout the Authors xvAcronyms xviPArt i introductionchAPter 1 Introduction why public private partnerships (PPPs) in agriculture?

3 Definition of PPPs for agribusiness development rationale initial reflections objectives and methodological approach of the study structure of the report 10references 11chAPter 2 Overview of the case studies typology of the PPP cases Partners Financing structure, scale and shares of investments Formality of the arrangement 22references 24 PArt ii typology of agribusiness partnershipschAPter 3 partnerships for value chain development rationale for value chain partnerships partnership objectives and characteristics overview of the cases main roles and functions of partners Performance and development outcomes major challenges in value chain partnerships success factors and lessons 48references 51ivCHAPTER 4 partnerships for innovation and technology transfer Rationale for innovation and technology transfer partnerships partnership objectives and characteristics Overview of the cases Main roles and functions

4 Of partners Performance and development outcomes Major challenges in innovation partnerships Success factors and lessons 68 References 69 CHAPTER 5 partnerships for developing agricultural market infrastructure Rationale for market infrastructure partnerships partnership objectives and characteristics Overview of the cases Main roles and functions of partners Performance and development outcomes Major challenges in market infrastructure partnerships Success factors and lessons 84 References 86 Further reading 87 CHAPTER 6 partnerships for delivering agribusiness development services Rationale for business development partnerships partnership objectives and characteristics Overview of the cases Main roles and functions of partners Performance and development outcomes Major challenges in partnerships for business development services Success factors and lessons 100 References 102 PART III Cross-cutting findings and conclusionsCHAPTER 7 Good governance and management of agribusiness partnerships Governance and management of agribusiness partnerships Promoting a sound public institutional framework Ensuring that good legislative and regulatory frameworks are in place and enforced Fostering prudent and transparent selection and budgetary processes Guaranteeing affordability and value for money of partnerships Designing adequate adjustment and exit strategies Conclusions on governance 123 References

5 124 CHAPTER 8 Benefits and challenges of agribusiness partnerships Potential benefits of agribusiness partnerships Common challenges of agribusiness PPPs 138 References 143 CHAPTER 9 Conclusions and the way forward Definition of agri-PPPs when are PPPs the best approach for achieving agribusiness development outcomes? Take-away lessons Study limitations and areas of future research 154 ANNEx 1 agribusiness partnership cases analysed 155 ANNEx 2 PPP case appraisal form 159 FIGURES1. Typology of PPP cases by region 172. public partners involved in the PPP cases 183. public partners involved in the PPP cases 194.

6 PPP financing structure by region 20 TABLES1. Overview of meso-level vCD PPP cases 322. Overview of micro-level vCD PPP cases 343. Summary of meso-level vCD PPP performance 424. Summary of micro-level vCD PPP performance 435. Overview of ITT PPP cases 576. Overview of ITT PPP cases for SMAE development 607. Summary of ITT PPP performance 638. Summary of performance of ITT PPPs for SMAE development 659. Contractual forms of PPP and allocations of responsibilities 7510. Overview of MI PPP cases 77vi11. Summary of MI PPP performance 8212. Overview of BDS PPP cases 9413. Summary of BDS PPP performance 9814. Agri- versus traditional PPPs 10815. Leading contracting authorities in agribusiness PPPs, by region 10916. Models of the institutional set-up for agri-PPPs 11317. PPP programmes in Latin America relevant to the agriculture sector 11518. Benefits of agribusiness PPPs 13719. Major challenges affecting the performance of agri-PPPs 13920.

7 Agri- versus traditional PPPs 149 BOxES1. Definitions of key terms 52. Examples of mega-agricultural PPPs 73. Scope of agri-PPP typologies 164. Formats of partnership agreements 225. Aligning agri-PPPs with national priorities 376. The experience of cooperatives in the oil-palm PPP in Indonesia 407. The challenge of land grabbing and potential solutions: evidence from Indonesia 488. 4P research partnerships for sugar and tea in the United Republic of Tanzania 569. Contractual arrangements for infrastructure PPPs 7410. The role of private partners in the kenyan wRS partnership 8011. Definitions and roles of the public institutions involved in PPPs 10712. Donor-sponsored PPPs operating outside the established institutional channels 11613. value for money and related concepts 121viiAcknowledgementsThis publication has been prepared by Marlo Rankin, Eva G lvez Nogales and Nomathemba Mhlanga, agribusiness economists in FAO s former Rural Infrastruc-ture and Agro-Industries Division (AGS), now part of the Agricultural Develop-ment Economics Division (ESA); Pilar Santacoloma, agribusiness officer for FAO s Latin America and the Caribbean Region; and Costanza Rizzo, FAO authors wish to express their special gratitude to the authors of case studies who collaborated on this project: George Essegbey, Rose Omari, Masahudu Fuseini, Hannah Nyamekye, Hannington Odame, Elsie Kangai, Jeremia R.

8 Makindara, Ken Ife, Grace Twinamatsiko, Trina Fizzanty, Muhammad Masyhuri, Muhammad Fida, Umm e Zia, Daleen Diane Richmond, Nerlita M. Manalili, Yang Minli, Francisco Aguirre A., Ricardo Arg ello, Manuel Chiriboga, Carol Chehab, Vinicio Salgado, David Mart nez, Carlos de los R os; and to Pilar Santacoloma who coordinated this part of the study. We would also like to thank Marco Camagni and Mylene Kherralah of the International Fund for Agricultural development (IFAD), Cath-erine Moreddu of the Organisation for Economic Co-operation and development (OECD), David Ivanovic of the World Bank, David Bright of Oxfam, Rafael-Isidro Parra Pena of the International Center for Tropical Agriculture (CIAT), Roberto Vega of Syngenta, Manuel Estrada-Nora Rodriguez of the World Union of Whole-sale Markets, Christian Pirzer of Endeva Inclusive Business, Whitney Gantt of the Grameen Foundation, Jetske Bouma of Netherlands Environmental Assessment Agency, Lan Huong Nguyen of FAO s Regional Office for Asia and the Pacific, and David Ryckembusch of the World Food Programme (WFP)

9 For their participation in an expert meeting on private public partnerships for agribusiness held at FAO Headquarters in Rome on 8 9 December 2015 to review a draft of this publication. Their feedback on the report and sharing of related work was greatly are grateful to Doyle Baker, Gavin Wall, Eugenia Serova and Divine Njie, former Directors and Deputy Director of FAO AGS, for their support to this initiative. Appreciation is extended to Patrick Labaste and Lan Huong Nguyen, who kindly peer-reviewed the manuscript, and to Larissa D Aquilio and Stefania Maurelli for production coordination, Jane Shirley Shaw for copy editing, Simone Morini for the design, and Giuseppe Provenzano for summaryAgainst a background of limited government resources and expertise, innovative partnerships that bring together business, government and civil society actors are increasingly being promoted as a mechanism for improving productivity and driv-ing growth in agriculture and food sectors around the world.

10 Commonly referred to as public private partnerships (PPPs), these initiatives are common in sectors such as infrastructure, health and education, but their application in the agriculture sector is relatively new. Agri-PPPs are broadly promoted as having the potential to help modernize the agriculture sector and deliver multiple benefits that can contribute towards sustainable agricultural development that is inclusive of smallholder farm-ers. However, the motivation behind this approach and the loose manner in which the concept is defined raise many unanswered questions about the types of project that may be suitably governed by improve understanding of both the potential benefits and the challenges of agri-PPPs, the FAO has gathered 70 case studies from 15 developing countries along with evidence from field-based support to PPP initiatives for agribusiness development in Central America and Southeast Asia.