1 public private partnerships for agribusiness development A review of international experiences public private partnerships for agribusiness development A review of international experiences Marlo Rankin Eva G lvez Nogales Pilar Santacoloma Nomathemba Mhlanga Costanza Rizzo FOOD AND AGRICULTURE ORGANIZATION OF THE UNITED NATIONS. Rome, 2016. Recommended citation FAO. 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, Italy Cover photographs FAO/Dan White FAO/Nemanja Knezevic The 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.
2 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 mentioned. The views expressed in this information product are those of the author(s) and do not necessarily reflect the views or policies of FAO. ISBN 978-92-5-109252-1. FAO, 2016. FAO encourages the use, reproduction and dissemination of material in this information product. 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 way. All requests for translation and adaptation rights, and for resale and other commercial use rights should be made via or addressed to FAO information products are available on the FAO website ( ) and can be purchased through iii Contents Acknowledgements vii Executive summary viii ABSTRACT xiv About the authors xv Acronyms xvi Part I Introduction Chapter 1 Introduction 3.
3 Why public private partnerships (PPPs) in agriculture? 3. Definition of PPPs for agribusiness development 3. Rationale 5. Initial reflections 8. Objectives and methodological approach of the study 9. Structure of the report 10. References 11. Chapter 2 Overview of the case studies 15. Typology of the PPP cases 15. Partners 16. Financing structure, scale and shares of investments 19. Formality of the arrangement 22. References 24. Part II Typology of agribusiness partnerships Chapter 3 partnerships for value chain development 27. Rationale for value chain partnerships 27. partnership objectives and characteristics 28. Overview of the cases 31. Main roles and functions of partners 35. Performance and development outcomes 41. Major challenges in value chain partnerships 44. Success factors and lessons 48. References 51. iv Chapter 4 partnerships for innovation and technology transfer 53. Rationale for innovation and technology transfer partnerships 53. partnership objectives and characteristics 54.
4 Overview of the cases 56. Main roles and functions of partners 61. Performance and development outcomes 64. Major challenges in innovation partnerships 66. Success factors and lessons 68. References 69. Chapter 5 partnerships for developing agricultural market infrastructure 71. Rationale for market infrastructure partnerships 71. partnership objectives and characteristics 72. Overview of the cases 75. Main roles and functions of partners 78. Performance and development outcomes 80. Major challenges in market infrastructure partnerships 83. Success factors and lessons 84. References 86. Further reading 87. Chapter 6 partnerships for delivering agribusiness development services 89. Rationale for business development partnerships 89. partnership objectives and characteristics 91. Overview of the cases 92. Main roles and functions of partners 96. Performance and development outcomes 97. Major challenges in partnerships for business development services 99. Success factors and lessons 100.
5 References 102. Part III Cross-cutting findings and conclusions Chapter 7 Good governance and management of agribusiness partnerships 105. Governance and management of agribusiness partnerships 105. Promoting a sound public institutional framework 106. Ensuring that good legislative and regulatory frameworks are in place and enforced 116. Fostering prudent and transparent selection and budgetary processes 118. v Guaranteeing affordability and value for money of partnerships 120. Designing adequate adjustment and exit strategies 122. Conclusions on governance 123. References 124. Chapter 8 Benefits and challenges of agribusiness partnerships 127. Potential benefits of agribusiness partnerships 127. Common challenges of agribusiness PPPs 138. References 143. Chapter 9 Conclusions and the way forward 145. Definition of agri-PPPs 145. When are PPPs the best approach for achieving agribusiness development outcomes? 150. Take-away lessons 152. Study limitations and areas of future research 154.
6 Annex 1 agribusiness partnership cases analysed 155. Annex 2 PPP case appraisal form 159. FIGURES. 1. Typology of PPP cases by region 17. 2. public partners involved in the PPP cases 18. 3. public partners involved in the PPP cases 19. 4. PPP financing structure by region 20. Tables 1. Overview of meso-level VCD PPP cases 32. 2. Overview of micro-level VCD PPP cases 34. 3. Summary of meso-level VCD PPP performance 42. 4. Summary of micro-level VCD PPP performance 43. 5. Overview of ITT PPP cases 57. 6. Overview of ITT PPP cases for SMAE development 60. 7. Summary of ITT PPP performance 63. 8. Summary of performance of ITT PPPs for SMAE development 65. 9. Contractual forms of PPP and allocations of responsibilities 75. 10. Overview of MI PPP cases 77. vi 11. Summary of MI PPP performance 82. 12. Overview of BDS PPP cases 94. 13. Summary of BDS PPP performance 98. 14. Agri- versus traditional PPPs 108. 15. Leading contracting authorities in agribusiness PPPs, by region 109.
7 16. Models of the institutional set-up for agri-PPPs 113. 17. PPP programmes in Latin America relevant to the agriculture sector 115. 18. Benefits of agribusiness PPPs 137. 19. Major challenges affecting the performance of agri-PPPs 139. 20. Agri- versus traditional PPPs 149. BOXES. 1. Definitions of key terms 5. 2. Examples of mega-agricultural PPPs 7. 3. Scope of agri-PPP typologies 16. 4. Formats of partnership agreements 22. 5. Aligning agri-PPPs with national priorities 37. 6. The experience of cooperatives in the oil-palm PPP in Indonesia 40. 7. The challenge of land grabbing and potential solutions: evidence from Indonesia 48. 8. 4P research partnerships for sugar and tea in the United Republic of Tanzania 56. 9. Contractual arrangements for infrastructure PPPs 74. 10. The role of private partners in the Kenyan WRS partnership 80. 11. Definitions and roles of the public institutions involved in PPPs 107. 12. Donor-sponsored PPPs operating outside the established institutional channels 116.
8 13. Value for money and related concepts 121. vii Acknowledgements This 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 consultant. The 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. 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.
9 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) 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 appreciated.
10 We 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 proofreading. viii Executive summary Against 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. 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.