2024 | Buch

Managing Agricultural Enterprises and Developing Agricultural Value Chains

Cases on Agribusinesses

herausgegeben von: Shashidhara Kolavalli, Gopal Naik, Mathew Tsamenyi, Suresh Babu

Verlag: Springer Nature Singapore

Buchreihe : Management for Professionals

Enthalten in: Springer Professional "Wirtschaft+Technik" , Springer Professional "Technik" , Springer Professional "Wirtschaft"

Inhaltsverzeichnis

Über dieses Buch

Dieses Buch mit Fallbeispielen, meist von kleinen bis mittleren Organisationen, aus Westafrika, Thailand und Indien bietet Fälle, die sich für die Ausbildung von praktizierenden Managern kleiner und mittlerer landwirtschaftlicher Unternehmen und Fachkräften des öffentlichen Sektors eignen, die sich mit landwirtschaftlicher Entwicklung beschäftigen. Das Buch umfasst einen Einführungsaufsatz, 22 Fälle, zwei Branchennotizen und ein Kapitel, das beschreibt, wie die Fälle verwendet werden können, um ein ein- oder zweiwöchiges Trainingsprogramm zu entwickeln. Bei diesen Fällen handelt es sich um Situationen in Unternehmen oder Sektoren, die eine Entscheidung erfordern, die aus der Perspektive eines Protagonisten, in der Regel eines hochrangigen Entscheidungsträgers, geschrieben wird. Die in dem Buch enthaltenen Fälle stammen überwiegend aus Westafrika - Ghana, Côte d 'Ivoire und Nigeria - und der Rest aus Indien. Darüber hinaus sind zwei Branchenhinweise enthalten, einer zur Tomatenverarbeitung in der Türkei und der andere zur Maissaatgutindustrie in Thailand. Sie bieten den in einigen westafrikanischen Fällen angesprochenen Situationen kontrastreiche Situationen. Case-based Teachingeignet sich besonders für die Ausbildung praktizierender Manager mit eingeschränkter formaler Ausbildung. Die Fälle in dem Buch reichen aus, um Schlüsselfragen im Management landwirtschaftlicher Unternehmen und in der Entwicklung der Wertschöpfungskette umfassend anzusprechen.

Mit KI übersetzt

Inhaltsverzeichnis

Frontmatter

Managerial Skills for Developing Agricultural Value Chains

Abstract

Strategies to develop agriculture prioritize strengthening upstream and downstream enterprises to help smallholder producers integrate into demanding and evolving food markets. The strategies are operationalized through value chain approaches geared to support private agro enterprises and help them link with producers. Helping small and medium agro enterprises (SME), which are often numerous in most countries, to grow offers an opportunity to strengthen private enterprises agriculture, apart from encouraging new ones to emerge. Building their managerial skills—to become formal and exploit growth opportunities—offers the foundation for such strategies, although how to help them grow is still not clear. Equally critical are the capabilities of managers of public programs that intervene to encourage productive alliances between producers and agro enterprises. Selectively intervening to help enterprises, without an adequate understanding of enterprises, they often make both intentional and unintentional errors. Building managerial skills in both private enterprises and public entities is, thus, essential to make effective interventions in agricultural chains.

Shashidhara Kolavalli, Gopal Naik, Mathew Tsamenyi, Suresh Babu

Organizing Training Programmes

Abstract

Training practicing managers of small and medium enterprises (SME) and of programmes developing value chains requires attending to both the content and learning methods. Because the trainees are unlikely to be prepared for traditional classroom teaching methods, in which concepts are presented to them in an abstract manner, using cases to demonstrate the utility of taught principles in real-life settings offers a way to enhance their learning. But to make case method effective, organizers must attend to many issues. The trainees must have the time and incentives to read the cases before discussion. The trainees selected need to have the capacity to participate in discussions and be in a position within organizations to apply their learning. The training may need to be done in parts to ensure that they are not kept away from their work for too long. The chapter offers guidance for making training effective.

Shashidhara Kolavalli, Nana Yaa A. Gyamfi

AlCava GH: Substituting for Imports

Abstract

AlCava GH was one of the major importers of Extra Neutral Alcohol (ENA) into Ghana, 90% of whose requirements were met from imports. The company was started five years before by acquiring 2,000 ha of land to produce ENA from cassava. Because duty, port charges, and transport accounted for 30% of the price, they thought they could competitively substitute for imports. They planned to invest in an annual 2.8 million litre capacity ENA plant, to capture a 4% share of the Ghana market. They would also invest in recovering carbon dioxide, a byproduct for which there was demand, and a plant to treat effluents. The company proposed to gradually expand the capacity to 9 million litres, its ultimate objective, by reinvesting its profits because it could not borrow now. The case offers information to estimate the returns to investment and consider how it may be affected by decisions on debt and equity and the uncontrollables such as interest rates and market prices.

Vishnuprasad Nagadevara

African Agro Development Bank

Abstract

Lending to agricultural sector requires special framework. The establishment of specialized Agricultural Development Banks by many developing countries in the sixties helped in both developing lending policy and extending credit and other banking facilities to agricultural sector. Being commercial banks, they were expected to balance market orientation with focus on developing agriculture, by lending to activities from primary production to exports which may not be prima facie viable. Relationship managers in the banks acted as intermediaries between the applicants unfamiliar with the formalities and the hardcore credit risk managers, guiding the applicants on preparing fundable projects and offering an initial appraisal. The applications later went through a more rigorous assessment of business, management, and industry risks. The case on African Agro Development Bank includes three loan proposals: for a small loan from a poultry farm, a request for credit enhancement from a group of maize growers, and for financing food processing that produced pineapple for exports. The caselets provide sufficient information for the participants to learn to assess the relevant market, business, and credit creditworthiness and decide on the proposal.

G. Ramesh

Crystal Lake Fisheries—I

Abstract

A Ghanian, who was educated in and worked as a financial professional in the UK, chose to return to Ghana to create businesses that would add value, create employment, and bring about positive changes in Ghana’s rural economy. Large-scale aquaculture was uncommon in Ghana; no one had successfully established cage culture in the Volta Lake, the largest artificial reservoir in the world. Because it would be pioneering, her consultants advised that her venture should run a vertical operation to avoid bottlenecks—she too wanted to focus on producing fingerlings, the seed for the industry, to spur the growth of aquaculture in Ghana—and that she should have skin in the game by investing her own funds to assure investors. A local bank offered to lend all the money she needs at 30%. She was evaluating her risks: of beginning with the consultant-recommended 3,000 ton capacity while she felt comfortable scaling up gradually and of input costs deviating substantially from the levels assumed. The case has the information needed to help her with her decisions.

Vishnuprasad Nagadevara

Crystal Lake Fisheries—II

Abstract

Bitten by the entrepreneurial bug, Patricia, a Ghanaian, who was educated and employed in the UK and had invested her savings in the company that she worked for, decides to go back to her country. The preliminary analysis done by the consultants she hired confirmed that her interest in producing tilapia in Ghana would be viable. They recommended that she should not borrow but Patricia decided not to put all her money into it. Patricia spent the last month negotiating the buyout of her share in her company and negotiating with agricultural development bank for a loan to fund working capital. The bank assessed her project to be risky because it was a pioneering commercial venture without skilled personnel to support the sector in the country. A commercial bank offered funding at an annual interest of 25% payable on the amount withdrawn, which requires her to exercise tight control on spending. Her foreign consultants agreed to send a team to implement the project but she wanted an implementation plan that she could monitor. The case has the information to prepare an implementation plan for Patricia.

Vishnuprasad Nagadevara

Crystal Lake Fisheries—III

Abstract

Twelve months into her tilapia production operation, Patricia and her manager were reviewing their costs and revenues in the previous year. Their assumptions about market prices had held, but they were not able to produce as much as they expected. They were concerned about the costs of feed which were beginning to rise although they were able to negotiate bulk discounts. Feed costs accounted for nearly one half of the costs of fish production costs. Feed quality too concerned them. Without a feed processing industry, Ghana depended on imports from South America, the middle east and Asia. The local substitutes such as palm oil residue and cassava peelings did not adequately provide the required balanced diet. Patricia wondered whether integrating backwards to produce the feed for her operations would benefit her. The case has information to help her optimize her operations and inform her of the sensitivity of recommendations to various assumptions.

Vishnuprasad Nagadevara, Gopal Naik

Crystal Lake Fisheries—IV

Abstract

After more than a decade of producing tilapia, Patricia wondered whether she could have done a better job meeting the domestic demand for tilapia and fingerlings, for which she seeks out the help of an MBA student interning in her organization. The fishery sector was growing slowly, but imports still accounted for one half of the fish consumed in the country. Captive fishery still faced many bottlenecks in the country: access to reasonably priced quality feed, land tenure, lack of insurance and access to technical assistance. The case includes information on the (1) technology of four stages of fish production: brood management and production fry, fingerlings, and table fish; (2) capital and operational costs of different stages; and (3) input and output prices. The case offers information to determine the profitability of production combinations (fry, fingerling and grow-out fish) and appropriate mix given the infrastructure and market conditions.

Gopal Naik

Crystal Lake Fisheries—V

Abstract

Established in the late nineties as the first commercial operations using cage fish farming on the Volta Lake, Lakeside fisheries had grown to be the largest commercial fish farm in Ghana by 2012. Commercial fish farming had grown in Ghana with appropriate domestic policies and technical and financial support from international donor agencies. Patricia, the CEO, was concerned about how the aquaculture market would evolve in Ghana. She needed to assess various aspects of the market to see if her business model was appropriate to meet the requirements of the changing market: how could she evaluate the competitive forces and should she venture into new value-added activities in the fisheries sector? The case has information on the sector in Ghana, the competition she faces, the global aquaculture market, and environmental issues associated with the industry. The case exposes the students/entrepreneurs to the technique of analysing industry attractiveness using Porter’s five forces framework and the PESTLE analysis.

P. D. Jose

Nuttech Limited

Abstract

The managing director of Nuttech Limited and his two business partners, who co-owned the company, were reflecting on their experience and the insights they had gained so far to map a growth trajectory for the firm. Beginning small in 1998 as vegetable exporters, they had not looked back. Changing the focus of their activities, they had capitalized on every opportunity they saw to grow consistently. From vegetables, they moved to exporting cashew nuts and groundnuts. They set up an oil extraction plant to process the nuts that they could not export. They decided to procure soybeans to make better use of their extraction capacity. Realizing a huge demand for shea butter, they dropped groundnuts. One of their particular concerns was the soya bean business, because of a lack of steady supply of raw materials. The case has information on their operations to generate some options to streamline their operations.

Gopal Naik

NutCo Ivoire: The Cashew Pricing Dilemma

Abstract

Nutco Ivoire, a cashew nut exporter from Cote d’Ivoire, buys from farmers and sells to buyers in India and Vietnam against forward contracts, often having received at least a partial advance payment. It buys mostly from small farmers, dries the nuts, and ships to buyers meeting the key quality criteria of outturn, the nut to kernel ratio. It guarantees a price at the beginning of the season to its suppliers, advancing nearly 70 percent of the expected proceeds. It has cemented its relationship with the growers they buy from having paid them contracted prices even when market prices fell below the contracted prices. But the growers demanded flexible pricing when in one year prices showed signs of rising above the contracted price. They want to treat growers fairly, but they wonder how they could assume all the risks because they too must honor the contracts with buyers. A case to consider options to manage price risks and ways to replace contracts with relationships.

Mathew Tsamenyi, Nana Yaa A. Gyamfi

Totgars’ Co-operative Sale Society: Dovetailing Business to Meet Members’ Needs

Abstract

A cooperative of arecanut producers in southern India began by marketing the produce on behalf of its members. Rather than merely offering the produce for sale in regulated auction markets, the cooperative also became a commission agent, earning a margin on sales. Subsequently, it began buying nuts in the market so that it could add value. It processed the nuts into an intermediate product that goes into making a popular chewable product. Marketing a profitable crop, it offered its smallholder members a gamut of services they need: credit, inputs, extension, and even a supermarket. It raised the capital it needs by offering higher than market returns on deposits by its members. It rewarded members through dividends, apart from the services, at competitive or reduced prices. All this did not enable it to take its members’ allegiance for granted—a group of producers left to start a competing coop. Recognizing limited value-adding opportunities, threats from imports, and potential health regulations that might limit the market for the nuts, it considered how it can help members diversify to other crops. A case to discuss smallholder producer organizations and integrating vertically and horizontally.

Gopal Naik, G. Gopi Sankar

DADTCO: Breaking the Commodity Oligopoly

Abstract

According to John Markesen, CEO of CASSCORP, Africa has yet another hidden treasure, i.e., cassava. CASSCORP has simplified the complexities of large-scale industrial processing—transporting of perishable bulky tubers, high water requirement and pollutants produced—with an innovative mobile processing unit (MobPro), to convert the cassava into cake and later into flour closer to where they are produced. However, it faces difficulties in obtaining a price for the flour that makes the process viable. The flour market in Nigeria was a multibillion-dollar industry, controlled by a cartel of local and multinational companies. While the government has required the millers to mix cassava flour, it is unwilling to ensure that domestic cassava flour producers are compensated adequately by wheat importers. This case study explores CASSCORP’s quest to overcome the wheat flour ‘mafia’ and educate the market to accept home-grown, locally produced cassava flour.

Mathew Tsamenyi, Nana Yaa A. Gyamfi

Megha Farms

Abstract

A large Indian family-managed poultry business invests in a modern mechanized unit to set itself apart from the low-margin, labour-intensive operations that characterize a majority of poultry farms. The upgraded technology, along with scaled up operations, made their operations more efficient—by reducing feed wastage, improving hygiene to reduce the risks of diseases, and using space more efficiently—and helped them produce better products. Although the government offered incentives for poultry units to mechanize, the investors could not rely on them because of the way they are delivered. Upgrading their technologies also required them to innovate at every stage because the technologies appropriate for their operations were not available off the shelf. Domestic suppliers had not advanced adequately because of the limited demand they faced; the technologies that they could source from other countries required them to make leaps that were not necessary. A case to consider strategies to source technologies and challenges in upgrading techproposed to be constructed are onenologies to become competitive.

Gopal Naik, Anand Kumar

Henn & Co.: Politics in the Henhouse

Abstract

A poultry firm, leading producer and a household name in Ghana, had ambitions of solidifying its position through a merger with an US poultry conglomerate, which was keen on gaining foothold in an African market. While negotiating an agreement, the founder contested in Ghana’s presidential election. Losing the election, his firm became an economic target of an administration that was not business friendly. The government interferes by offering the conglomerate partnership with a state poultry enterprise. The conglomerate declines and perceiving that it might expose itself to further interference, it withdraws from the merger agreement. Having reoriented its strategies while awaiting the merger, the firm borrows from a state-owned bank to execute a long-term strategy to go on its own. When the same party returns to power years later, the bank terminates the loan. The founder’s successors ponder how they can stay clear of politics. A case to discuss government business relations.

Mathew Tsamenyi, Nana Yaa A. Gyamfi

Bar Brothers’ Fishery in India

Abstract

Two poorly resourced brothers, one a college student and the other a school dropout, decide to venture into producing fish in ponds, after learning about inland fishery in a training offered by a producers’ association. They did not have the capital to invest, but a friend, who had urged them to attend the training, offered to let them use a pond he had leased for the same purpose and pay him only at the end of the year. Selling some of the few-weeks-old fingerlings to generate the working capital for the rest of the year, they finish the cycle and turn a decent profit. They expand their operations, moving to remote areas to lease ponds at lower costs but realize that they were trading off profits by doing so because of difficulties managing distant operations. They contemplate their future without ponds of their own, as competition pushes up pond leasing costs. A case to discuss entry costs and challenges in growing.

Nirmal Kumar Patra, Suresh Babu

Willfields and THF: Leveraging Operations for Value Chain Redefinition

Abstract

A self-described serial investor in Nigeria, who began with an oil and gas supply enterprise, diversifies into trading agricultural products to stabilize his revenues from oil trade. He also manages a nonprofit organization that supports small scale enterprises which helped women-owned enterprises in local villages. Noticing their primitive methods of producing cassava, he becomes determined to transform their practices. A believer in learning firsthand, he thinks that a large demonstration farm where they can work and learn would be the best way. He invited firms to participate in the endeavor to create a supply chain that represents a ‘fair collaborative framework,’ spreading benefits among all, but finds that not many investors share his spirit. A case to consider what social responsibility means in agriculture, particularly where enterprises need to work with producers; how one might mobilize investments for such a purpose; and the potential to take advantage of development funds for doing so.

Mathew Tsamenyi, Nana Yaa A. Gyamfi

BanIva: Going Bananas for Diversification

Abstract

A banana producer from Cote d’Ivoire exported the bulk of what they produced to the EU, selling the rest in African countries. They upgraded their production technologies to benefit from more efficient operations and achieve the quality demanded in the European markets where, as an ACP country exporter, they received preferential treatment. Their profit margins began to decline when that protection from the more efficient producers in Latin America diminished and competition increased at home. They contemplated what they should do. They could sell more in Europe but they needed to expand their farms; raising the required was not an option, given their low profit margins. Their options were to diversify to other crops, such as rubber, plantain, and teak or sell more in Africa, where they would be competitive because of their large capacity, proximity to the market, and technological advantages over other producers. A case to contemplate corporate strategy, particularly relating to producing behind protection and becoming competitive.

Mathew Tsamenyi, Nana Yaa A. Gyamfi

Akshayakalpa

Abstract

A veterinary professional, who offered artificial insemination services to dairy farmers during his long career with a large NGO, notices that the average small dairy producer in India does not get all the services they need in a coordinated way to profit from the breed improvements they make. They needed to reach out to multiple suppliers—such as dairy cooperatives, private dairies, the department of animal husbandry, animal brokers and feed suppliers—for the services they need. He teamed up with other technocrats to build a superior value chain to deliver wholesome milk to discerning urban consumers, offering all the needed services to dairy farmers that work with them. They require them to produce milk under ideal conditions, including cultivating the grass needed and using milk machines. They were able to sell the milk at a premium, but they wonder how they should reward their suppliers. The case provides a context for discussing significantly upgrading technologies and profit sharing along a value chain.

Gopal Naik, S. Rajeshwaran

GrainGrow: Bringing Innovation in Food Handling

Abstract

The entrepreneur, an electrical engineer, entered agriculture by trading maize. He offered credit to his buyers, but soon realized that the model does not work in Ghana. Just as he was close to giving up on the model, a brewery approached him to supply them with maize grits. Committing to supply large quantities, he realizes that he did not have a steady supply of maize. Having learned of business incubators in Silicon Valley, he thought of attracting agricultural graduates into farming by removing their barriers to entry—land and the necessary inputs—and supporting them while they become independent. As he struggled to attract youth to the remote area where he was able to get land, he wished the government would do more to make the area more livable with improved infrastructure, such as roads, schools, and hospitals. A case to consider building supply chains, social infrastructure, and models for public extension to support private enterprises.

Mathew Tsamenyi, Nana Yaa A. Gyamfi

Between the Ministry and the Multinational

Abstract

A multinational seed company was taken aback when a Ghanaian ministry rejected its application for a license to import hybrid seeds into the country. An agent of the company had registered the variety in the country several years earlier. The company partnered with USAID to make the seeds available to farmers through one of its projects. Ghana’s policy permitted imports of seeds, but it required the importers to offer a plan to produce the seeds in the country, giving them a short time to assess the market potential. A dysfunctional bureaucracy that could not communicate properly and a firm that felt entitled to enter any market but only marginally interested in developing a small market, required a third party of sorts to negotiate a resolution that met the requirements of the policy. The resolution did not result in a lasting congenial relationship. A case to discuss attracting private investments, communicating with the private sector, and implementing policies.

Fenton Sands

Maize Seed Industry in Thailand

Abstract

Thailand has emerged as a major exporter of seeds, with maize seeds in the lead. Investments the country made, with the support of donors, and collaboration with CGIAR seeded the industry in the 1950s. Thailand’s efforts to increase maize production, with emphasis on using improved varieties, boosted its seed sector. Although the public sector organizations orchestrated widespread adoption of maize seeds, they could not keep up with the growing demand for seeds. Thailand’s efforts to attract the private sector encouraged many MNCs to enter the market, who subsequently produced hybrids as well. Following considerable consolidation, the seed industry is now an oligopoly with MNCs in the lead. The government has tried to encourage local firms to develop, but by the nature of the industry domestic firms face barriers too high to enter the industry. This brief note offers a context to discuss what countries can do to attract global investments and the limits to sovereignty that can be achieved.

Orachos Napasintuwong

Replacing Tobacco in Malawi

Abstract

Agricultural Diversification (AgDiv), a project supported by USAID/Malawi’s Feed the Future initiative, was mandated to help small farmers diversify away from an over dependence on cultivating maize into peanuts, soybean, and orange flesh sweet potato. The project found a partner in three tobacco companies that were also trying to get the farmers they worked with to diversify away from growing tobacco—the demand for which was declining rapidly. They realized that they needed to increase the productivity of peanuts and soybeans to make the returns from cultivating them comparable to that of tobacco. The USAID project was able to achieve it by partnering with other USAID-supported programmes, public institutions in Malawi, and private enterprises. The efforts strengthened the value chains, with incentives for private enterprises to invest along them, benefitting both the farmers and the economy. A rich case to discuss public private partnerships and deciding where to intervene to develop value chains.

Fenton Sands, Shashidhara Kolavalli

The Phata Cooperative

Abstract

Noticing that a neighbouring community was thriving by growing sugarcane, a community in the poor region of southern Malawi discussed with their elders if they too could do it. They approached an agricultural management firm for guidance. The firm identified a source of funds to buy the irrigation equipment: a grant facility of the EU. The government had given grants and loans to many communities but not all of them had succeeded. They could get 3.2 million dollars grant, but they had to contribute half a million dollars, which they did not have. A social impact investor came to their help. With the agricultural management firm managing the collective farm, the cooperative could repay the loans and offer income to its members several folds greater than what they earned from cultivating rainfed crops. A case to consider whether outsourcing management is an option to make smallholder cooperatives successful.

Fenton Sands

Titel: Managing Agricultural Enterprises and Developing Agricultural Value Chains
herausgegeben von: Shashidhara Kolavalli
Gopal Naik
Mathew Tsamenyi
Suresh Babu
Verlag: Springer Nature Singapore
Electronic ISBN: 978-981-9758-50-0
Print ISBN: 978-981-9758-49-4
DOI: https://doi.org/10.1007/978-981-97-5850-0