igd IMPACT PRACTICAL, BUSINESS-DRIVEN IMPACT MEASUREMENT AGRIBUSINESS // 2014

Transcription

1 igd IMPACT PRACTICAL, BUSINESS-DRIVEN IMPACT MEASUREMENT AGRIBUSINESS // 2014 igdimpact SECTOR FRAMEWORK

2 igdimpact igdimpact is the Initiative for Global Development s (IGD) practical, business-oriented approach to impact measurement. Designed with direct input from businesses, sector-specific measurement frameworks help companies map potential (or realized) impacts to key business drivers and performance metrics. Sector-specific frameworks are currently available for the agribusiness, financial services, fast moving consumer goods (FMCG), information and communications technology (ICT), and power sectors. Businesses use the framework to guide impact assessment at any level from the micro impact of a single product or service to the macro impact of regional operations or public-private partnerships. Recent projects include the completion of an impact assessment with Visa Inc., evaluating the impact of their partnership with the Government of Rwanda, working with The Pearson Group in South Africa, and CountourGlobal in Togo. We have also utilized our impact measurement approach in our collaborations with the Rockefeller Foundation to identify opportunities to leverage the private sector to address post harvest loss. We look forward to partnering with your company on impact measurement. Please contact us at impact@igdleaders.org to get started. ABOUT IGD The Initiative for Global Development (IGD) is a nonprofit organization that drives poverty reduction by catalyzing business growth and investment in the developing world. We bring together an influential network of senior executives from sector-leading companies with the interest and capacity to make strategic investments in high-need, high-potential areas of Africa. Members of our Frontier Leader Network shape global connections and frontier market insights, and promote business-driven development to create economic growth and opportunity.

3 AGRIBUSINESS SECTOR Impact Framework // 2014 version BUSINESS DRIVERS POTENTIAL IMPACT SUGGESTED METRICS/MEASURES Achieving Growth Expand products and services Develop high-quality inputs for smallholders, adapted to local conditions Improve/upgrade/finance agricultural infrastructure (equipment, storage, processing, transportation) Enhance agro-processing capacity and techniques to deliver new products Develop nutritional products for local markets Serve more customers Implement input distribution strategy to reach rural, low-income and last-mile farmers Offer affordable products combined with value-added or extension services (e.g., agronomy, financial/ business training; finance, loans, insurance; ICT; mobile payments; soil mapping) Provide appropriate and affordable equipment and infrastructure solutions, integrating mobile technology Upgrade/build capacity, enabling higher volumes that meet standards for international markets/export Deliver high-quality processed goods at price points appropriate to target markets Increases availability and effectiveness of products in local markets. Connects input and output markets, reduces risks of investment, and provides greater security for producers. Improves quality and safety of products, and health and nutrition of consumers. Improves access and affordability to low-income, rural and SME customers. Improves productivity through product knowledge. Reduces post-harvest loss for staple/cash crops. Addresses critical gaps in smallholder financing. Enhances resilience to shocks. Promotes entrepreneurship among small-scale retailers, retail outlets, distribution centers. $ invested in R&D (or % of R&D budget) to develop affordable products for the low-income/ local market # new/adapted, low-cost products targeted to low income (e.g., low unit packs); % of total product portfolio % increase infrastructure capacity (transportation, storage); % utilization % increase in processing capacity; % utilized % increase in productivity; % increase in producer surplus % increase in new consumers; % low-income; % women % market penetration; % increase in market share $ invested in distribution outlets; #/% increase in outlets # value-add services provided; $ invested in # low-income receiving seasonal loans/finance, crop insurance, extension services/business training; resultant % increase in productivity $ spent on educational marketing campaigns (e.g., around product usage and benefits) $ cost per unit (input, transportation, storage, warehousing) $/# transactions conducted using mobile payments % increase in processing capacity; % utilization Agribusiness sector framework // 1

4 BUSINESS DRIVERS POTENTIAL IMPACT SUGGESTED METRICS/MEASURES Achieving operational efficiency and increased productivity through the value chain Local workforce development Hire local talent and build capability among employees to develop localized management and leadership Support professional training, technical and specialized agriculture training Cost-effective, responsible local sourcing Source high-quality inputs and agricultural raw materials sustainably from local suppliers, cooperatives, associations Integrate smallholders into value chains to reduce risk by providing credit/ financing and through forward contracts Comply with standards for food safety, traceability, and sustainability (e.g., fair trade, ethical trade) Optimized local production Deploy climate change adaptation techniques/sustainable agriculture to improve productivity, yields, quality and consistency of outputs Increase capacity and enhance local processing/production through effective technology improvements Promote sustainable production and resource efficiency; cut energy, water, waste Supports job creation. Transfers knowledge and addresses skills gaps. Builds capacity in primary production to achieve improved productivity, quality and yields, and processing. Integrates local suppliers into value chain. Encourages entrepreneurship along supply chain by creating jobs and enhancing skills. Improves farmer livelihoods while guaranteeing future supplies. Connects farmers/producers to offtakers and global markets. Improves local value retention through processing. Drives development of (export-oriented) agriculture industry. Promotes food and animal safety. Builds local production capacity. Creates jobs and develops human capital. Supports efficiency-gains within the supply chain. Reduces environmental footprint and waste, which creates efficiencies and reduces costs. Mitigates risks of climate change, which reduces farmer vulnerability. #/% skilled/unskilled jobs created; # filled by local employees; % women; $ wages/benefits paid # receiving training; $ and hours spent on training: qualitative increase in knowledge and capacity #/% seasonal/contracted workers $ spent on health management programs (e.g., HIV/AIDS) # jobs created or supported (skilled/unskilled) #/$ value of (forward) local producer/processor contracts % materials/inputs/ingredients sourced locally % total procurement sourced locally (vs. % imported) #/$ contracts with local suppliers (% women-owned) $ invested in building capacity of suppliers # hours spent on supplier training/skills transfer Applied Suppliers Code of Conduct for responsible procurement #/% producers/processors meeting international food and feed safety standards; $ value of exports % of production carried out in country % increase in productivity and output; resulting $ profits % reduction in energy/water usage/waste generated per unit produced; % reduction in carbon footprint % reduction in per unit cost $ invested in sustainable technology, financing, technical assistance Applied Producers Guidance/Code of Conduct % sites achieving zero non-hazardous waste to landfill Agribusiness sector framework // 2

5 BUSINESS DRIVERS POTENTIAL IMPACT SUGGESTED METRICS/MEASURES Responsible business High standards of governance Adhere to international standards for good governance, sustainable agriculture, and worker and environmental protection Respect human and indigenous rights regarding land ownership, water usage and bioengineering Comply with national/international food safety standards, quality and labeling regulation Create a culture in which performance is aligned with value Macroeconomic impact Make transparent payments to employees, suppliers, and governments Ensure that producers/farmers receive a fair price for their crops and products Effective corporate philanthropy Launch targeted initiatives aligned to core business which leverage company technology and expertise (e.g. agricultural mechanization, specialized farming techniques) Implement relevant corporate sponsorships Retains license to operate. Improves company transparency, accountability and reputation. Safeguards land rights and community health. Reinforces responsible business practices. Creates shared value for local community and company. Promotes good corporate citizenship. Motivates people to do good, while doing well. Stimulates local economic growth by increasing the capital flows needed to purchase local goods and services. Ensures company s inclusive economic growth benefits reach all segments of society. Creates shared value for local community. Addresses specific development needs, particularly when programs align to core business. Compliance with international standards/principles, internally and across value chain e.g., UN Global Compact; ILO s Declaration on Fundamental Principles and Rights at Work; UN Declaration of Human Rights; sustainable/fair trade agriculture Participatory engagement with local communities around land/resource rights Policy on GMO reflecting host government policy Development and implementation of a fair, effective companyspecific code of conduct/ethics Remuneration of senior executives linked to positive impact $ employee compensation; % earned locally $ paid in corporate and other government taxes $ operating expenses; % earned by local contractors $ paid to shareholders; %/$ shares held locally % increase in producer surplus Effectiveness of initiatives (in meeting defined goals/metrics) # local beneficiaries; # stating improvements to livelihood Perceived success of initiative (via stakeholder surveys) Effective CSR governance % of pre-tax profit invested in philanthropy/sponsorships # $ corporate sponsorships; # beneficiaries of sponsorships $ spent; gifts in-kind Agribusiness sector framework // 3

6 BUSINESS DRIVERS POTENTIAL IMPACT SUGGESTED METRICS/MEASURES Enhancing the operating environment Improve the policy and regulatory environment Engage local governments, ministries, and agricultural/farmer associations to promote sector development and prioritize investments in agriculture infrastructure, access to finance Advocate for reforms related to land rights, trade balance, and market distortions in the sector Promote effective agriculture and food safety standards Strengthen institutional capacity Collaborate with relevant ministries to foster knowledge-sharing; implement best practices; achieve effective standards-setting and compliance Develop farmer associations and extension services to improve reliability and quality of agricultural outputs Build capacity of higher education institutes to provide specialized technical and business training Partner to achieve common objectives Establish strategic partnerships to achieve efficient sharing of knowledge (e.g., seed technology, technical skills, access to market) Partner to apply ICT for soil mapping, agricultural information, and mobile payments Collaborate to address complex issues (e.g., child labor, financial literacy, access to finance) Creates more equitable marketplace to support socio-economic development. Contributes to local industry free from market distortions due to subsidies and pricing, which protects smallholders. Connects farmers to markets. Reduces postharvest losses. Increases value retention, farmer protection, access to finance, and incomes. Reduces agricultural imports. Increases productivity. Improves business skills. Builds capacity to address specialized skills gaps. Raises standards in agribusiness sector. Enhances domestic export potential. Reduces barriers to investment. Fast-tracks technology transfer into rural farming. Reduces industry s vulnerability to external shocks. Catalyzes investment. Builds capacity in underdeveloped markets by leveraging resources and sharing knowledge. Reduces costs and expands reach of interventions. Builds local capabilities to sustain activities in the long-term. Improves productivity through access to improved information. Advocate against market distortion, subsidies Land reforms achieved to balance protection of land rights with agriculture development Improved agriculture infrastructure Reforms to facilitate access to financial products; commodities exchanges linking farmers to markets Participation in agriculture councils and associations Increased local sourcing of inputs as a result of tax breaks/incentives granted Integration of literacy/education, business skills and modern agronomy techniques into governmentprovided extensions services; $ spent on training $ spent; # trained in specialist skills (e.g., seed technology and agro-processing) $ spent; # officials trained # local education institutes offering technical skills and business education/entrepreneurial programs #/% increase in local grower associations; # trained # MOUs/partnerships developed; $ invested in each partnership (e.g., joint research/development projects) # utilizing ICT-enabled agriculture information/mobile payments (% country soil mapped, input purchase, warehouse ticketing, sales) Partnership performance indicators defined and met; # beneficiaries of partnership; results of stakeholder surveys and/or independent evaluation Agribusiness sector framework // 4