The background and guidelines for delivering these PowerPoint presentations can be found in the facilitator’s manual: http://www.fao.org/3/a-i7968e.pdf http://www.fao.org/economic/esa/ This session presents step three of the IBM approach: Once the common upgrading priorities have been identified, activities and interventions to address them can be designed and implemented. © FAO: http://www.fao.org

1. Inclusive business models
www.fao.org/economic/esa/ © FAO, 2017
Step 3: Designing upgrading activities
SESSION 9

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Designing upgrading activities
Session 9
Upgrading activities
• What can be done to address common
upgrading priorities?
• Identify activities to improve business model

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Designing upgrading activities
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Considerations for selecting activities
1. Address priorities:
• Which activities are needed to address common
priorities?
2. Capabilities and responsibilities:
• What activities can producers and buyers implement?
• For which activities would they need support?
• What support can be given through the project?
• Do the actors have the competencies to implement the
upgraded business model or should they first work on
core competencies to manage current activities and
technologies?

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Designing upgrading activities
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Considerations for selecting activities
3. Sequence:
• What is needed first?
• Address some easy steps first to gain confidence
in the collaboration.
4. Investment costs
• Cost of one-off investments
• Recurrent costs of new activities
• Will additional income cover these costs?
• How to finance initial investment?
• Much can be gained from upgrading activities that require
relatively modest investments.

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Designing upgrading activities
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Linkage upgrading – activities
• Organize regular business meetings between producers
and buyers
• Develop a pricing mechanism/contract
• Develop and maintain information-sharing mechanisms
– price, quantity required, dates, contractual details
• Facilitate linkages with financial institutions

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Designing upgrading activities
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Organizational upgrading – activities
• Acquire storage facilities
• Improve storage management (training)
• Improve financial management (hiring
personnel, training)
• Sell unsustainable assets
• Develop contract with a service provider
(transport, accountant)

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Designing upgrading activities
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Product upgrading – activities
• Develop new product
• Improve quality of products (planting
techniques, seeds, yields)
• Improve environmental sustainability of
products (climate-smart farming techniques,
efficient resource management, pursuit of
environmental standard certification)
• Change characteristics of product
• Offer additional services (transport, storage)

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Designing upgrading activities
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Process upgrading – activities
• Reduce time for product transportation (collection
points)
• Organize collective marketing
• Improve cleaning and packaging processes

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Designing upgrading activities
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Blue Skies case
Top three priorities for buyers and sellers

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Designing upgrading activities
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Priority 1: Price
Buyer: Purchase at favourable price to compete in
the market
Seller: Sell a high price to maximize profit
Activities
• Develop pricing mechanism
• Establish clear criteria for increases/reductions
in prices as response to market variations,
weather, costs of inputs
• Organize periodic meetings between producers
and buyers

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Designing upgrading activities
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Priority 2: Quality
Buyer: Improve quality of products delivered
Seller: Reduce production costs for required
quality
Activities
• Strengthen support from technical team
(training, quality mechanism)
• Work with cooperative to increase
production support
• Design price mechanism that rewards for
high-quality products

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Designing upgrading activities
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Priority 3: Volume
Buyer: Increase volume delivered – decrease
side-selling and rejections
Seller: Increase volume of sales
Activities
• Mechanism to access seeds with better
yields
• Set up collection points to aggregate sales
and facilitate transportation
• Design process to reduce product damage
during transportation