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    Assessment Agribusiness Incubators - 31 May 2011

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    Aravazhi Selvaraj
    This document summarizes a report on agribusiness incubators and their impact. It discusses that incubators help make agriculture more productive and sustainable in developing countries by supporting startups. Different types of incubators are described that provide services like infrastructure, training and financing. Case studies show incubators have significantly grown sustainable small businesses in sectors like salmon, vegetables and handicrafts. Key lessons are that successful incubators help clients mitigate risk, integrate along value chains, demonstrate innovations, and adaptively scale up their approach.

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    Assessment Agribusiness Incubators - 31 May 2011

    Uploaded by

    Aravazhi Selvaraj
    110 views30 pages
    This document summarizes a report on agribusiness incubators and their impact. It discusses that incubators help make agriculture more productive and sustainable in developing countries by supporting startups. Different types of incubators are described that provide services like infrastructure, training and financing. Case studies show incubators have significantly grown sustainable small businesses in sectors like salmon, vegetables and handicrafts. Key lessons are that successful incubators help clients mitigate risk, integrate along value chains, demonstrate innovations, and adaptively scale up their approach.

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    This document summarizes a report on agribusiness incubators and their impact. It discusses that incubators help make agriculture more productive and sustainable in developing countries by supporting startups. Different types of incubators are described that provide services like infrastructure, training and financing. Case studies show incubators have significantly grown sustainable small businesses in sectors like salmon, vegetables and handicrafts. Key lessons are that successful incubators help clients mitigate risk, integrate along value chains, demonstrate innovations, and adaptively scale up their approach.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    110 views30 pages

    Assessment Agribusiness Incubators - 31 May 2011

    Uploaded by

    Aravazhi Selvaraj
    This document summarizes a report on agribusiness incubators and their impact. It discusses that incubators help make agriculture more productive and sustainable in developing countries by supporting startups. Different types of incubators are described that provide services like infrastructure, training and financing. Case studies show incubators have significantly grown sustainable small businesses in sectors like salmon, vegetables and handicrafts. Key lessons are that successful incubators help clients mitigate risk, integrate along value chains, demonstrate innovations, and adaptively scale up their approach.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 30

    Agribusiness Incubator Assessment: Impact and Lessons Learned.

    4th Global Forum for Innovation and Entrepreneurship


    Helsinki, 31 May 2011

    Agrifood Consulting International (ACI) Economic Transformation Group (ETG)

    The Context
    In most of the developing world, agriculture is a business of $2/day. In many cases agriculture is not sustainable.
    How to make agriculture in developing countries more productive and sustainable? Develop Sustainable Agribusiness

    Outline
    Paths

    Incubators are one path for agribusiness development

    Types

    There are different types of incubators and they evolve over time.
    Successful incubators learn how to fund themselves as they mature. Incubators have a significant impact in growing sustainable agribusiness SMEs. What have we learned?

    Business Models

    Impact

    Lessons

    10 Case Studies

    Differing in many dimensions


    100

    90
    80 70 60 50 40 30 20 10

    0
    Years of Operation
    (normalized indicators Max = 100)

    Initial Capital

    Number of Graduate

    Sales

    Operating Budget

    But with Something in Common

    They fill a gap among alternative approaches that pursue growth of commercial agriculture.

    3 Approaches for Growth of Commercial Agriculture

    Target Point
    Efficient Farm-to-Market linkages Rapid Technology Absorption Incentives to Invest

    Facilitate Large-scale Agribusiness Investment

    Agribusiness Incubators
    Invest in Farmlevel Organizations

    Starting Point
    Inefficient Farm-to-Market linkages Slow Technology Absorption Very limited Incentives to Invest

    Several Types of Agribusiness Incubators

    5 Types observed
    One Stop
    Agribusiness Sector Developer
    (eg Fundacion Chile)

    University And Researchbased


    Agribusiness Incubators
    (eg IAA-IPB)

    Agribusiness ValueChain

    Grass Roots
    Agribusiness Innovation Incubators
    (eg Villgro)

    Transnational
    Strategic Alliance Incubators (eg
    MLSVCF)

    Integrators
    (eg Timbali)

    Providing Many Services but. Two Services Specific to Agribusiness

    Many Services
    Infrastructure and facilities Business development services Access to finance Access to government programs Training and Capacity Building Strategic advice Technology advice Investment Linkages and networking Consulting services Matchmaking Product development

    Agribusiness Incubators are Different


    1. Reduce risks for their clients 2. Help build the value chain

    Business Models for Agribusiness Incubators

    Successful agribusiness incubators self-finance an increasing share of their operation budget as they mature.

    % Operation Budget funded by Fees, Consulting Services, Profit Sharing, Capital Gains
    100% 90% 80% 70% 60% 50%

    40%
    30% 20% 10% 0%

    Moving towards Replication.

    Advanced incubators replicate and scale up through:

    incubation of new incubators


    Fundacin Chile incubating:
    Fundacin Jalisco, Fundacin Sonora, Fundacin Peru

    ABI-ICRISAT incubating:
    10 incubators in India

    SMEs

    SMEs SMEs SMEs SMEs SMEs SMEs SMEs

    Incubator

    SMEs

    Incubator

    SMEs SMEs

    Incubator

    SMEs

    Incubator

    Impact

    Creation of sustainable agro-enterprises generating value added and profits


    Facilitate

    commercialization
    and modernization of agricultural system

    High social return on investment

    Diffusion of

    innovation

    Impact 3 examples
    Subsector level and medium large companies (Fundacin Chile) Small and medium enterprises (IAA-IPB) Small farm enterprises headed by poor women (Timbali)

    Incubator of Multiple Agribusiness Value Chains


    REGION I
    Introduction of hirame Esmeralda Subsidiary (citrus fruits)

    Asparagus Berries Fruits Salmon Oysters


    REGION VIII
    Tecnoplant Subsidiary (Radiata pine nursery) Carpe Diem Subsidiary (premium wines)

    Olive Oil Wine Canola Oil Forestry Cheese


    REGION X Berries La Unin Subsidiary Procarne Subsidiary

    REGION V
    Ignisterra Subsidiary (lenga furniture) Granjanova Subsidiary Punto Verde (vegetables)

    Granjasur Subsidiary (apples)


    Salmones Antrtica Subsidiary

    REGION IV
    Agronova subsidiary (citrus fruits) Olive oil

    M R.
    Asparagus Program

    Salmones Huilinco Subsidiary Cultivos Achao Subsidiary (oysters)

    American Subsidiary American Impressions (USA)

    REGIN IX
    Centec Subsidiary (furniture parts and pieces) Tecnagro Tecnofro (berries)

    Constructora e Inmobiliaria 2000 Subsidiary

    REGIN XII
    Salmotec Subsidiary Introduction of halibut

    Main Projects and Companies Developed

    Fundacin Chiles Salmon Program

    Industry Production
    Year 1983 2005 Tons 347 383.000

    US$ 2.2 billion in exports for 2006 23,6% of Chiles total food exports +35.000 direct and indirect jobs created

    IAA-IPB (Indonesia) Incubator of SMEs in Multiple Sectors

    Primary focus on startup small enterprises Help them to grow into sustainable medium enteprises

    Fresh Vegetables Coops Selling to Supermarkets and Fast Food Chains

    Production

    Sorting

    Cool Storage

    Packaging

    Transporting

    Handicrafts from Local Fibers to Exports

    Fibers from farmers

    Weaving

    Handicrafts for exports

    Coconut-based Drink
    Starting from scratch: initial investment of Ms. Aprisusi in 1995 = $1,200, manual filling.

    To Success: Ms. Aprisusi Sales in 2010 = over$2.4 million, employing 32 people, selling all over Indonesia, 8 automatic filling lines.

    Impact of Timbali (South Africa): Working with Women Farmers


    Graduates since 2004 = 140 small farm enterprises Creating franchises and full integration with cut flower value chain Poor women becoming assertive and economically independent small entrepreneurs

    Intervening in the Cut Flower Value Chain


    Creation of Brand

    Markets

    Products Packaging

    Crops
    FARMERS

    Line of Credit

    Inputs Nursery

    Training & TA

    Investment in Nursery

    23

    Lessons Learned

    My Success is the Success of My Clients.


    Incubators breed success, success meaning growth of sustainable agribusiness enterprises. 1 Risk Management
    The most effective agribusiness incubators help mitigating risk.

    2 Value Chain Integration


    Successful agribusiness incubators integrate actors along the value chain.

    3 Demonstration Effect
    Successful agribusiness incubators show ways to do innovations.

    4 Adaptive Scaling up
    Advanced agribusiness incubators move towards replicability

    Key Message 1: Manage Risk


    Successful agribusiness incubators help clients reducing the risk inherent to agricultural production and distribution. Successful incubators help clients to reduce these risks through a combination of technology, institutional, and networking strategies.

    Risk Mitigation
    Technology
    (eg. Drought tolerant seed at ABI-ICRISAT)

    Institutions Strategies
    (eg. Franchising to ensure price and market at Timbali or Fundacin Jalisco)

    Policy Networking
    (eg. Improving access to finance and government programs at IAA-IPB; changing sector policy at TnsMz or Fundacin Chile)

    Key Message 2 Integrate Actors in the Value Chain


    Successful agribusiness incubators overcome coordination failures within a value chain and by doing so they are more likely to achieve industry or sector impact.

    Successful integration implies finding incentives for collaborating and linking previously disconnected farmers and consumers in urban and global markets.

    Key Message 3: Demonstration Effects


    Successful Agribusiness incubators have a powerful demonstration effect: previously untried ventures become possible and a positive energy for change becomes diffused.

    Key Message 4: Adaptive Scaling up


    Scaling up and replicability are the real test of the efficacy of the incubating approach to agribusiness development. The evidence reviewed so far shows promise.

    Equally important, the evidence shows adaptive replicability through the incubation of incubators.

    Conclusions

    Agribusiness Incubators are the New Path for Agribusiness Development in the developing world.

    Their success will require a concerted effort of global institutions and strong policy support of national governments.

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