Partnerships Resource Centre /SDC-Maastricht School of Management

PROJECT #594
20 July 2011

Multi-
Stakeholder
Platform
Contribution to Value Chain
Development
The Honey & Beeswax, Milk & Milk Products,
Pineapple and Edible Oil & Oilseeds
Value Chains in Ethiopia

Synthesis Report

Sarah Drost, Maastricht School of Management

Jeroen van Wijk, Maastricht School of Management
Fenta Mandefro, Addis Ababa University
Contents
Executive Summary..................................................................................................................... 3
Acknowledgments ........................................................................................................................ 7
Abbreviations and acronyms ..................................................................................................... 8
1. Introduction .............................................................................................................................. 9
1.1 Research objective and questions .................................................................................. 9
1.2 Theoretical background................................................................................................. 11
1.3 Methodology .................................................................................................................... 14
1.4 Outline of this report...................................................................................................... 16

2. Context..................................................................................................................................... 17
2.1 The Ethiopian business climate ................................................................................... 17
2.2 The SNV BOAM program ............................................................................................ 17
2.3 The Coordination Groups ............................................................................................. 19

3. Coordination Group dynamics: four themes .................................................................... 21

3.1 Goal alignment ................................................................................................................ 21
3.2 Stakeholder involvement ............................................................................................... 24
3.3 Governance....................................................................................................................... 26
3.4 Embeddedness ................................................................................................................. 30

4. Institutional Change ............................................................................................................. 35

4.1 Access to knowledge ...................................................................................................... 35
4.2 Access to capital .............................................................................................................. 37
4.3 Access to markets ............................................................................................................ 38
4.4 Access to organisation ................................................................................................... 42

5. Conclusions ............................................................................................................................. 43
6. Twelve lessons learned......................................................................................................... 47
7. Limitations .............................................................................................................................. 54
8. References................................................................................................................................ 55

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Executive Summary
Multi-stakeholder platforms are increasingly recognized by researchers and
practitioners as promising mechanisms for stimulating economies in developing
countries. An increasing number of non-governmental organisations (NGOs) and
private enterprises are participating in such platforms, however systematic research
on their effectiveness and impact is scarce. Therefore, the NGO SNV initiated this
study to learn from a number of MSPs which SNV started in 2005 in Ethiopia under
the Business Organisations and their Access to Markets (BOAM) program, financed
by the Embassy of the Kingdom of the Netherlands. The Maastricht School of
Management (MSM) / Partnerships Resource Centre (PrC) were contracted to study
the contributions of four selected MSPs to the development of value chains for the
Ethiopian honey and beeswax, dairy, oil seeds and pineapple sectors. In total 437
organizations participated in at least one of the 66 CG meetings that were organized
in the period 2005-2010.
The overall objective of the study is to gain insight in and generate knowledge
on how, and under which conditions multi-stakeholder platforms contribute to the
development of value chains, resulting in the following research questions:

1. What are the conditions for fruitful collaboration?

2. What changes are required to facilitate agricultural value chain development
in developing countries?
3. In what way can MSPs create opportunities needed for value chain
development?
4. In what way have the four SNV-supported MSPs created opportunities needed
for the development of value chains in respectively the honey, dairy, oil seeds,
and pineapple sectors in Ethiopia?
5. How could SNV BOAM improve the promotion of multi-stakeholder processes
to increase their contribution to value chain development?

Three streams of literature have been explored to guide this research project:
agricultural value chain development literature, collaboration literature, and
institutional theory. To examine the MSPs, both their internal, organisational
dynamics and their external dynamics, i.e. the changes facilitated in key areas of the
institutional business environment, were analysed. Agricultural value chains in
developing countries can only be developed by mitigating or removing a number of
institutional barriers to upgrading by value chain stakeholders. Key barriers that are
commonly mentioned in the academic literature include the lack of access to
knowledge, to capital, to predictable markets, and to organisations. Therefore, value
chain MSPs are supposed to create opportunities conditional to value chain
development by addressing these four key barriers. We posit that internal dynamics
and external dynamics are positively related; MSPs that better meet the conditions
for fruitful collaboration can generate more effects leading to institutional change.

A mixed-method design is used for the data collection and -analysis, including in-
depth interviews with 67 CG stakeholders (18 honey, 18 dairy, 18 oilseeds, and 13

3
pineapple) participating in the CG meetings, a social network analysis and document
analysis (program documents and meeting minutes of 66 meetings). The social
network analysis is mainly used to verify the qualitative data. All primary data were
collected in Ethiopia from August to November 2010, both in Oromia and the
Southern Nations, Nationalities, and People's Regional States. All interviews were
transcribed and data were analysed with the qualitative analysis software program
MAXQDA. Finally, outcomes are cross checked, compared to and extended with
information provided by several key informants to ensure triangulation. Inter-rater
agreement was taken into account to assess the degree of agreement between the
three researchers.

Interviewees highly appreciate the four CGs under study that served as new,
horizontal platforms where stakeholders from different societal sectors in the
Ethiopian four value chains could meet and discuss in a rather open atmosphere on
pressing issues in their sectors. A considerable contribution of the CGs is that they
enabled the creation of linkages between organisations that did not exchange
information before the start of the meetings. Private sector actors, also from remote
areas, were enabled to meet, establish contracts, exchange knowledge and learn from
one another in a rather open atmosphere. The four CGs also enhanced the
governments’ appreciation of the four sectors as well as of the importance of the role
to be played by private businesses. Hence, the CGs created a ‘window of opportunity’
for the four sectors. Moreover, SNV BOAM thoroughly considered the process of
setting up the multi-stakeholder platforms.

Findings suggest that all CGs have played a role in addressing value chain
stakeholders’ access to knowledge, markets and organisations, but to variable degree.
All CGs contributed largely to value chains stakeholders’ access to knowledge
(technical, market, organisational) through information exchange and trainings
facilitated through the CGs.
The CGs have facilitated access to (new) (stable) markets by opening export
markets (honey), stimulating the establishment of business to business relations,
generating market information, promoting contractual agreements, and increasing
quality awareness and quality based pricing systems. But especially in the pineapple
and dairy sectors, oligopsonic market structures exist that limit the changes that are
promoted in the CGs and their operations. Therefore, it remains a challenge to make
local markets more predictable for smallholder farmers and small and medium sized
enterprises. Nevertheless, the CGs have been able to attract several investors,
wholesalers, and processing companies to the meetings who have the potential to
reduce the market oligopsony that exists in the Ethiopian pineapple and dairy
sectors.
Except for pineapple, in all CGs stakeholders’ access to new organisations
rather improved, but only the honey CG did succeed in facilitating active membership
in external organisations that did not originate in or through the CGs. In the
pineapple sector the situation differs due to the absence of relevant professional
organisations.
In general access to affordable capital for smallholders and small and medium
sized enterprises remained an issue of concern despite the fact that the CGs
contributed to the participation - and sometimes even provision of capital – of several

4
Banks and MFIs in the meetings. It is likely that causes for the limited effects should
be attributed to the general macroeconomic- and political climate of developing
countries and of Ethiopia in particular, resulting in a reluctant financial sector. Still,
more than in the other sectors, the honey CG was able to generate capital from
within the value chain.

We identified four internal collaboration themes that have the greatest explanatory
power in describing the differences in effects we found for collaborative multi-
stakeholder initiatives: goal alignment, stakeholder involvement, governance, and
embeddedness. Conform our hypothesis, the four case studies show that the
relationship between internal dynamics and external dynamics is rather linear;
horizontally organised CGs with strong goal alignment and committed network
leaders, high stakeholder involvement and -embeddedness are preconditions to
durable change in the institutional business environment. The honey CG managed to
develop a strong export-orientation, tie a core group of committed stakeholders and
‘sector leaders’, and highly involved government authorities that previously had little
interest in the sector. Relationships with the government were instrumental in
opening up access to international honey markets.
The dairy CG on the other hand, initially lacked both stakeholder involvement
from the two main private key players as well as embeddedness in relevant and
strong third organizations. This is however recently improving with stronger
anchoring in the government through the establishment of the dairy board steering
committee and upcoming Dairy Board. Furthermore, one of the key private
processors in the dairy sector that was initially reluctant to communicate with any
producer organisation is now a member of this dairy board steering committee. Still,
the dairy network was found to be most hierarchal compared to the other CGs and
until now, no dairy chain actor has emerged as a primus inter pares capable of
organizing the dairy chain actors into a more powerful sector. Moreover, goal
alignment has remained a weak element as divergent stakeholders’ interests and low
confidence and distrust among dairy stakeholders, particularly between producers on
the one hand and processors on the other, was a major constraint to the performance
of the dairy CG.
Nevertheless, stakeholders’ trust development was deliberately stimulated in
the CGs, especially in those of dairy and pineapple, increasing their potential to have
a substantial effect on changing the institutional environment of the sectors’ business.
But in the pineapple CG, absent private sector leaders, an unclear focus in strategic
intervention plans, and a too dominant public sector influence slowed down the pace
of institutional innovation in the pineapple sector.
Finally, in the oilseeds CG, promising relationships with the government, also
through the Public Private Partnership on Oilseeds (PPPO), have improved the
interest in and attention given to the oilseeds sector. The oilseeds CG did facilitate
trust-building, but this was not sufficient for an efficient transaction between the
chain actors. Members and the central private company were discouraged in
investing time and resources in the oilseeds value chain, because of the absence of a
willing and committed nucleus group of participants, the high CG member rotation
and long procedures for acquiring the SNV BOAM funds.

5
 Although the development of the four sectors still has a long way to go, the
case studies found sufficient evidence that the multi-stakeholder platforms have been
critical elements in the SNV-BOAM program that aims at creating linkages needed
for value chain development. In developing countries, such as Ethiopia, linkages
between private sector actors are often weak due to vast geographical distances,
vulnerable communication systems and the mutual lack of trust and confidence.
Moreover, cross-sector linkages are often even weaker due to historical divides that
exist between the state sector and the private sector; and between both sectors and
civil society. In this environment, SNV successfully facilitated a tri-sector multi-
stakeholder approach under the BOAM program in Ethiopia.
In the future however, much effort remains necessary to a) further involve
key-decision making government authorities and (lead) private firms in public-
private dialogues; b) move earlier and faster with these decision makers; c) facilitate
access to affordable capital for smallholders and small and medium sized enterprises;
d) attract domestic and foreign investors; and to e) develop professional services to
stimulate the four sectors in their continuous process of sustainable development.
The synthesis report ends with twelve lessons learned and recommendations
to SNV BOAM in order to improve the promotion of multi-stakeholder processes to
increase their contribution to value chain development.

6
Acknowledgments
The authors acknowledge the contributions of Jakomijn van Wijk of the Sustainable
Development Centre of Maastricht School of Management and Ralph Besselink of
Tien Vazen Consultancy. Their work was indispensable in the questionnaire
preparation and social network analysis. The researchers have benefited greatly from
the discussions with Marc Steen and Piet Visser of SNV Ethiopia during the research
design process. The field research in Ethiopia was also efficiently facilitated by SNV
BOAM staff and value chain advisors. Finally, we thank all interviewees, who kindly
provided us with their insights and who made this case study possible.

7
Abbreviations and acronyms
B2B Business to Business
BCaD Consulting Management Business Creation and Development Services
BDS Business Development Services
BOAM Business Organisations and their Access to Markets (program)
BoARD Bureau of Agriculture and Rural Development
BoFED Bureau of Finance and Economic Development
CG Coordination Group
DSA Daily Subsistence Allowance
EAB Ethiopian Apiculture Board
EBA Ethiopia Beekeepers Association
ECCSA Ethiopian Chamber of Commerce and Sectoral Association
ECOPIA Ecological Products of Ethiopia
EHBPEA Ethiopian Honey & Beeswax Producers and Exporters Association
EMDTI Ethiopian Meat and Dairy Technology Institute
EMPPA Ethiopian Milk and Milk Products Producers & Processors Association
EPOSPEA Ethiopian Pulses, Oilseeds, and Spices Processors and Exporters Association
ESBA East Shoa Beekeepers Association
ETFRUIT Ethiopian Fruit and Vegetable Marketing Share Company
FBO Farmer Based Organisation
HBRC Holeta Bee Research Centre
ILRI International Livestock Research Institute
JARC Jimma Agricultural Research Centre
LOL Land O’Lakes
MFI Micro Finance Institute
MoA Ministry of Agriculture
MoTI Ministry of Trade and Industry
MoU Memorandum of Understanding
MSEDA Micro and Small Enterprise Development Agency
MSM Maastricht School of Management
MSP Multi-Stakeholder Platform
NGO Non-Governmental Organisation
OCPC Oromia Cooperative Promotion Commission
PLC Private Limited Company
PrC Partnerships Resource Centre
PPPO Public Private Partnership on Oilseeds
SDC Sustainable Development Center
SIP Strategic Intervention Plan
SME Small and Medium Enterprises
SNNPRS Southern Nations, Nationalities, and People's Region State
SNV Netherlands Development Organisation
QSAE Quality Standard Authority of Ethiopia
TA Technical Auditor
TC Tissue Culture
VCD Value Chain Development

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1. Introduction
Multi-stakeholder platforms1 (MSPs) are increasingly recognized by researchers and
practitioners as promising mechanisms for stimulating economies in developing
countries. The so-called chain platforms can help to bring actors, operating directly
or indirectly in the chain, together and realise common objectives through dialogue
and cooperation (Vermeulen et al. 2008). An increasing number of non-governmental
organisations (NGOs) and private enterprises are participating in such platforms,
however systematic research on their effectiveness and impact is scarce. Therefore,
the NGO SNV initiated this study to learn from a number of MSPs which SNV
started in 2005 in Ethiopia under the Business Organisations and their Access to
Markets (BOAM) program, financed by the Embassy of the Kingdom of the
Netherlands. The Maastricht School of Management (MSM) / Partnerships Resource
Centre (PrC) were contracted to study the contributions of four selected MSPs to the
development of value chains for the Ethiopian honey and beeswax, dairy, oil seeds
and pineapple sector. SNV2 is a non-profit, international development organisation,
with extensive hands-on experience in their value chain approach. MSM’s
Sustainable Development Center3 stands for expertise on sustainable economic
development in emerging markets. MSM is partner in the Partnerships Resource
Centre4, an open centre where academics, practitioners and students can create,
retrieve and share knowledge on cross sector partnerships for sustainable
development.

1.1 Research objective and questions

This synthesis report examines the effects of four multi-stakeholder platforms that
were established by SNV BOAM to improve access to (quality) markets for
stakeholders in the honey and beeswax, milk and milk products, edible oil and
oilseeds and pineapple value chains in Ethiopia. The core of SNV BOAM’s approach
is to bring primary and secondary value chain actors and other stakeholders together
to find solutions for identified bottlenecks in the four value chains. These actors join
forces in the so-called Coordination Groups (CGs), which have a multi-stakeholder
nature5.
The overall objective of the study is to gain insight in and generate knowledge
on how, and under which conditions multi-stakeholder platforms contribute to the
development of value chains, with a focus on SNV’s BOAM program (agriculture,
horticulture) value chains in Ethiopia. In terms of contribution the synthesis report of
the overall study has three aims. First, the study should generate learning for
practitioners and value chain developers on the role of MSPs in the development of
value chains. This synthesis report will therefore end with lessons learned and

1 Comprising of dialogues, policy making, and implementation, the term ‘multi-stakeholder’ is often
attached to, platforms, processes, and partnerships (Warner, 2006). In this research we refer to
multi-stakeholder platforms when discussing MSPs.
2 SNV BOAM Ethiopia: www.SNV BOAMworld.org/en/countries/ethiopia/Pages/default.aspx
3 MSM - SDC: www.msm.nl/1/1/uk/research/sustainable_development_center/
4 PrC: www.erim.eur.nl/ERIM/Research/Centres/SCOPE/Partnerships_Resource_Centre/About
5 Website SNV BOAM & Annual Report 2008

9
recommendations on how SNV BOAM can improve its multi-stakeholder processes
to increase their contribution to value chain development. Second, the study should
contribute to the learning process of MSP members and other local Ethiopian
stakeholders through verification of results and knowledge dissemination. Finally,
the study should contribute to the academic debate on how value chain partnerships
can facilitate sustainable competitiveness in developing countries.
Two sets of questions have guided this research project, relating to (a) our
theoretical approach, and (b) the multiple case studies:

(a) Theoretical questions

• What are the conditions or fruitful collaboration?
• What changes are required to facilitate agricultural value chain
development in developing countries?
• In what way can MSPs create opportunities needed for value chain
development?

(b) Case study questions

• In what way have the four SNV BOAM-supported MSPs created
opportunities needed in the development of value chains in respectively
the honey, dairy, oil seeds, and pineapple sectors in Ethiopia?
• How could SNV improve the promotion of multi-stakeholder processes to
increase their contribution to value chain development?

10
1.2 Theoretical background

Multi-stakeholder initiatives are generally

characterised as horizontally organised, with a greater
degree of flexibility and openness as traditional forms of
governance. In policy-related documents, MSPs are often
considered as highly promising alternative forms of
governance. They are based on the “recognition of the
importance of achieving equity and accountability”,
involving equitable representation of stakeholder views,
and are “based on democratic principles of transparency
and participation” aiming to develop “partnerships and
strengthened networks among stakeholders” (Hemmati,
2002:2).

Three streams of literature have been explored to guide this research project:
agricultural value chain development literature, collaboration literature, and
institutional theory. Relevant contributions have been used to gain insight and
generate knowledge on how, and under which conditions partnerships (including
MSPs) can contribute to the changing of institutional business environments to
facilitate the inclusion of (smallholder) farmers and small and medium sized
enterprises (SMEs) into value chains. We make a distinction between MSP internal
and external dynamics. We identified four internal collaboration themes6 that have
the greatest explanatory power in describing the (differences in) effects for
collaborative multi-stakeholder initiatives: goal alignment, the governance of the
MSP, the degree of involvement of the members in the MSP, and the extent to which
the platform and its members are embedded in society. These collaboration themes
are referred to in this report as the MSPs’ ‘internal dynamics’. External dynamics are
defined as the effects the CGs has had on the institutional environment and that
facilitate farmers and other chain actors to become more viable players in their
respective value chains. We posit that internal dynamics and external dynamics are
positively related; MSPs that better meet the conditions for fruitful collaboration can
generate more effects leading to institutional change. The theoretical model is
visualized in appendix 1. The remainder of this section briefly explains the theoretical
concepts that make up both the MSP’s internal and external dynamics.

(a) Internal dynamics

A brief review of relevant academic collaboration literature reveals that a high level
of engagement of stakeholders, formalised goal alignment, risk- and resource-
sharing, trust and transparency, shared learning, formalisation and joint decision
making processes and activities are critical factors for successful multi-stakeholder
partnerships, particularly when these deal with more ambitious and complex issues
(Ansell & Gash 2008; Springer-Heinze 2007; Bitzer et al. 2010, Kolk et al. 2008).

6 In the interviews and four case studies a large variety of key critical collaboration factors were
included. In the process of synthesizing the findings, four collaboration themes were abstracted that
have the greatest explanatory power in describing the differences we found.
11
In the four case studies we found that goal alignment, governance, involvement and
embeddedness are particularly relevant in the context of this research and for this
synthesis report, as well as trust building. The latter is presented as a moderating
factor between internal and external dynamics in textbox on page 23.

Formalised goal alignment is a basic requirement for successful collaboration

(Kolk et al., 2008). Stakeholder goals are related to their ‘Theory of Change (ToC)’.
Unlike substantive theories that are linked to scientific disciplines, a ToC is a
program theory that is underlying an intervention strategy (Westhorp 2011). A clear
ToC by the MSP initiator (in this research: SNV’s ToC under the BOAM program)
and a strong alignment with the ToCs of individual MSP members are expected to
contribute to enhanced effects of the MSP. Weiss (1995) defines a theory of change
quite simply as a theory of how and why an initiative works. The value of
partnerships lies in the potential to create win-win situations if all stakeholders are
willing and able to contribute to the achievement of goals (Bitzer et al. 2010a).

Collaboration presents the highest strategic level of engagement and implies

that the partners share risks, resources and rewards. This also entails a formalisation
of governance structures, including contractual arrangements to specify objectives,
activities and responsibilities (Austin 2007). Shared (decision making) processes and
activities, trust, risk- and resource-sharing and transparency are indispensable in
here (Kolk et al. 2008), as well as notions on power distributions in the value chain
MSPs.

In a four-year study of the collaborative activities of as small NGO in

Palestine, Lawrence et al. (2002) found that inter-organisational collaboration leads
to the development of new institutions (defined as ‘rules for behaviour’).
Collaborations that are both highly embedded and have highly involved partners, are
the most likely to generate “proto-institutions”: new rules, technologies and practices
that arise and are diffused beyond the boundaries of the specific MSP contexts, and
that are adopted by other organisations in the field. These proto-institutions
“represent important first steps in the process of institution creation, thus potentially
forming the basis for broader, field-level change” (Lawrence et al. 2002: 283). They
may become new institutions if they diffuse sufficiently.

Embeddedness describes the degree to which a collaboration is enmeshed in

inter-organisational relationships (Dacin et al 1999; Granovetter 1985). Highly
embedded collaborations involve (1) interactions with third parties, (2) representation
arrangements, and (3) multidirectional information flows (Lawrence et al. 2002). In
order to examine whether the four MSPs have facilitated changes in institutional
fields we investigate not only the relationships among collaborating MSP members,
but also how the collaboration embeds them in the wider institutional field.

Involvement focuses on the way in which participating organisations relate to

each other. According to Lawrence et al. (2002), high levels of involvement entail
“deep interactions among participants, partnership arrangements, and bilateral
information flows”. A high level of involvement among participants is necessary for

12
institution creation. Involvement is investigated through commitment, motivations
and participation.

The internal dynamics are verified and complemented with a social network
analysis. The network approach “allows researchers to capture the interactions of
any individual unit within the larger field of activity to which the unit belongs”
(Kilduff & Tsai, 2003: 13). A social network analysis describes network
characteristics and concepts such as embeddedness, social capital, and network
centrality. Moreover, a social network analysis has the ability to address important
aspects of the social structure of a network: the sources and distribution of power
(Hanneman & Riddle 2005). Table 1 exhibits the MSP internal dynamics.

Table 1. Basic collaboration conditions

MSP Internal dynamics Key factors

Goal alignment a) Convergence of Theories of Change

b) Compelling case
c) Collective goal setting process
Stakeholder involvement a) Commitment
b) Motivations
c) Participation
Governance a) Selection of stakeholders & agenda setting
b) Decision making
c) Role network leaders
d) Distribution of benefits
e) Transparency and accountability
Embeddedness a) Embeddedness of organisations
b) MSP embeddedness
c) SNV BOAM embeddedness
Source: Compilation based on Kolk et al. (2008), Van Tulder & Pfisterer (2008), Bitzer et al. (2010), Lawrence
et al. (2002).

(b) External dynamics

The external dynamics refer to the (perceived) changes in institutional business
environment that facilitate inclusion of farmers and SMEs into the four value chains.
The fragmented nature of Africa’s agricultural sector is one of the limiting factors to
its development. The majority of farmers and SMEs face huge barriers to link
themselves to national and global markets, while access to these markets is
considered critical to growth in developing countries (OECD, 2006; World Bank,
2008). The most important institutional challenges to inclusion in commercial value
chains concern those formal rules, inter-organisational arrangements, and informal
customs that prevent farmers and SMEs from having access to knowledge &
technology, credit, markets, and professional organisations (Bitzer et al 2010b; Van
Wijk and Kwakkenbos 2011).
Lack of access to capital or credit is a major constraint for many smallholders
(Altenburg 2007; Kaplinsky and Morris 2001). Broader access to financial services
would expand their opportunities for technology adoption and resource allocation

13
(World Bank 2008). The lack of access to knowledge often hampers agri-food
enterprises to adopt new practices that build trust and confidence of buyers in the
quality and safety assurance mechanisms for their produce (Henson and Jaffee 2006;
Garcia Martinez and Poole 2004). Farmers are exposed to highly volatile markets,
which hinder investments in the agricultural sector. A more stable market for
suppliers through buyer commitment and price stability would motivate farmers and
SMEs to invest in production capacity and quality improvement (Gibbon and Ponte,
2005). Finally, chain actors, particularly farmers need to be organized to develop
capacity in terms of supplying volumes and quality, and guaranteeing regular supply.
Access to organisations facilitates risk sharing, the pooling of resources, enable
collective learning, and developing market power (KIT et al. 2006).
1.3 Methodology

We used a mixed-method design for data collection and -analysis, including in-
depth interviews, analysis of existing documents (field documents), group discussions
with SNV BOAM in Ethiopia and a social network analysis.

All primary data were collected in Ethiopia from August to November 2010,
both in Oromia and the Southern Nations, Nationalities, and People's Regional
(SNNPR) States. Research was executed in collaboration with a team of local
consultants that was especially responsible for the interviews in the oil seeds value
chain CG.

A sample of 67 CG stakeholders (18 honey, 18 dairy, 18 oilseeds, and 13

pineapple) was drawn for the interviews in the following manner. We selected
candidates in each value chain from participant lists of five Coordination Group
Meetings (begin, end and middle) who played specific roles in the concerning value
chains, such as chain actors, chain supporters, chain influencers, and chain facilitators7.
Some critical and reluctant stakeholders were explicitly included. Eventually,
interviews were held with all relevant value chain stakeholders, including the leading
honey processing company and two large scale dairy processors operational in the
country. See appendix 3 for an overview of interviewees per stakeholder group in the
four value chains. The researchers also made field visits, for instance to households
engaged in backyard beekeeping, private pineapple farms in Didiche, a private
nursery site (capacity: 43,000 pineapple seedlings) in Genbela (both in SNNPRS), and
enterprises engaged in dairy farming and processing. For a complete overview of the
interviewees, see appendix 4. For confidentiality reasons, they are made anonymous in
the report.

Four databases were constructed that scored the participation of each

organisation in each Coordination Group meeting, the type and subtype of the
organisation and its role in the value chain8. Finally, a Coordination Group meeting

7 For a complete overview of stakeholder roles in the value chain, see appendix 2.
8 The classification of organisations in type (private sector, public sector, civil society and education),
subtype (e.g. processing company, producer, consultant, research institute etc.) and value chain role
(chain actor, supporter, influencer and facilitator) has to be regarded as an analytical tool. In reality,
there is not such strict distinction, as for example many producer cooperatives (now classified as a
14
of each value chain was attended to a) have an idea of the working of the CG in
practice, and b) to introduce the researchers to the relevant stakeholders in order to
promote interview response. The questionnaire can be found in appendix 5.

Picture: pineapple farm in Didiche and pineapple nursery in Genbela (both in SNNPRS)

On the basis of the databases, a social network analysis was executed with the
program UCINET 6.303 which is a comprehensive program for the analysis of social
networks and other proximity data. A social network analysis allows for linking
micro and macro levels, and an integration between qualitative, quantitative and
graphical data. In this research, the social network analysis is mainly used to verify
the qualitative data. In appendix 6 the results of the social network analysis are
presented. In the report, qualitative descriptions are presented, and -if applicable-
followed by a brief quantitative check resulting from the network analysis.

Not all interview questions were proposed to all 67 interviewees. Since we

were interested in the social mechanisms at work rather than in statistical realities,
only those having expertise or being knowledgeable on a certain subject were
questioned on that subject. For example, a financial institute might be less
knowledgeable on the (technical) varieties that exist in the value chain product, or a
research institute that has no expertise on the contractual agreements that exist
between suppliers and buyers. In other cases, the respondent had only attended one
CG meeting and therefore lacked knowledge of CG internal processes over time.
Moreover, time pressure indicated by the respondent was taken into account during
the interviews that lasted on average 1.5 hours. Although effort was made to propose
as many questions as possible to all stakeholder groups, conclusions are often based
on the views of less than all respondents of each value chain.

business representative body in the private sector) are also involved in civil society activities.
However, their main aim is to represent an economic active producer group and most of the time, the
cooperatives engage in chain actor activities (e.g. collecting milk or processing tasks). This is the
reason to classify them under the private sector. Another example is a university (classified under
Education) who acts as a BDS provider as well.
15
 The secondary data included content analysis of the BOAM program, with
relevant documentation including Coordination Group meeting minutes of 66
meetings in total and impact data on production, income and employment areas
provided by SNV Ethiopia. Furthermore, the secondary data include descriptions of
the honey, dairy, oilseeds and pineapple value chain national and international
markets, and relevant aspects of network-, collaboration literature and institutional
change theory. They can be found in each case study report. The CGs are set up and
studied in various sectors (agriculture, apiculture, horticulture) to enable comparison
between the various platforms, and to provide lessons learned.

All interviews were summarized and data were analysed with the qualitative
analysis software program MAXQDA. Network analysis has been executed for the
two-mode database containing organisations which have attended the dairy, honey,
oilseeds and pineapple CG meetings in Ethiopia.

Finally, all outcomes are cross checked, compared to and extended with
information provided by several key informants to ensure triangulation (e.g. SNV
BOAM staff, experts, chain Lead Advisors). Moreover, inter-rater agreement was
taken into account to assess the degree of agreement between the three authors.

1.4 Outline of this report

The report is structured as follows: chapter 2 clarifies the context of this study by
providing a short background on the Ethiopian business climate and -markets and
SNV BOAM’s strategy of establishing the Coordination Groups. In chapter 3, the
internal dynamics of the Coordination Groups are represented by four identified
themes while chapter 4 analyses the (perceived) changes in the institutional business
environment of the four value chains, as a result of the MSP (external dynamics).
Chapter 5 presents our main conclusions on the relationship between internal and
external dynamics continued by a presentation of twelve lessons learned and
recommendations to SNV BOAM in chapter 6. Finally, chapter 7 ends with a
description of limitations of the study.

16
2. Context
This chapter describes the (2.1) general business climate and market opportunities
and -constraints in Ethiopia. Specific descriptions of the Ethiopian and international
markets and constraints for honey and beeswax, dairy, pineapple and oilseeds and
edible oils can be found in the four case study reports. This is followed by a brief
clarification of the (2.2) SNV BOAM approach and strategy of establishing the (2.3)
Coordination Groups.

2.1 The Ethiopian business climate

As in many African countries, agricultural marketing systems in Ethiopia are

generally weak and inefficient. High transaction risks and costs, asymmetric or
absent market information, and commitment failures are among the main problems in
African market institutions. Moreover, surplus production hardly matches between
adjacent areas, there is no effective transport network, imported food items (i.e. edible
oils) distort local markets and processing of agricultural produce is poorly developed,
resulting in very little added value being created.
Linkages between private sector actors are often weak due to vast
geographical distances, vulnerable communication systems and the mutual lack of
trust and confidence. Moreover, cross-sector linkages are often even weaker due to
historical divides that exist between the state sector and the private sector; and
between both sectors and civil society.
Although there was substantial market potential for all four sectors under
study, value chain stakeholders perceive a multitude of constraints to sector
development including discouraging financial policies and long procedures to access
bank loans, the minimal infrastructure in the production regions, the absence of
mandatory quality standards, low quality awareness, barriers to acquire arable land,
inadequate extension services, lack of supporting government policies, the traditional
small scale and poor production processes, lack of technological inputs, distrust in the
chain, and finally the presence of dominant market parties.
2.2 The SNV BOAM program
To tackle these problems, SNV developed the ‘Support to Business Organisations and
their Access to Markets’ (BOAM) program9. Under this program, a Value Chain
9 SNV BOAM’s program, financed by the Embassy of the Kingdom of the Netherlands in Addis
Ababa and until the end of 2009 by the Irish Embassy, contributes to sustainable poverty reduction
in rural Ethiopia through value chain development. The overall BOAM program period is five years,
and started from September 2005. The program aims at improving the access to markets for small
and medium agribusiness players along selected value adding chains (SNV BOAM program proposal
2005-2010). In 2009 a transformation process of the BOAM program into a centre of excellence for
value chain development has started in the form of BOAM2 scaling up phase. Some key chances are
the emphasis on Business to Business (B2B) value chain development and the up-scaling of both
production as well as a new fund structure. The additional target of the BOAM program up-scaling
phase is to develop, test and introduce innovative approaches that aim to improve business to
business relations in selected value chains (SNV BOAM annual report 2009). A one-year extension of
the BOAM program was requested and approved, until August 31, 2011, to maximize the results to
be obtained from the BOAM program (BOAM 2 program proposal 2010-2011).
17
Development (VCD) approach was developed. It is “characterized by (i) a combined
sector and business to business (B2B) orientation” (IOB Inception Report, 2009: 27),
(ii) a focus on ‘pull’ factors; working from the middle of the value chain at both ‘up-
stream’ and ‘down-stream’ levels (pers. comm. SNV BOAM, February 2011), (iii) “a
firm direction towards the private sector (private businesses) and the middle of the
value chain as the entry point, (iv) the use of multi stakeholder processes in the form
of Coordination Groups as the platform for decision making and anchoring of the
local ownership, (v) the use of local consultants or capacity builders to increase
outreach, sustainability and ownership and (vi) the use of leverage and innovation
funds” (IOB Inception Report, 2009: 27). Therefore, the MSP approach is only one
part of the whole ‘holistic’ SNV BOAM value chain approach. Apart from BOAM,
SNV runs two other value chain programs (PSNP plus & RAIN)10. The four case
studies under study are only part of the impact areas, sectors and programs of SNV
BOAM Ethiopia.

SNV’s Theory of Change for general value chain development and pro-poor
development through Private Sector Development comprises three stages: (a) From
Conception to Embryo, when a network structure is developed where value chain
development can flourish. Focus is on MSP-like structures, and on the development
of professional associations. The MSP network develops a strategic and operational
Intervention Plan, and is responsible for sector development. The ToC assumes there
is “no hindrance of old institutions”; (b) From Embryo to Infant, where the intervention
plans materializes. Several business-driven value chains are developed, with actors
willing to share ideas and experiences in the “network”. The intervention plans
should be revised regularly to keep up with developments in the network and the
market. Businesses are expected to take more responsibility for the further
development of the chains; (c) From Infant to Mature. During this last stage, an
institutional environment and specifically sector or branch associations are able to
support the development of value chains. Services are provided by professional
organisations in a commercially sustainable manner and the mismatch between
demand and supply as identified in each intervention plan is addressed. Investors
have access to a professional network of service providers and financial services
(access to investment and working capital for value chain actors) are available and
used by value chain actors. Research institutes provide in-demand research. The
resulted up-scaling of value chains and individual businesses generates sector growth
and increased competitiveness.

The BOAM program is based on the idea that change can only be induced if it
builds on knowledge and experience already present in the concerning sectors. In
total 29 agricultural value chains were surveyed on the basis of ‘what was already
there in the sector’. On the basis of a set of criteria, eventually six priority chains
were chosen out of these 29, including the dairy, honey and beeswax, oil seeds,
pineapple, mango and apple value chains.

10 SNV BOAM Annual Report 2009

18
 Characterization CGs
The interviewees appreciate and characterize
2.3 The Coordination Groups the four CGs as ‘exchange forums’ where
value chain stakeholders exchange
Establishing the four CGs in 2005 was information on market and technologies, i.e.
one of SNV’s strategies under its on where to find appropriate buyers, who pays
BOAM program and was only a logical the best prices, what is the best shop to sell,
on quality issues. Members learned not only
step in the process of bringing together
from the exchange of their experiences but
all the relevant knowledge and also from presentations on agronomic
experience of stakeholders in the innovations, e.g. oilseeds members learned
concerning value chains11. The CGs aim about growing olive trees and producing olive
at promoting efficient and equitable oil. In addition, the CGs are ‘relation
linkages for the economically active platforms’ that bring multiple actors and
poor along the four value chains. sectors together and stakeholders learn about
each others’ (sector) problems. As such it
From the network analysis we found contributes to sector coordination,
that in total 437 different organisations relationships improvement and trust building.
attended the four value chain CGs from The CGs created linkages and collaborations
2005-201012: between organisations that did not exchange
information before the start of the meetings.
They are characterised by a voluntary set-up,
• Dairy database: 125 absent formal frameworks, and a non-binding
organisations, 18 meetings character. The CG is also considered to be a
• Honey database: 127 ‘neutral’ meeting place with tough but open
organisations, 18 meetings discussions.
• Oil seeds database: 101 On the other hand, the interviewees
are critical in their characterization as well.
organisations, 17 meetings
Looseness of the group and frequent rotation,
• Pineapple database: 80 absence of key decision makers resulting in
organisations, 13 meetings slow implementation of decisions and limited
policy impact are point of discussion.
Moreover, interviewees pointed to a lack of
follow-ups of the agreements that were made
in the meetings. These are discussed in detail
in chapter 3.

11Clarification meeting SNV BOAM, 8 November 2010.

12By the end of 2010, already 19 meetings took place for the honey, oil seeds and dairy value chain
CGs. The pineapple CG counted 14 meetings by the end of 2010. Nevertheless, the social network
analysis was based on fewer meetings due to the participation lists in the meeting minutes that were
made available to the researchers at start of the research project in June 2010.
19
Picture: (upper): Pineapple CG meeting 14 in Awassa (SNNPRS, Ethiopia), November 9, 2010 and (below)
Honey Coordination Group Meeting, 11 February 2010, Kings Hotel Addis Ababa

The CGs consist of representatives of key actors in the four value chains (regional,
national and sporadically international), including input suppliers, private
farmers/beekeepers, producer cooperatives and –unions, business associations,
collection centres, private processing companies, wholesalers, exporters, NGOs,
women’s organisations, government agencies and ministries, private researchers and
consultants, research institutes, universities, microfinance institutes and banks,
Chambers of Commerce, and private investors13.

The BOAM program prescribes the selection of both a Value Chain Leader and a Value
Chain Facilitator for each value chain CG. The Value Chain Leader is chosen by the
CG and acts as the focal person who should guarantee the local ownership of the CG
and who is representing the CG. Ideally for SNV BOAM, a Chain Leader represents
a key private sector organisation in the chain. The Chain Leader is supported by value
chain development advisors or coaches, who add distinct expertise to the program (agro-
processing, organisational strengthening, women entrepreneurship/gender and
monitoring and evaluation). In addition, SNV BOAM makes available a Value Chain
Facilitator to facilitate and activate communication amongst CG members and to
disseminate information.
From September 2005 onwards the dairy, oilseeds and honey CG meetings
have taken place every three months (four times a year). The pineapple CG meetings
have started to take place bi-annually, but from May 2007 every three months. In
general, the meetings have the following pattern: the CG Facilitator opens the
meeting with a recap of the previous meetings, participants introduce themselves,
fund utilization reports are discussed, experts present about new researches and
technologies related to the dairy sector and Question and Answer Rounds are held in
between. The first CG meeting started in English, but currently Amharic is the main
language used in the meetings. The Facilitator translates if necessary.
Following the recommendations of the Mid Term Review (Aleme et al. 2008)
CG Executive Committees for the evaluation of concept notes for the BOAM
designated funds were established. Next to this, SNV BOAM has assignment
contracts indicating capacity building interventions with all clients (i.e. processors,
farmer organisations, business associations, and government). Finally, a new funding
structure was introduced.

13 This list is not exhaustive.

20
3. Coordination Group dynamics: four themes
This chapter analyses the CG internal dynamics, based on the findings of the in total
66 meetings organized by the four value chain CGs (2005-2010). Four main themes
were identified with regard to the workings of the MSPs and stakeholder
participation in the four network platforms. They have great explanatory power in
describing the (differences in) effects we find in the four CGs. They are (3.1) goal
alignment, (3.2) stakeholder involvement, (3.3) governance and (3.4) embeddedness.

3.1 Goal alignment

The first theme identified in the research is ‘goal alignment’. Goal alignment by
stakeholders is considered to contribute to the effectiveness of collective goal-setting
processes, which, in turn, positively influences the success of the MSPs. Stakeholder
goals are related to their ‘Theory of Change’. To measure goal alignment, the (a)
convergence of Theories of Change, the (b) compelling case as a driver of each value
chain CG and the (c) collective goal setting processes were examined.

(a) Convergence of Theories of Change

It is expected that a strong alignment with the implicit ToCs of individual MSP
members contributes to enhanced effects of the MSP. Whereas SNV BOAM has
specified a vision on why and how private sector development can stimulate economic
growth that reduces poverty, this theory is not very explicit about the role of the CG
in this process. The “MSP-like structures” should operate as a network until, in the
second or third phase, new professional associations take over the strategic and
communication roles of the CGs. With the formulation of joint strategic intervention
plans (SIPs) in the MSP network, convergence of the ToCs for the development of
the sectors is one step closer, nevertheless, not guaranteed.

(b) Compelling case

Was there a ‘compelling case’ as driver of each value chain CG? Are the CGs driven
by an important need that can be best fulfilled through an MSP (CG), and that is
recognized and accepted by all members?
Findings suggest there was a compelling case for each CG. The four sectors
under study were in ‘disarray’ before the establishment of the CGs. They were
characterized by fragmented and backward production-, processing- and marketing
systems. Since all sectors initially received little recognition and support from the
government and the private sector could not organise the sectors, there was a
compelling case in all value chains to initiate a multi-stakeholder platform where
actors from the three different societal sectors (private sector, government, and civil
society) meet and work together to better link smallholder producers and processors
to (international) markets. SNV BOAM successfully facilitated this tri-sector
approach (see also section 3.4). Moreover, the collaboration in a multi-stakeholder
platform is considered necessary to exchange information, tackle the problems in
each sector and to create change in the whole country.

21
(c) Collective goal setting process
The four CGs devoted proper attention to a collective goal setting process through
the formulation of common objectives, joint SIPs and operational plans. The clarity
and focus in upgrading strategies differs per CG. In the honey and oilseed CGs they
were clear from the onset, but less in the pineapple CG. Although the upgrading
strategy in the pineapple value chain is the introduction of Smooth Cayenne for the
fresh and processed domestic and regional export markets, initially, retaining to this
strategy required too many changes in the support environment and business
relations and therefore focus is presently more on the domestic markets. Although
the common goal and upgrading strategy in the dairy CG -improving the quality of
dairy products- has been clear from the onset, stakeholders initially hardly operated
on these shared goals as distrust, mainly between producers and processors,
persisted. Trust building is a key issue in an effective goal setting process (see also
textbox below). The honey CG is highly export-oriented. SNV BOAM heavily
supported a prominent export company, promoted the producers/export
organisation and then established the CG. With the oilseeds SIPs, SNV BOAM and
CG members fine-tuned the CG’s overall focus on improving the scarcity of improved
seeds and supply of oilseed for oil extraction and export business14.

In sum, goal alignment in the CGs is clear. SNV BOAM has specified a vision
on why and how private sector development can stimulate economic growth that
reduces poverty. This resulted in private sector development promotion of the four
selected value chain CGs under study, driven by an important need that could be best
fulfilled through the CGs (compelling case). In all four CGs there was a collective
goal setting process through the formulation of common objectives, SIPs and
operational plans. Nevertheless, it is likely that divergent stakeholders’ interests and
prevailing distrust among several stakeholder groups the pineapple and dairy CGs
have obstructed their facilitation more compared to the other CGs.

14 SNV BOAM2 Program Proposal, 2009

22
A matter of trust: improved relations, transparency and trust building

Trust building was identified as a key process in the CGs, and found to influence both conditions for
collaboration (i.e. distrust obstructs the process of identifying common and shared goals) as well as
outcomes of the collaboration (i.e. facilitating the establishment of business to business relations).
Ideally, stakeholders meet and collaborate in the stakeholder platforms, and develop a sense of trust
as a result of these interactions.
Generally, all four CGs are valued for their contribution to improved relationships,
transparency and trust building between stakeholders in the four value chains. The platform is
appreciated as a ‘neutral’ meeting place where participants can discuss informally (especially during
the coffee breaks). “Without the CG we would never have these open discussions on delicate subjects”
(interview 9, pineapple case study). Furthermore, a considerable contribution of the CGs seems to be that
it enabled the creation of linkages between organisations that did not exchange information before
the start of the meetings. CG members are also deliberately encouraged by the chain Facilitators and
Lead Advisors to have bilateral discussions and to exchange contact addresses during lunch and
coffee breaks. More than in the other value chain CGs (oil seeds, honey and dairy) the pineapple
agenda is directed towards “the action groups or action approach” and “(bilateral) grouping”. The
facilitation tool has the potential to actively engage stakeholders and to strengthen the dialogue and
trust relations between the different chain actors, supporters, influencers and facilitators. It is action
oriented and has the potential to create commitments (pers. comm. SNV BOAM, February 2011). In
the pineapple CG, SNV BOAM plays a larger and active role in establishing relationships,
recognizing that strengthening different relationships contributes more to solving constraints than
“focusing on experts telling how it should be done” (pers. comm. SNV BOAM, April 2011). As such
SNV BOAM plays the role of ‘broker’ and is actively linking actors and stakeholders in and outside
the CG. Interviewees appreciated the role of these interactive processes in promoting trust and a
‘sense of complementarities’ between stakeholders.
Although all value chain CGs facilitate (the creation of) business relations, the degree of trust is in
most cases not yet sufficient for an efficient transaction between the chain actors. Often, cooperative
unions, processors and exporters are not yet comfortable with farmers. Especially in the dairy CG,
trust is a major issue. Particularly the problematic relationship between dairy producers and
processors was discussed in several meetings. The majority believed there was limited or no mutual
trust and cooperation and the “vertical relationships between processors and producers are not based
on a partnership” (dairy CG17 meeting minutes: 15). The two main dairy processing companies are
reluctant to become a member of the EMPPA as they mistrust and do not acknowledge the
association. According to SNV BOAM, the frictions are partly caused due to the limited life span of
the dairy products. As the conservation period is limited, daily selling and buying processes cause
higher dependency on buyers. Cooling mechanisms are expensive, and the products are under the
influence of the dairy fasting seasons in Ethiopia. Another explanation could lie in the limited
capacity in the dairy sector. An attempt, supported by SNV BOAM, to ameliorate the relationship
between producers and processors through a series of consultancy meetings in 2009-10, rendered
little at the outset as the number of processors and producers participating in the series of
consultancy meetings are thus far out of proportion. Eleven producer organisations were present at
the first meeting compared to two processing companies. Even more critical, processors were not
present in the second meeting of the consultation process.
Finally, there are cases in which mistrust in other elements of the general BOAM program, for
example on application procedures for funds, have had an impact on the participants’ interest and
commitment to the CG.

23
3.2 Stakeholder involvement

To measure stakeholder involvement, (a) stakeholders’ commitment, (b) their

motivations to join and (c) participation in sub-commissions of the CGs was assessed.

(a) Stakeholder commitment

Table 2. Level of stakeholder commitment evaluated in four value chain CGs (%)
Commitment Honey Dairy Oilseeds Pineapple
N=12 N=15 N=15 N=10
Low 8 31 8 10
Medium 42 38 92 72
High 50 31 0 18
Total 100 100 100 100

The level of commitment in the four CGs varies from low to high according to the
interviewees (Table 2). If we compare the four cases, honey CG participants are most
committed, followed by the oilseeds and pineapple CG. In the honey CG, there is a
highly committed nucleus group, including a committed Chain Leader and Ministry.
With 31 %, the dairy CG had the highest score on a low level of commitment.
Commitment in the dairy CG could be flawed due to the general low capacity in the
sector and the initial reluctance of the country’s main dairy processing companies to
join. At the start, they saw few concrete achievements and little change in
government’s commitment to the sector. They became interested however, in the
process of setting up a Dairy Board. In the pineapple CG, the level of commitment is
modest as participants are only very active during the meetings and in specific
committees, but not outside the meeting room. This attitude is possibly related to the
persistence of the existing, oligopsonic15 market structure that hinders the CG to
facilitate the upgrading in the sector, as well as with CG members’ doubt about the
commitment of SNV BOAM itself. SNV has been reconsidering the continuation of
the pineapple CG in 2008 because of the lack of private investors (Aleme et al 2008).

A common problem in all four value chain CGs is the high rotation of
participants in the CG meetings. The social network analysis confirmed high rotation
and irregular attendance of participants (appendix 6). According to the majority of the
interviewees, the frequent rotation and irregular attendance are indications of low or
modest commitment. Moreover, this rotating group lacks knowledge of the previous
meetings and questions are repeated every meeting. Rotation is related to both
variable organisations present at the meetings, as well as to different representatives
of one organisation. In fact, the CG meetings are made up of two groups of
participants. An active nucleus-group is very commitment, with another, rotating
group that is not “joining the meetings to contribute, but they are there to get
something (i.e. SNV BOAM funds)” (interview 1, honey case study). Typically, none of

15 An oligopsonic market refers to a situation of a small number of buyers dealing with a large number

of sellers. An oligopolistic market is the opposite: few sellers and many buyers. In a monopoly the
market is dominated by one seller, whereas in case of a monopsony the market is dominated by one
buyer.
24
the interviewees in the oilseeds CG believed there is such as a highly committed
group in the oilseeds CG ‘to steer the wheel’ and an overwhelming majority
complained on the high rotation and early exit of participants. The social network
analysis revealed that the oilseeds CG indeed scored highest on the percentage of
exits (71.2 %). Possible reasons brought forward by several interviewees are the
absence of a strong and committed private sector company that is willing to invest,
long procedures for acquiring SNV BOAM funds resulting in discontent and flawed
commitment in the oilseeds CG16, influence in the CG decision making17, and lack of
interest to include agendas other than those in the BOAM framework18. The high
rotation is also related to the fact that –mainly- public officials/experts migrate to
other positions and organisations in the private sector and civil society19. SNV
BOAM responded to the high rotation by sending invitation letters that stated:

“We would highly appreciate if your good office could send the same representative
who has been participating in previous MSPs”20.

(b) Stakeholder motivation

The motivations to join the CGs are diverse although for most interviewees in all
four CGs linked to incentives provided by SNV BOAM (technical, financial and
organisational support) and to the business opportunities it offers (i.e. meeting new
suppliers or buyers, unemployment relief). Sharing knowledge and experiences was
also several times mentioned as a motivational factor to join the CGs. Motivations
are never solely intrinsic. In reality, interviewees have to see the link with and
benefits for their own program and goals in order to be motivated to join a multi-
stakeholder platform. Moreover, there is need for technical and financial assistance in
all four sectors in Ethiopia.
SNV BOAM has paid CG participants a Daily Subsistence Allowance (DSA)
covering transportation costs and/or accommodation for those from far to level the
playing field for stakeholders to participate. Although this financial incentive could
be a motivation for participation in itself, it is not seen this way by the interviewees
and by SNV BOAM. Despite the gradual decrease in SNV BOAM’s DSA there has
been no major drop-out of participants in the dairy, honey and pineapple CGs. The
number of oilseeds participants halved in the 19th oilseeds CG meeting, nevertheless,
this is probably not related to a decrease in DSA. In general, DSA has been an
important factor to allow for the participation of organisations from remote areas.

(c) Participation in CG sub-commissions

The establishment, membership and participation in (steering, ad hoc) committees
and working groups are indicators of actors’ involvement. Although in each CG sub-
organisations were established (including the Executive Committee), successes were
not crystallised in every CG. Only in the honey case, the CG generated a high rate of
successful sub organisations, such as the quality working group, that was successful
in adding Ethiopia to the list of countries which have approved residue monitoring

16 Clarification interview with SNV BOAM’s Lead Advisor for Oilseeds Value Chain, 22/03/2011
17 Clarification interview with a representative of an oilseeds private company, 23/03/2011
18 Clarification interview with a representative of a oilseeds processors association , 23/03/2011
19 Clarification interview with SNV BOAM’s Lead Advisor for Oilseeds Value Chain, 08/04/2011
20 Source: Invitation letter 18th CG meeting (honey)

25
plans. The honey CG also established the Ethiopian Apiculture Board (EAB), which
proved itself successful in taking over the sector-wide facilitating role of SNV
BOAM. The investment of time and resources of the honey CG Leader played a role
in this regard.
3.3 Governance

MSPs are often considered as highly promising alternative forms of governance.

They are inclined to be horizontally organised, with a greater degree of flexibility
and openness than traditional forms of governance. “Although MSPs may create
more understanding between various parties sitting at the same table, it is
questionable whether MSPs are in reality horizontal processes in such contexts [i.e.
culture, kinship, political], or is there a degree of verticality present, related to
internal power sharing and leadership” (Warner, 2006:22). Actors participating in
multi-stakeholder platforms do not necessarily have equal powers to negotiate, and
influence the process of agenda setting, selection of stakeholders and decision
making. Therefore, we analysed both formal and informal arrangements of CG
governance, including a) selection of stakeholders and agenda setting; b) decision
making processes; c) the role of network leaders, and d) transparency and
accountability. The social network analysis verified and complemented the qualitative
findings with identifications of central actors and information on ‘network brokers’.

a) Selection stakeholders and agenda setting

The CGs operate under leadership of a trio consisting of the CG Chain Leader, the
CG Facilitator who is contracted by SNV BOAM, and the SNV BOAM value chain
Lead Advisor. They play a key role in selecting and inviting new members, agenda-
setting, and preparing the meetings. The invitation database builds on the previous
meetings attendants, and when new organisations wish to be invited the trio decides
on approval taking into account the participants’ potential contribution to the
concerning value chain. Changes in the SNV BOAM program coordinating staff
considerably influenced the new CGs invitation policy. The first BOAM coordinator
insisted the number of participants should not exceed 30-35. However, from meeting
nine (end of 2007/beginning of 2008) the value chain Lead Advisors -headed by the
second BOAM coordinator- started inviting many participants (often over 60
participants), aiming at broad based information dissemination. This prompted SNV
BOAM to look more critical at the engagement processes within the coordination
groups21. Invitation became more regulated with only one participant from each
organisation receiving DSA. Less relevant and non-motivated participants were
removed from the participation lists, although this did not happen often according to
the CG Facilitators.
About one or two weeks in advance of the next CG meeting, the CG
Facilitator sends out a package per email or fax (no regular post mail) to the
participants that includes the invitation letter, the agenda of the meeting, and a
summary of about two pages on the previous meeting (not the full meeting minutes
as MSM received them). Only those CG members who push their issues through in

21 SNV BOAM Annual Report 2009

26
previous meetings can influence the CG agenda. Often, this is related to their
capacity.
Although stakeholder selection and agenda setting procedures are generally
similar in all four value chain CGs, members’ appreciation differs. Satisfaction varies
from modest to high, and solely in the dairy CG, members are only low to modestly
satisfied. This is related to perceived inaccuracy in invitation, failure to invite key
players to the meetings, boring meeting formats, and lack of influence to prioritise
the agenda setting. The latter was also endorsed by an oilseeds CG interviewee. In
all four case studies interviewees indicate that organisations that lack email addresses
to receive the meeting agenda in advance miss the opportunity to anticipate and
prepare on the meetings’ agenda.

b) Decision making processes

Apart from the leading trio, SNV BOAM has made attempts to share some of its own
responsibilities in respect of the four value chains to create more ownership in the
CG process with stakeholders. An observation out of the secondary data is that the
formal aim of the CG has gradually been shifting from ‘creating linkages’ towards
‘creating ownership in the sector’. The second BOAM program coordinator endorses
this strategy towards a long term vision for the CG. Its main initiatives were the
establishment of the Executive Committee in 2009 for the evaluation of concept notes
regarding BOAM designated funds and the assignment of contracts between SNV
BOAM and its clients (including CG members) on capacity building interventions.
The Executive Committee, with five key actors from each sector, could evaluate,
approve or reject funding proposals, although the SNV BOAM program manager
takes the final decision22. Nevertheless, after 2009, SNV BOAM only contracted CG
organisations with approved concept notes by each value chain CG Executive
Committee. According to what was recommended in the Mid-Term Review, the CG
Executive Committee should empower the sector in general and the CG in particular
by giving stakeholders a say in the allocation of its industry related funding as was
the case in the four CGs.
Although the four CGs were set up as informal governance structures,
moments of more formal (non-financial) decision making could be identified, and
these were predominantly related to the election of nominees for certain positions in
committees or boards. Examples are the election of the CG Leaders and of the
members for the Executive Committees and the Apiculture Board in the case of
honey. In the oilseeds CG members voted on the candidacy for a future steering
organ. In general, these decisions are being made by those present in the meeting, on
the basis of the ‘one man-one vote’ principle. No single interviewee indicated this
process is unequal. Moreover, almost all respondents interviewed believed members
have an equal opportunity to speak out without discrimination (Table 3). This
situation is likely to be different in case of more formal governance structures.
Finally, common objectives, joint Strategic Intervention Plans (SIPs) and
operational plans were formulated in the meetings (see also 3.1). They were adjusted
in response to CG members several times, although they were already prepared in
preliminary stakeholder workshops with value chain representatives identified by

22 I.e. dairy CG13 meeting minutes.

27
SNV BOAM. Interviewees sometimes felt that certain issues, such as land policy
issues, were (initially) not included in the SIPs despite the stringent problems they
cause for many stakeholders in the four value chains. Still, in the SIPs revisions by
stakeholders in 2009, stakeholders had new opportunities to include pressing issues
in the SIPs, such as input supply issues in the dairy value chain.

Table 3. Perceptions on ‘equal say’ evaluated (%) in four CGs

Equal Honey Dairy Oilseeds Pineapple
say
Yes 93 92 100 78
No 7 8 0 22
Total 100 100 100 100

(c) The role of network leaders

Network leaders and their role in CG governance are central in the CGs. CG
members elected a Chain Leader for each CG. SNV BOAM prefers a private
processing company as a Chain Leader because such a central player has strong
interests in linkages “both upstream and downstream in the chain”23. A central Chain
Leader who operates as a primus inter pares and who encompasses a sector-wide vision
can fulfil the role of leading an entire industry sector towards modernization, as was
the case in the honey CG. In this coordination group, the president of a prominent
honey processing company was elected as a CG Leader. The CG Leader proved
himself to be pro-active and a model example of blooming business in his own honey
processing company with 50 % production increase and 150 % farmer income
increase as a result of trainings provided to farmers. He provides CG members with
Chain Leader reports and summaries of each meeting, and he was always present.
Finally, he is president of a leading producer and exporter association, the EHBPEA.
Also in the oilseeds CG a stable and committed leadership manifests; the Chain
Leader elected at the first CG meeting is still willing and committed to lead the
oilseeds CG. As former President of a sector wide association (EPOSPEA) he has a
clear vision on the direction of the development of the oilseeds sector. Nevertheless,
he experiences disincentives to exert extra efforts since he believes that neither CG
members are highly committed to carry out assigned responsibilities effectively, nor
are EPOSPEA and the Oil Millers’ Association strong and active to support the CG
(interview 12, oilseeds case study). In the social network analysis, the centrality and
broker role of both the honey and oilseeds CG Leaders was confirmed (appendix 6).

In the pineapple and dairy CG, CG leadership is an issue of concern. In the

social network analysis, both the dairy and the pineapple CG Leaders are not visible
as central actors and/or network brokers (appendix 6). In the dairy CG, no single
member was willing to take up the CG leader tasks in the first meeting; a symptom of
poor commitment according to the dairy Facilitator. After the retreat of the first CG
Leader in the fifteenth meeting (due to his retirement), another manager of a private
dairy producing and processing firm was elected as the new CG Leader. Although

23 Discussion Group SNV BOAM, August 12, 2010.

28
representing a blooming business, the dairy Leader’s company proved to be too small
to fulfil the role of leading an entire industry sector towards modernization. The
dairy platform is currently in the process of electing a new CG Leader, but there is
not an obvious new candidate that is supported by the far majority of CG members.
One candidate, EMPPA, is a producers and processors association and apparently
considered not yet strong enough to fill the leadership vacuum by at least nine
interviewees (more than half of the dairy interviewees). They, including SNV BOAM,
have a preference for a more powerful processing company or the Dairy Board that
could more forcefully promote the market and quality requirements throughout the
sector. Meanwhile, SNV BOAM takes over leadership responsibility (opening
meetings, summaries of the last meetings etc.).
Also the pineapple CG, finding a private sector buyer that could lead the CG
with the unanimous support of the CG members was difficult. Furthermore, no
strong sector association is expected to have emerged in the fruit sector by August
2011 (phase out of SNV BOAM)24. Therefore SNV BOAM explores other forms of
sector steering, such as decentralization through the development of local action
groups that focus on specific local issues. Also, the strengthening of the southern
regional Micro and Small Enterprise Development Agency to steer value chain
development in the fruit sector is explored. Nevertheless, there is no unanimity on a
future body to steer the pineapple value chain and CG.
Apart from the Chain Leaders, individual stakeholders can fulfil network
leading roles as well through participation in the CGs. Simply stated, those members
participating more often, have higher control of and access to information and
resources shared in the meetings. In appendix 6, the roles and names of the CGs
information brokers are discussed, derived from the social network analysis.
Although differences in numbers were not spectacular, it was found that the dairy CG
is most hierarchal compared to the other CG’s; fewer participants control information
(and possibly resource) diffusion.

d) Transparency and accountability

Judging from the comments of interviewees, the overall transparency of CG activities

in all four chains can be rated as medium-high. The meetings are open to public
(although more restricted towards the latest meetings), and meeting minutes,
agendas and other documents are shared with stakeholders. Nevertheless, the process
of CG succession in all value chains -except for the honey CG- has been confusing.
Members have different ideas on who will take over the CG governance after the
final CG meetings will be organised by SNV BOAM in August 2011.
The four CGs were set up as informal network platforms, therefore, formal
accountability mechanisms are absent in all four value chain CGs. Still, informal
forms of accountability are there. For example, CG members only receive SNV
BOAM funds if their proposals are in line with the SIPs identified by stakeholders in
the value chains. In addition, members need to present their fund utilization reports
in the CG meetings, in front of all other critical and reflecting stakeholders. The CG
is challenging assumptions in an open and transparent way. Still, organisations do
not fulfil agreements reached in the meetings. In general, this is related to a modest

24 SNV BOAM 2 proposal.

29
interest of certain key stakeholders and monopolists in the value chains (i.e.
government decision-makers, pineapple investors, pineapple wholesalers, and dairy
processors) to bring about fundamental change in the concerning markets, which was
predominately apparent in the pineapple CG.

Overall, the data gave the impression that the four CGs are horizontally organised.
The CG Executive Committee gave stakeholders a say in the allocation of its
industry related funding. The four CGs were set up as informal governance
structures, and members felt they have an equal say. Members, committees and
future steering organs were elected by CG members. After the Mid-Term Review in
2009, SIPs were revised and stakeholders were often able to change the SIPs in the
direction they preferred.
Yet, a degree of useful verticality was present, related to CG leadership,
organisational capacity and internal information sharing. Although horizontal
organised MSPs offer a greater degree of flexibility and openness, central network
leaders (actors or organisations) who operate as a primus inter pares can fulfil the role
of leading an entire industry sector towards modernization. In both the honey and
oilseeds CG leading organisations and -associations were central in the network,
although the oilseeds Chain Leader felt discouraged to invest sufficient resources and
time. Not all stakeholders have been able to articulate their needs/demand; only
those with the ability to push their issues through in previous meetings can influence
the CG agenda and discussions. Moreover, benefits depend on stakeholders’ pro-
active attitude and the capability to articulate interests. Nevertheless, the overall
BOAM program contributes by building the overall collective capacity in the sectors.
CG governance in the dairy CG was regarded most difficult with the lowest
appreciation of agenda setting and selection of stakeholders, problematic leadership
capacity and the most hierarchal configured network (information is diffused through
a limited number of network brokers). In the pineapple CG, finding a sector steering
actor or organisation is difficult.

3.4 Embeddedness
This theme is on the embeddedness of the four MSPs in the wider institutional field,
at different levels (organisational-, MSP-, and SNV BOAM level). It assesses the a)
embeddedness of participating organisations, b) the embeddedness of the MSPs and
Boards and public private partnerships -formed in the MSP- in society. Finally, c)
SNV BOAM’s inter-organisational embeddedness was assessed.

a) Embeddedness of participating organisations

Several participating organisations joined the CGs as a result of being tipped by

other organisations. Especially in the honey and oilseeds CG these inter-
organisational relationships have been supportive in linking and motivating
stakeholders to become a member of the CG. Furthermore, strong sector associations
can be instrumental in inviting new members to the meetings. In the pineapple and
dairy value chain CGs a strong association like the EHBPEA does not exist.

30
 Embeddedness of participating organisations in multiple MSPs is also
regarded. Several organisations are participating in all four MSPs25. Among these
organisations are the Ministries of Agriculture and Trade & Industry; the Chamber
of Commerce; a BDS service provider (Facilitators in the pineapple, honey and
oilseeds CG), several financial institutes and banks, governmental implementing
agencies, NGOs and a women association. See appendix 6 for a complete overview of
central members participating in the meetings. Most of the government agencies
focus on the honey CG however. In the pineapple CG, most of these organisations are
regional (SNNPRS). The actors involved in multiple MSPs transfer information and
contacts from one MSP to the other to the benefit of the members, and enhance the
general networking opportunities for them. In this way they contribute to the effects
of the each MSP.

b) MSP embeddedness in society

The core of SNV BOAM’s approach is to bring key value chain stakeholders together
to find solutions for identified bottlenecks in each value chain. Embeddedness of the
four MSPs in all three societal sectors is therefore considered necessary. As stated
before, the VCD approach developed under BOAM program is directed towards the
middle of the chain (private businesses) as the entry point. This approach is
confirmed in the social network analysis; the majority of the participants in the value
chain CGs represent private sector organisations (appendix 6). In addition, the
embeddedness of the four CGs in the public sector is a specific issue that SNV BOAM
considered from the outset.

The research found that fruitful relationships with the government are
indispensible in the overall development of the horticulture-, agriculture- and
apiculture sectors. The sectors’ performances are destined to linger when there are
no government agencies aboard to adopt, implement and enforce, for example, basic
food security standards. None of the four sectors were clearly on the government’s
radar screen, but during the CG process the government of Ethiopia has developed
an interest in all four value chains-to variable degree. For instance, the oilseeds CG
has promoted and demonstrated the role of the sector in the fight against poverty
and in ensuring sustainable development. This encouraged policy makers to increase
interest and attention to the edible oil and oilseeds sector, for example through
market promotion and -research.
In the dairy CG, the commitment of the Ministries was initially limited to
their participating in the CG meetings26. The required significant restructuring of
the Ethiopian dairy sector cannot take place without supportive governmental
policies, but the government did not prioritize the dairy sector after the liberalization
of the economy. Nevertheless, mid 2010, the government choose dairy as one of the
four agricultural products in its five years Agricultural Growth Program of 250
million dollar.

25 In the pineapple CG, there are also links with the mango and apple CGs, but they are no part of
this study.
26 SNV BOAM 2 proposal.

31
 In the pineapple CG, relationships with the public sector are evident. Out of
the four value chains under study, the government is best represented in the
pineapple CG. There is even a relative overrepresentation (compared to the other
CGs) of the public sector (confirmed in the social network analysis, appendix 6) as
“they fill the void of the absent private sector” (interview 11, pineapple case study). But
having intensive relationships with the government runs the risk of slowing down
external dynamics and progression, because decision-making must pass the
governmental hierarchy first (pers. comm. SNV BOAM, September 7, 2010).
Although SNV BOAM is critical on the role of the government in several MSPs as
government agencies do not always offer reliable public services27, they do recognise
the need for state support as it remains vital and necessary for the durability of the
changes achieved.
Only in the honey CG representation of all sectors and stakeholders is
considered rather complete by the interviewees (Table 4). The Ministry of
Agriculture plays a prominent role in the Ethiopia Beekeepers Association (EBA)
(presidency), played an active role during the process of EU Third Country Listing,
and will probably offer a location for the CG meetings after SNV BOAM has phased
out in August 2011. The network analysis confirms the central network roles of both
EBA and MoA. MoTI and the company of the honey CG Chain Leader seem to have
developed rewarding relationships as well. Nevertheless, MoTI’s primary attention is
directed towards export of honey and oilseeds products rather than to the overall
development of the sectors.

The absence of key decision makers of government and financial agencies is explicitly
deplored in all four value chain CGs because they could significantly help solving the
problems of each sector. A pineapple investor responded: “I appreciate the learning
possibilities from other stakeholders in the pineapple value chain; however, they have
no authority to make the necessary decisions” (interview 4, pineapple case study).
Although key government agencies are often well represented in the meetings,
several interviewees indicated their participation is characterised by frequently
rotating experts who do have little or no influence in government decision making
and policy processes. Also the CGs have proactively invited banks and MFIs to the
meetings, but if participating, often non-influential bank clerks were sent to the
meetings instead of financial key decision makers (i.e. bank manager) (interview 14,
dairy case study). The social network analysis confirmed the absence of financial
organisations (i.e. banks, MFIs) as central network players in every CG (appendix 6).
Finally, the social network analysis confirmed the absence of the two main dairy
private processing companies in the country as a central network player.

Table 4. Stakeholder representation according to participants of the four value chain

CGs in percentages (%)
Represtation Honey Dairy Oilseeds Pineapple
Complete 83 27 13 30
Incomplete 17 73 87 70
Total 100 100 100 100

27 SNV BOAM Annual Report 2009.

32
Last, the embeddedness of Boards and PPPs (formed in the MSP) in the wider
institutional field can augment the effects of an MSP. For instance the Office of
Public Private Partnership on Oilseeds (PPPO)28 initiated in the oilseeds CG is said
to be the “brain child of the oilseeds CG” to complement its efforts, particularly in the
policy area in which the oilseeds CG is less competent. The PPPO has improved the
interest in and attention given to the oilseeds sector as well. Both MoTI and MoA
are participating in the forum. Another example is the embeddedness of the
Apiculture Board in the honey value chain in the international civil society
community, i.e. Apitrade Africa and Bees for Development (see also section 4.4).

c) SNV BOAM’s inter-organisational embeddedness

Finally, SNV BOAM’s inter-organisational embeddedness as a result of its MSP

activities was assessed. SNV BOAM is not the sole donor involved in the VCD
approach, but is embedded in a broader international development network. The
most prominent organisations with value chain development programs are the
German GTZ, Oxfam GB, and the Royal Netherlands Embassy (RNE), which
supports the dissemination of best practices among donors, government institutions
and practitioners. The government of Ethiopia has adopted the sectoral and value
chain approach. These links of SNV BOAM also embed the CG members in the wider
institutional field.

In sum, all CGs are embedded in society and have been supportive in creating
linkages between public- and private sector and civil society, nevertheless, with
varying results. The data give the impression that sector representation
arrangements and relations with the government are strongest in the honey CG,
followed by the oilseeds and pineapple CGs, and finally the dairy CG. Of main
importance is who is representing the key sectors. For example, governmental
agencies may be participating in the four CGs, however, if they do not sent key
governmental decision representatives, the effects will be imperfect according to
several interviewees. Moreover, a strong private sector is necessary for value chain
development. In the network analysis, the private sector approach was confirmed.
But the capacity and quality of the central private sector players showed great
variety; for example the key private sector players in the dairy CG (e.g. Selale Dairy
Cooperative and Adama Woman Entrepreneurs Association) are less capacitated than
the honey key private players (e.g. Beza Mar, Comel PLC). Embedded MSPs, inter-
organisational relationships, and embeddedness in multiple MSPs result in
multidirectional information flows and transfer of information and contacts to the

28 The Office of Public-Private Partnership on Oilseeds (PPPO) is a multi-stakeholder platform

established by public and private actors namely: The Royal Netherlands Embassy; the Ministry of
Agriculture; the Ethiopian Pulse, Oilseeds, and Spice Processors Exporters Association; and the
Dutch Product Board for Margarine, Fats and Oils (an MVO). The partners signed a memorandum
of understanding on March 5, 2008 and the Office started its activities in early 2009. The partnership
is usually referred to as the Ethiopia-Netherlands Public Private Partnership on Oilseeds. The
PPPO, initiated in the oilseeds CG, is engaged in high level policy interventions, which are believed
to complement the efforts of the CG in implementing the five SIPs it had indorsed (Minutes of the
13th Oilseeds CG Meeting, March 12, 2009).
33
benefit of the members, and enhances the general networking opportunities for them.
In this way they contribute to the effects of the each CG. Finally, linkages of SNV
BOAM also embed the CG members in the wider institutional field.

34
4. Institutional Change
This chapter elaborates on the CG’s external dynamics, the institutional changes in
the value chain’s business environment facilitated by the CGs. We address the
question to what extent the CGs have generated effects that improved the conditions
for upgrading for farmers and SMEs in the four value chains. The focus is on
opportunities for value chain actors to acquire knowledge and technology, capital or
credit, opportunities to stabilize and/or access (new) markets, and to become part of
professional associations. Both meeting minutes as well as perceptions of
interviewees on changes in the institutional environment (appendix 7) were examined.

4.1 Access to knowledge

Access to knowledge refers to market, technical, or organisational information that

value chain actors can acquire either by themselves or by hiring affordable service
suppliers. To what extent have the CG meetings facilitated oilseeds, honey, dairy and
pineapple chain actors in their access to such knowledge? Has the CG been
indispensible in this respect?

The answer is yes. All CGs contributed largely to value chains stakeholders’
access to improved technologies and knowledge. For instance, information shared in
the CGs (i.e. where to buy seeds, who offers the best prices) and trainings (indirectly
funded through the CGs) on production agronomy, new varieties, quality based
pricing systems, and diversification of products improved awareness on quality issues
and the value of the products. It is through the CGs that stakeholders meet with their
Business Development Services (BDS) providers (i.e. BCaD), and cooperatives and
processing companies acquire the resources to train their suppliers. For example, the
Holeta Bee Research Center received an increasing number of requests for advice and
training during the meetings (from trainers, advisors, processors, and NGOs) and
their service work expanded considerably. In addition, in the CG meetings, site visits
were organised to for example research centres, processing companies and a nursery
site, contributing to knowledge exchange and information sharing. Interviewees
furthermore pointed to (see also appendix 7): the availability of new types of beehives,
new means of production (tissue culture in pineapple), dairy product diversification,
the uptake of processing activities, general upgrading of research in Ethiopia, and the
introduction of quality based pricing systems and new pineapple varieties. On the
other hand, interviewees saw little or no improvement in access to new animal breeds
and –feed, new bee colonies, and a reduction of animal diseases.
Interviewees highly appreciate the trainings and information they received,
therefore several interviewees expressed their concern for the moment the BOAM
program phases out (August 2011). They expect that technical, financial, and
organisational service support will remain necessary for the sectors in the future,
especially as local government agencies often fail to provide regular trainings and
support. Furthermore, although CG members receive information on proper

35
technologies, there are often no means to access the expensive technologies (see also
section 4.2).

Pictures: Dairy value chain in Ethiopia

The cows are indispensible in the dairy sector

Introducing a quality based pricing system: milk quality testing (fat content & sourness) in Sululta

Milk collection centre and dairy products diversification (cream, cheese, ricotta)

Source pictures: own compilation first author

36
4.2 Access to capital

Access to capital involves the possibilities for value chain actors to acquire a credit,
loan or budget for their commercial activities. Changes in the access to capital were
assessed through interest rates, duration, collateral requirements, pay-back
conditions, and characteristics of the funding organisation. It was also verified
whether the CGs were indispensable in facilitating stakeholders’ opportunities to
access capital/credit.

In developing countries -including Ethiopia- Banks rarely lend money to small

scale suppliers, and farmers/beekeepers have only access to MFI’s and informal
lenders. However, both individual farmers as well as cooperative members are
exposed to high interest rates (16-20 percent) charged by MFIs. In addition, MFIs
do not to provide large amounts of credits. The interviewed Development Bank of
Ethiopia is mandated to finance (agricultural) development projects. Clients of the
Development Bank are private investors and farmer cooperatives and they can
receive loans against a 7.5 % interest rate per month. However, criteria of the Bank to
obtain loans are often not met29.

Access to capital/credit was therefore a point of discussion in the CG’s. The

CGs channelled and partly accounted for considerable amounts of innovation- and
sector funds (3 million Euros) being pumped into the four sectors, which were made
available through the overall BOAM program. More than the other CGs, the honey
CG was able to generate capital from within the value chain through the investments
of the lead private processing company. Moreover, the CGs contributed to the
participation - and sometimes even provision of capital (dairy) – of several Banks and
MFIs in the meetings and in the honey CG access to inputs and finances was
identified as one of the SIPs. Finally, capacity building through the CGs improved
the creditworthiness of several participating organisations and increased attention to
the various sectors.

Despite these efforts, access to affordable capital for smallholders and small
and medium sized enterprises remained an issue of concern. The majority said the
CG did not positively affect the willingness of Banks and MFIs in Ethiopia to lend
any money to stakeholders in the value chains. So far, the credits have been
“untouchable” (interview 6, honey case study). Several interviewees pointed to lack of
access to capital or credit services as a major bottleneck to the development of their
sector. However, it is likely that causes for the limited effects should be attributed to

29 Criteria mentioned are: 1) the product should be in the priority list of bank; 2) the
recipient is not capacitated sufficiently according to a feasibility study carried out by the Bank 3) the
recipient needs a business license (secure licence of Bureau of Trade and Investment or MOTI or any
other authority that provides licences to operate); 4) it has to secure an investment certificate from
the regional or federal investment authority; and an 5) equity contribution has to be met (30 % own
contribution of client). Products appear in the priority list if they operate on a commercial scale and
have an export potential. Investors are having problems meeting the equity contribution criterion
and to obtain the investment certificate that is often delayed.

37
the general macroeconomic- and political climate of developing countries and of
Ethiopia in particular, resulting in a reluctant financial sector.
Initially, BOAM discussed whether or not to include loan guarantees in the
program; however donors of SNV BOAM were not willing to finance that (as
recipients are not effective presently due to their financial incapacity). Main problems
are that currently only established clients receive loans, not starters. Also, the
Ethiopian financial sector is heavily state regulated, even for the private farms, and
agriculture is seen as a high risk investment.
Picture: backyard beekeeping and beekeepers women’s association in Akaki Kaliti, Addis Ababa.

Source: private collection first author

4.3 Access to markets

Changes on the access to (new) markets were examined by gathering information on
prices, context exchange in the meetings, and buyer and farmer commitments
(advance payments, contractual arrangements and quality standards).

The findings suggest that all CGs have played a role in addressing smallholders and
small and medium sized enterprises’ access to (new) markets, but to variable degree.
Noteworthy is the contribution of the honey CG in legitimately opening access to
export markets. All interviewees believed the honey CG had effectively promoted
the shift from domestic to export honey. A major success was the opening of the
international honey market when the CG’s Quality Working Group managed to have
Ethiopia registered in the EU Third Country Listing30. The first high quality
Ethiopian table honey was exported to the European market in 2008. Furthermore,
the prices in the Ethiopian honey sector have tripled in the past five years, and in the
period from 2004/05 to 2008/09 prices of honey even quadrupled; from ETB 4.00-
5.00 to ETB 18.00-20.00 per kg31. This success attracted other honey processors to
the meetings as well.

But also the other three CGs did manage to facilitate a number of positive changes in
respect of market institutions. The main step forward is that all CGs have effectively
served the function of a contact platform, enabling the establishment of new business
to business (B2B) relations (see also textbox). Facilitators and Chain Lead Advisors

30 Registration is conditional for the import of any product of animal origin into EU countries.
31 Sources: MinBuZa, 2010; pers. comm. MOTI, August, 2010

38
 deliberately encouraged stakeholders to have bilateral
and group discussions and to exchange contact
SNV BOAM aims at addresses during the meetings’ lunch and coffee breaks.
delivering B2B support to In the pineapple CG, SNV BOAM organized bilateral
guarantee that a reliable sessions to unite actors with similar business interests.
supply and market outlet is The sessions link for example clients to their BDS
assured. In their opinion, providers.
facilitating the
development of business Document analysis and interviews indicated the
relationships and following examples of such relations32:
arrangements between
downstream traders, • The leading research institute in the honey
processors and farmer sector has attracted an increasing number of
organizations on one side requests for advice and training from
and small farmers and their organizations it met during the CG meetings.
organizations on the other
• The leading honey processing company currently
side is essential for
acquires its modern beehives from Kindu, a
business development.
Source: SNV BOAM’s value chain
modern and appropriate technology and
approach. equipment manufacturing centre, because the
company met Kindu representatives in the CG
meetings.
• The dairy Chain Leader and a dairy Cooperative
Union received credit from a Bank and MFI they had met in the CG.
• In the pineapple CG, cooperatives were linked with wholesalers and processors
and an Ethiopian University provided input material for the Tissue Culture
Laboratory.
• In the oilseeds CG an attempt was made to link Ethiopian oilseeds companies
with European companies operating in the oilseeds value chain to facilitate
access to market and technology information.

Another positive effect of the CGs lies in generating information to better

employ the SNV BOAM funds on markets and certification. For some interviewees
the CGs helped identifying who is working on what in the sector. For others, the CG
facilitated access to the funds to finance experience-sharing visits to and/or
participation in international trade fares (e.g. Dubai Gulf Food Trade Fare in 2009
and 2010), or exchange visits to Kenya, to the Africa Dairy Farmers’ Exchange
Forum33. Others used the funds for the facilitation of HACCP certification.

32 See case study reports for more detailed examples.

33 Dairy CG 12 meeting minutes.
39
 Picture: Group sessions in pineapple CG, Awassa (Ethiopia)

Furthermore, information exchange on quality issues and quality based

payment systems improved farmers and SMEs awareness and valuation of their
products. For instance, beekeepers were initially not aware of the value of beeswax.
“They even threw it away in the production process. From the meetings they learned
to appreciate its value” (interview 1, honey case study). Moreover, it puts pressure on
the government to develop mandatory quality standards for the sectors. The
adoption of quality standards is still voluntary in most Ethiopian value chains.
Although the Quality and Standards Authority of Ethiopia (QSAE) drafted quality
standards, monitoring and enforcement are often absent. In the honey and beeswax
value chains, producers have to comply with the QSAE standards for honey, beeswax
and beehives, which are equivalent to the Codex Standard (EU/FAO/WHO). But the
government body is not internationally accredited to certify honey products. On top
of this, adulteration is a common practice, and testing laboratories are absent in
Ethiopia. In the case of honey, certification can only be done abroad and handled
through the EHBPEA. Despite this complicated process, seven Ethiopian honey
companies have managed to become ISO9001 & HACCP certified. The other CGs
also have been promoting the concept and practice of quality for a better market
share. For instance, the introduction of quality based pricing schemes, an idea raised
in the CGs, inspired the manager of a dairy collection center to introduce such a
scheme. It helped him “to think differently” (interview 11, dairy case study). Moreover,
the CG has also promoted consumers’ awareness on the quality of edible oils through
the involvement of an active Consumers’ Protection Association (interview 17, oilseeds
case study).

In developing countries, it is a challenge to make local markets more

predictable for smallholder farmers and SMEs. Particularly in the Ethiopian dairy
and pineapple chains oligopsonic market structures exist where a small group of
buyers dominates the market and hence limit the changes that are promoted in the
CGs in their operations. For instance, in the dairy market, the two main processing
companies are believed to set price at unfair low levels and to obstruct the possibility
of price negotiations. Nevertheless, the CGs have been able to attract several
investors, wholesalers, and processing companies to the meetings who have the

40
potential to reduce oligopsonic market structures. For example, the engagement of
two larger fruit wholesalers participating in the pineapple CG reduced the
dependency of the cooperatives on the fruit “Piazza wholesalers”. “Already by 2010
the position of the Piazza wholesalers in the low-quality fresh fruit value chain had
weakened. Farmer organizations, processors and regional traders are by-passing the
main centres for wholesale distribution, resulting in higher margins” (Visser et al.,
SNV BOAM, 2011). In the dairy CG, processing companies are willing to pay better
prices for quality dairy products since more processing companies have entered the
market and competition between buyers is increasing. SNV BOAM attributes this
increase in private processors partially to its support to private processors and the
establishment of the EMPPA (fact sheet SNV BOAM). Finally, the considerable
demand for export honey enables beekeepers to shift to other buyers. As such, “the
CG contributed to a reduced dominance of the local buyers” (interview 1, honey case
study).

The formulation of contractual agreements was stimulated in all four CGs

by means of contract promotion and, indirectly, building trust. Direct linkages and
contractual agreements between producers and processors/exporters offer another
‘way out’ to improve ‘monopolists’ markets. But most processors and exporters still
depend on middlemen since they distrust smallholder producers and cooperative
unions in ensuring predictable and regular supply of oilseeds or raw milk. Currently,
several exporters/processors and cooperatives in the pineapple, oilseeds and dairy
value chains are participating in such contractual negotiations, facilitated by SNV
BOAM even tough hardly any change has so far been perceived. For example, the
fruit wholesalers ETFRUIT and ELFORA are exploring the purchase of “Red
Spanish” pineapples directly from the cooperatives34, but the weak capacity of the
cooperatives and the ‘Piazza monopoly’ appears to be a hindrance. Cooperatives lack
the ability to tie farmers to them since they are “incapacitated and cannot offer
sufficient support to their members”. According to SNV BOAM, contracts were
established once or twice in the pineapple CG process, however they failed due to
farmers’ side selling practices to merchants that encouraged the farmers to sell their
products directly to them35 (interview 11, pineapple case study).

In short, the CGs have facilitated access to (new) markets by opening export markets
(honey), stimulating the establishment of B2B relations, generating market
information and -exchange visits, promoting contractual agreements, and increasing
quality awareness and quality based pricing systems. Nevertheless, especially in the
pineapple and dairy sectors, oligopsonic market structures exist that limit the
changes that are promoted in the CGs in their operations.

34 SNV BOAM Annual Report 2009.

35 Pineapple CG10 meeting minutes.
41
Examples of successes in the Ethiopian honey, dairy, pineapple and oilseeds sectors:
• The first high quality Ethiopian table honey was exported to the European market in
2008;
• Honey production has expanded with more than 60% in four years time, from 24.600
tons in 2004/05 to 39.660 tons in 2008/09;
• Good Agricultural Practice (GAP) training was provided to numerous farmers and
beekeepers in all four sectors; for example, to 2,600 pineapple farmers and to 15,000
oilseeds smallholder farmers;
• The task group on infrastructure resulted in the improvement of 27 km of road by the
government to make pineapple investment lands accessible;
• A business pilot venture between a private pineapple processing company and 2 farmer
organizations was initiated. 6 new pineapple processed products were developed (jam,
compote, wine, sun dried, vinegar, juice) and 160 pineapple producers, majority women,
were trained in processing of the pineapple products. The new products were promoted
and supplied in two towns under the companies’ label;
• A private oilseeds company is working with 5000 oilseeds smallholder farmers and
started piloting cosmetic olive oil extraction out of indigenous olive seeds and
establishing exotic varieties olive trees for food oil extraction;
• The government to Ethiopia is considering the oil value chain as a priority and oilseeds
and edible oils are included as part of the 30 years agro processing master plan;
• The upcoming establishment of the Dairy Board has attracted government attention to
the dairy sector in Ethiopia;
• Monopoly of dairy processors was broken with support to private processors and the
establishment of Ethiopian Milk Producers and Processors Association.

Sources: SNV BOAM’s factsheets, biannual report 2010, annual reports.

4.4 Access to organisation

Access to organisations is an important condition for farmers and SMEs to share

risks, pool resources, enable collective learning and develop negotiation power in
value chains. All four CGs have been successful in this respect; the very function of
the CG meetings has been serving as a platform where stakeholder groups could
meet, learn, share, and collectively undertake actions. However, the CGs differ in
their success of facilitating members’ access to new professional organisations. Three
of the four CGs have supported some individual members to access new professional
organisations, for instance the EMMPA (dairy) and EHBPEA (honey). The oilseeds
CG has played an important role in the establishment of a parallel MSP –PPPO,
which is involving multiple organizations. But only the honey CG did succeed in
facilitating active membership in external organisations that did not originate in or
through the CGs. For instance, the honey CG facilitated the EAB in becoming
member of Apimundia, Apitrade Africa and Bees for Development. In pineapple the
situation differs due to the absence of relevant professional organisations in the
pineapple sector. Only the fruit wholesalers of the Addis Ababa market are organised,
but they have no interest in the pineapple CG.

42
5. Conclusions
This study assessed the effects of four multi-stakeholder platforms, known as
Coordination Groups (CGs) that were established by the NGO SNV in 2005 to
improve the access to the value chains for stakeholders in four Ethiopian markets:
honey, dairy, oilseeds, and pineapple. In total 437 organizations participated in at
least one of the 66 CG meetings that were organized in the period 2005-2010. What
lessons can be drawn from this experience? What are critical conditions for success?
What can be said about the way ahead?
As a response to pressing issues in the previously neglected sectors, the four
Coordination Groups were established under SNV’s Support to Business
Organisations and their Access to Markets’ (BOAM) program. It was felt that there
was a need for an instrument that could create awareness and set priorities around
these issues, facilitate public-private dialogue, increase stakeholder engagement and
strengthen the capacity of the sectors. Contact building and networking among chain
stakeholders is considered a necessary condition for a value chain to develop.
Stakeholders highly appreciate the four CGs under study that served as new,
horizontal platforms where stakeholders from different societal sectors in the
Ethiopian four value chains could meet and discuss in a rather open atmosphere on
pressing issues in their sectors. A considerable contribution of the CGs is that they
enabled the creation of linkages between organisations that did not exchange
information before the start of the meetings. SNV BOAM played the role of
independent ‘network broker’ and facilitated the establishment of Business to
Business relations between stakeholders in the Ethiopian context. Moreover, it
created a learning platform generating general and sector specific technical- and
market information.
The process of setting up the multi-stakeholder platforms was thoroughly
considered: SNV BOAM has specified a vision on why and how private sector
development can stimulate economic growth that reduces poverty; the four CGs
devoted considerable attention to a collective goal setting process and CG
participants could adjust common objectives, strategic intervention- and operational
plans; the CGs are horizontally organised and from 2009, stakeholders had a say in
the sector allocated funding through the CG Executive Committees. Moreover, a
number of SNV BOAM initiatives have been supportive in ‘levelling the playing field’
for stakeholders. First, the meetings in all four CGs are currently in Amharic, the
language that all stakeholders understand. Therefore, all stakeholders, including
farmers, had a (equal) say in the meetings. Second, the DSA reimbursement has been
functional in ensuring participation of poorer organisations and actors from remote
areas for whom travel and accommodation costs were a real barrier to participation.
Third, in principle, every stakeholder is welcome to participate in the open and
transparent CG meetings. Finally, the CGs channelled and partly accounted for
considerable amounts of innovation- and sector funds being pumped into the four
sectors, which were made available through the overall BOAM program.
Next to these contributions, CG participants also pointed to insufficient
involvement from key- private players and government decision makers, high
rotation, distrust, and absent leadership in the meetings. In what way did this effect
change processes in the four value chains?

43
Conform our hypothesis - that MSPs that better meet the conditions for fruitful
collaboration can generate more effects leading to institutional change- the four case
studies show that the relationship between internal dynamics and external dynamics
is rather linear; horizontally organised CGs with strong goal alignment and
committed network leaders, high stakeholder involvement and -embeddedness are
preconditions to durable change in the institutional business environment.
Trust was identified as a moderating factor between internal and external
dynamics. Ideally, stakeholders meet and collaborate in the stakeholder platforms,
and develop a sense of trust as a result of these interactions. Trust built then,
positively relates to, for example, improved access to markets as buyers and suppliers
engage in trusted relationships. On the contrary, lack of trust can have the opposite
effect.
The findings suggest that all CGs have played a role in addressing
smallholders and small and medium sized enterprises’ access to knowledge, markets
and organisations, but to variable degree. All CGs contributed largely to value chains
stakeholders’ access to knowledge (technical, market, organisational) through
information exchange and trainings facilitated through the CGs.
The CGs have facilitated access to (new) markets by opening export markets
(honey), stimulating the establishment of business to business relations, generating
market information and -exchange visits, promoting contractual agreements, and
increasing quality awareness and quality based pricing systems. In the pineapple and
dairy sectors, oligopsonic market structures exist that limit the changes that are
promoted in the CGs and their operations. Therefore, it remains a challenge to make
local markets more predictable for smallholder farmers and SMEs. Nevertheless, the
CGs have been able to attract several investors, wholesalers, and processing
companies to the meetings who have the potential to reduce the (black) market
oligopsony that exists in the Ethiopian pineapple and dairy sectors.
In all CGs except for pineapple, stakeholders’ access to new organisations
improved somewhat, but only the honey CG facilitated access to new professional
organisations -formed externally from the honey CG- for honey stakeholders. In the
pineapple sector the situation differs due to the absence of relevant professional
organisations.
In general access to affordable capital for smallholders and small and medium
sized enterprises remained a major issue of concern. Some results were visible: the
CGs contributed to the participation - and sometimes even provision of capital – of
several Banks and MFIs in the meetings, and capacity building through the CGs
improved the creditworthiness of several participating organisations and increased
attention to the various sectors. Particularly the honey CG was able to generate some
capital from within the value chain. Nevertheless, the overall outcome is rather
limited. However, it is questionable whether that should be attributed to the CG
organization. Finance institutions are highly dependent on the general, national
macroeconomic- and political climate which may be far beyond the scope of an
agricultural multi-stakeholders platform.

Collaborations that are both highly embedded and have highly involved partners, are
the most likely to generate an intermediate institutional change that may become
more widely adopted and hence established practice. The honey CG managed to

44
develop a strong export-orientation, tie a core group of committed stakeholders and
‘sector leaders’, and highly involved government authorities that previously had little
interest in the sector. Relationships with the government were instrumental in
opening up access to international honey markets.
The dairy CG on the other hand, initially lacked both stakeholder involvement
from the two main private key players as well as embeddedness in relevant and
strong third organizations. The dairy network was found to be most hierarchal
compared to the other CGs and until now, none has emerged as a primus inter pares
capable of organizing the dairy chain actors into a more powerful sector. Moreover,
goal alignment has remained a weak element as divergent stakeholders’ interests and
low confidence and distrust among dairy stakeholders, particularly between
producers on the one hand and processors on the other, was a major constraint to the
performance of the dairy CG. Despite these obstacles, the dairy sector is recently
stronger anchored in the government through the establishment of the dairy board
steering committee and upcoming Dairy Board. Furthermore, one of the key private
processors in the dairy sector that was initially reluctant to communicate with any
producer organisation is now a member of this dairy board steering committee. And
mid 2010, the government choose dairy as one of the four agricultural products in its
five years Agricultural Growth Program.
The CGs deliberately stimulated stakeholders’ trust development, especially in
those of dairy and pineapple, increasing their potential to have a substantial effect on
changing the institutional environment of the sectors’ business. Only in the pineapple
CG, the pace of institutional innovation slowed down due to the absence of private
sector leaders, an unclear focus in strategic intervention plans, and a too dominant
public sector influence.
Finally, in the oilseeds CG, promising relationships with the government, also
through the PPPO, have improved the interest in and attention given to the oilseeds
sector. The oilseeds CG did facilitate trust-building, but this was not sufficient for an
efficient transaction between the chain actors. Members and the central private
company were discouraged in investing time and resources in the oilseeds value
chain, because of the absence of a willing and committed nucleus group of
participants, the high CG member rotation and long procedures for acquiring the
SNV BOAM funds.

SNV BOAM, in 2005, initiated four value chain multi-stakeholder platforms from
scratch. Although the development of the four sectors still has a long way to go, the
case studies found sufficient evidence that the multi-stakeholder platforms have been
critical elements in the SNV-BOAM program that aims at creating linkages needed
for value chain development. In developing countries, such as Ethiopia, linkages
between private sector actors are often weak due to vast geographical distances,
vulnerable communication systems and the mutual lack of trust and confidence.
Moreover, cross-sector linkages are often even weaker due to historical divides that
exist between the state sector and the private sector; and between both sectors and
civil society. In this environment, the international NGO SNV -who implements the
BOAM program-, successfully facilitated a tri-sector multi-stakeholder approach in
Ethiopia. Private sector actors, also from remote areas, were enabled to meet,
establish contracts, exchange knowledge and learn from one another. The four CGs
also enhanced the governments’ appreciation of the four sectors as well as of the

45
importance of the role to be played by private businesses. Hence, the CGs created a
‘window of opportunity’ for the private sector.
In the future, considerable effort remains necessary to a) further involve key-
decision making government authorities and (lead) private firms in public-private
dialogues; b) move earlier and faster with these decision makers; c) further facilitate
access to affordable capital for smallholders and small and medium sized enterprises;
d) attract domestic and foreign investors; and to e) develop professional services to
stimulate the four sectors in their continuous process of sustainable development.

46
6. Twelve lessons learned
We finish off the report of this multiple case study with a series of lessons learned
and recommendations to SNV BOAM in respect of the continuation of the program.
The majority of the ‘lessons’ are directly related to the further facilitation of the CGs,
while the latter few are also meant to provoke a broader discussion on the CG’s role
in the BOAM project and the direction of the project itself.

Lesson 1: Keep the momentum of what has been started

Stakeholders very much appreciated the Coordination Groups as an additional
vehicle to organize the business environment of their respective industry sectors. But
the social transformation processes that drive institutional change are slow. To
effectively facilitate change in neglected industry sectors in developing countries
requires time, investments, and long-term commitment of value chain stakeholders to
ensure genuine improvement. Opportunities created in the CGs can function as a
catalyst for further development of the sectors. Therefore it is important to keep the
momentum and to continue with what has been started to enhance the chances for
success. Therefore, the first recommendation is to:

Continue support (create linkages) to at least three of the four value chain CGs under
study – those of the dairy, pineapple and oilseeds sectors- as the CGs have proved their
value in creating linkages for value chain development. The honey CG already reached
a sufficient amount of autonomy to continue on its own.

Lesson 2: Find the champions

Horizontally organised MSPs offer a greater degree of flexibility and openness
compared to traditional, more hierarchical forms of governance. Nevertheless, there
should be leadership. If certain actors or organisations are in the position to bring in
their own networks and resources and if they possess the capability to bridge
(existing) divides, they can fulfill the leading role of network broker. Searching for
such a ‘credible leader’ (who can drag and push) is recommendable, but only if he or
she can act as a primus inter pares. If such an actor does not exist, than the leadership
issue is likely to continue to be a hot issue. This is especially true in cases where the
divides among stakeholders are wide.

Find ‘the champions’; the credible local leaders that can act as network brokers. If they
seem absent in a sector, potential local leaders could be identified and supported in
developing leadership qualities. The involvement of a relative outsider, such as the
sector’s global lead multinationals or their first-tier suppliers might be another option.

Lesson 3: MSPs intend to change but also depend on their economic and
political context
Although it seems evident, change only occurs if the value chain stakeholders are
willing to change. In the pineapple CG several key stakeholders have no interest in
47
changing the subsector. The Piazza wholesalers and traders disengaged from the
pineapple CG since they were unwilling to compromise their oligopoly position. Also
in the dairy value chain CG we see reluctance to change due to favored oligopoly
positions of the few large scale processing companies. The success of changing the
institutional environment also depends on the willingness of private enterprises to
invest, and in the dairy and pineapple CGs initially little interest has been
forthcoming. Pineapple investors even withdrew their commitment. Banks and MFIs
were generally not willing, or able, to lend any money to stakeholders, mainly
smallholders, in the four value chains. This could seriously limit the effects of any
value chain MSP trying to facilitate change in intuitional environments. In Ethiopia,
only value chain stakeholders in the more regular sectors, such as coffee, generally
have better access to investment capital. The value of partnerships/multi-stakeholder
platforms lies in the potential to create win-win situations if all stakeholders are
willing to contribute to the achievement of goals. In all sectors, least in honey,
stakeholders are struggling with existing institutional structures and market
domination defended by other stakeholders. This issue has probably limited the
effects of the oilseeds, pineapple and dairy CGs on actual changes in the institutional
business environment. The honey value chain, a rather simple and new value chain, is
experiencing fewer hindrances from ‘old, established institutions’. To induce change
MSPs require contextual strategies. Therefore, the third recommendation is to:

Continue to define well suited MSPs fitting the context of each sector in future MSP
projects. There are inherent restrictions for every MSP, related to for example macro
economic and political issues, weak business infrastructures and unwilling (dominant)
market parties and/or governments. MSPs cannot solve these issues on their own but
they can contribute to creating linkages needed for value chain development as the four
SNV BOAM supported MSPs did. Every MSP requires a unique approach and set-
up fitting the dynamics of each sector and taking into account the number of
participants and frequency of meetings, stakeholder representation, accountability and
quality embeddedness in society.

Lesson 4: Balance the number of participants and meeting frequency

In principle, every stakeholder is welcome to participate in the open CG meetings.
Only later on in the MSP process, invitations became more regulated with only one
participant from each organisation receiving DSA. Within the SNV BOAM team
discussions emerged on engagement processes and who to invite in the coordination
groups. At times there were too many participants in the meetings according to the
interviewees. It was impossible to ‘hear all stakeholders’ voices’ with 76 participants
present in the fifteenth honey CG meeting. In addition, it triggers high levels of
rotation of non-contributing members. A related point of discussion was the
frequency of the MSP meetings. The dairy, oilseeds and honey CG meetings have
taken place every three months (four times a year), whereas the pineapple CG
meetings have started to take place bi-annually, but later on every three months. The
question rises what size and meeting frequency MSP-like structures should have in
order to generate more effects that could lead to institutional change. The lesson
learned is that it is necessary to balance the number of participants and meeting
frequency in each context to level the playing field.
48

Find other ways to ensure stakeholders’ voices are heard, e.g. by visiting and
interviewing them;

Consider a format where the first meetings are open to all interested stakeholders to
ensure a broad based representation and to identify the main issues at stake in the
sector(s). In the following meetings, participation could be organized on the basis of
invitation, focused on representations of stakeholder groups and prominent firms
(domestic or abroad), and taking into account the agenda relevance for the various
organizations. Stakeholders do not necessarily have a stake in all these issues and can
more selectively attend meetings. It is advisable to repeat this format every year to
identify new issues and stakeholders.

Lesson 5: Ensure quality embeddedness in society

Key to durable changes in the institutional business environment are high
stakeholder involvement and embeddedness. The social network analysis revealed
that the four MSPs are embedded in all sectors of society and are to some extent
anchored in the ministerial level. A second step is to attract competent, high level
representations of stakeholder groups. Interviewees, for example, explicitly deplored
the absence of key governmental decision representatives in the meetings. Also the
capacity and quality of the central private sector players showed great variety. MSPs
should be aware that there may be too many organisations that have little or nothing
to add. On the other hand, deep embeddedness has a flip side. Having an intensive
relationship with the government runs the risk of becoming too dependent from
certain agencies. In the pineapple CG we found that strong governmental
involvement slowed down change and progress in business environments, because
any decisions had to pass the governmental hierarchy first.

Ensure embeddedness of the MSP in all societal sectors. One way of ensuring a public-
private dialogue is to have high level ministerial representation in an Advisory
Committee or Board, such as SNV BOAM already did under the BOAM program;

Consider stepping-up efforts to have key decision makers at the relevant state-levels
and the lead private firms or private sector associations aboard in the MSPs. Even if
they are initially not willing to participate, keep the door open as their interest might
grow. Invitation on personal basis (letters, visits) and meetings organised on specific
issues will increase response.

Lesson 6: Develop a Board as soon as stakeholders develop ‘a voice’

CG members pointed to lack of implementation and follow up of agreements in the
meetings. This relates to limited commitment of several members in the meetings as
well as to the lack of formal accountability mechanisms in the MSPs. At the start, a
MSP is a vehicle to coordinate common interests and goals. For continuity purposes
one could consider formal support mechanisms, such as a Board, as soon as members
start to see the benefits of a MSP and start to represent their stakes (‘having a voice’).
The Board ensures embeddedness at the ministerial level since the government is
part of this supervisory body. Establishing Boards in the CGs, such as the Ethiopian

49
Apiculture Board and the upcoming Dairy Board, is one of the successful strategies
under the BOAM program to promote public and private sector dialogue.

As soon as core and regular visitors start to develop ‘a voice’, establishing a Board, a
supervisory body elected by stakeholders with defined stakeholder roles and formal
contracts, is advisable. Vital for the Board is the role of the government who ideally
acknowledges the importance of the development of the sector and who embraces a
coordinating task.

Lesson 7: Subgroup discussions help building trust

Trust building in meetings is essential. Trust positively relates to, for example,
improved access to markets as buyers and suppliers engage in trusted relationships.
Moreover, trust building is a key issue in an effective goal setting process. The lack
of trust can have the opposite effect. Generally, all four CGs are valued for their
contribution to improved relationships and trust building between stakeholders in
the four value chains. CG members are also deliberately encouraged by the chain
Facilitators and Lead Advisors to have bilateral discussions and to exchange contact
addresses during lunch and coffee breaks.

Continue to play the role of trusted ‘broker’ by actively linking actors and stakeholders
in and outside the CGs. The “action groups or action approach” and “(bilateral)
grouping” followed in the pineapple CG could serve as a model.

Lesson 8: Goal alignment is a continuous process

The CGs cannot address all high and different expectations of the stakeholders. A
discrepancy between expectations and outcomes is therefore likely, especially when
the rotation rate among participants is relatively high with new participants
attending the CGs almost every meeting. Oilseeds processors for example, expect the
oilseeds CG to play a key role in technology transfer (financial support to buy a
modern edible oil refinery) while producers expect the oilseeds CG to create sufficient
access to improved seeds and markets. Making expectations more explicit to enhance
goal alignment is advisable, not only in the first meeting, but also at later stages.
Therefore, in future MSP programs SNV BOAM could:

Consider to reserve more time for specifying the expectations of and benefits for each
individual member or actor group. Such a goal alignment process could be repeated
regularly with newcomers.

Clarify and define roles, responsibilities and benefits for each MSP member. Clearly
link individual contributions to the benefits members receive. Contracts with each
participating member and follow-up sheets could improve follow up of agreements.

50
Lesson 9: Elaborate on the program’s Theory of Change
SNV BOAM has explained its rationale for engaging in multi-stakeholder platforms
in support of value chain development in a specific document.36 According to the
document MSPs can be seen as new governance structures that can reconcile value
chain stakeholders’ interests through dialogue, that promote inclusiveness when
addressing sustainability issues, and that enable problem solving at a decentralized
level. “MSP-like structures” should operate as a network until new professional
associations take over their strategic and communication roles. In its ToC, SNV
BOAM distinguishes three stages of value chain development: embryonic, infant,
mature. The MSP networks are particularly relevant during the first stage, ‘from
conception to embryo’, when they are to be succeeded by professional associations.
A program Theory of Change is helpful in guiding and monitoring the
program, but it is also an interesting type of theory because it is practitioner-based
and may be very useful for integration into broader scientific theory formation. In
this context SNV-BOAM is encouraged to elaborate on its ToC, especially in respect
of the distinction of phases in value chain development. It is not yet clear when the
value chain moves from one stage to the other, and how the concepts “infant” and
“mature” are defined in terms of their pro-poor or economic development content.
For example, do the concepts still apply when a foreign investor develops an
integrated new value chain by investing in a new pineapple plantation, transportation
and export facilities?

Elaborate on the Theory of Change and clarify the definition of stages of value chain
development and make more explicit what MSPs could contribute to in the various
stages.

Lesson 10: Reach out to obstructing, non-participating stakeholders

Particularly in the dairy and pineapple chains oligopsonic market structures exist
where a small group of buyers dominates the market and hence limit the changes that
are promoted in the CGs, much to the frustration of CG members and SNV BOAM
itself. The CGs and SNV BOAM saw no other option than to circumvent and
neutralize the “monopolists” as they are commonly labelled in documents and
interviews, although the CG meetings remained open to them. The question is what
would be a fruitful strategy to reach out to obstructing non-participating
stakeholders. It is not obvious for any foreign NGO that facilitates value chain
developments to challenge dominant market parties. The support from the
government for such a strategy may remain weak because of the established interests
of the targeted firms and traders. It may put both the MSP and the NGO in a
vulnerable position. Further, value chain MSPs, by definition, may not work as
countervailing power to “monopolies”. MSPs are symbolic spaces to bridge divides
among stakeholders, not to broaden them.

36 SNV BOAM, ‘Theory of Change for general VC development and ToC for pro-poor development
through Private Sector Development’. Undated document; SNV and IFAD (2010). ‘Brokering
Knowledge for scaling up Best Practices in Inclusive Market Access in East and Southern Africa.’
Report of a Conference held 23–24th June 2010, Nairobi, Kenya.
51

Consider a strategy vis-à-vis established dominant chain stakeholders in case they
significantly hinder necessary changes in the sector’s business environment. One option
is to start a process of scenario thinking about the future of the respective industry
sectors in Ethiopia. Scenarios for Ethiopia’s ‘pineapple sector in 2020’ or ‘dairy sector
in 2020’ could be developed as a tool for thinking creatively about common grounds
and the future with MSP-opposing stakeholders. Such a process could make
stakeholders realize that the continuation of a business-as-usual strategy may end up
in an ‘everybody is losing’ scenario, while several innovative ‘win-win’ or ‘no-lose’
paths may be discovered. If SNV BOAM would facilitate such a scenario-thinking
process, it should appreciate its independent position towards all stakeholders.

Lesson 11: Beware for supply-side elements in demand-driven approach

SNV has underwent a significant paradigm shift from a development NGO
supporting farmers and production increase towards an organization with a more
commercial approach based on the assumption that the private sector can become an
engine for development. SNV BOAM therefore proactively aims at a private
processor or exporter as “Chain Leader” who is also chairperson of the CG. The
support for such a leader is a relevant and important aspect of SNV BOAM’s
demand-driven approach in the CGs. However, the scope of value chain development
remains confined to the national borders of the host country. This element in its
private sector development program may hinder SNV BOAM in conceiving the
global market context of the local value chains and CG dynamics. For example,
honey and oilseeds are partly export commodities and therefore part of global value
chains. The lead firms in both chains are foreign retailers or processing companies
that have the market power to impose its quality standards on all suppliers upstream
in the value chain. In local chains, foreign companies may also play a more prominent
role in restructuring local supply chains when they get interested in local market
opportunities, for example in the case of dairy or pineapple.

Consider a more radical implementation of the paradigm shift towards facilitating the
private sector in its role as an engine of economic development. Local value chain
development initiatives require a global approach that identifies the main global
players, in respect for both the domestic and foreign markets. The identification of the
global lead multinationals or their first-tier suppliers may improve opportunities for a
knowledge transfer concerning international quality standards, may raise the interest
of the lead firm to source from Ethiopian producers, may raise interest among lead
multinationals to invest in local market development in Ethiopia, and may increase the
interest of Ethiopian producers to invest in branding activities in the markets of the
lead firms.

Lesson 12: Access barriers to affordable capital require closer investigation

The study shows that none of the four CGs have generated substantial effects that
make rural banks or buyers more willing to loan to farmers or SMEs. SNV BOAM
has proactively invited banks and MFIs to the meetings, but with little result. Most
Banks and MFIs abstained from participation in the meetings, and those who were

52
present were hardly more willing to loan. Apart from the funding of SNV BOAM
itself and apart from some encouraging developments from within the honey value
chain, there is little long-term improvement in the access to external capital, a key
condition for upgrading by value chain actors. How come? It is likely that causes for
the limited effects should be attributed to the general climate of doing business in
Ethiopia, which is beyond the scope of the CGs and the entire BOAM project.
Nevertheless, whatever the reasons may be, capital providers apparently doubt the
market opportunities for Ethiopian producers in the dairy, oil seeds, pineapple, and
honey sectors. Could this be an indication that the development of value chains for
local markets requires long-term, supply-oriented support in order to create a
demand?

Consider additional research on the barriers to capital and credit provision for SMEs
and smallholder farmers in the four sectors in the context of assumed market
opportunities of the four commodities.

53
7. Limitations
The inherent problem of evaluation research is how to attribute changes observed
to the intervention, in this case the multi-stakeholder platforms or CGs. This
problem was prominent since the CG approach was part of the far larger SNV
BOAM program. Especially when organisations already have established long term
relationships with SNV BOAM, the clear cut distinction between services provided
by SNV BOAM or through the CG is not easy. It was therefore crucial that we
remained aware on this challenge throughout all research phases, especially also
during the interviews when interviewees regularly mixed up CG activities with other
BOAM program elements.
Second, during the field work the researchers operated in close collaboration
with SNV BOAM and were partly dependent on SNV BOAM for their selection of
interviewees. Though this substantially facilitated logistics and minimized non-
response, such embeddedness holds the risk of losing independency in the eyes of
interviewees. Organisations might shy away from reflecting critically on the CGs as
they fear the continuity of their good relationship with SNV BOAM. To avoid bias,
stakeholders that had exited the CGs as a result of a conflict or those unwilling to
participate were explicitly incorporated in the interview sample. Furthermore, the
researchers constructed a list of relevant stakeholders in advance to ensure
independent sampling.
Third, we have not explicitly taken into account whether and how the
political context of Ethiopia has impacted on the way MSPs are organised and
functioning.
Finally, further research is necessary if one wishes to explain several
observed trends in the social network analysis, for instance on the underlying reasons
for the civil society being mainly involved in the honey CG and oilseeds CG and less
in the dairy and pineapple CG.

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8. References
Aleme, T.K., Maijers, W. & Posthumus, H. (2008). Mid Term Review SNV BOAM
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