Advisory on Baseline and Target Value Setting, and Annual Data Collection on the Development of Gross Margins and Employment in Small Agricultural Enterprises in the Banana and Cacao Supply Chains in Ecuador
Climate, Environment and Biodiversity
Client: GIZ
Period: 06.2022-01.2025
Country: Ecuador
Context
The global program “Sustainability and Value Added in Agricultural Supply Chains” is part of the special initiative “ONE WORLD – No Hunger” (SEWOH). On behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ), the program promotes the sustainability of 7 selected agricultural supply chains in 11 partner countries.
Agricultural commodities like coffee, cocoa, natural rubber, palm oil, cotton, tea, soybean, and bananas play an important role for rural development in many developing and emerging countries where they form the basis for the life of millions of households. However, their production and processing are accompanied by numerous ecological, economic and social challenges. Often supplied as unprocessed raw material into global supply chains, limited value is added in producing countries. Many farming households are struggling to meet their basic needs and invest in sustainable production practices. Furthermore, these commodities are often perceived as drivers of deforestation and forest degradation.
With consuming markets and multinational companies strengthening their efforts to eliminate deforestation and human rights abuses from the supply chain, sustainability of raw material is becoming a precondition for market access. To address these challenges the program implements the project Sustainable Agricultural Supply Chains (Cadenas Sostenibles) in Ecuador.
Project description
The Sustainable Agricultural Supply Chains Project in Ecuador, Cadenas Sostenibles, aims to improve the access of small-scale producers to the global market for sustainably produced agricultural commodities. It seeks therefore to improve the overall sustainability of production of the selected commodities by sustainably increasing productivity, slowing down commodity driven deforestation and promoting business linkages for more sustainable purchase practices of lead companies. Important objectives of the global program and its projects are among others the improvement of productivity, income and employment. To measure the impact of interventions on program indicators two theory-based approach are employed: (i) Gross Margins as a proxy method to calculate income and yield increase, and (ii) Donald Kirkpatrick’s approach to evaluate training effectiveness and thus effects on employment.
After piloting activities in 2020, implementation of the project started in 01/2021 in the banana value chain. The project focuses on the province of El Oro, one of the three regions with the highest banana production in Ecuador bringing together the largest number of small producers (farms with less than 30 ha). From 01/2022 on, the project will additionally support small cacao producers in the province of Esmeraldas. Cacao production in Esmeraldas is characterized by small scaled production systems, a high, cacao induced rate of deforestation.
The political counterpart of the project is the Ministry of Agriculture and Livestock (MAG) and its aligned institutions, the National Institute of Agricultural Research (INIAP) and the Agency for Phytosanitary and Zoosanitary Regulation and Control (Agrocalidad).
Services
The contractor provides advisory contributing to the project objective along the following project phases with its key tasks:
- Phase 1 (Inception): The consultancy team to develop an approach and advise GIZ on adaption needs of the proposed methodologies (Proxy and Kirkpatrick) and definition of proxy for the data collection. Furthermore, collection and assessment of secondary data for the banana and cacao supply chain.
- Phase 2 (Data Collection): Collection of secondary and primary data (conduct expert interviews, focal groups in line with the assessment approach developed).
- Phase 3 (Baseline and Target Values): Validation of the methodological approach results after phases 1 and 2. A data validation workshop to present the baseline study (including inputs for the achievement of target values).
- Phase 4 (Annual Data Collection and Target Value achievement): After having trialed and adapted the methodology/questionnaires for conducting the base line on gross margin and employment development, repetition of the data collection on an annual base to identify developments regarding productivity, income and employment in the proxy farms. Provide continuous advice on how to achieve the targeted values.