In agri-processing, start with the customer, not the crop

When a donor or DFI programme has an agri-processing workstream, the terms of reference usually make the sector clear enough. Who should run it is less clear. The obvious candidates are agronomists and value-chain specialists, and for many programmes that is right. But when the workstream sits inside a business that processes and sells, the problem in front of you is often not in the field at all.

The problem

The businesses at the far end of these mandates tend to look alike. The owner knows his crop, or his milk, or his product, better than anyone. He has built the supply base and the processing capacity. What he has not done is work out how to sell more of what he makes, at a price that pays, or build a company that can carry the extra volume when he does. Scaling is where he gets stuck.

That is a commercial problem, not a technical one. It needs someone who can sit with the owner, whoever runs production and whoever does the selling, and work out how the business makes money and where it loses it. For whoever staffs the workstream, that is a different profile from the one the sector heading suggests.

What I have seen

For the past seven years I have worked inside small and medium businesses in Africa, Asia and South America, most of it as a senior expert for PUM Netherlands. Several of those assignments were in agriculture and agri-processing, and in none of them was growing the thing that needed fixing.

In Zimbabwe, a chilli business drawing on a large outgrower network needed an operating model and an implementation plan for processing and export.

In Bangladesh, the work was a demand-led supply chain linking Nayakrishi farmers to markets in Dhaka. The shift was from farmers pushing whatever they had towards the city, to planning supply around what the market wanted.

In Indonesia, a dairy cooperative needed a recovery plan; implementation contributed to a 30% increase in output over three years. In Kenya, a soil-analysis company needed a growth plan and support putting it into practice.

Different products and different countries, but the same pattern. And these markets do not behave like the mature ones in the West. Supply is unreliable, credit is scarce or ruinous, the rules move, good people are hard to keep, and the family usually sits inside the business. A plan that ignores that does not survive its first season.

Indonesia and Zimbabwe both carried on past the original scope, through remote coaching and mentoring. That is where a plan turns into an implemented one.

What I would do about it

If I were running that workstream, I would start with the numbers and the customer, rather than the crop. Who is buying, what do they want, and which customer segments generate the healthiest margins? It is very important that the business focuses on serving those segments, and that the rest of the plan is built around them. From there I would work out how the company makes money and where it loses it, across the whole value chain from supplier to customer. Looking at the whole chain rather than one function is usually where the step change comes from.

Then I would build the plan with the management team, so that it is theirs rather than mine, and turn it into something with owners and a sequence. Then I would stay alongside them while they deliver it. I coach as much as I advise.

I will say what needs to improve in a product. I will not tell anyone how to grow it, or how to configure the equipment that processes it. In agriculture that means commercialisation, market access and processing. If the programme needs an agronomist as well, it needs one, and I would rather say so at the start than find out halfway through.

The pattern suits how these mandates run: prepare remotely, go in for a defined block, follow up online. I work under the lead firm's brand, on its mandate and to its scope. And I stay until the plan is implemented, not until the report is filed.

If you have an agri-processing workstream coming up, send me the country and the format your CVs go in, and I'll send you mine, cut to fit.