Partners for Advancing Agriculture ®

Achieving Scale and Sustainability of Market-based Development: Two Perspectives

Spring 2015

In July of 2014 the government of the Democratic Republic of Congo (DRC) announced a plan to create 20 agro-industrial parks. These parks will represent a key pillar of their $6 billion Agricultural Investment National Plan running through 2020. Included in these agro-industrial parks will be the formation of commercial anchor farms, training and financial support for small holder farmer groups, distribution of agricultural inputs, equipment, and irrigation technologies, building of grain storage facilities, and development of processing centers.  

The DRC has always been considered a potential African bread basket, rich in natural resources. With 80 million hectares of arable land, enough pasture land for 40 million head of cattle, rivers and lakes representing a potential of 700,000 tons of fish, and abundant rainfall, the DRC has the potential to serve as a key exporter in a region rapidly growing in food and feed demand. However this has not materialized as while the DRC was once a net exporter at independence, the government forecasts in 2014 agricultural imports of $1.5 billion with exports only $200 million.

While there are many reasons behind this massive agricultural gap, including political instability, lack of infrastructure and financing to name a few, this recent investment raises a greater question of what is the optimal strategy to transform an underperforming sector. After all, there are many agricultural technologies being deployed throughout parts of Africa today that are improving productivity but not reaching the DRC farmers.

At Context, we have a long history of working on the commercialization of technologies in agriculture, making it more productive, more efficient and more sustainable. In such complex development challenges as the DRC, both top-down and bottom-up perspectives are required to formulate a strategy that leverages the inherent interdependencies of two theories of change, technology-driven and cluster (network effect) approaches.

The technology-driven approach is commonly referenced within agricultural through examples of hybrid corn adoption in the US during the 1930s-1950s (and later GM corn) and more recently the rapid adoption of hermetically sealed bags (PICS) for grain in Africa.

The key component and foundation of this model is an attractive (or game changing in the above examples) technology, that is then enabled with the development of a market-like environment, a robust technology supply chain, and strong partners that drive commercialization through fostering an information ecosystem – the system supporting farmers in making informed decisions.

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The cluster approach, on the other hand, seeks to accelerate development and overcome constraints that no one single technology developer can effectively surmount through ensuring macro-level market enablers (e.g. infrastructure, regulatory framework, market-clearing mechanisms, etc.) are in place, co-locating complementary stakeholders and developing market literacy, as appropriate. The most referenced example of a cluster approach is Silicon Valley and the many innovation successes that have come out of that geographical technology cluster. While less widely known, there are agricultural successes as well, such as the development of the soybean sector in Mato Grosso, Brazil (1980s-1990s) and the Amul Dairy Cooperative in India (1940s, 1970s, 1980s). If the DRC can effectively organize cluster stakeholders and foster their relational dynamics, then the DRC will join these agro cluster success stories.

As urgency to accelerate agricultural sectors in the developing world intensifies, it will be critical to not only learn from past failures and successes, but to develop the best strategy for technology adoption best suited for local market and enabling environments. Context has the know-how and expertise to break down large complex challenges into actionable strategies.

Provided by Context Partner, Mark Nelson; Context Senior Associate, Robert Lowenthal; Context Consultant, Will Rogers.

References

Misser, Francois. DRC – Agro-industrial parks to address the food security challenge.  Southworld, July 1, 2014, François Misser

Ulimwengu, J. DRC Agricultural Business Parks Initiative. An Integrated Strategy to Unleash Economic Development and Address Food Insecurity in DRC and Beyond.

Matopoulos, A. et al. Exploring Clusters and their Value as Types of business networks in the agricultural sector. Operations Research.  An International Journal. Vol.5, No. 1 (2005), pp.9-19.

Galvez-Nogales, E. FAO. Agro-based Clusters in Developing Countries: Staying Competitive in a Globalizing Economy. Agricultural Management, Marketing and Finance Occasional Paper. 2010.

Sonka, S. et al. Case Study – PICS Project: Triple layer bags in Africa. Rockefeller Foundation. Forthcoming 2015.