Tools for Mending Weak and Fractured Value Chains

Thanks for the comment.  Although WE knew that good cooperatives and associations required strong leadership and financial stability, which usually meant some sort of dues-paying mechanism in exchange for services, due to the distrust between Cambodians, we could never get the members of working groups, coops or associations to make regular contributions to a "management fund" even when we they had good management.  We worked with an ILO project that promote savings groups and the idea was well accepted by the working groups and others.  They used the interest earned from the savings groups to fund activities for the members - visits to vendors in other provinces, training in Artificial Insemination and other such skills.  We have actually stopped promoting savings groups because of governance issues.  But the experience of having members put money together cooperatively has resulted in cooperative and association members now being willing to contribute "dues" regularly to keep help defray the costs of operations...and this  has been independent of the savings groups.  So the savings groups served the purpose of increasing trust and willingness.  But that increased trust and willingness requires that leadership also provides services. When the two are combined, it is sustainable.  When it isn't, the coop or association ends.  Savings groups require a heavy dose of oversight and good management.

Thanks for the good question.  MSME 1, was a three year, $5 million project started in 2005 that worked in three very poor and one moderately poor provinces.  We worked in swine, aquaculture, and clay tiles.  Due to a legal restriction, we could not work with government officers for the first two years, which inhibited results of sustainability.  MSME 2/BEE, was the follow on that began in 2008.  it worked in 17 provinces and with nine value chains - swine, aquaculture, clay tile, safe piped drinking water, sanitation, honey, resin, eco tourism, and garments.  Before beginning any activity the MSME team considered sustainability.  Relationships are sustainable across the supply chain.  The working groups, cooperatives, and associations are sustainable because people now pay dues and receive services.  The cross provincial and international missions are, surprisingly, sustainable.  We've observed many examples of firms who have self financed additional overseas missions and purchased technical consultants to come to Cambodia.  Private public dialog meetings are sustainable because they are led by the private sector institutions such as cooperatives and associations, or by government officers who already have meeting facilities and, as a normal part of their business practices or official duties interact with the other sectors. The radio talk shows are sustainable because they have a broad audience of over 2 million listeners, which will attract advertising dollars.  And the trade fairs are sustainable because there are now several large commercial enterprises that promote these events for a profit. 

But not everything we did in the form of activities was intended to be sustainable.  For example.

The strategic communications training was not sustainable; it was a one off event performed four times.  It is probably too expensive to be replicated by the private sector, but now  that many business persons have confidence and relationships with government officers, it has served its purpose.

But the key to economic growth, the business relationships and good governance are in place.  We see no reason why the growth of the economy and civil organizations will not continue.  And we see no reason to believe the government officers will fall back to a command and control form of management. 

Come visit the project before July 31 and observe for yourself.  You can ride with the teams, ask questions, and make your own judgements.  Our Cambodian team would love to show you their good work.

This is a complex answer, but i'll try to simplify it.  The dynamics of pork are feed, breed and speed. Starting with Feed; Cambodia once had a thriving feed industry, but it was decimated by Thai competitors such as - I'll just make up an acronym, CP, that quite literally put everyone out of business by depressing the prices long enough that no one could compete.  Once the Cambodian competition was removed, prices were increased and the feed business was profitable, for CP.  But the high cost of feed made raising pigs too expensive for Cambodian farmers.  The MSME Project worked with firms that sold small grinders and commodity dealers to encourage investment in community-scale feed mills.  Using local Cambodian products, these feed mills could produce feed competitively to CP, assuming CP did not initiate uncompetitive practices.  This lower cost feed could reduce the cost of swine raising  by 20-40%.  Now Breed. Government extension services in Thailand and Vietnam invested heavily in higher quality lean meat swine beeds.  After visiting the US on an MSME cost-shared mission, one Cambodian entrepreneur invested nearly $10 million to build a hi-quality breeding firm.  He imported breeds from Britain and also raised piglets for sale.  MSME facilitated several visits to the facility.  That investment was combined with a resurgence in the art of Artificial Insemination, trainings for which MSME facilitated with leading service suppliers.  With high quality, low cost local feeds combined with high quality, fast growing swine varieties, Cambodian raisers can now produce at prices competitive to imports.  The only problem occurs when the political elite establish self serving monopolies for themselves to control imports from Thailand and Vietnam, or when diseases break out in Vietnam, and farmers and traders "dump" pigs on the Cambodian market.  The political elite can avoid all taxation, inspections, and road taxes, while Cambodia raisers cannot avoid them.  If Thai or Vietnamese pigs enter Cambodia on a level playing field of inspection and taxation, Cambodia pigs are now competitive.  It's a success story of the project's faciliatation services.  The industry is set to go it without any further support from MSME.  In recent months, the MSME team has encouraged local departments of agriculture to faciliatate training - through input suppliers - on a free training (embedded price) manner, must like the MSME Project has operated for several years.  This Private-Public partnership will allow the industry to continue to be introduced to new medicines, vaccines, and production practices to keep productivity improving, and production costs to keep being reduced.