Horizontal Linkages. Make a greater effort to create horizontal linkages among the microentrepreneur beneficiaries of the programme with a view to achieving better synergy among peers and adding to the reservoir of business knowledge that they have developed together. The organization of meetings, thematic workshops and study visits might be an efficient means to that end. It might also be worthwhile to consider creating a rural enterprise observatory, with the support of IICA, given its experience in setting up other observatories.
Horizontal Linkages. During the 3rd quarter of FY 2009, PRODEL anchor firms and their producers explored and established connections with their program stakeholders to develop horizontal linkages along value chains. One creative linkage involves a leadership council, dubbed the Consortium 8, which was formed to increase sales for member entities through the hire of a joint sales manager. The Technological Institute of Monterrey Director for Latin America, Xxxxxxxxx Xxxx, has been named as President for the Consortium. Other achievements during the quarter include: AAPPSME and Jugo Facil team up to produce and market Horchata in bottled liquid form to be offered in the domestic Ecuadorian marketplace. Through its biocatalyzation laboratory, AACRI Rio Intag supports productivity improvements for fellow anchor firms and value chain members through organic pest and disease control technology. A commercial alliance among Café Xxxxx, Café Xxxxxxxx and ESCOFFEE was formed to develop local and potential export market activities. Xxx Xx Xxxxxxx and ESCOFFEE signed a commercial agreement for the joint storage, processing and sale of Robusta coffee. Contacts have been made for distributing the Inaquinua brand of Xxxxxx Xxxxxx Industrial Agriculture Company (Inagrofa) in the southern border region of Ecuador through support from the AAPPSME marketing director. PRODEL dairy anchor firm Mondel established alliances with value chain stakeholders to include the State Polytechnic University of Carchi (UPEC), the Ministry of Agriculture, Livestock & Fisheries (MAGAP), Ecuadorian Center for Agricultural Services (CESA), the Diocese of Tulcan, the Italian –Ecuadorian Fund, the Carchi Provincial Council, the Xxxxxxx Salesian Family Foundation (Gruppo Salinsa), and Cereales Andinos to strengthen sector linkages among the various organizations. A solidarity-based alliance was developed among Gruppo Xxxxxxx, Xxxxxx and the Salesian Family Foundation to work in rural community economic development initiatives related to the dairy industry.
Horizontal Linkages. Although horizontal cooperation should be fostered at every level where a joint constraint arises, MSE cooperation is often required for MSE to contribute to and benefit from competitive industries. MSE cooperation can take the form of informal or formal groupings of MSEs, as well as networks of MSEs that are managed through a third party (e.g., lead firm, broker, trader, etc.). The key to gaining value from horizontal cooperation is the recognition of a joint constraint or constraints that require joint action. The type of intervention approach will be dependent on the end result from the cooperation and the unique cultural and market context in which the MSEs operate. Cooperation at trader and lead firm level needs to focus on issues of joint constraint. Cooperation that limits internal competition (i.e., price fixing, collusion on regional control) should be limited through increased competition through alternative links. PROFIT’s horizontal linkages activities will include: • Assess the selected industries to identify the constraints and opportunities related to horizontal cooperation • Facilitate cooperation that helps MSEs to deliver on quality and quantity requirements; • Facilitate cooperation that reduces transaction costs by aggregating logistics requirements and reducing per unit costs of inputs by bulk purchases; • Facilitate cooperation that fosters sharing of market information, establishes social capital based around shared market interests, generates learning, and allows for functional upgrading (i.e., moving to a higher value added function along the value chain). • Facilitate cooperation that fosters MSEs to meet shared commitments to lead firms due to social pressure, especially if the relationships include a range of embedded services and contracting mechanisms that reduce market risk. • Facilitate cooperation that fosters MSEs to develop the volume and bargaining power needed to establish a more mutually dependent relationship (i.e., win-win) with lead firms. PROFIT intends to broaden the definition of the producer group to include any group of producers that are seen to be cooperating to improve their livelihood, whether external linkage dependent or independent, formally or informally organized. The key is whether they are effectively addressing joint constraints leading to improved incomes and are economically rather than socially orientated. It is the addressing of these cooperation issues within the selected value chains that the ...
