Leveraging a hybrid processing model to link artisanal processors to global food value chains
Julius Gatune (African Centre for Economic Transformation)
Paper short abstract:
Demand for "African foods" in the west has grown. The larger artisanal processing sector is good at sourcing supply but cannot meet quality. A processing model where artisanal processors produces a bulk product. The SME packages, does quality control allows artisanal processor to link to GVCs.
Paper long abstract:
Demand for "African foods" in the west has grown with the diaspora population. However getting reliable suppliers has been a challenges. The food manufacturing is dominated artisanal processors who cannot meet quality standards. All the same, a number of SMEs with needed resources to produce a product that meets food safety and quality standards have entered the market and formalize the processing. However, the SME suffer from supply challenges. Getting consistent supply and the right price and quality. Contracting models are prone to side-selling. On the other hand, Artisanal processors have low capacity to meet quality standards but since many artisanal processors are also farmers and also rural based, they have largely solved the supply challenge. The two sectors have synergy that can be exploited through business model innovation. One model that has seen rural processors in Ghana have their products sold in Europe is a hybrid processing model where artisanal processor sell a bulk product to an SME. The SME then packages and does business development for European markets. More crucially the SME also provides quality assurance support to artisanal processor ensuring product meets expected standards. This hybrid processing model then provides an opportunity for linking artisanal food processors to global value chains. AS SMEs tend to be male dominated (due to significant resources needed) and artisanal processing is dominated by women (who established the sector), this model also makes the value chains more inclusive.
- Inclusive development?