Module 7 - Colombia: Productive Agribusiness/Farmer Partnerships

Liberalization of the economy, coupled with an overvalued peso and falling world prices for commodities, have led to fundamental changes in the composition of Colombia’s agricultural production. However, the rural population’s limited education and business skills, the high cost of and limited access to capital (particularly for smallholders), and the prevalence of rural violence have impeded smallholders’ ability to capitalize on these changes. The challenge facing the rural sector is to increase its competitiveness in a free market economy. The government’s strategy is to promote farming systems that combine both perennial crops (agroecological conditions permitting) with subsistence and annual crops and animal husbandry. This strategy is expected to allow farmers to reduce debt levels, diversify risk, and increase employment and incomes.

Project Objectives and Description

The Productive Partnerships Support Project seeks to establish economically viable and sustainable partnerships between agribusiness and organizations of small-scale producers, by providing an integrated package of incentives and assistance. Demand-driven, sustainable, productive partnerships are expected to generate income and employment opportunities for participating small-scale farmers. A “productive partnership” is any collaborative arrangement between a small-farmer organization and an agribusiness that reduces technical, commercial, financial, and/or social risks; increases productivity; and produces income gains in a value chain in ways that benefit all parties.

Project implementation is based on three principles: (1) the (limited) responsibilities of the public sector are specifically defined; (2) the execution of project activities is completely decentralized and transferred to the private sector; and (3) participation of stakeholders is structured through a clear distribution of roles and responsibilities, based on the recognized competencies and capacities of each party. Operational procedures are designed to provide transparent rules, clear eligibility criteria for identification of beneficiaries and allocation of resources, an efficient flow of funds, and adequate supervision.

Participation of relevant stakeholders at the strategic level of the project is ensured by including representatives of the financial sector, agricultural producer organizations, and small-farmer organizations in the National Technical Committee, which ensures that the project is implemented consistently with the agreed conceptual and technical design. A Coordination Group (consisting of a team of dedicated professionals with relevant disciplinary backgrounds) reporting to the Committee conducts a public information campaign, selects productive partnership ideas (which are presented jointly by the prospective participants), arranges the contracting of Technical Assistance Providers to facilitate preparation and implementation of productive partnerships, and establishes agreements with partnership representatives for administration of incentive programs.