What are AFIOs (or Agri-food Industry Organizations) and why are they important for sustainable market transformation?

Written by NewForesight Consultancy and originally published on LinkedIn

Introduction

NewForesight was commissioned by the Bill and Melinda Gates Foundation to conduct a study on Agri-Food Industry Organizations (AFIOs) and assess selected AFIOs in 3 countries: Nigeria, Tanzania and Ethiopia.

Despite their importance, there is limited evidence (both gray and scientific literature) on the contributions of these institutions. One of the contributions of this study, was to develop a framework to better define and understand AFIOs, together with a new lens on these market institutions as change agents of country-led Inclusive Agricultural Transformation (IAT) – or as we call it in NewForesight, sustainable market transformation.

What are AFIOs?

AFIOs are a heterogeneous set of member-based entities that integrate (vertically and horizontally) a broad group of value chain actors, represent the collective business interests of their members, and work to address market failures. They enhance the business environment and competitiveness of the sub-sector they operate in, while advancing the agenda of their members and the agri-food sector.

There are 4 principles that define AFIOs: member-centric, market-led, network-orientated, and policy-focused. Concretely, these are institutions that are known under different denominations. Some are branded as trade associations, while others are named business associations or business interest associations. AFIOs can also include organizations denominated as federations, unions, apex organizations, producer organizations, cooperatives, societies, chambers of commerce, boards, etc. This nomenclature usually depends on the characteristics of the AFIOs and the context (i.e., language, country history, and statutory framework).

Why are AFIOs important?

AFIOs are key market institutions to work with because:

●    AFIOs effectively integrate domestic market demand with producers and SMEs’ supply.

●    AFIOs actively promote and enforce sector regulations, grades, and standards. This can include supporting members on regulation and policy matters, as well as advocating governments for policy reforms favorable to the sub-sector.

●    AFIOs gather sector intelligence to proactively support service provision, policy reform, and market linkages. They provide market-level information at an aggregated level, while providing business intelligence to government and AFIO members.

●    AFIOs are service providers to key value chain actors, including producers, processors, and traders. Services can include providing training and mentorship of members to increase professionalization of operations and sub-sectors.

These functions make AFIOs a key partner for traders, exporters, service providers, governments, and organizations that work with smallholders and SMEs.

What are key features to consider when working with an AFIO?

AFIOs can be strategic partners to effectively reach out to smallholders and SMEs globally, as well as to work with local actors such as governments and development institutions. Key features that help understanding their potential for successful partnerships include:

●    Its defining characteristics: Who are its members and what does the organization do. Membership composition is relevant to determine the mission, mandate and functions the organization play as market facilitator, service provider, and advocate/representative for its members.

●    Its level of professionalism or how well equipped is the organization to function. This helps to understand how the organization operates, and which are the strengths and improvement areas where the AFIO can grow. We have used the SCOPEinsight methodology and tools to assess their professionalism with a standardized approach (learn more here).

●    Its strategic ambition. As any organization, AFIOs have a vision for themselves on how they would want to grow. Knowing this ambition is relevant to understand the vision that every AFIO has for the sector where it operates, and in consequence, work towards a common vision for the future.

Do you want to know more about AFIOs?

●    Read our report “Agri-Food Industry Organizations as a vehicle for Inclusive Agricultural Transformation” here.

●    Join us in the public webinar that will be hosted by AGRA next December 2nd at 3:30 CET/5:30 EAT. You can register here. 

●    Contact our expert Silvana Paniagua if you want to learn more about how AFIOs can be leveraged to create more sustainable sectors.

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