Service Delivery Models: Insights for continuous improvement and farm impact

The insights from this report: Service Delivery Models- Insights for continuous improvement and farm impact, signify a key milestone on the journey to create cost-effective and scalable solutions, that allow smallholders to grow and sustain their businesses.

Over the past years IDH has been partnering to deliver services to smallholder farmers for improving their productivity and livelihoods. In doing so, we seek to prototype service delivery models (SDMs) which not only create real impact for farmers, but that also make commercial business sense. However, we found that there is barely any “science” on this. There is limited data and evidence on what works and what doesn’t, on cost structures, on funding models, on levers for driving cost-effective impact, etc.

Therefore, we initiated a systematic, data-driven approach to understanding and improving SDMs with ten partners in the coffee and cocoa sectors. This report presents the overall findings of these case analyses. It provides data-driven insights on topics such as farmer profitability and value creation, service optimization and financial structures of SDMs. With the report we aim to contribute to a more professional business management approach to smallholder service delivery.

Some of the key findings from the report include:

  1. Farmer profitability as company driver – companies have shifted from focusing on farmer productivity to farmer profitability. A key component of this, is taking into account the overall farm system & cash flow needs of farmers when designing services.
  2. Farmers as clients – companies see smallholder farmers as “clients” of their service delivery model instead as sole beneficiaries. Farmer segmentation and tailor made service supply to specific farmer segments are seen as ways to optimize service supply to clients.
  3. Long term investments are needed – companies increasingly become aware that without long term investments in rejuvenation in coffee and cocoa their services will not create long term positive impact at farmer level.
  4. Models for financially viable service delivery –companies see the need to understand the degree to which services and types of farmers are subsidized by external funding and how revenue mechanisms make (parts of) their services commercially viable.
  5. Adding value to service delivery – following the analyses, companies see the value of either adding new services to the model, adjust delivery mechanism, or scaling services that have proven effective.

We hope that you enjoy reading and that it inspires you to innovate. If you have ideas or suggestions, or would like to get involved in this topic, please contact us through Iris van der Velden (vandervelden@idhsustainabletrade.com).

 

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