What Happens When Competitors Collaborate?
In Malawi Christian Aid has found that a common purpose – realising the potential of the rice and pigeon pea sectors – has brought competitors together with interesting results.
You may wonder why competing smallholder co-operatives, buyers, traders, processors and exporters would join forces? Well, ultimately they believed it’s better to be competitors in a growing market than a shrinking one, and that by working together, they could address barriers preventing market growth. That, and if all the rival businesses in your sector agreed to meet, you really don’t want to be the only one not in the room.
You may also wonder what all of this has to do with an NGO. Christian Aid has been engaging with the rice and pigeon pea markets in Malawi for many years so we were able to act as a “market facilitator” leveraging our trusted connections in the sectors to bring together stakeholders to discuss the opportunities and challenges they are facing.
And when the stakeholders in the rice market met they realised that together they had a stronger voice and the power to address sector wide issues - like pricing, or export bans – and that’s how the National Rice Platform of Malawi was born.
So far this all sounds quite idyllic - everyone putting aside their interests and differences for a common goal? The reality is slightly more challenging. Setting up something like the National Rice Platform - which is now recognised by the Malawi government as a lead voice on the development of the rice sector – was a challenging endeavour.
For example, different members had different views on how it should be governed and managed– it took time, and excellent negotiation skills to help the stakeholders decide a model of governance and priority focus areas. It also took bold moves to ensure that the Platform was protected from undue influence – for example everyone agreed individuals in influential positions in the sector should not be allowed to be elected to the leadership committee.
There are also challenges over legitimacy – what is Christian Aid’s motive and interest? No one is completely neutral and after all, our primary aim is for this process to benefit smallholders so why trust us? By approaching stakeholders in the rice sector in partnership with the Grain Traders and Processors Association (GTPA), a respected actor in the rice market, it helped bring other stakeholders in the sector on board.
So you can get competitors in the room, but how do you get them to move from observing to engaging? Getting real buy in, addressing suspicions and pre-conceptions, takes an investment of time in relationships or unspoken views can de-rail the whole venture. There was a tipping point when stakeholders went from observing to fully engaging - this was when they realised that only together could they address sector wide issues which were shaped by national policies. In short, they were more influential collaborating, than competing.
And that brings us nicely to the role of the government. The Malawi government actively engage with the National Rice Platform and are keen to support it as it gives them direct access to many voices from across the sector - this results in more informed policy decisions. It is challenging however to manage so many key stakeholders – you have to work through negative pre-conceptions on all sides (e.g. smallholders as disorganised, big business as bad, politicians as not delivering), these are not small issues to overcome.
Finally, what about the smallholders? Our primary interest is unashamedly that this process benefits them. So much investment is required in building confidence to speak to a room full of “big men”, to ensuring smallholders enter the forum seeing themselves as equal stakeholders in their sector. Electing farmer representatives must be democratic – these representatives must then be equipped to voice the concerns of the 18,000 famers they represent.
Competitor collaboration as a solution to addressing market wide issues isn’t easy, but it does yield results. We have created a way for marginalised farmers to directly influence the future of their sector. We have seen supply chain issues being resolved – commodity exchanges now store and trade pigeon peas for farmers – no more selling at low prices just because they have no choice. We are looking forward to seeing the same successes in policy change on rice as we’ve seen in the pigeon pea sector in Malawi where farmers have successfully achieved a change to a product export ban opening up a new market to 620,000 farmers.
So back to the question what does all this have to do with an NGO? My answer would be it’s about us being smarter with the resources we have in order to increase the scale of our impact. Leveraging our local connections and trust empower market stakeholders to understand and resolve market challenges and opportunities.. There are 42,000 farmers in the rice sector and a policy change, secured by the National Rice Platform, should benefit each and every one of them. Facilitating competitor collaboration is clearly one way NGOs can harness the power of the private sector to address poverty.