|Food Chain No. 16 - November 1995 (ITDG, 1995, 16 p.)|
In this issue you will read an article about a successful oil processing project in Zimbabwe. We thought that readers might be interested to hear more about some of the wider lessons learnt during this project and to consider how our lessons compare with their own.
The appropriate scale of technology is important and it should have sufficient production capacity to ensure a commercially viable enterprise, and preferably be capable of generating financial returns substantial enough to bring real and sustainable improvements to the quality of life. This has implications for manual technologies which are introduced only for reasons of simplicity or affordability.
Gross changes in agricultural policy and pricing mechanisms can rapidly make manual technologies commercially nonviable, as they do not have the production capacity to cope. An example is cited in the article of the experience of the manual screw press in Malawi. When we became interested in transferring this same technology to Zimbabwe, it was found to be only marginally viable; and was subsequently made non-viable by rapid increases in groundnut prices caused by the 1991-2 drought.
Provided that basic commercial viability issues are met, it is important that as wide a range of technology options as possible is offered. This will allow for differing levels of investments, business management, marketing experience and personal preferences. While the programme in Zimbabwe primarily promotes the Tinytech technology as a viable solution for decentralized oilseed processing, it also provides information on four other oil processing technologies which are available.
It is an all too common cry, particularly from those users of imported technologies, that business is periodically constrained while the delivery of a spare part or component from overseas is awaited. In the introduction of a new technology like the Tinytech to Zimbabwe, it is important to consider the establishment of support structures. Technology users need to be provided with local access to technical support, repairs and spare parts. The establishment of such a support structure is also important in that it can create much needed linkages and support with other sectors of rural small-business activity, e.g. informal engineering workshops.
As small rural businesses often suffer from the problem of being invisible, isolated and with a lack of representation and market intelligence, another support is the establishment of collective groupings of manufacturers or trade associations.
A NEUTRAL FACTOR
It sometimes appears that emergent business people consider the technology they are using as 'the goose that lays the golden egg' - that is it will be profitable irrespective of how it is used.
Provided a technology is viable and sustainable, once a sufficiently large number of enterprises become established using that technology, it becomes possible to see that the particular technology concerned is often a neutral factor in the subsequent success or failure of the enterprise. From our experience, it would appear that other factors such as form of ownership, business management, marketing expertise and the location of the enterprise are often more critical areas than the technology itself.
This is a well known problem of small enterprises. In the introduction of a new technology, it is often tempting to support would-be technology users with access to that technology on credit terms. Indeed, in the pilot phase of the project, access to the Tinytech was made on credit terms to the initial four entrepreneurs in an effort to share the risks of a new venture.
Subsequent experience showed that access to credit did not prevent two of the four entrepreneurs from failing. Provision of credit on these terms suffers from a basic irony - how does one recover debts from a small enterprise struggling to survive without threatening its survival? We have now ceased to make technologies available on credit terms. Instead we have concentrated on providing emergent business people with the information - technical briefs, feasibility studies, profit and loss and cash flow forecasts - with which they can produce a business plan and be provided with an improved chance of accessing the necessary loan from the financial institutions.
The existence of a market for decentralized agro or food processing products is of paramount importance. Low levels - or indeed the lack - of disposable rural incomes inhibit the proliferation and range of commercially viable opportunities A guaranteed consistent supply of raw materials is also essential to the success of a small-scale enterprise A glut of produce, e.g. tomatoes or fruits, is not sufficient justification for the establishment of a rural agro or food processing enterprise. Opportunities need to be market led.
After working with a collaborating institution during the pilot phase of the project, the dissemination phase of the Tinytech project took a more direct approach - programme staff working directly with ´the emergent entrepreneurs. This direct approach paid dividends, increasing our knowledge and awareness of the problems facing emergent entrepreneurs.
The direct approach is not without problems however, and it is necessary with most entrepreneurs to establish terms of reference, if the entrepreneur is to be unsubsidized and independent. Requests for the programme to assist with incidental transport, or to make costly support visits to rectify equipment problems caused by lack of maintenance are best politely refused, or if undertaken then charged at the going rates. It is necessary at the outset to have a clearly defined agreement detailing the respective roles and inputs of the entrepreneur and the programme or agency, and to enforce that agreement if it proves necessary.