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The role of small and medium agrifood enterprises in food systems transformation - The case of rice processors in Senegal











Ilie, E.T. & Kelly, S. 2021. The role of small and medium agrifood enterprises in food systems transformation: the case of rice processors in Senegal. FAO Agricultural Development Economics Technical Study No. 10. Rome, FAO.





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    This study looks at the business models of small and medium sized rice processors in Kenya in order to better understand the policy and technical support they need to grow and fulfil their role in agrifood systems transformation. More specifically, by employing semi-structured interviews with Kenyan rice millers, the technical study identifies challenges in their day-to-day business activities, including procurement, inbound and outbound logistics, in-house operations, financing, and human resources management. Additionally, the publication looks at opportunities for improving the business enabling environment in which these enterprises operate, providing a set of policy options to foster their role. The methodology cross fertilises different disciplinary perspectives in order to gather evidence for formulating policy in a way that integrates several policy fields and cross-cutting issues such as food safety, quality and nutrition; farmer-market linkages; decent rural employment and gender equality; or rural investment. The paper showcases how small and medium agrifood manufacturers respond to the business enabling environment and also contribute to local development from multiple angles.
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    Policies and institutions shaping the business enabling environment of agrifood processors in Senegal
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    Small and medium agrifood enterprises (SMAEs) such as processors, transporters and other service providers, play an important role in achieving sustainable development objectives. For instance, they connect farmers to urban markets; make significant investments in rural areas; provide employment to vulnerable populations such as women and youth; and propel the modernization of agrifood value chains. In sub-Saharan Africa, where agriculture comprises 53 percent of total employment and 15.5 percent of gross domestic product, supporting SMAEs can have great implications for pro-poor growth and rural transformation. To support SMAEs in fulfilling their potential, the Food and Agriculture Organization of the United Nations (FAO) has been dedicating research to better understand their policy and technical needs. This publication is such output and aims to provide an assessment of the policy and institutional framework in Senegal shaping the business models of small and medium agrifood processors. This systemic appraisal of Senegal’s business enabling environment for SMAEs was cross-fertilized with an analysis of the business models of three rice millers, resulting in a related FAO technical study 'The role of small and medium agrifood enterprises in food systems transformation: the case of rice processors in Senegal'. The analyses were carried out using a multidisciplinary agrifood systems approach, which looks at policies and institutions related to procurement, operations, logistics, finance, marketing and sales, human resources, and strategic partnerships. Due to its well-articulated policy documents and the extensive research on various aspects of the business enabling environment conducted in the country, Senegal represents a compelling case to illustrate the links between policies and the activities of agrifood processors.
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    For the most part, small food manufacturers were allowed to remain open during the COVID-19 crisis to ensure food security, but their operations were nonetheless hampered from a range of perspectives. The aim of this report is, first, to analyse how small food manufacturers were impacted by the fall-out from the COVID-19 pandemic and the effects of government measures enacted to halt its spread, and second, to provide recommendations that contribute to the recovery of the small food processing sub-sector in sub-Saharan Africa (SSA). In so doing, the study identifies measures that can mitigate the disruptive impacts on agri-food manufacturers and which also contribute to building a resilient business environment for small and medium enterprises (SMEs) across agrifood value chains. It also provides data to inform the process of structural reforms and systems change needed at the national level of targeted countries.

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