There is much hype about public-private partnerships (PPPs) as the panacea for integrating developing farmers into mainstream value chains. Unfortunately, there are not enough instances where such PPPs have sustainably secured developing farmers in these value chains in South Africa. The common experience is that the PPPs do not take off; where they have, they are too short-lived to have a meaningful impact; and, they are often perceived not to be realistic enough for broader support from value chain actors. As a result many have fizzled out during conception or the moment the main driver steps aside.
Despite the limited successes there is strong belief that PPPs are an important tool for improving economic inclusiveness. As such, some of us in the agriculture space have been punting them for the longest of time through proposals such as commodity-based extension and mentorship, and blended finance for agriculture.
That said, there are a number of reasons why successes have been limited. One of them is trust issues amongst agri-sector role players. This is an element agri-sector role players generally acknowledge that it needs to be worked on. The response to the current covid-19 pandemic is helping the country to build some measure of trust, and will leave a track of useful lessons to build upon.
Trust is a crucial factor that contributes to the successful implementation of PPPs projects. By description it is a, “positive expectations about another’s motives with respect to oneself in situations entailing risks”. It is the feeling of certainty that the partner is going to behave according to your expectations and not let you down. It reduces uncertainty and the fear of opportunism amongst partners, and enhances cooperative behaviour, contributing to higher partner satisfaction and partnership efficacy.
Furthermore, “trust is one essential element of a strategic partnership that cannot be written into a contract.” It minimises the effort required for contract negotiation and monitoring, and as such reduces transaction costs as well as the subjective risk of entering into a relationship. Trust is not static but built over time; it is earned. Sadly, common practice is that suspicion rather than trust is a starting point of a collaboration.
To build trust, partnership experts suggest starting with clearly defined, realistic and mutually agreed upon objectives and responsibilities. The aims should be modest, practical and achievable. At the end of the negotiation process, a certain level of trust needs to be established for parties to actually proceed to the final step, which is partnership formation. The lower the level of trust, the stricter the memorandum of agreement that would be formulated by the partners. The higher the level of trust, the fewer the perceived risks that should be mitigated; and hence the more likely it is that negotiations will run smoothly. Intending partners are encouraged to establish a certain level of trust and then take a risk of the partnership. Success in implementing the initial programme would lay a foundation for more ambitious collaboration.
In most agri-circles we get stuck in discussing the concept and rarely progress to the contracting stage, probably because the negotiating parties are uncertain about each other’s motives. A number of ways of getting past this uncertainty include engaging an independent broker that is trusted by the all intending partners to facilitate the partnership. A compelling strategic intent with clear definition of what is in it for each partner should be established. Short term, realistic and achievable goals should be set and the parties be open to engagement throughout the partnership formation process. It is advisable to have an exit strategy in case the partnership does not work. But a key step is reaching a level of agreement where the partnership can actually start delivering something. As the successes build, trust will grow.
Our common strategic intent no doubt is an inclusive and growing South African agriculture sector. As in the fight against covid-19 we need to trust each other enough that we are indeed all working towards this common purpose, and that the more we cooperate towards achieving it, the higher the chances of success.
Article by: Dr Langelihle Simela
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of Mzansi Agriculture Talk.