Project Title

Promoting Integration of SMEs into Agribusiness Global Value Chains 

Project Year

2015   

Project Number

CTI 11 2015A 

Project Session

Session 2   

Project Type

Standard 

Project Status

Completed Project   
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Project No.

CTI 11 2015A 

Project Title

Promoting Integration of SMEs into Agribusiness Global Value Chains 

Project Status

Completed Project 

Publication (if any)

 

Fund Account

APEC Support Fund 

Sub-fund

ASF: General Fund 

Project Year

2015 

Project Session

Session 2 

APEC Funding

117,366 

Co-funding Amount

103,917 

Total Project Value

221,283 

Sponsoring Forum

Committee on Trade and Investment (CTI) 

Topics

Trade Facilitation 

Committee

Committee on Trade and Investment (CTI) 

Other Fora Involved

 

Other Non-APEC Stakeholders Involved

 

Proposing Economy(ies)

Thailand 

Co-Sponsoring Economies

Australia; Japan; Korea; New Zealand; Peru; United States; Viet Nam 

Expected Start Date

01/11/2015 

Expected Completion Date

31/05/2016 

Project Proponent Name 1

Kridipak Mongkolyuth (new PO wef 11 February 2016) 

Job Title 1

Not Applicable 

Organization 1

Bureau of America, Pacific and International Organisations, Department of Trade Negotiations 

Postal Address 1

Not Applicable 

Telephone 1

66-2 5077407 

Fax 1

66-2 5475616 

Email 1

kridipakm@dtn.go.th; apec.deskdtn@gmail.com 

Project Proponent Name 2

Not Applicable 

Job Title 2

Not Applicable 

Organization 2

Not Applicable 

Postal Address 2

Not Applicable 

Telephone 2

Not Applicable 

Fax 2

Not Applicable 

Email 2

Not Applicable 

Declaration

Kridipak Mongkolyuth 

Project Summary

Promoting the integration of SMEs into agribusiness GVCs is necessary for APEC to achieve its mission of promoting balanced and inclusive growth through trade and investment liberalization. This project arranges the APEC agribusiness GVC workshop in Thailand to facilitate the collaboration and partnership among diverse stakeholders, including; agribusiness SMEs and TNCs, TIPAs of APEC member economies, related trade associations, public organizations and academic institutes. In addition, this project also conducts empirical and active research to identify non-tariff barriers preventing agribusiness SMEs from entering GVCs, and to explore capacity-building needs of SMEs and discover enabling factors for SMEs to integrate into GVC. 

Project timeline: In Bangkok, Thailand 2 days during January – February 2016 (taking into account APEC meeting schedule).The project report and recommendations will be submitted to MRT 2016.

Relevance

As a result of global trade liberalization, around 80 percent of global exports are accounted by trade in networks of Global Value Chain (GVCs). According to document published by APEC Policy Support Unit (PSU) (2013), the formation and expansion of GVCs has mostly been facilitated by transnational corporations (TNCs). The growth of GVCs brings opportunities to some SMEs including agricultural cooperatives, but also places challenges to many SMEs that are being left out of the chain. Therefore, to promote the sustainable and inclusive growth of APEC member economies, the integration of SMEs into GVCs through trade and investment liberalization should be actively supported at domestical and international level.

Despite the fact that most of the low income population in developing and least developed economies are in agribusiness, studies by the World Bank revealed that most of them are not integrated into agribusiness GVCs. The promotion of agribusiness SMEs integration into GVCs through trade and investment liberalization provides benefit directly not only to those SMES but also to their suppliers; the farmers and fishermen, and to their rural areas. Policies to support SMEs capability to participate and benefit from GVCs within market mechanism and reducing barriers to trade and investment are recognized as more sustainable and effective than other alternatives; for example, financial aid or trade aid.

To enhance SMEs’ possibility of being integrated into GVCs, the policymakers at domestical and international level must deeply realize the factors preventing agribusiness SMEs from entering GVCs, such as, tariffs; SMEs’ capacity shortages; non-tariff barriers; and market environment. Accordingly, the policymakers can appropriately tailor measures for facilitating the integration of SMEs into GVCs and strengthening their SMEs’ capability to meet TNCs requirement dynamically. According to the World Bank’s studies on agribusiness, the project will particularly benefit the Developing Member Economies since their agribusiness SMEs will require greater assistance in terms of technical and trade knowledge. It will also contribute to greater participation and shared value of their suppliers, farmers and fishermen in meeting their rural areas development and inclusiveness as well as meeting consumer’s need while achieving our region’s economic growth. 

This project has a direct link to the promotion of regional economic integration (rank 1st) by:

1) SME Development, including facilitating access to regional and global markets as outlined in the Global Value Chains (GVCs) blueprint;

2) Supply Chain Connectivity and Cross-border E-commerce Innovation and Development for SMEs;

3) Building an open economy in the Asia-Pacific featuring SMEs innovative development, interconnected growth, and shard interest; and

4) Achieving food security.

Objectives

1) To assist agribusiness SMEs to expand market access, internationalization, and high growth;

2) To identify non-tariff barriers and business environment preventing agribusiness SMEs from entering GVCs and to explore practical solutions;

3) To identify capacity-building needs of agribusiness SMEs and to explore enabling factors for agribusiness SMEs to be integrated into GVCs;

4) To organize the agribusiness GVC workshop to facilitate the collaboration and partnership among diverse stakeholders, including agribusiness SMEs and TNCs, TIPAs of member economies;

5) To enhance networking activities and provide best practices in order to shorten the time for SMEs' integration into the international markets; and

6) To deliver policy recommendations for APEC economies to facilitate SMEs’ integration into GVCs and improve their competitiveness in agribusiness sector with a view to enhance their sustainability and inclusivity.

Alignment

This project supports the APEC missions of promoting trade and investment liberalization, assisting institutions that are adversely affect by the operation of the market, and building capacities for member economies to take advantage of global trade and supports the operations of Small and Medium Enterprises. This project is also in line with APEC Leaders’ Declarations 2014, APEC Ministerial Meeting’s Statement 2014, 2014 - Third APEC Ministerial Meeting on Food Security and SMEWG Strategic Plan 2013-2016, by addressing the importance of strengthening the participation and access to global markets for SMEs. The project directly contributes to the APEC Strategic Blueprint for Promoting Global Value Chains for Development and Cooperation, which was endorsed by APEC Economic Leaders in 2014. Furthermore, this project is mainly consistent with the instructions of APEC Ministers in 2014, the initiative on Promoting SME’s Integration into Global Value Chains in Major Industries under the leadership of Korea which Thailand is participating as a Sector Lead in agribusiness. The project will encourage APEC economies to present concrete policy recommendations that can facilitate the integration of SMEs into GVCs through arranging forum bridging opportunity for agribusiness SMES to be integrated into GVCs and identifying factors influencing the success of the integration of SMEs into GVCs as well as strengthening the global food security. These factors are tariff and non-tariff barriers, capability shortages of SMEs, and other enabling factors. This project also supports the enhancement of the role of agricultural producers, fishing communities and SMEs in the food supply chain management.

The agribusiness SMEs workshop activities serve several objectives of this project; (a) creating a platform to exchange ideas and consultations among TNCs and SMEs; (b) providing the chance for SMEs to identify factors preventing SMEs integration into GVCs, for example, NTBs, capability shortages, and market environmental factors and to induce the practical solutions; (c) mobilize TIPAs of member economies to identify business opportunities for collaboration and facilitate partnership between TNCs and SMEs in agribusiness. The agribusiness SMEs workshop will be pursued with close collaboration with Small and Medium Enterprises Working Group (SMEWG), including its project on the APEC Project "Supply Chain Capacity Building for SMEs: Supply Chain Management, Cold Chain Storage and Technical Regulations" to have complement/synergies in this field.

TILF/ASF Justification

Trade and investment liberalization in APEC has resulted in more opportunities for business to expand its business operations and market from local scale in regional and global scale. As a large number of business enterprises in APEC is categorized as SMEs the establishment of this project on promoting integration of SMEs into Agribusines global value chain can help drive dynamic and harmonies Asia Pacific community by championing  free and open trade and investment, promoting and accelerating regional economic integration through creating regional supply chain encompassing direct stakeholders from upstream, middle stream, and downstream agribusiness with the support from government and industrial experts. The project will begin with the presentation and discussion on growing opportunities of food and agribusiness trade and investment in the region, various subsectors, and highlight tariff and non-tariff measures, and business environment preventing the participation of SME in global value chain. Afterwards, the discussion will focus on measures and practices to improve capacity of SMEs, and open opportunities to collaborate and facilitate the establishment of business partnership amongst liked mind partners in the region including SMES and TNC to achieve sustainable and inclusive economic development.

Beneficiaries and Outputs

Outputs: 

1) Analytical study on the non-tariff barriers and business environment that impede the participation of SMEs in GVCs and the capacity building needs and enabling factors of SMEs to participate in GVCs of three sub-sectors; livestock (poultry), fisheries (frozen food) and organic rice: These analytical studies are conducted by an independent researcher and will engage stakeholders from the upstream, middle stream, and downstream SMEs agribusiness as well as industrial association and experts and government organization through rounds of in-depth interview and focused group discussion. The outcome of the analytical studies will be compiled into a paper where summary and initial recommendations will be presented and discussed at the Workshop under this project.

2) A 2-day Workshop to be held in Bangkok, Thailand during January-February 2016: The workshop is open to wide range of participants; SMEs, TNCs, TIPA, industrial associations and government organizations. The researcher will be invited to present their analytical studies on three sub-sectors; livestock (poultry), fisheries (frozen food) and organic rice. Speakers from international organizations, government agencies, private sectors and academics will also be invited to share their views on the Global Value Chain relevant to Agribusiness sector, best practices/show cases of success/challenging stories, comment on the analytical studies and key trade and investment policy recommendations. The Workshop shall therefore broaden the views / create understanding of the opportunities and challenges of GVCs participations. In parallel, the Workshop will provide opportunity for business networking and matching between TNCs and SMEs in the Agribusiness.

3) Report: The analytical studies' findings, summary and recommendation from the Workshop will be generated into a comprehensive report aiming at identifying the next steps/actions relevant to the trade and investment policy recommendations and targeted capacity building which will assist SMEs development and integration into GVCs in the Agribusiness sector. The report is to be distributed to APEC related fora and stakeholders for information and further collaboration of future APEC activities. 

Outcomes: All the 3 outputs will help raise awareness, understanding and knowledge, best practices and challenges as well as practical business solution relevant to SMEs participation in the Agribusiness GVCs. These activities may lead to creation of a platform for cooperation network among key players/stakeholders within each sub-sector's value chain, particularly business alliance between TNCs and SMEs, across all APEC economies to support SMEs capability to participate and benefit from GVCs. Furthermore, government agencies and the academic institutes will have the opportunity to learn and review the trade and investment policy/measures as well as the technical requirements that are barriers to SMEs. Strategies and alternative policies to assist SMEs development and participation in GVCs will be further developed and pursued. 

Beneficiaries: 

1) SMEs in agribusiness (potentially in food, health, and beauty & wellness sub-industries);

2) TNCs in agribusiness (potentially in food, health, and beauty & wellness sub-industries) having or willing to build supply chain network with SMEs;
 
3) Related business associations, chambers, councils or clusters;

4) Global value chain companies;

5) Government officials, government agencies and policy makers;

6) Representatives of TIPAs or SMEs promoting organizations from APEC member economies; and

7) Related international public organizations and academic institutes (e.g. UNESCAP, UNDP, Codex, OIE, ISO).

Dissemination

The Organizer will compile and made available the presentation of all speakers through the APEC official website. Discussion notes / summary findings / recommendations from each session of the workshop will also be compiled, incorporated into a report, in addition to the 3 sub-sectors analytical studies, and disseminated electronically for APEC committee and sub-fora, particularly the SMEWG and ATCWG, for further collaboration and information sharing in this area. Such information will be accessible to all APEC economies' participants involved in the project, policy development officials, industry associations and academic institutes through the APEC official website.

The final output (the report) together with other lead sectors will be further incorporated into GVC Conference to be held before MRT 2016 and developed into the final report on “Promoting SMEs' Integration into GVCs in Five Major Industries” scheduled for 2016 AMM/AELM.

Thailand official websites, including Ministry of Commerce, Ministry of Agriculture and Cooperatives, Ministry of Industries, The Office of SMEs Promotion (OSMEP), will also be used to disseminate the information derived from this project for a wider audience. With further collaboration, such information could be also be distributed through industry/trade associations of Thailand and APEC partners.

Gender

As APEC underscores the importance of promoting women’s economic empowerment, this project has taken the "Guidelines for Incorporating Gender Considerations in Promoting the Integration of SMEs with GVCs" to ensure involvement of women participants at different stages of the project development. First, the development of this proposal and the Project Overseers are women. Second,during the analytical study stage, which is a critical preparatory step toward this project (the Workshop and Report), independent researchers as well discussants in focused groups include both women and men. Guidance on appropriate experts including both women and men to provide pratical experience/solution that will enhance women’s participation in the workshop may be sought from the FAO and Policy Partnership on Women and the Economy (PPWE). Finally, the project will seek cooperation with industries associations, government agencies and academic institutes in outreaching the Workshop for greater participation of women entreprenuers and delegates. Women involvement is expected at least at 40 per cent of the project. The project will assess women participation through an evaluation form.

Work Plan

Date

Activities

March – October 2015 (Self-Funding)

1)  Submit Concept Note/Full Proposal to APEC for consideration

2) Preparing background information including;

-  Structures of agribusiness GVCs in APEC economies

-  Previous researchers and working papers on SMEs and GVCs

-  GVCs structure of agribusiness

3) Collect views/suggestions from target groups through in-depth interview and focused group meetings with SMEs, TNCs and public organisation

4) Analysing data and information to explore:

-  Economic impact of integrating SMEs into GVCs

-  Key success factors in integrating SMEs into GVCs

-  Barriers (NTBs, gender, capacity shortages) preventing SMEs from entering GVCs

-  Practical policy recommendation and responsible organisations

November 2015 – April 2016

Preparing and organising industry workshop

- Raising awareness of agribusiness SMEs opportunity in the GVCs

- Planning programs and contents for targeted SMEs and TIPAs

- Running workshops for agributiness SMEs in APEC economies, with presentation by TNCs, SMEs and scholars

- Providing database for business matching between SMEs and TNCs

- Reviewing, summarising information and drawing policy recommendation at domestic and international level

May 2016

Submitting, publishing and distributing final report

Risks

Risk

Risk Management

GVC Workshop

1) Speakers:

-  Selection of appropriate and experienced candidates

-  Absence of expected speakers

1)   Speakers:

-  Early consultations with international organizations, government agencies, and APEC economies in identifying appropriate and experienced speakers

-  Early arrangement of speakers and seek back-up speakers

Risk

Risk Management

2)   Participants: appropriate qualification and wide participation from APEC economies

3) Venue selection

2) Participants: set specific criteria/target for Workshop participants in the General Information document for nominating participants

3) Convenient and accessible venue

Progress Report

4)   Duplication of work with other APEC sub-fora or international organization

5)   This project covers a very wide range of potential topics and therefore  may contain factors that will affect the adoption of recommendation made.

3)  Review the existing literature to avoid redundancy

4) Seek two types of recommendations: 1)  general recommendations on the three sub-sectors and 2) specific recommendations for a number of selected measures that impede SMEs from entering GVCs

Monitoring and Evaluation

A number of indicators are applied in order to measure the progress and success of the project:

1) Responsiveness: Satisfaction level of attendees is higher than 80%.

2) Outcome: 70% of SMEs participating in the workshop have higher awareness and better understanding about opportunities and  ways to integrate into GVCs, 80% of participants are SMES from APEC Economies and at least 20% of SMEs are women.

Linkages

This project utilizes the information and knowledge about SMEs integration into GVCs from several international institutes (for example; UNCTAD, World Bank, WTO, OECD) and academic publications. In addition, this project actively encourages the participation of all related organizations, i; (a) representatives of TIPAs or SMEs promoting organizations from APEC member economies; representatives of global value chain businesses; (b) related business associations, chambers, councils or clusters; (c) related international public organizations and academic institutes. In addition, this project is one out of five sectors of the APEC initiative on “Promoting SME’s Integration into the global value chains”. Thus, this project is expected to link its operation with the cooperation with SMEWG, for example, participating in cold chain management seminar.

Sustainability

This project, including Workshop materials / report / networking, will form the basis for continuous discussions on GVCs in the Agribusiness sector. The report with its practical solutions/recommendations on the existing barriers and non-friendly business environment for SMEs entering GVCs will be used as a tool for CTI/SMEWG/ATCWG for planning of further facilitation/liberalization/capacity building in this area. The report, together with other lead sectors, will be further developed collectively by the five Sector Leads into the final report on “Promoting SMEs' Integration into GVCs in Five Major Industries” in 2016 for wider dissemination. Workshop speakers and participants will remain valuable resources to get inputs or experts for future activities such as survey, questionnaires, case studies and capacity building projects.

Short term impact resulted from the project such as awareness, understanding and knowledge relevant to SMEs participation in the Agribusiness GVCs will be questioned and measured through questionnaires circulated at the end of the Workshop. In the medium and long-term, the impacts may be measured through national-level statistics agencies, industry associations and SMEs oriented organizations, where increase in a percentage of SMEs participating in GVC and decrease in cost and time associated with SMEs export may be evaluated. Follow-up questionnaire with SMEs partners could be undertaken to gauge level of accessibility to GVCs.

Project Overseers

The Project Overseers will be:

1) Ms.Paiyada Hanchaisuksakul
Director
The Federation of Thai Industries Small & Medium Industrial Institute (SMI)
Queen Sirikit National Convention Center, Zone c 4th Floor
60 new Rachadapisek RD., Klongtoey, Bangkok 10110 Thailand

Tel: 66 (0)234 1049
E-mail:  paiyadah@off.fti.or.th

2) Ms. Bhornbhat Punngok
Senior Trade Officer
Dpartment of Trade Negotiations, Ministry of Commerce, Thailand

563 Nonthaburi Rd., Bangkraso, Muang District, Nonthaburi, Thailand 11000

Tel: 66 (0)2507 7418
Email: bhornbhatp@dtn.go.th, apecdeskdtn@gmail.com

Cost Efficiency

Not Applicable.

Drawdown Timetable

Not Applicable.

Direct Labour

Not Applicable.

Waivers

Waiver

Justification

Waiver for advance payment

Travel airfare, per diem for speakers and active participants – to encourage participation in the project.

Fund 8 speakers for the Workshop

PO requests for funding of 8 speakers for both days. As the Workshop will last for 2 days, 8 speakers are needed to stay until the end of Workshop because they will contribute to the recommendations of Workshop which is one of the most important outcomes of the project.

Are there any supporting document attached?

No 
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Project No.

Project Title

Project Status

Publication (if any)

Fund Account

Sub-fund

Project Year

Project Session

APEC Funding

Co-funding Amount

Total Project Value

Sponsoring Forum

Topics

Committee

Other Fora Involved

Other Non-APEC Stakeholders Involved

Proposing Economy(ies)

Co-Sponsoring Economies

Expected Start Date

Expected Completion Date

Project Proponent Name 1

Job Title 1

Organization 1

Postal Address 1

Telephone 1

Fax 1

Email 1

Project Proponent Name 2

Job Title 2

Organization 2

Postal Address 2

Telephone 2

Fax 2

Email 2

Declaration

Project Summary

Relevance

Objectives

Alignment

TILF/ASF Justification

Beneficiaries and Outputs

Dissemination

Gender

Work Plan

Risks

Monitoring and Evaluation

Linkages

Sustainability

Project Overseers

Cost Efficiency

Drawdown Timetable

Direct Labour

Waivers

Are there any supporting document attached?

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Reprogramming Notes

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Monitoring Report Received

Completion Report Received

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