Agriculture-Based Clustering (ABCs) Farming Strategy

EXECUTIVE SUMMARY

An Introduction to Agriculture-Based Clusters (ABCs) :

Agriculture-Based Clusters (ABCs) represent a strategic framework designed to enhance the agricultural sector by fostering community-centric initiatives. These strategies focus on empowering youth and women economically through targeted training and support in farming, value addition, and processing. ABCs play a vital role in promoting collaboration among agricultural and processing enterprises, thereby contributing to the overall growth and sustainability of the sector.

It's All About mindset change, Bringing Farmers Together to Generate Higher Income and Build Generations of Rich People (Hunter)

ABCs & Farming clusters:

FPI takes Cluster farming as a transformative solution for rural development and mitigating urban congestion worldwide, presenting a compelling opportunity for donors and financing institutions to engage with our organization. By uniting farmers, agribusinesses, and service providers in concentrated hubs, we enhance collaboration and resource sharing, driving agricultural productivity and efficiency. This approach not only cultivates economies of scale, reducing operational costs and boosting farmers’ incomes, but also revitalizes rural economies, creating sustainable livelihoods that discourage migration to overcrowded urban centers.

Moreover, cluster farming fosters significant job creation within rural communities, establishing organized agricultural structures that provide stable, diverse employment opportunities in sectors such as processing, marketing, and logistics.

By reducing rural unemployment and lifting families out of poverty, we create a compelling environment for investment. Our commitment to sustainable agricultural practices further ensures that these communities thrive without compromising environmental integrity, addressing climate change challenges while unlocking the potential for innovative, eco-friendly solutions.

We invite your partnership to amplify the impact of cluster farming, connecting farmers with cutting-edge research institutions to promote technological advancements and best practices. Improved access to markets through collective bargaining enhances pricing power and establishes robust supply chains, creating value for all stakeholders involved.

As we advance our mission, your support will play a crucial role in building vibrant rural economies, ultimately offering sustainable solutions to urban congestion and fostering resilient communities. Together, we can drive meaningful change and enhance the quality of life for countless individuals while achieving our shared goals of economic development and sustainability.

The ABCs support innovation, globalization, internationalization, localization, and competitiveness of agro-based clusters as a sure solution in building bridges connecting different ecosystems, supporting innovation, and competitiveness.

Research proves that most individual landholders across Africa are small. More than 70% of the holdings are marginal, measuring up to one hectare or less, and a few have more than 5 hectares but have the capacity to feed the world if they are well coordinated, as well as technically and financially supported.

The statement above gives a sure reason for the cluster development approach in agriculture, eminently suitable for Africa. It has become the only sustainable approach to addressing the higher-income needs of marginalized farming families in Africa and other developing countries.

Agriculture-based clustering, which entails grouping agricultural activities and related entities based on geographical region, production types, or market access, is gaining traction globally. This approach has several potential benefits and applications, making it a viable solution in various contexts:

1. Resource Optimization: By clustering agricultural production in specific areas, farmers can share resources such as equipment and infrastructure, leading to cost efficiencies and improved productivity.

2. Knowledge Sharing: Clustering allows for the exchange of knowledge and best practices among farmers, which can lead to improved crop yields and more sustainable practices.

3. Supply Chain Efficiency: The proximity of producers can enhance the efficiency of supply chains, reducing transportation costs and time, thus improving the freshness and quality of produce.

4. Market Access: Clusters can strengthen bargaining power for farmers, making it easier to access markets, negotiate better prices, and even facilitate direct sales to consumers.

5. Economies of Scale: As farmers work together, they can achieve economies of scale in purchasing inputs and marketing, leading to enhanced financial viability.

6. Sustainability: Clustering can promote sustainable agricultural practices, as it fosters cooperative approaches to management of resources like water and soil, and enables collective action against pests and diseases.

7. Innovation and Technology Adoption: Clusters can attract research and development initiatives, leading to better access to new technologies and innovation tailored to specific local needs.

8. Policy Support: Governments and organizations can better design agricultural policies and programs tailored to the needs of clustered producers, improving effectiveness.

While agriculture-based clustering offers significant advantages, it also faces challenges such as initial investment costs, the need for effective coordination among diverse stakeholders, and possible resistance from farmers used to traditional methods.

Overall, when executed effectively, agriculture-based clustering can be a powerful solution to many issues facing the agricultural sector, especially in the context of climate change and increasing global food demand.

Cluster Development:

The cluster development approach in agriculture and agri-based industries implies directing funds and other resources to building groups of small landowners collectively. It involves creating horizontal and vertical linkages between local agricultural enterprises.

These enterprises then get linked to facilitating agencies like the local government, non-governmental organizations, etc. These bodies improve the collective capacity of connected enterprises through financial and technical support.

Small and marginal farmers usually gain from connections with other stakeholders in the agricultural value chain. This is the vision guiding the cluster development approach.

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ABC

HVPs

FPI-I'S ABC CLUSTER FARMING CONCEPT

FPI believes that Agro-based Clusters will assist in the implementation of its ambitious Rural and Urban Agriculture Innovative Production Program RUAIPP strategy as it assist in mobilization, Identification, Engaging, and Empowering of farming communities through skill and knowledge transfer methodologies that build passion and increase the participation of locals in farming activities and increase the demand for nutritious food in an economy.

Our cluster success in agrifood production is determined by the following formula:

D +P = 2G

D stands for the Annual Rate of Growth in demand for food.

P stands for Population Growth Rate.

2 stands for Income Elasticity of Demand for Agricultural Products.

G stands for Rate of Increased Per-Capita Income.

Farmer's Pride International's (RUAIPP) is a comprehensive strategy aimed at promoting sustainable agricultural development through the implementation of Agriculture-based Clusters Concept. This strategy encompasses various key factors including annual growth rate, population growth, income elasticity of demand for agricultural products, and the rate of increased per capita income:

1. Annual Growth Rate:

The RUAIPP strategy takes into account the annual growth rate of the agricultural sector in order to assess the overall performance and potential for expansion. By analyzing the annual growth rate, Farmer's Pride International can identify opportunities for investment and development within the agriculture sector. This analysis allows the organization to focus its efforts on high-growth areas and implement strategies to enhance productivity and output.

2. Population Growth:

Population growth is a crucial factor in determining the demand for agricultural products. As the population grows, so does the demand for food and other agricultural commodities. Farmer's Pride International's RUAIPP strategy considers population growth projections to anticipate future demand for agricultural products. By understanding population dynamics, the organization can tailor its agricultural production and marketing efforts to meet the evolving needs of a growing population.

3. Income Elasticity of Demand for Agricultural Products:

The income elasticity of demand measures the responsiveness of the quantity demanded of a good to a change in consumer income. As incomes rise, consumers may allocate a larger portion of their budget to agricultural products, particularly high-value and specialty items. By analyzing income elasticity, Farmer's Pride International can identify opportunities for expanding production of products that exhibit a strong income elasticity of demand. This knowledge allows the organization to align its agricultural production with changing consumer preferences and income levels.

4. Rate of Increase in Per Capita Income:

The rate of increased per capita income directly influences consumer purchasing power and consumption patterns. Farmer's Pride International's RUAIPP strategy accounts for changes in per capita income to understand how it impacts the demand for agricultural products. As incomes rise, consumers may seek higher-quality or more diverse agricultural products, leading to shifts in production and marketing strategies. By monitoring changes in per capita income, the organization can adapt its agricultural production to align with evolving consumer preferences and purchasing power.

Farmer's Pride International's RUAIPP strategy on Agriculture-based Cluster Concept is designed to be responsive to key economic and demographic factors such as annual growth rate, population growth, income elasticity of demand for agricultural products, and the rate of increased per capita income. By incorporating these factors into its strategic planning, the organization can effectively identify opportunities, address challenges, and optimize its agricultural production and marketing efforts to promote sustainable growth and meet the needs of diverse consumer populations.

This concept assists FPI-I to determine the type of products to promote for production as it joins the global market on production of High-Value Products (HVPs), which are globally demanded, cross-border, value chain builders done in geographical project areas under the RUAIPP with such areas termed as Agro-Based Clusters (ABCs).

We can all agree that (COVID-19) pandemic left calamitous challenges that accentuated the need for High-Value Products (HVPs), this prompted FPI-I to change its farming strategy to promote value chain development that will generate new income and employment opportunities in both urban, peri-urban, and rural areas. Moreover, the transition toward HVPs-oriented agriculture is essential for achieving Sustainable Development Goals 1 and 2, no poverty, zero hunger, and good health and well-being. Enhancing farm income is vital for achieving food security and promoting sustainable agriculture. Therefore, the central question is how do we transition toward HVPs-oriented agriculture in African countries?

Agri-based clusters include globalized value creation processes, digital and carbon-neutral transformations as well as sectoral and technological convergences, today’s Agro-based businesses face complex and turbulent environments:

They need to buy affordable quality seeds
They need to sell a stream of new and better products in identified growth markets which are often heavily contested.
They need to take the lead in quality improvement and new technologies.
They need to produce and sell at competitive prices

To reach these goals, farms must innovate successfully through dedicated R&D on a regular and long-term basis.

Agriculture in developing countries is transforming from the production of cereal grains to high-value agricultural products (HVPs) and processing them to meet the standards demanded in the market. The production of HVPs is usually geographically clustered and, hence, such areas may be termed Agro-Based Clusters (ABCs). However, not all ABCs process products to meet high-quality demand. We categorize ABCs into Farming Clusters (FC), where no processing is involved, and Industrial Clusters (IC) where processing, including value addition, is a significant activity to meet the quality requirements of exports and supermarkets. The major challenge for developing countries is to develop ABCs and transform their FCs into ICs.

The World Bank (2007) argues that this transformation provides unprecedented opportunities for developing countries to improve the income of poor smallholder farmers. In order to supply HVPs to export markets and supermarkets, fresh and processed HVPs must be safe and of high quality (Reardon et al., 2005). The safety of food is now considered vital for the growth and transformation of agriculture, which are needed to feed a growing and more prosperous world population, for the modernization of national food systems, and for a country’s efficient integration into regional and international markets (Jaffee et al., 2019).

STARTING AND MANAGING CLUSTER FARMING :

Cluster Farming formation:

Cluster farming is a strategic and comprehensive approach that goes beyond the traditional methods of organizing village farming groups and simply instructing them to plant certain crops. At its core, this methodology is focused on promoting a transformative mindset change within the farming community.

The process involves a multifaceted approach that begins with identifying key stakeholders, mobilizing them, and building trust through open communication and collaboration. This is followed by the crucial steps of influencing their perspectives, motivating the farmers, equipping them with the necessary resources and knowledge, and deploying them to the field.

What benefits do agriculture-based clusters bring to members?

Through clustering of small-scale farmers and SMEs can win together on things such as negotiating discounts on inputs, marketing their products, or lobbying policymakers.

To win Research and development (R &D are required to support this transition toward high-value agriculture production through the Agro-based cluster development approach. Although there is a wealth of research and initiatives relating to cluster development in various industries, little attention has been paid to clusters in the agricultural sectors (Gálvez-Nogales, 2010). Therefore, the international research community can contribute to the transition by helping to design an effective strategy to develop agro-based clusters in developing countries. Moreover, governments and donors can contribute by providing support to research programs that aim to deepen our understanding of agro-based cluster initiatives, structure, and outcomes.

The cluster approach will enable smallholder farmers and agro-processors to engage in high-value agriculture through at least two key mechanisms. The first mechanism is knowledge and information spillovers. The vertical and horizontal coordination between actors in the agricultural value chain and supporting organizations will foster trust, reduce transaction costs, and facilitate the flow of knowledge and information. Knowledge and information transfers will then promote the diffusion of technological and managerial innovations. These innovations are important because, in high-value agriculture, good performance by cluster members can boost the success of others. For example, the performance of agro-processors is highly dependent on the crop quality produced by farmers. The second mechanism is collective actions. Organizations within a cluster can be used as a means to consolidate marketing operations, such as market research and crop quality certifications. These collective actions will substantially reduce the transaction costs of individual farmers and agro-processors, thereby allowing each member to enjoy low transaction costs as if it had a greater scale. Moreover, farmer organizations will also enable smallholder farmers to access credit, quality inputs, and machinery (Bizikova et al. 2020).

Otsuka and Ali (2020) propose five strategies for the development of agro-based clusters in developing countries. First, stakeholders within a cluster must be mobilized into various groups, such as farmer cooperatives and agro-processors associations. Second, stakeholders in the cluster must be trained through their groups. Specifically, training for improved cultivation practices must be offered to farmers, seed companies, and nursery operators. Moreover, farmers should be trained in grading, marketing, and management. Besides, managerial training must be offered to agro-processors. Third, the collective actions within each group and the vertical linkages between farmers and agro-processors through contracts must be promoted. Fourth, a regulatory framework to implement quality standards must be set up. Finally, a project management unit must be established to coordinate the interests of diverse stakeholders and promote the cluster-based agricultural transformation approach.

From Planning to Practice:

Clustered agribusinesses can benefit from sharing workers. If these businesses were on their own, they might not have been able to offer full-time jobs individually. At the same time, these jobs provide a solution to rural unemployment and migration, which municipalities struggle to deal with. Local universities and extension services benefit from a growing agriculture sector that employs their students and drives policy dialogue on research and innovation.

Cluster Formation

A cluster should be composed of 6 to 20 individuals or even more but should remain manageable. These are groups of trained and existing local farmers who are practising small-scale to commercial agriculture and linking them to an FPI-funded Hub Farm. They must organize themselves, have a constitution, and have a committee with leaders from the Chairperson, vice, secretary, vice, treasurer, and three committee members.
These farmers will become Cluster Farms/ satellite farms or out-growers, together they will form a solid entrepreneurial group capable of sharing both the benefits and burdens.
Satellite Farms must be within a radius of 50 km of Hub Farm and will be set up as a mixed farming company; producing a variety of crops, animals, and other products such as fish, grass, crops, goats, sheep, crops, and others will be poultry farms for broiler and other poultry products, etc.
The Hub farm will supply Satellite Farms with training and inputs.
Matching all products that are produced and grown on Hub Farm to ensure quality and sustainability.
Next to this, the Hub Farm will provide the necessary infrastructure such as barns and/or fish ponds.
Satellite farmers will be trained by the Hub Farm in the fields of crop production, animal husbandry, preparing feed schedules, identifying diseases, record keeping, accounting, management, and planning in order to promote their independence.
Distribution, marketing, and trading of the products are done by the Hub farm, allowing the Satellite Farms to focus on the production of their crops and animals.

Cluster Strategy

FPI's main focus on clustering is to build the capacity of the urban and rural farmers and open up domestic and international markets for them through the following steps :

Providing funds and incentives for farmers
Finance the Hub farm:
Financing of Satellite Farms:
Investment period of 5 years;
Takes 30% of shares and profits from all sales and investments;
Annual interest ___ %;
All loans issued out must be paid back at agreed interest and during agreed periods.

CLUSTER SELECTION

FPI has put in place a well-designed and participatory selection process based on clearly defined criteria that is essential for the success of the farming clusters initiative. This process allows for the identification of clusters where the impact of planned interventions can be maximized given the available time and resources. The following guidelines outline the key aspects of the cluster selection process:

Criteria for Cluster Selection

1. Membership Composition:

Each farming cluster should consist of 6 to 20 members. This size is optimal for fostering collaboration, sharing resources, and ensuring effective communication among members.
Members must demonstrate a commitment to working together and have a shared vision for their farming activities.

2. Initiative and Resourcefulness:

Potential cluster members must have started farming on their own initiative, utilizing their own resources. This demonstrates their commitment to agriculture and their ability to manage farming activities independently.
Clusters should show evidence of prior agricultural efforts, whether through individual farms or informal cooperative arrangements.

3. Reporting and Accountability:

Clusters must agree to report to the Farming Partnership Initiative (FPI) for assessment and evaluation. This accountability ensures that clusters remain focused on their goals and adhere to agreed-upon practices.
Regular reporting will facilitate monitoring of progress and identification of challenges, allowing for timely interventions and support.

4. Capacity for Growth:

Selected clusters should exhibit potential for capacity building. This includes a willingness to learn, adapt, and implement new farming techniques or technologies.
Clusters that demonstrate an openness to training and development will be prioritized, as this enhances the effectiveness of the initiative.

5. Community Engagement:

Clusters should have a clear plan for engaging with their local community. This includes sharing knowledge, resources, and best practices with other farmers, which can amplify the impact of the initiative.
Community involvement can also foster a supportive environment for cluster members, enhancing resilience and sustainability.

Selection Process

1. Initial Outreach:

Conduct outreach to local farming communities to inform them about the farming clusters initiative and the criteria for selection.
Engage with local agricultural organizations, extension services, and community leaders to identify potential cluster members.

2. Application and Assessment:

Interested groups should submit an application that outlines their farming background, resources, and commitment to collaboration.
FPI will conduct assessments to evaluate the applications based on the defined criteria, focusing on the members’ farming experience, resource utilization, and community engagement.

3. Interviews and Site Visits:

Shortlisted clusters may undergo interviews and site visits to assess their farming practices, resource availability, and group dynamics.
This step ensures that selected clusters are genuinely committed to the initiative and possess the necessary foundation for success.

4. Final Selection:

Based on the assessments and site visits, FPI will finalize the selection of clusters that will proceed to the capacity building and funding phases.
Selected clusters will be notified and provided with information on the next steps in the initiative.

Conclusion

The cluster selection process is a critical step in ensuring the success of the farming clusters initiative. By adhering to clearly defined criteria and engaging in a participatory selection process, the initiative can identify clusters that are well-positioned to benefit from capacity building and funding. This approach not only maximizes the impact of interventions but also fosters a sense of ownership and collaboration among cluster members, ultimately contributing to sustainable agricultural development in the region.

Once a cluster has been selected for support, a Cluster Development Agent (CDA) or cluster broker, is appointed to facilitate the process of cluster development in the different target clusters.

After undertaking a cluster diagnostic study the CDA will work with the cluster to enable the cluster stakeholders to work together to take the cluster from

an underdeveloped one to a performing cluster, and to ultimately establish and operate a cluster governance structure.

We believe that our approach shall support the building of sustainable food systems across the world, besides meeting SDG 1 to 8 Targets, the project shall enable Africa to feed its continent and the world at large.

Clustering is a great way to formally organize a complex sector like agriculture, promote development and accelerate change. To quote the old proverb: if you want to run fast, go alone; if you want to go far, run together. Farmers are encouraged to establish and register clusters in their communities as associations and cooperatives and link them with FPI. Read more: >>>>

FOR TRAINING ON CLUSTER FARM MANAGEMENT, PLEASE CALL FPI-I ON: +26773269606

Cluster-based Value Chains

Transformation of FCs into AICs

In the long run, there is a need to transform “traditional agriculture,” we must upgrade Farming Clusters (FCs) to Agriculture Industrial Clusters (AICs), where the participation of interconnected (not necessarily geographically contiguous) private firms, be it processors, supermarkets, or traders, play a major role in the value chain. To meet changing quality demand parameters, the roles of innovators, researchers, and financiers become very important for the development and survival of AICs. Additionally, mechanisms to assure the quality of agricultural products.

FROM FC TO AIC TRANSFORMATION:

Cluster Strategy Implementation

Agriculture Based Clusters Structure

This emergent business model lays social goals onto the profitability and loss-prevention objectives observed in traditional food supply chains. A successful cluster will return profits for food distributors and agricultural producers, as well as generate social benefits through values-oriented food production and marketing..

Improvement of product quality

The first step to transforming FCs into AICs is to improve the quality of agricultural products. For this purpose, the availability of improved seeds or root stocks of fruit trees is essential. A longer-term solution is to invest in agricultural research to breed improved varieties and select rootstocks suitable for the local climate. High-quality seeds and rootstocks must be certified, and the government must monitor their sale through a robust monitoring system and appropriate infrastructure.

Benefits of Cluster Business Model

1. Better access to research/technical information

2. Better sourcing of good quality inputs/materials

3. Better quality extension services

4. Greater access to markets

5. Better access to financial support, etc

6. Improved negotiating power

7. Lower cost of operations

8. Promotes the establishment of cooperative groups

9. Promotes strategic alliances for agribusiness development

FPI-I clustered establishes Food value chains which can be most effective when the members involved in the cluster projects can agree upon a set of mission values, such as farm viability, farmland preservation, healthy food access, and sustainable production practices, and a set of shared operational values, such as accountability, long-term commitment, open and ongoing communication, and transparency, and use these shared missions and operational values as a means to differentiate and add value to the products they are offering to their customers

To those in the industry, farming is a way of life. Yet as farms consolidate and city populations grow, the farming lifestyle is becoming more and more unique. Investors looking to diversify have multiple options when it comes to investing in farmland. Here are the main options:

Principles

The FPI cluster model contains several guiding principles:

It must be locally owned and aligned with the country's goals
It must be market-driven with projects led by the rural and urban sectors
It must be multi-stakeholder with open and inclusive engagement
It must be Holistic, integrating the full value chain into the agriculture system
It must be globally connected and supported

Framework

In addition, there is an eight-step framework:

Design

Engagement: Identify and engage influential champions
Alignment: Develop a shared partnership agenda
Structured: Establish a partnership structure

Implement

Planned: Define specific goals and action plans
Implemented: Implement action plans
Advanced: Leverage milestones to drive progress

Adapt and scale

Scale: Institutionalized proven models
Review: Assess the partnership strategy and structures

The Great Value of Agricultural Based Clusters:

Key characteristics of cluster farming include:

Coupling economies of scale with sales of differentiated food products that are designed to attract consumer demand and obtain premium prices in the marketplace
Using cooperative strategies to achieve competitive advantages and the capacity to adapt quickly to market changes • Emphasis on high levels of performance, trust, and responsiveness throughout the network
Emphasis on a shared vision, shared information (transparency), and shared decision-making and problem-solving among strategic partners
Commitment to the welfare of all participants in the value chain, including providing adequate profit margins to support the business and its owners, fair wages, and business agreements of appropriate and mutually acceptable duration

Additionally, farmers, ranchers, and other agricultural producers in food value chains:

Know their production and transaction costs and are able to negotiate prices based on acceptable profit margins above those costs.
Perceived contracts and agreements as fair, having been freely agreed to, providing equitable treatment to all partners, and including appropriate timeframes.
Are able to own and control their own brand identity as far up the supply chain as they choose. This may involve co-branding with other strategic partners.
Participate fully in the development of mechanisms to resolve conflicts, communicate concerns about performance, and alter directions within the value chain.

A Word of Caution to Cluster members before Preparing to Enter a Cluster Arrangement:

Look Before You Leap!!

Before a farmer or business decides to enter into a cluster partnership with other businesses, it is critical to perform due diligence. Conducting thorough assessments of the market, the strengths and weaknesses of prospective partners, and one’s own capacities will go a long way towards making good decisions and building strong, long-lasting partnerships. Know Yourself, Know Your Market Entering or building a value-based food supply chain requires an understanding of how each business fits into the chain and why they are part of it.

Questions that should be considered by the cluster leaders and partners include:

How does each partner/organization contribute to the chain, and how does it help the chain support its core operating principles?
What motivates each partner organization to work within the chain?
What does the chain require of each partner organization?
What does this food value chain look like structurally, and how do the organizations’ structures mesh with this? By coordinating business planning and operational strategies, businesses within the value chain can maximize the benefit they receive from natural synergies resulting from their overlapping scope of activities, needs, and interests.

Know Your Collaborators

The best cluster collaborators are those that have similar values, different competencies, and compatible business structures and scales. They also need to be willing and able to participate fully in information sharing, decision-making, and investment. In short, are collaborators willing to be forthcoming and engage with questions, conflicts, and new perspectives? To answer this question, businesses building value-based food supply chain relationships should determine if potential collaborators have these characteristics:

Commonalities and mutual interests
Compatible values
An understanding of the rights and benefits of each partner
An appreciation of the obligations and responsibilities of each partner
The ability to interact and consult extensively with others in the chain
A willingness to consider new collaborators and perspectives
Equal risk exposure
A willingness to share brand identity or allow for a separate identity (carrying the farmer’s story through to retail packaging, for example, can be important for the farm’s business but difficult for the marketer’s business to accommodate)

Potential collaborators should be prepared to make the investments and commitments required by answering questions such as:

What resources, infrastructure, or products is each party willing and able to contribute?
How much time is each party willing and able to invest? It is important that all parties are honest and realistic about their schedules and are able to balance available time with the work of maintaining and building the relationship.
How committed is each party to the cluster-based food production supply chain?

Value-based food supply chains require reliable collaborators, the kind who will stand firm by their commitments even when another opportunity or better price beckons.

Do Your Research To Protect Your Assets

In a value-based cluster, the greatest asset is business reputation. Customers want to trust that what they see is what they get. Researching business partners is a necessity, just as an individual who is hiring a new employee would perform a background check on the potential employee. Checking into a potential collaborator’s past can uncover warning signs. Sample issues to investigate might include looking at the prospective partner’s record on:

Upholding agreements
Meeting orders and coming through with products
Paying suppliers on a timely basis
Reputation for fair business dealings

The time may come when the relationship is clearly not working. One way to prepare for that possibility is to plan for failure—that is, develop an exit strategy upfront for all collaborators. A third-party mediator can also help parties reach a mutually acceptable arrangement. Another option is to identify other, more beneficial, ways in which the relationship might evolve.

Strong Cluster Relationships: Some Indicators for Success

The business collaborator keeps the triple bottom-line (economic, social, and environmental outcomes) in mind and is consistent with the value chain’s criteria.
Collaborators are able to offer and accept constructive criticism.
Collaborators with more economic power do not wield and abuse it, but check their power in favor of balanced relations with value-chain partners.
The cluster enterprise is flexible enough to quickly make business decisions, adjust to market downturns, and capture new market opportunities.
The cluster scale, structure, and locale fit its purposes (big enough, nimble enough, close enough to key suppliers or buyers).

Weak Cluster Relationships:

What To Avoid

Unmeasured goals and expectations of collaborators
Switching loyalties, such as to outside buyers
Inability to make effective decisions
Inability to accept criticism
A lack of trust, can build resentment and an adversarial relationship
Unwillingness to share risks and benefits
Unbalanced distribution of work, risk, and benefits.

Cluster Funding by FPI:

After the cluster has qualified for funding, which normally happens after 2 successive successful harvests of one high value crop (HVP), FPI will buy 30% shares in the cluster and fund the cluster for a period of 5 years, below is what will be covered

Will mobilise financing for the first setup for the satellite farmers;
Assist the farmers with the construction of their mixed farms;
Training for farming clusters by the FPI Hub Farm in the field of food production, animal care, preparation of feed schedules, and identifying diseases;
Supply the Satellite farms with animal-/ fish feed, young animals, fingerlings, and seedlings.
Educates the farmers and their families in accounting, management, and planning in order to promote their independence;
All products are produced and grown on the Hub Farm to ensure quality and sustainability;
FPI will take care of the distribution, marketing, and trading of Satellite farm products across the world.

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