Organic Business Guide/Annexes

Annexes
'''Some of these annexes can be downloaded as "ready-to-use" tools in Word and Excel format. Click here to go to the download page'''.

Useful references and websites
Organic agriculture Organisations and websites
 * IFOAM - International Federation of Organic Agriculture Movements: Comprehensive information, principles and standards, member directory, list of professionals, publications, media, training platform etc. http://www.ifoam.org
 * ISOFAR - International Society of Organic Agriculture Research: Research publications and events. http://www.isofar.org
 * Organic world: Statistics and news. http://www.organic-world.net
 * Organics at FAO - Food and Agriculture Organisation: Publications, country data, glossary, bibliographic references, web links, link to research institutions, events etc. http://www.fao.org/organicag
 * Organics at ITC - International Trade Centre: Business directories, news, publications http://www.intracen.org/organics
 * Naturland: Organic cultivation guildines for various crops. http://www.naturland.de/publications.html
 * ILEIA - Centre for Information on Low External Input and Sustainable Agriculture: Library, information, news. http://ileia.leisa.info
 * UNEP-UNCTAD: Capacity building on organic agriculture. http://www.unep-unctad.org/cbtf → Organic agriculture

Publications
 * FAO (2007): Organic Agriculture and Food Security, ftp://ftp.fao.org/docrep/fao/meeting/012/ah952e.pdf
 * FiBL/ITC (2007): Organic Farming and Climate Change, https://www.fibl-shop.org/shop/pdf/mb-1500-climate-change.pdf
 * IFOAM Training manuals on organic agriculture in the tropics, http://www.ifoam.org → Growing Organic → Training Platform
 * Pretty, J., 2005. The Earthscan Reader in Sustainable Agriculture. Earthscan, London.
 * Nemes, N., 2009. Comparative Analyses of Organic and Non-Organic Farming Systems: A critical assessment of farm profitability. FAO Rome. ftp://ftp.fao.org/docrep/fao/011/ak355e/ak355e00.pdf

Organic certification Publications http://www.fao.org/docrep/010/a0791e/a0791e00.HTM
 * Standards and regulations: see Annex A5.1
 * EPOPA/CTA/FAO, 2006: Regulations, standards and certification for agricultural exports.
 * FAO Manuals on Certification for agricultural exports. http://www.fao.org/ES/ESC/en/15/262/highlight_269.html
 * IFOAM Internal Control Systems for Group Certification – Training Kit for Producer. www.ifoam.org → Growing Organic → Training Platform
 * ICS tools on www.organicandfair.org → Publications and http://www.organiccotton.org → Library
 * IFOAM/IOIA, 2000. International Organic Inspection Manual. shop.ifoam.org
 * The Organic Standard: Monthly journal on organic certification topics. http://www.organicstandard.com
 * The Organic Certification Directory. http://www.organicstandard.com/directory.html

Fair trade Organisations and websites
 * FLO - Fairtrade Labelling Organisations International: Standards, products, producers, resources, news. http://www.fairtrade.net
 * Fair Trade Institute: Online collection of Fair Trade research publications. http://www.fairtrade-institute.org
 * World Fair Trade Organization. http://www.wfto.com
 * Fair for Life. http://www.fairforlife.net
 * Ecocert Fair Trade. http://www.ecocert.com/-EFT-.html
 * Soil Association Ethical Trade. http://www.soilassociation.org

Value chain facilitation Organisations and websites
 * GTZ ValueLinks (http://www.value-links.de/manual/distributor.html)
 * KIT Value chains for development (http://smartsite.kit.nl/smartsite.shtml?ch=FAB&id=12505)
 * SDC Markets4Poor (http://www.markets4poor.org/publication)

Publications
 * UNEP/UNCTAD, 2008. Best practices for Organic Policy. What developing country governments can do to promote the organic sector.

Agricultural extension Organizations and websites
 * Agridea. http://www.agridea-international.ch
 * Global Farmer Field School. http://www.farmerfieldschool.info

Publications
 * Agridea, 2002. Innovative Approaches to Financing Extension for Agriculture and Natural Resource Management. Conceptual considerations and analysis of experience. http://www.agridea-international.ch
 * CIP-UPWARD/IDRC, 2005. Participatory Research and Development for Sustainable Agriculture and Natural Resources Management: A Sourcebook. http://www.idrc.ca
 * Helvetas, 2005. You Pay for What You Get. From budget financing to result based payments. http://www.helvetas.org

Gender issues in value chains Organisations and websites
 * Agri-ProFocus Gender in Value Chains Learning Group. http://genderinvaluechains.ning.com

Publications http://www.ifoam.org → Growing Organic → Training Platform
 * EPOPA Gender Learning and Sharing; Project end report. http://www.grolink.se/epopa/Publications/GenderProjectEndReport.pdf
 * Farnworth, Cathy & Jessica Hutchings, 2009. Organic Agriculture and Womens’ Empowerment. IFOAM. http://www.ifoam.org → Growing organic → Arguments for Organic → Social Justice
 * IFOAM Training Module on Gender in Organic Agriculture.
 * Pyburn & Verhart (forthcoming). Strategies for Addressing Gender in Certified Coffee Chains. KIT, Amsterdam.

Business planning and management Organisations and websites
 * ICA - International Cooperatives Association. http://www.ica.coop/al-ica
 * FAO/ILO. Cooperatives and Producers' Organisations. http://www.fao-ilo.org/fao-ilo-coop
 * ILO - International Labour Organisation. Publications related to agricultural cooperatives http://www.ilo.org/empent/WorkingUnits/lang--en/WCMS_DOC_ENT_DPT_COO_EN/index.htm
 * Agromisia/CTA, 2006: Starting a cooperative. Farmer-controlled economic initiatives. http://www.agromisa.org/agrodoks/Agromisa-AD-38-E.pdf
 * Financing institutions: see Annex "Financing Institutions providing loans for organic and Fair Trade businesses"

Publications http://www.kitpublishers.nl/smartsite.shtml?&id=33740&ItemID=2764&ch=FAB
 * Berdegué, J.A., E. Biénabe and L. Peppelenbos, 2008. Keys to Inclusion of Small-scale Producers in Dynamic Markets. IIED London.
 * FAO, 1998. Agricultural Cooperative Development. A manual for trainers. ftp://ftp.fao.org/docrep/fao/005/X0475E/X0475E00.pdf
 * FAO, 2009. Business management for small-scale agri-industries. http://www.fao.org/docrep/011/i0499e/i0499e00.htm
 * Koning, M. de, van Steenhuijsen Piters, B., 2009. Farmers as Shareholders; A close look at recent experience. KIT, Amsterdam.
 * MATCOM Cooperative Training Manuals, available from COOP@ilo.org.

Markets and marketing Organisations and websites
 * For a list of the main organic trade fairs, see chapter "Organic Business Guide"
 * CBI - Centre for the Promotion of Imports. http://www.cbi.eu
 * Organic Monitor: Organic market information. http://www.organicmonitor.com
 * Organic Trade Association: Business platform for North America. http://www.ota.com
 * EU Generalised System of Preferences, http://ec.europa.eu/trade/wider-agenda/development/generalised-system-of-preferences
 * US African Growth and Opportunity Act, http://www.agoa.gov
 * Sanitary and Phytosanitary Measures. http://spsims.wto.org
 * SIPPO - Swiss Import Promotion Programme. http://www.sippo.ch

Publications
 * Agromisia/CTA, 2004: Marketing for small-scale producers. http://www.agromisa.org/agrodoks/Agromisa-AD-26-E.pdf
 * Buley, M. et al, 1997. Exporting Organic Products; Marketing Handbook. GTZ, Eschborn
 * EPOPA, 2006. Organic Exporter Guide – hands-on help for organic exports from Africa. http://www.ifoam.org
 * FiBL, 2004. A Guide to successful organic marketing initiatives. https://www.fibl-shop.org/shop/show.php?sprache=EN&art=1338
 * IFOAM, 2004. Developing Local Marketing Initiatives. A Guide for Small and Medium Enterprises. http://shop.ifoam.org/bookstore/product_info.php?cPath=64_22&products_id=452
 * ITC, 2007. Overview of World Production and Marketing of Organic Wild Collected Products. http://www.intracen.org/organics
 * ITC, 2006. Marketing Manual and Web Directory for Organic Spices, Culinary Herbs and Essential Oils. http://web.archive.org/web/20070110014101/http://www.intracen.org/Organics/documents/marketing-manual.pdf
 * Organic Exchange, 2009: Export Logistics. An introductory guide to procedures. http://www.organicexchange.org/Documents/farmer_expo2.pdf
 * CBI, 2004. Export Planner. A comprehensive guide for prospective exporters in developing countries. http://cbi.nl/marketinfo/cbi/?action=showDetails&id=55&via=pub
 * SIPPO/CBI, 2003. Your Image Builder. http://www.sippo.ch/internet/osec/en/home/import/publications/sippo_and_partner.html
 * SIPPO, 2008. From contacts to contracts. A guide to practice. http://www.sippo.ch/internet/osec/en/home/import/publications/sippo_and_partner.html

Value chain facilitation
Consultancy for developing organic value chains

Donors and development agencies supporting organic value chains
The following table lists important organisations that are or have been active in supporting organic value chain projects. Please note that the list is not complete, and that priorities may change over time.

Business planning
Outline of a business plan for an organic business

Executive Summary
 * A very important part of your business plan, especially if you want to convince investors! Provide on max. 2-3 pages a precise summary of the main aspects of your organic business.
 * Cover at least the following: Scope of your business (production, processing, trade etc.), description of products, certifications, target markets, organisational set-up, management team, financing sources, finance requirements.
 * Keep it short; details on each of these points should be explained in the body of the business plan. The executive summary is meant to give a short, to the point, overview of your business, your financial needs and the unique selling points of your business.

Description of the company or organisation
 * Explain who you are (legal organisation) and what is your motivation for organic farming, the envisaged development impact, your guiding principles in working with farmers etc.
 * Describe your business history; include historical data on volumes, turnover, number of farmers and employees etc.
 * Outline how you are organized (organisational chart), especially how you involve farmers in your business, how you are linked with processors, traders or service providers.
 * Describe the current status of your business and your future plans (growth, product diversification, vertical integration).

Business environment
 * Describe the political, social and economic environment in which your business operates. What are the main obstacles and threats for an organic business? What opportunities can be used? What is the attitude of the government towards organic businesses; are there supportive policies?
 * Describe the situation of other organic businesses operating in your country. Do they collaborate or participate in networks?

Products and services
 * Describe the products you are planning to offer, the degree of processing, and the quality specifications. Explain which certifications you envisage.
 * Analyze how your products compete in the market.
 * Describe the purpose of your products. Describe any specific features or benefits of your products, i.e. the competitive advantage (or disadvantage) of your product.

Industry and value chain analysis
 * Describe the organic industry you are in (volumes, revenue, trends). Describe the opportunities and threats of the industry to your company.
 * Describe the value chain(s) in which you are involved (value chain map). Analyse and describe any bottle necks, critical links, opportunities and threats in the value chain.

Marketing plan
 * Describe your target markets (at local, regional and international level) and the respective clients (processing industry, wholesalers, retailers etc.). Indicate the market size and average sales price of each target market.
 * Identify the trends of your target markets concerning market growth and preferences and how these trends form an opportunity or threat for your business.
 * Outline how you will reach your target market (sales price, marketing activities, marketing channels and material).

Competitive analysis
 * Identify your main competitors. Describe the strength and weaknesses of the competitors, including product quality and sales price.
 * Clarify your competitive (dis)advantages.
 * Define the market share you envisage to achieve and motivate how you will achieve this.

Operations Plan
 * Describe the location of your office and production area, the facilities and equipment needed. Indicate the planned number of associated farmers, production figures, number of staff etc.
 * Describe the activities from input supply up to sales, including the arrangements for bulking, storing, transporting and processing of the produce.
 * Describe the extension and internal control system, the system to manage information, and the measures taken to ensure product quality.
 * Calculate the variable and fixed costs of the production (cost price).

Financial Plan
 * Demonstrate the feasibility of your business (break-even). Calculate and comment your expected profit or loss over the next 3-5 years (including worst case - best case scenarios). Include an income statement and balance sheet with the results of the past 3 years (for existing businesses) and the planned results of the coming 3 to 5 years.
 * Calculate the expected cash flow and the need for (trade) finance for the first two years on a monthly basis.
 * Describe the sources of funds (own capital, investments, loans, advance payments by clients, grants), and how they are used.

Management Plan
 * Describe the management structures and how decisions are taken. Describe the profiles of the individual members of the management team.
 * Describe the Advisory Board, the supporting organisation or the consultants assisting you.
 * Describe which competencies are still missing and how you plan to get them.

Risk analysis
 * Demonstrate your ability to understand potential problems that could occur to your business. Explain how you plan to reduce and manage these risks.

Production planning tool - example
Download the corresponding excel file here

Examples of cost price calculations
Example of organic pineapple processing

Example of organic cotton fibre production

Organisational set-up and processes
Roles and responsibilities in extension and ICS

Download the corresponding word file here

Job description for Field Officer - example
Download the corresponding word file here Team and responsibilities The Field Officer (FO) functions in a team comprising of other Field Officers and a Documentation Officer (DO), all managed by the Field Supervisor (FS). The FO reports to the Field Supervisor. The team works from the field office. The FO attends monthly team meetings in the organic field office. Progress and any problems are reported and a plan made how to solve them.

The FO is assigned to a certain area, a locality, a group of farmers for whom he/she is responsible. The FO is expected to live in that area. The FO is not expected to be a farmer unless it is a model farm. During the time of internal inspection (2 months of the year), the FO may be transferred to the locality of a fellow FO.

The FO shall be a good representative of the exporter. This includes that the right information from the exporter is communicated to the farmers, and that important information from the farmers is fed back to the exporter (via the Field Supervisor). Good communication normally means through contact farmers.

Assistance to farmers The FO shall be responsible for correctly informing the farmers (men and women) of the standards of organic production as laid down in the internal regulation. This means that regularly, awareness and training workshops are held on demonstration farms, or otherwise. The FO shall assist the farmers (men and women) in improving agricultural production in a sustainable organic way. This may involve some experimentation on the demonstration farms or on individual farms. The strategy for farm improvements is decided every year in the team. The FO is to implement that strategy. The FO shall work with the farmers to produce predominantly Grade 1 produce; picked at the right time in the right way, properly fermented, washed and dried.

Responsibilities within the ICS The FO shall implement the Internal Control System as described in the ICS manual. This means that the FO is responsible that for each farm under his/her responsibility
 * correct information is available, updated from the Farm Entrance Form
 * producer contracts are signed
 * a proper yield estimate is done prior to harvest
 * an annual internal inspection is done
 * non-compliances from the internal inspection are followed-up
 * areas for improvements indicated during the internal inspection are addressed
 * Corrective Action Requests from the certification body are implemented

The documents under the FO’s control are always kept dry and in a secure place. Documents gone missing are reported instantly to the FS. The FO guards the organic integrity of the farmers under his/her control. Failure to maintain organic status is a reason for summary dismissal.

Responsibilities during marketing During marketing, the FO shall
 * communicate prices and buying times to the farmers
 * monitor prices paid by the competition and report to the FS
 * advise farmers on logistics (storage, delivery)
 * confirm the identity of delivering farmers
 * assist the buying agent in establishing the quality grade
 * address substandard quality
 * investigate suspicions of over delivery and contamination

Equipment Every three years, the FO is given a bicycle as means of transport. The FO is responsible for maintenance of the bicycle. Breakdown of the bicycle is not an acceptable excuse for work not done. The FO is given gumboots and a cap to identify him/her as the internal inspector.

Targets Every year specific targets are set by the FS (number of farmers, yield, new practices implemented, ICS work done on time). When achieved, the FO receives a bonus.

Confidentiality All documents are confidential and should not be shared with any person without the consent of the Field Supervisor. Information requests from outsiders are forwarded to the FS. The FO shall assist buyers and/or inspectors of the certification body when they are visiting the farmers. At that time, the FO shall answer questions, share information, show documents etc. to facilitate the visit.

Further conditions The Field Officer is not allowed to work for one year for another organic operator after termination of his/her job, regardless who is to blame for the discontinuation of the employment.

Date:

Signature of FO Signature of Employer

Content of an Operating Manual
Use and update of the manual
 * Objectives, how to use, distribution
 * Revision and up-dating of the manual

The organic production and Fair Trade system
 * The organic farming system, production methods
 * The Fair Trade system, handling of minimum price and premiums

Organisational set-up
 * Organigramme, roles and responsibilities
 * Selecting and organizing the producers

The extension system
 * Roles, processes and tools
 * Training of staff
 * Training of farmers
 * Extension visits
 * Facilitating farmer-to-farmer exchange
 * Supply of inputs

The Internal Control System (ICS)
 * Roles, processes and tools
 * Training of staff
 * Risk management
 * Documentation
 * Internal inspection visits
 * Internal approval procedure

Post-harvest operations Quality management and monitoring
 * Storage, bulking, transport
 * Processing
 * Marketing, payments
 * Data management
 * Sampling, cross-checking
 * Product quality management
 * Impact monitoring

Annexes
 * Reference documents
 * Forms and templates

Annual operational plan
Download the corresponding excel file here

Certification and ICS
Overview of important organic standards and labels

Farmer agreement - example
Download the corresponding word file here

Internal regulations – example
Download the corresponding word file here

List of non-conformities and sanctions – example
Sanctions and the levels of decisions Download the corresponding word file here

Non conformities according to internal standards / internal control



Marketing tools
Product description sheet - example of cotton from Burkina Faso Download the corresponding word file here



Contract between seller and buyer - example Download the corresponding word file here

General tools
Typical pitfalls, and how to avoid them



Checklist: What makes a successful organic business

 * Your farmers are loyal to you. More farmers want to join. The farmers appreciate the support of the field officers; both production and quality increase. The farmers have a farm with a future.
 * An organisation with head office, grading, processing and packing facilities, stores, field office and buying stations is in place. Quality assurance has been developed. You work with the same, reliable transport company year after year.
 * The company is well-managed, the staff is well trained, there is low staff rotation. The company can always be reached by email, phone, and fax, and it responds rapidly. There are clear arrangements for decision making when key staff members are travelling.
 * There is proper organic certification for the target markets. The contact with the certifier is pleasant. There are only few corrective action requests after the annual inspection.
 * You have a sizeable volume of a number of products of a quality demanded in the market. Every three years there is a new product. A unique selling proposition has been developed, one that is recognised by your buyers and competitors. You improve your business by asking feedback from customers.
 * Every year the marketing plan is rehearsed and confirmed. A number of markets and buyers have been tested. You operate in 2-3 different markets. Longer term agreements have been made with 2-3 selected buyers. You see each other every year. You have visited each other.
 * There are clear and efficient procedures on how to define prices (in buying and selling). There is a consistent policy on handling price and exchange risks. The company is in touch with the latest market and price developments.
 * A continuous analysis of costs and benefits shows that normally there is a 15-20% margin. This margin is used to expand the business.
 * Your health and that of the family is well.