Knowledge

NewForesight drives sustainable market transformations. We do this by sharing the knowledge we accumulated in this field, and applying this knowledge to develop strategies for our clients as well as handing them the tools necessary to implement change. On this page you will find the premise of our work, the S-curve and the Shapes and Forces models.

NewForesight bases its models on a wealth of experience with sustainable market transformations in global agricultural systems. Over 1 billion people work in agriculture, making it the second greatest source of employment worldwide. However, many of them live in poverty. On top of this, the numerous agricultural practices that bring food to our tables every day deplete and pollute valuable soil, use 70% of all the fresh water in the world, diminish biodiversity and accelerate climate change. The impact of agriculture and the urgency for a sustainable market transformation in this sector signify that lessons learned here are valuable for all economic sectors.

Four Stages of Market Transformation

Sustainable market transformations follow a series of four distinct stages that we set out in the sustainable transformation curve (S-curve). Recognizing the phases can help you identify patterns and guide you to initiate, accelerate and drive systemic change. Each of the four phases is characterized by the adoption of progressively effective sustainability practices. As the sector advances along the S-curve, sustainability increasingly matures and enters the mainstream market.

knowledge 1_s curve narrow

  1. In the inception phase, there is no comprehensive approach to sustainability within the market. Market demand for sustainable products remains niche. NGOs and other stakeholders set up their projects pushing for sustainability in isolation.
  2. Market demand leads to the emergence of more organized and visible sustainability initiatives in the first movers phase. Broader interventions involving multiple stakeholders are created. Competition between initiatives leads to innovation in business models, but also to inefficiencies and duplication of efforts.
  3. Inclusive and structural change takes place in the critical mass phase. Stakeholders work together to tackle obstacles that inhibit sustainability. Governments institutionalize the agenda and expand the drivers of change.
  4. In the final phase, the institutionalization phase, the sector has effectively put an end to practices that are environmentally damaging or socially undesirable. In this phase sustainability becomes mainstream and institutionalized.

For further reading, Changing the Food Game by Lucas Simons explains in detail the four phases of a sustainable market transformation. The necessity of a sustainable market transformation of our entire food system becomes clear, as well as the way forward.

Jason Clay (PhD- Senior Vice President of Market Transformation, WWF) about the book: “Sustainable food systems are pre-competitive. We must work together to produce more with less by focusing globally on productivity and efficiency while reducing waste. This book suggests how we can find the tipping points to get ahead of the curve”

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Shapes and Forces models

To feed 10 billion people in 2050, a major transformation of our food system is required. The current system is unsustainable: it is responsible for global greenhouse gas emissions, pollution, soil degradation and desertification, socially undesirable situations and diminishing yields. NewForesight developed the Shapes and Forces Model that identifies possible agricultural sector shapes and the forces that determine the sustainability of an agricultural sector. Agricultural commodity sectors can be defined by their shape. A shape illustrates the relative proportion of different farms based on scale and organization within the sector.

Subsistence smallholders are at the bottom, entrepreneurial farmers in the middle and highly organized farm estates at the top. The level of organization and professionalism of farmers is a good indicator for productivity, efficiency, market access and bargaining power and related to the uptake of sustainability practices in that particular sector. A sector’s shape can therefore indicate its absorption capacity for sustainability practices. Of the identified fives shapes, the diamond shape is the preferred shape for sustainability, in which the majority of the farmers are entrepreneurial SMEs. Their degree of scale and organization is most suitable for intensifying production in a truly sustainable manner.

The shape of a sector can be altered by the understanding and influencing of the forces that determine its shape. We have identified the four main forces in the agricultural sector. To develop a strategy for a sustainable market transformation, we map the forces for the sector in question and analyze what change is required.

Agriculture knowledge

More detailed information on the Shapes and Forces models can be found in our publication Sustainable Intensification: A strategy for sustainable design.

If you have any questions, please do not hesitate to contact Tessa van der Meiden with your questions. She will connect you to the appropriate consultant.

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Sustainable Sector Transformation Model

Addressing sustainability issues in agro commodity sectors is challenging, especially in sectors that are dominated by smallholders. In these sectors, systemic change has proven to be elusive. Current transformation models, whether public or market driven, have only been able to realize systemic change to a limited extent.

Therefore, Aidenvironment, NewForesight and IIED have developed a groundbreaking holistic Sustainable Sector Transformation Model commissioned by the IFC, the Dutch Ministry of Foreign Affairs, SECO and IDH, the sustainable trade initiative.

The Sustainable Sector Transformation Model is used to analyze a particular agricultural value chain by defining the five building blocks needed for the transition towards a sustainable agri-sector. This analysis can lead to a local development agenda which includes all stakeholders, from government, civil society and the private sector.

Altering a system is not something that is done in isolation: sector stakeholders need to work together to change the incentives that drive the sector. The Model’s holistic approach attributes responsibility to those who have the appropriate mandate and are empowered to make those decisions. An essential part of the process is coming to a vision for the sector shared by all relevant stakeholders, and making each actor responsible for the success of a transition towards that shared vision. Stakeholder buy-in, a solid strategy and concrete actions are indispensable factors for success.

The Sustainable Sector Transformation Model

Sustainable transformation model

Figure: Sustainable sector transformation model

The five building blocks, which are also oulined in figure above, are:

I. Sector alignment and accountability
This building block focuses on the development of a vision on farm and sector quality, including the setting of a strategy that reaches that goal. This vision should be shared by all relevant stakeholders, and the strategy includes clear roles and responsibilities for each of them. All are held accountable according to key performance indicators (KPIs). A monitoring and evaluation (M&E) system will provide for the data to measure progress and to revise the approach when new information or best practices are identified.

II. Strengthening of demand
Part of a sustainable sector are procurement practices that are organized in such a way that they reward improvement and exclude worst practices. Buyers should position themselves as preferred buyers and possibly provide additional services, such as capacity building or providing inputs.

III. Public sector governance
The public sector has an important role as regulator and facilitator: they support sector transformation where the market fails or is incapable to act. This includes enforcing social and environmental regulation (e.g. land tenure, labor, conservation), providing investments (e.g. infrastructure, research, input subsidies) and governing the market to ensure effective quality differentiation and price transmissions, reduce price volatility and improve sector organization (e.g. minimum prices, quality regulation, marketing boards).

IV. Organization of the production base
The organization of the production base can enable the market to reward good performance and exclude worst practices. Key for wide-scale promotion of sector quality is to organize producers around service delivery. Organization could be obtained in different ways, for example through service provider networks, outgrower schemes, supply chain networks, and cooperatives of sector-wide organization.

V. Organization of the service sector
Services such as extension, inputs and finance need to be accessible, demand driven, high quality and bundled where possible. In the ideal situation, services are provided by a competitive market of service providers that treat farmers as clients. Farmers are more and more able to pay for the services themselves. Service delivery, in a sustainable sector, rewards good performance and excludes worst practices. When a professional service sector is not available, buyers or the public sector could organize this alongside the complementary – possibly non-competitive – investments to build a professional service sector. Small sector levies and taxes may offer potential for longer-term sector-wide financing of services.

If you would like to know more about the model and its development, as well as examples of its implementation, please visit http://sectortransformation.com/, see our publications on the topic at the bottom of this page, or feel free to contact us.

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Publications

NatCap-article      Cocoa roadmap Indo-article    Sustainable Intensification at Scale     IFC roadmap-article     SustSectTrans-article     SectGov-article     SDM-article     VSS-article     

Book cover

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