Workshop: Value Chains - An introduction to value chains


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Workshop: Value Chains - An introduction to value chains

  1. 1. WORKSHOP<br />an introduction to value chains<br />malcolmbeveridge and froukjekruijssen<br />WorldFish Center, Penang<br />18-22 July 2011<br />
  2. 2. overview<br />Fish market, Dohaa<br />purpose<br />introduction to value chains<br />methodologies<br />value chain analysis<br />value chain development<br />using value chain analysis and development<br />case studies<br />Source:<br />source: Oxfam America (2011)<br />
  3. 3. purpose<br />value chains are central to the CRPs<br />WorldFish scientists should understand the basics<br />by the end of the workshop, we intend that you have a better understanding of<br />what a value chain is (jargon)<br />why value chain research is central to the CRPs<br />value chain analysis<br />what value chain development entails<br />how to engage with VC research in the Center<br />
  4. 4. background<br />
  5. 5. value chains – a definition <br /><ul><li>‘.. comprise all activities needed to bring farmed produce to consumers..’ *
  6. 6. credit
  7. 7. seed
  8. 8. feed
  9. 9. production
  10. 10. processing
  11. 11. storage
  12. 12. marketing
  13. 13. distribution
  14. 14. consumption</li></ul>* source: Gomez et al. 2011. Science, 332, 1154-1155.<br />
  15. 15. value chains<br /><ul><li>applied to an enterprise, a conglomerate, a sub-sector or a sector
  16. 16. at each node a product is exchanged or transformed and value added</li></ul>inputs<br />and<br />services<br />transport<br />and<br />processing<br />marketing<br />consumption<br />production<br />upstream<br />downstream<br />increasingly used in development and associated research because they<br />provide a good framework to ensure desired outcomes and impacts<br />identify where problems – e.g. inefficiencies, gender inequities - are occurring and where interventions are needed<br />highlight the importance of private sector development and identify where public sector and civil society can best play a role<br />
  17. 17. value chain analysis<br />
  18. 18. value chain analysis<br />the analysis of <br />chain configuration (input-output structure)<br />institutional framework<br />governance<br />upgrading (development)<br />takes account of<br />dynamics<br />barriers, opportunities<br />inputs<br />and<br />services<br />Shrimp farming value chain, Bangladesh<br />source: USAID(2010)<br />
  19. 19. institutional framework<br /><ul><li>‘.. the rules of the game in a society’*
  20. 20. organizations
  21. 21. formal (e.g. laws) and informal (e.g. norms of social behaviour) rules
  22. 22. value chain analysis
  23. 23. factors that interact with the functioning of the value chain
  24. 24. external to the governance of the chain
  25. 25. influence terms of participation, gains.</li></ul>NGOs<br />regulations<br />organizations<br />and<br />pressure groups<br />political<br />parties<br />inputs<br />and<br />services<br />transport<br />and<br />processing<br />production<br />marketing<br />consumption<br />ministries<br />standards<br />producer<br />organizations<br />industry<br />organizations<br />*source: North (1990)<br />
  26. 26. governance<br />“.. inter-firm relationships and institutional mechanisms through which non-market, or ‘explicit’, coordination of activities in the chain is achieved..”*<br />exercising governance<br />deciding who does what, when, how, under what conditions along the chain<br />results in allocations of resources, distributions of gains, and specific terms of participation and of exclusion<br />‘lead firms’<br />occupy one or more functional positions along a value chain that govern or drive it<br />decide who does what along the chain, how, with what specifications and for what rewards<br />inputs<br />and<br />services<br />*source: Humphrey & Schmitz (2004)<br />
  27. 27. value chain development<br />
  28. 28. value chain development - program design<br />source:<br />
  29. 29. step 1 – which value chain?<br />Typical supply flows for livestock products in a lower-income country<br />source: ILRI/CIAT/WorldFish/ICARDA (2011)<br />
  30. 30. step 2 - value chain analysis<br />modified from<br />
  31. 31. step 2 - e.g. study type methodology<br />inexpensive; rapid; useful for scoping - preliminary analysis - and where limited outputs and outcomes (i.e. little change) are sought<br />Production Zone<br />Consumption Zone<br />Inputs<br />Farm<br />Traders<br />Processing<br />Retailers<br />Processors<br />Retail outlets<br />Hatcheries<br />On-farm<br />seed<br />Large Traders<br />On-farm<br />feed<br />Feed Mills<br />Informal Traders<br />Energy Commodities<br />Manure<br />generalized aquaculture value chain, Zambia<br /><ul><li>inaccuracies/biases
  32. 32. methodologies
  33. 33. key informants (phone and e-mails; field visits)
  34. 34. published information (reports and papers; statistics)</li></li></ul><li>steps 3–4 – identify and assess solutions<br />e.g. green bean exports, Kenya<br />discuss with solution<br />providers and users<br />Type of<br />constraint<br />Constraint <br />Market-based solutions<br />modified from<br />
  35. 35. steps 5–6 – intervene and monitor<br />Step 5 – choose interventions<br /><ul><li>focus on causes not symptoms
  36. 36. prioritize
  37. 37. strategic view
  38. 38. enable (invest), incentivize and sustain change</li></ul>Step 6 – measure performance<br /><ul><li>more affordable fish
  39. 39. increased consumption by target groups
  40. 40. more gender equitable employment</li></ul>source:<br />
  41. 41. developing value chains<br />
  42. 42. (i) TNCs - maximizing poverty reduction<br />e.g. Coca-Cola/SABMiller, Zambia<br />Objectives<br />determine how the company’s procurement, manufacturing and distribution practices influence how easily poor people find quality employment, earn a living wage, sustain a business or participate in the market.<br />source: Oxfam America (2011)<br />
  43. 43. maximizing poverty reduction among TNCs<br /><ul><li>numbers of workers at each node
  44. 44. incomes and benefits; taxes generated
  45. 45. empowerment
  46. 46. freedom of association
  47. 47. grievance and dispute resolution
  48. 48. diversity and women’s participation
  49. 49. environmental impacts</li></ul>recommendations<br />independent audit<br />actions<br />source: Oxfam America (2011)<br />
  50. 50. (ii) improving small-scale producer value chains<br /><ul><li>small producers linked only to buyers of their products
  51. 51. reduces rewards and/or whole value chain performance
  52. 52. sales of small volumes
  53. 53. high uncertainty of price
  54. 54. sales to many buyers
  55. 55. cannot acquire reliable market information or access finance and other support from buyers
  56. 56. poorly quality standards and quality
  57. 57. lack of traceability</li></ul>seaweed farming, Tanzania<br />
  58. 58. upgrading<br />process upgrading: transform inputs into outputs more efficiently by reorganizing production system or through better technologies. e.g. change from cage to pond culture by fish farmers<br />product upgrading: change to more profitable product lines e.g. processors switch from frozen to breaded fillets<br />functional upgrading: increase skill set e.g. from feed mill to vertically integrated company that includes farming and processing<br />inter-chain upgrading: use skills acquired in a different sector/chain e.g. farmers switch from rice to Pangasius<br />other forms of upgrading: increase volume, meet standards and certification, deliver on logistics and lead times, get paid better for the same product e.g. Fair Trade<br />photos: Chen Oai Li, Hong MeenChee, Ingrid Kelling, Froukje Kruijssen<br />
  59. 59. (iii) cost – benefit analysis of fishing<br />Objectives<br /><ul><li>evaluate impact of interventions
  60. 60. quotas, effort regulation or area closures
  61. 61. on ecosystems, the economy, society and food availability</li></li></ul><li>cost-benefit analysis fishing - methodology<br />Ecopath/Ecosim<br />Value Chain Analysis<br /><ul><li>links trophic eco-system model to a value chains</li></ul>source: Christensen et al. 2011<br /><ul><li>determine flow (amounts, revenue, costs) of fish products from sea to consumer</li></ul>describe the social benefits (employment, incomes) from fish production and trade<br />consider income distribution and social benefits of the fishing sector<br />
  62. 62. modeled benefits to fleet and value chain<br />revenue<br />revenue<br />profit<br />profit<br />source: Christensen et al. 2011<br />
  63. 63. (iv) gender<br />value chains are embedded in a social context<br />value chain development affects gender roles and relations<br />gender equity and value chain competitiveness are mutually supportive goals<br />
  64. 64. supporting gender equitable value chains<br />understand men and women’s roles and relationships<br />foster equitable participation<br />address the distinctive needs of women<br />support women’s economic advancement<br />design and promote gender equitable, benefit sharing mechanisms<br />include men in defining problems and solutions<br />source:<br />
  65. 65. removing gender constraints<br />source: USAID (2010)<br />
  66. 66. further reading<br />Christensen et al. 2011. A combined ecosystem and value chain modeling approach for evaluating societal costs and benefits of fishing. Ecological Modeling, 222, 857-864.<br />Gomez, M I et al. 2011. Research principles for developing country food value chains. Science, 332, 1154-1155. <br />Mayoux, L and Mackie, G. 2008. A Practical Guide to Mainstreaming Gender Analysis in Value Chain Development . International Labour Office. - Addis Ababa.<br />Oxfam America. 2011. Exploring the Links Between International Business and Poverty Reduction. The Coca-Cola/SABMiller value chain impacts in Zambia and El Salvador. Oxfam America, <br />Riisgaard, L, Bolwig, S, Matose, F, Ponte, S, du Toit, A and Halberg, N. 2008. A Strategic Framework and Toolbox for Action Research with Small Producers in Value Chains. DIIS Working Paper no 2008/17. Copenhagen: Danish Institute for International Studies.<br />Rubin, D, Manfre, C and Barrett., K N 2009. Promoting Gender Equitable Opportunities in Agricultural Value Chains: A Handbook. Publication prepared under the Greater Access To Trade Expansion (GATE) project, under the Women in Development IQC Contract No. GEW-I-00-02-00018-00, Task Order No. 02. Washington, DC: United States Agency for International Development.<br />USAID. 2011. Gender and Pro-Poor Value Chain Analysis: Insights from the Gate Project Methodology and Case Studies.<br />Veliu, A, Gessesse, N, Ragassa, C.and Okali, C. 2009. Gender Analysis of Aquaculture Value Chains in Northern Vietnam and Nigeria. Agriculture and Rural Development Discussion Paper 44. Washington, World Bank.<br />
  67. 67. fin<br />