Value Chain Analysis for Sustainable Rural Development by: Ivan Idrovo and Marian Boquiren. Contracted by: GIZ-Department of Agriculture-NCI-Philippines

1. SECTION 2: VALUE CHAIN MAPPING
After the selection of the value chains is complete, the next step is to map the value chain.
Mapping of the value chain is a vital step in guiding the analysis of selected chains. This
section shows examples on how to capture the different dimensions of a value chain.
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2. A Subsector Analysis examines all the firms, channels and markets related to a specific
product or service.
The Value Chain Analysis focuses on a single vertical chain of firms leading to a particular
consumer market. Value Chain Analysis also often includes additional analytical elements
beyond Subsector Analysis such as inter-firm cooperation, governance and support market.
The Value Chain is concerned with one market channel only while the Subsector comprises
the different channels and the competitive relationship between those channels
In the coffee subsector, for example, there can be two and more value chains such as:
-
Independent grower- who sell to traders, these traders will sell to Wholesalers, who
then sell to local retail outlets;
Multinational company using sub contracted growers, this allows high quality control
and close relationship between growers and multinational company.
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3. The value chain map illustrates the flow of commodities or products from producer to
consumer as well as the interrelationships between players in the chain. Basic components
that should be illustrated in the map include the following:
a) Markets: The market is the final destination of the product. Markets can be defined by
segments (e.g., geographic, type of end-user, etc.)
b) Functions: Each step through which the product passes during the production and
distribution system is referred to as function. For example, in the case of coconut oil,
functions include coco planting, copra production, transportation and marketing of
copra, oil milling, refinery, etc.
c) Actors: Actors are the key players and their roles within the subsector (e.g., farmer,
trader, farm worker, processor, etc.) Actors should be grouped by categories of firms
rather than individual firms by name.
d) Linkages between each participant blocks with arrows in the direction of the product
flow
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4. After the collection of additional data and conduct of in-depth interviews, it is
recommended that an adjusted map is prepared showing the following: a) support
services; b) product life cycle and/or product formats; c) costs and prices; d) number of
enterprises, geographic location, wealth ranking, gender; e) value chain governance; and
e) volume
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This is an example of a map that shows where the targets are and the chain in which they
are participating. Adding the indicative volume of products flowing through the chain
provides an overview of the size of the market being catered to by the target group. The
map indicates that target groups are not able to participate in bigger and seemingly more
lucrative markers.
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5. The map provides the underlying analytical skeleton for the investigation and gives a
preliminary rapid visual overview of the subsector or the value chain.
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6. It is important to look at all the channels and value chains, understand their dynamics and
interdependences. This will indicate whether the majority of the enterprises are in
prosperous, growing or dying channel; and when necessary, how to move and upgrade
these enterprises into another channel. When concentrating on a specific value chain
without identifying other channels and value chains of the same product, important
possibilities for upgrading can be missed.
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