This is part of a USAID training on facilitating value chain development. Module 1 includes an introduction to value chains (through a large group activity) and different elements of value chains

1. FACILITATOR NOTES
MODULE 1: UNDERSTANDING VALUE CHAIN SYSTEMS
Module Learning Objective
To introduce the importance of systems thinking to improve the performance of value
chains to meet end market requirements and create broad-based wealth
Session 1: Introduction to Value Chains
Objectives
To understand actors and interconnected systems within the value chain
framework
To introduce actors in one of the project’s target value chains
Methodology
Large group activity
Key Messages
Value chains are made up of multiple roles and functions performed by
interdependent market actors—many of whom are not part of the core system
(e.g., rules setters, service providers)
You must understand the organization and structure of a value chain system
before determining what your project will do
Timing
Approximately 45 minutes
Materials
Identity Cards
Activities
ACTIVITY: Value Chain System Role Play
Welcome: Brief (60-second) introduction.
Logistical Setup: Give each participant an Identity Card that states the generic
name of a value chain actor in one of the project value chains. Hand out a few
blank cards for entrepreneurs to find new opportunities or gaps to fill. Ask
participants to “find their market”—link with those actors that they buy from
and sell to. Allow at least 10 minutes for participants to meet others in their
roles and try to make deals.
Debrief: After 10 minutes, discuss starting with “Who was successful? Who
wasn’t? Was the system efficient?” Draw out key terms: who are the players,
type of relationships (vertical and/or horizontal) nature of relationships
relative to how they compete and/or cooperate?
Summarize: This is a system – multiple players, multiple functions – you can
call it a value chain, a market system, or a value chain system. Our picture of a
system includes many players, many of whom are not part of the tightly linked
chains that transform raw materials into finished products and transport or
distribute them to a range of end markets. Our picture is going to be much
broader than typically can be seen through the eyes of one player (a processor,
a farmer, a farmers’ cooperative) or from our “target group” typically small
Facilitator Notes: Module 1
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2. farms or firms within a much broader and complex system. Our goal is to shift
the purpose of the system away from a norm of everyone for him/herself to one
where all system players find better ways to compete and cooperate in order to
achieve a collective purpose of constantly upgrading to meet end market
requirements that results in wealth creation (e.g. growth with equity).
Facilitation Tips
Decide how far you want to take this activity beforehand. It could become a central
way to explain most concepts in the curriculum and continue for a long time.
There may not be time to debrief with each actor, depending on how much time
you have and how many participants there may be in the room.
Ensure a large space is available in or outside the training room that
participants can move around in freely for this activity.
During the debrief, ask open-ended questions to encourage participants to
discover information and raise issues themselves, rather than lecturing and
providing answers.
A simple way to distinguish between vertical and horizontal linkages is to keep
in mind that vertical means firms performing different functions, whereas
horizontal refers to firms performing the same function.
Potential
Questions from
Participants
If participants ask for clarification on what to do or to obtain more background
on their roles, try not to give any additional instructions as they will figure the
process out as they move forward. Tell them that they can make any
assumptions about their roles and the instructions that they wish.
Discussion /
Debrief
Questions
To introduce end-consumer preferences and end-market demand: Ask
end-consumers: “What kind of / quality of end-product do you want?” As you
proceed to other actors, you could refer back to the qualities or specifications
introduced, by asking “Do you know what the end-consumer wants? What are
you doing to ensure that you are able to provide this?”
To introduce multiple market channels: “Where does the chain
split/separate to link to differing end-consumers or end-markets?”
To introduce understanding that chains do not work neatly step-by-step
and that actors often bypass other actors: “Can anyone sell directly to any of the
actors higher up the chain or do you have to go through the others that are
immediately next to you in this role-play?” “What are examples in this role-play
situation where this does or could occur?”
Conclude by summarizing the basic functions being taken on by various groups
of roles in the chain and how the value chain can be plotted according to these
functions (e.g. end consumer/retailing, exporting, packaging processing,
producing, input supplying)
Exploring rules and norms:
“Did anyone consider regulations and rules as part of their chain?” “What are
examples of specific actors that do act or could act that represent these?” (E.g.
government, policy makers, regulators)
“Did you only consider formal rules?” “What about informal rules, what are
Facilitator Notes: Module 1
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3. examples of these?” (E.g. taboos, cultural norms)
Adaptations /
Variations
Preparation
You may want to have participants retain their roles throughout the workshop
so that you can ask them how they would respond in certain circumstances and
also introduce new players with people taking on new roles as the workshop
progresses. These roles could potentially be written directly onto participants’
name badges.
Prepare Identity Cards
o Prepare miniature cards each with one generic name of a value chain
actor in one of the project value chains, either preprinted or written
directly onto card). Print the name in large letters on each card.
o If possible, get name badge holders or stickers with the names on it so
that each person’s card can be easily seen by the other participants.
o Ensure there are enough for one card / role per participant.
o Using pictures on the cards can add value, especially to groups not
familiar with more formal training techniques and which prefer less
writing. For example: Banks could have picture of a local bank, an input
supplier could have pictures of seeds and fertilizers, an equipment
supplier could have pictures of a piece of farm equipment, etc. Simple
words could work well too, however, as they allow participants to
visualize their own context directly.
Rice Value Chain System Actors
1. Importer of Long-Grain White Rice
2. Local White Rice Trader
3. Local Paddy Trader
4. Large-Scale Paddy Miller
5. Medium-Scale Paddy Miller
6. Community Hand Miller of Paddy
7. Community Hand Thresher of Paddy
8. Retail Grocery Outlet
9. Open-Air Food Market
10. SME Agro-Input Dealer
11. Large Input Supply Firm
12. Small-Scale Paddy Farmer
13. Commercial Long-Grain Paddy Farmer
14. Small-Scale Emerging Commercial Paddy Farmer
15. Community Leader/Chief
16. Rural Transporter
17. Tractor Service Provider
18. Owner of Agricultural Crop Warehouse
19. Ministry Of Agriculture Official
20. Rural Bank Manager
21. Credit Officer from a Large Bank
22. Radio Station Manager
23. Spray Service Provider
24. Ag Extension Officer
25. ICT Firm
26. Ag Equipment Dealer
Facilitator Notes: Module 1
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4. Facilitator Notes: Module 1
4

5. Module 1 Session 1
Rice Value Chain Actor Role Play
Session 2: Course Objectives and Agenda
This session provides basic guidelines on how to introduce the workshop objectives, presenters, and
agenda or route map for the learning.
Objectives
To introduce the workshop objectives and agenda
To align workshop objectives with participant expectations
To introduce the workshop presenters
Key Messages
Key Workshop Objectives:
o To orient and train staff on value chain systems approach to project design
and implementation
o To ensure that everyone on a project is working towards the same goal,
with the same vision, and working with market actors in a consistent way
o To orient and train staff on facilitation practices, including developing an
on-going staff/project capacity building plan
o To develop internal knowledge management practices and systems that will
ensure effective implementation
o To operationalize the work plan based on market facilitation best practices
o To result in more detailed action plans for the project components and staff
Timing
Approximately 20 minutes
Methodology
Presentation
Materials
Agenda/PowerPoint slide with workshop objectives
Activities /
Presentation
PRESENTATION: Introduce Goals andObjectives
Hand out agenda
Ask participations for their expectations
Compare participant expectations against agenda
Try to satisfy any mismatch with time for issues not covered by the agenda
PRESENTATION: Introduce Presenters
Provide background to the experience and expertise of the workshop
presenters to give credibility to the information that will be shared and
presented.
PRESENTATION: Introduce Participants(optional)
You may decide to ask each participant to introduce themselves and their
organizational affiliation, although this could take extensive time. You may
prefer to simply have participants wear name badges with the names and
organizations written in large, easily legible letters.
PRESENTATION: Introduce Agenda
Expand a little further on each of the modules and sessions as they are
Module 1 Session 1: Rice Value Chain Actor Role Cards
1

6. introduced as part of the agenda, giving a few examples or additional learning
points that will be explored in each of the sections. You may list these on the
PowerPoint, write them on a flipchart or put up a diagram which shows the
Route Map that participants will move through during the workshop. This Route
Map can be used at various times throughout the workshop, preferably at the
start of each day, start by reflecting on what was covered previously and where
on the Route Map (agenda) the participants currently are and where they are
going. Show participants where they have been and where they will be going as
they explore topics during the workshop.
Ask if there are key questions that you would like answered through the
workshop? State whether or how they will be addressed throughout the
project.
Discussion /
Debrief
Questions
When project staff and partners are from different places around the country,
there is a need to ensure that everyone is on the same page in terms of the
project and how everyone will be operating.
This type of workshop is particularly important at the startup phase of the
project to ensure that everyone is aligned around the same vision for the
project.
This will allow project staff and partners to gain the knowledge and skills to
share this thinking with others in the field, such as other field project and
partner staff, or with private sector players and other value chain actors.
When workshop participants reread the project workplan after the workshop,
the aim is to ensure that everyone understands the workplan in a more similar
way.
Adaptations /
Variations
Route Map: You can leave this up throughout the workshop and refer to it
during the debriefs. You may decide to write key messages on colorful cards
and put these under the various parts of the route map as you finish each
session, leaving these on the wall throughout the training.
Facilitation Tips
It is better not to provide participants with exact time slots for each module or
activity on the agenda because it lets them know if you are running over or
under time. It also reduces your flexibility to change the focus or timing of the
agenda. For this reason it is useful to only provide the start and end times for
the entire day.
Preparation
Project Vision Poster: Prepare a large page that states the overall project vision.
Route Map Poster: Prepare posters along wall which represent workshop Route
Map.
Route Map Handout: You may also decide to print a copy of the Route Map for
each participant.
Agenda Handout: You may decide to provide a copy of the agenda for the
workshop to each participant, although it may be better to simply provide the
Route Map. If the agenda is provided, do not include times for individual
sessions.
Session 3: Value Chain System Elements

7. Objective(s)
To understand principles that guide our work.
To understand definitions and basic interrelationships between value chain
actors.
Key Messages
Value chain systems involve interdependent players interacting together for a
common purpose best achieved through the effective functioning of the whole
system to meet end market requirements resulting wealth creation
A system can be simple or complicated, with many functions and players, rules,
and support services – but all systems are complex with individual firms
competing against each other and cooperating with each other in order to
provide value to the end-market consumer.
Materials
PowerPoint slides (3 slides)
Timing
Approximately 30 minutes
Methodology
Brief presentation of framework followed by plenary discussion on system
principles and why they are important to understand as guides to our work.
Activities
ACTIVITY: Presentation
Slide 1: Key Terms and Definitions
Delivering value to end market consumers is the starting point for understanding
how a market system works.
Supply is organized by transforming raw materialsintofinished products and
delivering them to end market consumers.
Inter-firm relationships are both vertical (firms doing different things) and
horizontal (firms doing the same things)
How well value chain actors perform their functions is influenced by:
o inter-connected systems and
o rules of the game.
Think of inter-connected systems as other systems—both commercial and noncommercial—that cut across many value chains. These might include the following:
o Sector-specific commercial systems: agriculture services like tractor or
spraying or agriculture equipment sales or leasing.
o Cross-cutting commercial systems: banking, legal, accounting services.
o Cross-cutting non-commercial systems: educational, advocacy, consumer
protection services.
Think of rules as the values, beliefs, customs codified either as formal laws and
regulations that govern business or as informal norms and practices that influence
entrepreneurship and business. Rules are formal and informal and cut across
geographic boundaries from local communities to the global economy.
Slide 2:Inter-Connected Systems
The solutions to unlocking pro-poor growth potential in rice, for example, may be
solving problems in inter-connected economic systems such as manufacturing or
services.

8. The example in slide two illustrates the importance of inter-connected systems by
understanding that a rice farmer plays two roles:
o a producer of rice who must satisfy his or her buyer’s requirements;and
o a consumer of goods and services whose requirements must be met by suppliers
(e.g., services, inputs or equipment).
Slide 3: System Elements
Three core aspects – value chain relationships, rules and inter-connected systems –
will guide the successful interaction of inter-dependent market actors (private, public
and civil society) to create wealth by continuously meeting changing market
requirements.
Facilitation Tips
Potential
Questions from
Participants and
Suggested
Responses
Create a flip chart on key terms: At the beginning of the workshop key terms
will be used loosely and they need tightening. Add new and unfamiliar terms
to this list and arrive at a working definition for each. Key terms to get on the
list now include:
o System
o Multi-function
o Multi-player
o Relationships
o Rules
o Inter-connected Systems
o Performance/upgrading
Ask open-ended questions to encourage participants to discover information
and raise issues themselves, rather than lecturing and providing answers.
Many participants will likely have more grounding in understanding the firm than
in the larger economic systems in which they operate. The objective of the entire 5
day program is to “change the way participants think” about their work by
introducing and working with a value chain system approach. Clarify the terms
and their meaning as much as possible but avoid trying to get everyone on the
same page on the first day. Use simple analogies to help participants understand a
system: for example, the human body is a system with inter-dependent parts that
must work together to be healthy and happy.

10. Module 1 Session 1
Rice Value Chain Actor Role Play
Task
You are the actor on the card and you are asked to conduct the following activities:
Identify the most important other actors to you and what exchanges or
business transactions you can make with them.
Be prepared to explain why they are important to you and what deals you made
with them.
Module 1 Session 1: Rice Value Chain Actor Role Cards
1

11. Importer of
Long Grain
White Rice

12. Local White
Rice Trader

13. Local Paddy
Trader

14. Large-Scale
Rice Miller

15. Medium-Scale
Rice Miller

16. Community
Hand Miller of
Rice

17. Community
Hand Thresher
of Paddy

18. Retail Grocery
Outlet of Rice
Products

19. Open Air Food
Market of Rice
Products

20. SME Agro-Input
Dealer

21. Large Input
Supply Firm

22. Small-Scale
Paddy Farmer

23. Commercial
Long Grain
Paddy Farmer

24. Small-Scale
EmergingComm
ercial Paddy
Farmer

25. Community
Leader/Chief

26. Rural
Transporter

27. Tractor Service
Provider

28. Owner of
Agricultural
Crop
Warehouse

29. Ministry Of
Agriculture
Official

30. Rural Bank
Manager

31. Credit Officer
from a Large
Bank

32. Radio Station
Manager

33. Spray Service
Provider

34. Ag Extension
Officer

35. ICT Firm

36. Ag Equipment
Dealer