Whole Value Chain Development

Whole Value Chain Development

Area of Interest

A common refrain we have been hearing from governments, donors, researchers, institutions and NGOs in relation to agriculture and food in emerging economies in recent years is a need to focus on “whole value chain development” approaches. This is perhaps a reaction to underperformance or uneven development – it is not hard to think of cases where isolated pockets of success in aspects of the value chain have been diminished in impact and benefit because they are disconnected from upstream or downstream participants. It is also perhaps inevitable if one accepts that the private sector has a very important role in development, as it treats all or most stages of the value chain as commercial actors, and so investment by the private sector eventually demands development of the whole chain. Even in cases of economic transformation, a renewed emphasis on the value chain is being promoted. For instance, Vietnam has become a lower middle-income country in the space of 30 years, with strong improvements in social indicators, reduction in poverty and better average incomes. Much of this success is attributable to export-led industrialisation, including in agri-food. Vietnam is now the world’s second-largest exporter of coffee and rice. However, growth in these commodities has been achieved while many of the smallholder producers remain with very low incomes; environmental degradation, emissions and pollution put future prosperity at risk; and much of the emphasis has been on the production of large volume but mid- to low-quality product, increasingly at variance with consumer demand. Influencers and IFIs like African Development Bank are also prioritising value chain development under their Feed Africa Strategy. This has identified 18 value chains, ranging from rice to livestock (with different emphases depending on the agro-ecology), and they expect member countries to prioritise a number of VCs from the list depending on their circumstances, probably 4-6 per country. A key benefit of the approach from the point of view of the Bank is that it makes it easier to leverage private sector co-financing. This is also the view of other proponents like Alliance for a Green Revolution in Africa (AGRA) as they see a clear path to engaging private sector participation in inputs, off-take and financing roles. Whole value chain development has much to recommend it, but a number of questions also need to be answered – perhaps most importantly, is the approach sufficiently subtle and flexible to deliver sustainable growth, and how should the risks of inappropriate growth and over-reliance on individual product chains be mitigated?  

Purpose of the Group

To consider what Ireland can offer in respect of approaches and experience of whole value chain development. To ask the question, can we influence by identifying some of the best principles of whole value chain development so that it is sustainable. Are there process models that be made repeatable regardless of the product area?  

Relevance to the Forum

If donors and governments in Africa and Asia are speaking of the need for whole value chain development, it is inevitably going to feature in any considerations of the design and effectiveness of technical assistance and development initiatives. Secondly, it could be argued that one of Ireland’s key strengths in agri-food is in making diverse stakeholders and participants at different stages of the value chain work towards common goals. This, rather than scale, is a powerful tool and a key reason why anyone else should regard Ireland as an example to follow.  

Resources

Selected References  

Membership

Relevant to all members of IFIAD – in particular we need more private sector voices on this topic. Join us.

Annex – What’s the Value Chain?

Classic View

Alternative View


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