www.fao.org/ag/ags

Sustainable Food Value Chain Development

Concepts, framework & principles

Derived from FAO (2014). Developing sustainable food value chains – Guiding principles. Rome

Sustainable Food Value Chains (SFVC)•The SFVC concept•Value-added defined•Sustainability defined•Analytical framework

This module is based on:

www.fao.org/3/a-i3953e.pdf

The SFVC conceptWhat is a sustainable food value chain?

A food value chain consists of a range of actors that participate in the coordinated production and value adding activities that are needed to make food products available to a consumer.

A sustainable food value chain:

• is profitable throughout (economic sustainability); • has broad-based benefits for society (social sustainability) and • shows a positive or neutral impact on the natural environment

(environmental sustainability)

Supply chain

Input supplier

sProduce

rsAssembl

ers, tradersProcess

orsRetailer

s

Flow of services, goods, products and information

A simple value chain

Design and product

development

Production

Inward logisticsTransforming

inputsPackaging

Marketing Consumption&

recycling

The concept of value-added…Non-labourcost

Value addedto society

Marketprice

Consumerwillingnessto pay (=price)

Salaries/income

Netprofits

Taxes Consumersurplus

Value added toVC stakeholders

Neg

ativ

e ex

tern

aliti

es

Pos

itive

ext

erna

litie

s

The concept of sustainability…

ECONOMICIMPACTS

ProfitsJobs/incomesTax revenuesFood supply

SOCIAL IMPACTS Added value distributionCultural traditionsNutrition and health Workers rights and safety Animal welfare Institutions

ENVIRONMENTAL IMPACTS Carbon footprint Water footprint Soil conservation Animal & plant healthFood loss and waste Biodiversity Toxicity

Inclusivegrowth Green

growth

Eco-social

progress

SFVCD

International markets

National markets

Environmental

Naturalelements

Sustainability

Societal

Socio-culturalelements

Organizationalelements

Institutionalelements

Infrastructuralelements

Serviceprovision

Inputprovision

Finance

Distribution

Processing

Aggregation

Production

Economic

Go

ve

rn

an

ce

Core value chain

Extended value chain

National enabling environment

Global enabling environment

SFVCAnalytical framework

Points to remember•Two key challenges in SFVC development…

▫Understand the sources, key leverage points and approaches that will maximize value impact

▫How to facilitate VC activities by bringing together the capacities of the public sector, the private sector, and civil society into an effective partnership

▫SFVC development is guided by performance measures that reflect contribution to well-being – economic, environmental and social

10 principles in SFVC development

1. Economicallysustainable(profitable)

4. Dynamicsystemsbased

5. Governance-centered

6. End-marketdriven

2. Sociallysustainable(inclusive)

3 .Environmentallysustainable(green)

7. Vision/strategydriven

8. UpgradingFocused

9. Scalable

10. Multilateral

Conclusion• Sustainable food value chain

development:

▫ Seek broad-based impacts on poverty reduction in agriculture in the context of globalization

▫ But requires a systematic approach to measuring, analyzing and improving performance in order to realize its potential

• Value chain mapping and policy analysis can be powerful tools to facilitate gainful links to Global Value Chains.

This module is based on:

www.fao.org/3/a-i3953e.pdf