Value Chain Concepts: Perspective from LIVES

LIVES Project Implementation Planning Workshop Addis Ababa, 11–12 July 2012

Berhanu Gebremedhin

The value chain concept

• When IPMS started operation ………….

• Now ………………..

• However ………………..

Why has not dairy production developed? • Farmer Abreham: Could not produce enough

feed • Farmer Hagos: Not suitable in our

agro-ecology• Farmer Megersa: Not good milk market

access • Farmer Zeberga: No processing

facilities during fasting period• Farmer Behailu:Not enough demand for our

milk

Why …? (2)• Farmer Baredo: Extension service is weak• Farmer Chaltu: Poor business training and

assistance • Farmer Berhe: Inadequate credit supply• Farmer Tadelle: Weak input supply service• Farmer Dindamo: Poor communication

infrastructure • Farmer Tafesse: Poor transportation

facilities

Why …? (3)• Farmer Bedassa: Rules and regulations are

restrictive

• Farmer Dinkinesh: Taxation is high

• Farmer Ayalneh:Kebele administration is corrupt

• Farmer Hingidu: Very weak collective action

Production

Postharvesthandling

Retailing

Consumption

Trading

- -

Market support services Market support services

Financial servicesFinancial services

TransportationTransportation

CommunicationsCommunications

Govt. Policy/regulationGovt. Policy/regulation

Extension Service Extension Service

Input supplyInput supply

Business support services and enabling environment

ResearchResearch

Commodity value chain

Trading

Input Supply

Processing Processing

Processing

Value chain actors

• Value chain actors: Actors involved in ownership of commodity and its value addition

• To be contrasted with service providers

Service Providers• Public (extension, input supply, research, market

information etc.): provide service mostly for free, but also for fee

• Private (input supply, credit, transport, processing, storage, etc.): provide service on fee

• If service is provided by the value chain actor itself for own business, service becomes part of the value chain actor activities (eg. transport, processing)

•

The value system

• The system that comprises the value chain actors, service providers and the institutional environment in which the value chain actors and service providers operate, including the institutions that govern their actions and interactions.

Thank You!

The Value Chain

Input supplyProductionTradingProcessingTradingRetailing Consumption

Value chain actors

• Value chain actors: Actors involved in ownership of commodity and value addition

• To be contrasted with service providers

• Value chain:Input supply Production post-harvestTrading Processing trading Consumption

• Value chain actors: Actors involved in ownership of commodity and value addition

• To be contrasted with service providers (also called business development services (BDS))

Main objective

• Determining the reach of the project– Commodities– Geographical coverage– Value chain actors and service providers

• Initiate baseline data collection– Data

Regional teams

• ILRI/IWMI HQ staff• lIVES regional staff/consultant• Regional partners staff (BoA, RARIs)

Identification of commodities, Zones, Districts, PAs

• Regional meetings with BoA, BoW, RARI to introduce project and select Commodities/Zones ( 2-3 Zones/Region) – expert consultation and GIS maps and zonal statistical data

• Zonal meetings with partners to introduce project and select clustered Districts/commodities (3 districts/Zone) – expert consultation, ranking

• District meetings with partners to introduce project and determine suitable PAs/commodities (max 4 commodities/District/PA

Service providers and other value chain actors and linkage

• Other commodity value chain actors – traders, processors and whole/retails and vertical linkages

• Public and private sector suppliers of physical inputs and services and vertical linkages

• Public and private sector suppliers of skills (including gender), knowledge/information and vertical linkages

• Linkages between value chain actors and service providers by commodity (matrixes)

Baseline data and maps

• District level data on number of animals and irrigated areas (fruits and vegetables)

• PA level data on number of producers• Regional, zonal and district level data on

public sector staff Agricultural offices, Livestock office, Water offices

• GIS maps soils, elevation, rainfall, agro ecolocial zones, land use,

Thank you