FARM AND RURAL BUSINESS DEVELOPMENT
VALUE CHAIN DEVELOPMENT: Expanding markets
Although rural economic actors are independent, many are part of an integrated chain of economic functions and linkages. All the activities that connect a specific raw material to its various end-markets is collectively called a “value chain”. In rural value chains, market sizes differ dramatically among the actors. Available markets are usually much smaller for actors further up the chain (toward the primary producers), making it less attractive and riskier for them to invest in technical improvements or expanding production.
By understanding the processes involved in the production, distribution, and sales of a product or service, it is possible to identify the main sources of growth in a chain, the distribution of margins and profits, and the key leverage points of that can be enhanced in order for chain actors to deliver higher value and increase their income. Often, this is achieved through solutions that overcoming the consequences of being a small-scale producer.
ACCESS’s value chain research and development toolkit has been designed especially for rural producers of agricultural commodities and agri-entrepreneurs. It focuses particularly on market size and market linkage (for purchases of inputs as well as sales of outputs) in order to create incentives for investment and expansion.
- Value chain analysis
- Value chain financial product development
- Farm and enterprise demonstrations
- Business modeling
- Market linkage
- Facilitation of partnerships between value chain actors
INNOVATIVE APPROACHES TO SUCCESS
One of the most effective learning methodologies is learning-by-doing. To encourage the value chain to develop, ACCESS facilitates small-scale grant programs for demonstration activities to test “proof of concept” and thereby demonstrating to the community that it is economically rational to invest in production.
RESULTS AND REFERENCES
- Financing the Large Cardamom Value Chain in the EDR with a Focus on Smallholder Farmers: UNCDF Nepal/UNNATI, 2017-18.
- Value chain analysis of selected commodities in Chin and Kayin State: ActionAid Myanmar, 2017.
- Value Chain Analysis for Farm and Enterprise Development in Myanmar: European Union, Agence Française de Développement, 2013-17
- Value chain analysis for financial product development for First Microfinance Bank of Pakistan: Japan International Cooperation Agency, 2010-11.
- Rapid Rural Appraisal of Tea Production in Phu Tho Province, Vietnam: TYM, July-August, 2013