Donor interventions in value chain development : working paper

In December 2004 the Employment and Income Division of the Swiss Agency for Development and Cooperation set up an online platform for exchange and joint learning between practitioners and conceptualists engaged in developing value chains in rural areas. This initiative offers an open forum (www.sdc-valuechains.ch); over 120 persons, from around 35 countries joined and discussed relevant topics during 9 debate cycles. In this paper the main highlights of the work so far are pulled together and presented for discussion.

Value Chain (VC) is an analytical as well as an operational model. The model takes up the fact that a product is rarely directly consumed at the place of its production. It is transformed, combined with other products, transported, packaged, displayed etc. until it reaches the final consumer. In this process the raw materials, intermediate products and final products are owned by various actors who are linked by trade and services, and each add value to the product. Various types of public and private services, like business development services, electricity, transport, financial services, etc., are as important as favourable framework conditions, i.e. laws, regulations and their enforcement. The Value Chain model supposes that by understanding these interactions, it is possible for private and public agencies (including development agencies) to identify points of intervention to (1) increase efficiency and thereby increase total generated value, and to (2) improve the competence of intended actors to increase their share of the total generated value.

With examples and recommendations for further reading.