valuechaindefine


 * How are we using the term ‘value chain’ in MP3.7?**

A value chain refers to various activities, actors and relationships that influence the value consumers derive from a product as it is passes through the different phases of production and marketing for delivery to the consumer (Figure 1). In the case of MP3.7, the products are animal source foods (ASFs), i.e. meat, milk and fish.




 * Figure 1. Basic activities defining a value chain**

The purpose of the value chain is to provide a product of value to the consumer, for which the consumer is willing to pay. That value is then distributed back along the value chain to the various activities and actors depending on how much ‘value’ each contributed and on their ability to capture that share.

Defining the boundaries of a value chain can be difficult. The activities and actors directly involved in producing and selling an egg are easy to identify, but the egg value chain can also be viewed as extending back to the chicken feed used and the farmers who produced the ingredients, and from there back to the source of maize seed used by those farmers, and so on. It also interacts with the community, the environment and the institutional context (e.g., government) in which it operates

A value chain can be quite complex as it can involve a number of interrelated production activities. Figure 2 shows how livestock and fish farmers in a developing country might be part of increasingly complex value chains in which a product is produced under increasingly intensive systems and destined to different types of consumers.



Source: IFAD. Value chains, linking producers to the markets. Livestock Thematic Papers: Tools for Project Design. Accessed at []

Value chains are often described as in Figure 2 by identifying the various actors involved along the product's path from farm to consumer, but the value chain concept goes well beyond describing the structure of the chain to understanding how each actor and activity add value to the product and to what degree they benefit from that service or function. How much each actor benefits is likely to depend on how relationships among the various actors are governed and the market power held by the actor.


 * Why all the interest in value chains?**

A value chain perspective takes a broader view of development than the traditional focus on simply improving technical efficiency and productivity in animal product supply chains. That traditional focus emphasizes the product itself, whereas the value chain perspective shifts the emphasis to its value. It recognizes that stimulating production and income generation for the poor can be driven by opportunities to add value to animal products and that these opportunities are typically set within complex webs of actors and activities which require a range of technical and institutional strategies.


 * Some resources about value chains and development**


 * Value chains, linking producers to the markets. IFAD Livestock Thematic Papers: Tools for Project Design. Available at http://www.ifad.org/lrkm/factsheet/Valuechains.pdf
 * C. Martin Webber and Patrick Labaste. 2010. Building competitiveness in Africa’s agriculture : a guide to value chain concepts and applications. World Bank. Available at: http://www.technoserve.org/assets/documents/building-comp.pdf
 * Kurt Larsen, Ronald Kim, and Florian Theus. 2009. Agribusiness and innovation systems in Africa . World Bank. Available at: http://web.worldbank.org/WBSITE/EXTERNAL/WBI/WBIPROGRAMS/KFDLP/0,,contentMDK:22309089~menuPK:1727232~pagePK:64156158~piPK:64152884~theSitePK:461198,00.html
 * World Economic Forum. 2009. The Next Billions: Business Strategies to Enhance Food Value Chains and Empower the Poor. Available at: http://www.weforum.org/pdf/BSSFP/NextBillionsBusinessStrategiesEnhanceFoodValueChains.pdf
 * Andres Feller, Dan Shunk, and Tom Callarman. 2006. Value chains versus supply chains. BPTrends. http://www.bptrends.com/publicationfiles/03-06-ART-ValueChains-SupplyChains-Feller.pdf