| the value chain framework is a tool that facilitates the agdev team’s strategy development and...

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The value chain framework is a tool that facilitates the AgDev team’s strategy development and planning

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The value chain framework is a tool to This will allow the AgDev team to

▪ Develop a common language and organize information/data in a standardized format

▪ Ensure that value chain constraint analysis is comprehensive and systematic

▪ Establish a structured fact base at the individual country-level and the regional & global level

▪ Map potential interventions to particular step(s) in the value chain

▪ Create a comparable fact base across IVCTs to facilitate communication within the AgDev team and with development partners

▪ Ensure that all critical constraints are identified

▪ Identify shared constraints across value chains in a particular country and across countries for a given value chain

▪ Develop a clear view of potential value chain interventions, enabling teams to design holistic solutions within and across IVCTs and countries

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AgDev team members have noted several considerations to keep in mind when applying the framework

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Under-standing the actors along the value chain and how to influence them is critical

Incorporating cross-cutting and iterative thinking is an important part of applying the framework

▪ The framework, like the actual value chain, is not linear. There are many interactions and interdependencies along the chain that should be considered when applying the tool (e.g., closed loop or integrated approach)

▪ Traditional interventions often place significant risk on the farmer alone; interventions should seek to align incentives by spreading risk across the value chain (e.g. input suppliers paid through product surplus, nucleus farms, etc.)

▪ Many important considerations appear at multiple stages of the VC (e.g. food safety is important throughout post-harvest to retail)

▪ The framework provides a basis for actionable insight when used to structure data at the country-level (especially for the farm and market portions of the chain). Country-level views of each value chain can then be “synthesized” to a regional or global level

▪ Analysis should include all actors, their behaviors, economics and capabilities (e.g., private sector agro-dealers, government extension services, consumer preferences)

▪ Advocacy is an important lever to influence donor and anchor country support for smallholder productivity (including implementation of national plans, building political will for better policies and supporting financial interventions for smallholder farmers)

▪ Each intervention should be assessed based on the productivity gain it will generate

▪ The cost of serving small farmers is high; interventions should be designed to test lower cost models for service delivery and seek opportunities for aggregation where possible

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Value chain assessment framework

31 For crops includes soil fertility and soil health (organic and inorganic fertilizers), crop management (herbicides), weed and pestmanagement (insecticides), mechanization and water management; for livestock includes feed, water and production equipment (e.g., housing,waterers)

Inputs and farmer servicesPost-harvest handling and access to markets

Research and development

Improved genetics & repro-duction

Animal genetics systems

Feed

Livestock production manage-ment2

Vaccine/ drugs/diagnostics development

Livestock discovery

Aggre-gation, quality and storage

End-user demand

ProcessingAnimal health systems

Knowledge exchange

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Crop improve-ment



DiscoveryAgronomic research

Fertilizer/Chemicals

Farm manage-ment2

Seed systems

Know-ledge ex-change

Aggrega-tion, quality and storage

End-user demand

Processing

Farmer

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Multi-value chain national policies

Data and data systems

Value chain-specific regulations

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Environment

Nutrition

Gender

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Infrastructure, transport/logistics

Finance & insurance

Livestock

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Common opportunities between crops and livestock IVCs

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Common value chain linkages between crops and livestock

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BMGF strategies should leverage the significant overlap between crop and livestock IVCs when designing interventions

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Improved genetics & repro-duction

Animal genetics systems

Vaccine/ drugs/diagnostics develop-ment

Livestock discovery

Aggre-gation, quality and storage

End-user demand

Process-ing

Animal health systems

Feed

Livestock produc-tion manage-ment

Knowl-edge ex-change

Entire farm ecosystem (i.e., crops, livestock, other farmer factors)

Farmer

Agro-dealers

Crop breeding for animal nutrition

Crop channelsFeed for livestock

Exten-sion services

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Crop value chain assessment framework – overview

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1 Includes seed systems, soil fertility and soil health (organic and inorganic fertilizers), crop management (herbicides), weed and pest management (insecticides), mechanization and water management

2 Includes agronomy ; farm production management includes the entire ecosystem of crops, livestock and other on-farm factors

Crop value chain framework overview

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Multi-value chain national policies: Regulations that influence public investments, private sector enabling environments and market-distorting government interventions

Data and data systems: Data that facilitates the democratization of near real-time information and decision support tools

Value chain-specific regulations: Regulations that govern genetics/seed/fertilizer and crop availability, safety, efficacy, quality and movement

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Environment: Research and interventions aimed at protecting natural resources and enhancing environmental outcomes

Nutrition: Research and interventions aimed at satisfying the nutrition needs, behaviors, and preferences of consumers

Gender: Research and interventions aimed at empowering women and girls along the value chain

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Farm manage-ment2

Seed systems


Aggrega-tion, quality and storage

End-user demand

Processing

Farmer

Infrastructure, transport/logistics: Roads, water, electricity, connectivity, etc. that are key for farmers to access inputs and markets and maintain food safety and quality

Finance & insurance: Access to credit, indexed insurance and low-cost savings instruments to increase access to inputs, markets and manage risks

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1 Includes soil fertility and soil health (organic and inorganic fertilizers), crop management (herbicides), weed and pest management (insecticides), mechanization and water management2 Includes agronomy

Crop value chain assessment framework – descriptions (1/4)

Segment

Inputs & farmer services

Research & deve-lopment

Working descriptions

Crop improve-ment

Research designed to develop improved crops with higher intrinsic gains and/or greater resistance to abiotic and biotic stresses and suitable for local farming systems. Includes increasing the rate of genetic gain in crop breeding for both global and local systems via better methods and better implementation, improving farmer adoptability & feedback to breeders and increasing the rate of varietal replacement; includes working with national and international agricultural research centers

Research designed to develop breakthrough concepts in intrinsic yield via fundamental pathways, abiotic and biotic stress responses, research tools and methods, and ‘omics technology/systems biology reveal novel avenues for enhancing and accelerating productivity gains and adoptability by smallholder farmers in target crops and anchor geographies that catalyze additional funding in crop product development

Disco-very

Agro-nomic research

Research leading to the development of better farming practices for the benefit of smallholder farmers and suitable to local environments; includes evaluating, improving and disseminating best practices for crop management (e.g., soil health, pests & diseases, water, quality, post-harvest technologies such as PICS bags) ; improving farmer adoptability and feedback to agronomists; improving efficacy, economic return; reducing risk & cost; improving environmental sustainability; includes work with NARs


Effective and sustainable systems (formal and informal) that enhance/accelerate the availability of appropriate and affordable fertilizer blends, crop and pest management chemicals and farming equipment; may include work with agro-dealers, extension services , farmer organizations and input manufacturers

Dissemination of more precise, timely and accessible agronomic recommendations based on specific farming systems to maximize farm productivity, input efficiency (fertilizer, labor) and improve the natural resource base (soil, water, ecosystem services); this includes the farmer’s perspective through feedback loops which help inform and revise agronomic recommendations; also includes training on business skills (costs, trade-offs between crops, etc.) to improve farmer decision-making; may include extension services, other donors, NGOs and farmer organizations


Seed systems

Effective and sustainable systems (formal and informal) that deliver quality improved seeds based on demand; may include work with agro-dealers, foundation seed entities and nurseries

Farm manage-ment2

Effective and sustainable production and cultivation techniques and practices used on farm, including crops and livestock; includes business decisions made by the farmer about which crops to grow, how much to invest in inputs, etc.; may include farmer organizations

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Crop improve-ment




Farm manage-ment2

Seed systems


Aggregation, Quality and Storage

End-user demand

Processing

Farmer

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Crop improve-ment




Farm manage-ment2

Seed systems


Aggregation, Quality and Storage

End-user demand

Processing

Crop value chain assessment framework – descriptions (2/4)

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Post harvest handling and access to markets

Aggregation for bulk selling, effective and affordable on- and off-farm storage options, and systems that pay for quality enable farmers to maximize the value of their output. Aggregation reduces transaction costs and increases the share of market price captured by the farmer. Storage enables farmers to avoid buying expensive food during the lean season or to avoid selling surplus at a low price during the harvest glut. Quality considerations include superficial characteristics such as grain size, as well as food safety factors, such as aflatoxin levels. Meeting food safety requirements allows farmers to access formal markets and protects family health; may include wholesalers and retailers

Aggregation, quality and storage

End user demand

End-user demand includes on-farm consumption, off-farm human consumption, animal feed, structured markets such as grain reserves, as well as other uses of agricultural output. Credible demand signals encourage farmers to make investments to increase production and improve quality. More broadly, understanding consumer preferences and need of end users (including consumers and retailers) is critical to developing sustainable interventions based on consistent demand; may include end customers who can be the farmers themselves

Process-ing

Farm-, community- and commercial-scale processing adds value to farmers’ raw output by reducing loss, protecting food safety, preserving or improving quality, and increasing price. Processing includes mechanized drying, cleaning, grading/sorting, milling, packaging, branding, and distribution to end markets; may include local and international production plants

Segment Working descriptions

1 Includes soil fertility and soil health (organic and inorganic fertilizers), crop management (herbicides), weed and pest management (insecticides), mechanization and water management2 Includes agronomy

Farmer

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Value chain assessment framework – descriptions (3/4)


Policies and data

Regulations that influence public investments (e.g., NARS, extension, certification systems, rural and market infrastructure, national data systems, government human capital), private sector enabling environments (e.g., competition policy, business licenses, taxes, import/export permits, land rights) and ad hoc market-distorting government interventions (e.g., input subsidies, price controls, trade bans, import tariffs, commodity price controls); includes regional and global policies which often align with national policies

Regulation governing ag science1, seed/fertilizer/grain availability, safety, efficacy quality and movement; regulations are generally specific to an individual value chain

Multi-value chain national policies (informs global and regional policies)



Data and data systems (e.g., price, weather forecasts) that facilitate the democratization of near real-time information and decision support tools to inform policy and investment decision by policymakers, actors along the value chain (e.g., agro-dealers, service providers), and farmers

Roads, water, electricity, connectivity, etc. that are key for farmers to access inputs, make informed decisions to increase productivity, and access equitable markets to support increased incomes and broad-based economic development. These elements impact food safety and quality and include the transportation/delivery skill/infrastructure (e.g., cold chain and proper handling techniques) needed for each IVC

Enabling Environ-ment Infrastructure,

transport/logistics

Financial inclusion of rural families including access to credit, indexed insurance and low-cost savings instruments to increase access to inputs, markets and manage risks (including those associated with rain-fed production systems); may include banks, microfinance institutions and informal money lenders

Finance & insurance

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1 Includes regulations on biosafety, transgenics, vaccines and quarantine to support disease research, among other regulated areas of agriculture science

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Environment

Nutrition

Gender

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Finance & insurance

Infrastructure, transport and logistics

Research and development Inputs and farmer services Post-harvest handling and access to markets

Crop improve-ment

Agronomic research

Other input systems

Seed systems

Knowledge exchange

Farm manage-ment

Discovery ProcessingEnd-user demand


Farmer

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Value chain assessment framework – descriptions (4/4)

Founda-tions of sustain-able produc-tivity`

Environment Research and interventions aimed at enhancing and sustaining the ecosystem of services and inputs required for agriculture and the natural co-benefits produced through agricultural production; mitigation of the harmful effects of agriculture, and provision of environmental services

Nutrition The design of research and investments to target the nutrition needs, behaviors, and preferences of consumers and provide the nutritional products, information, and incentives to facilitate consumption of a nutritious diet, particularly among children and women of childbearing age

Gender Research and interventions addressing the needs and preferences of women farmers and aim to empower women along the value chain to have access to and control over productive resources, output markets, and earned income from agriculture; attention to fostering women scientists

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Fo

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Environment

Nutrition

Gender

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Finance & insurance

Infrastructure, transport and logistics

Research and development Inputs and farmer services Post-harvest handling and access to markets

Crop improve-ment

Agronomic research

Other input systems

Seed systems

Knowledge exchange

Farm manage-ment

Discovery ProcessingEnd-user demand


Farmer

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The value chain framework is incorporated in step 2 of the IVCT strategy approach

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1 For each value chain, analysis will focus on formal trade, informal trade and on-farm consumption2 Includes soil fertility and soil health (organic and inorganic fertilizers), crop management (herbicides), pest management (insecticides), mechanization and water3 Includes agronomy; farm production management includes the entire ecosystem of crops, livestock and other on-farm factors

Problem and scopedefinition

Diagnose value chain constraints with a structured fact base

Ground hypotheses in context of VC’s focus countries

Identify intervention ideas, rationale and potential impact

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OutputStrategy component

Itera

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▪ Country-level perspective on cross-cutting value chain needs and national priorities

▪ Country-level productivity targets

Integrated cross-value chain perspective at the country-level▪ Supplement initial country value chain perspectives with “field” research input where needed▪ Identify cross-value chain opportunities in a given country▪ Map change agents and focus areas of other stakeholders across value chains▪ Set country-level targets (direct and spillovers where possible) for value chains

Exit strategy and local stakeholder ownership process (e.g., gov’t, private sector, farmer organizations)

▪ Landscape of small farmers relationship with value chain

▪ Quantification of overall opportunity▪ Identification of target countries

among all anchor countries

Problem statement: What is the role of the crop in farmer income and food security in anchor countries, to what extent are smallholder farmers crop yields and incomes significantly below potential levels

Overall landscape▪ What is the importance of this specific value chain?Geographic scope▪ In what countries is this value chain important?▪ What are the aggregate and country-level demand/supply dynamics and yield gaps?Value chain opportunity▪ What is the number of households living under $1/day that grow this in each country?▪ What is the yield gap at the individual farm level for each country?▪ What is the estimated income increase/impact on food security from closing the gap for each country?

– Farm/livestock production management3

– Knowledge exchange

▪ Post-harvest handling and access to markets– Aggregation, quality

and storage– Processing– End-user demand

▪ Constraints, relevant data and evidence for each VC segment/ enabling factor at target anchor country level

▪ Initial view of value chain steps that have the greatest impact on productivity

Policies and data▪ Value chain-specific regulations▪ Multi-value chain national policies▪ Data and data systemsSustainability▪ Gender▪ Environment▪ NutritionEnabling Environment▪ Finance and insurance▪ Infrastructure, transport/logistics

Apply VC assessment framework for each country

Crop and Livestock Value chains steps1

▪ R&D– Discovery/livestock discovery– Crop improvement/improved genetics

& reproduction– Agronomic research/vaccine, drugs,

diagnostics development▪ Inputs & farmer services

– Seed systems/animal health systems– Animal genetics (livestock only)– Other input systems2

▪ Initial list of strategic priorities at global, value chain and country level

▪ Clear rationale for each hypothesis

Initial intervention ideas▪ Develop hypotheses (i.e., suite of interventions that will have the highest impact on the IVCs major constraints). Rationale supporting ideas

should include :▫ Theory of change informed by learnings from grants▫ Why lifting this constraint will have the greatest impact on productivity vis-à-vis other constraints▫ BMGF’s comparative advantage▫ Spillovers▫ Relevant foundations of sustainable productivity (e.g. gender, environment, etc.)▫ Who is currently investing in the space (public and private)?▫ Who are potential partners?▫ Alignment with national priorities and initiatives?

▪ For critical steps in the VC that will not be addressed by BMGF, a clear view on who will address its

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| the value chain framework is a tool that facilitates the agdev team’s strategy development and...

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