Value chains and trade: guides for value chain development - a comparative review

In recent years, governments, donors and NGOs have increasingly embraced value chain development (VCD) for stimulating economic growth and combating rural poverty. In gen- eral, VCD aims to facilitate the building of mutually beneficial links between smallholders and other chain actors, such as processors, exporters and retailers that interact for the pro- duction and marketing of a given product. Chains selected for development interventions must be economically viable while at the same time accessible to poor farmers. The design of interventions for VCD is often based on a careful analysis of the business context, actors in the chain, and the relationships between chain actors. With the emergence of VCD in devel - opment programming, numerous guides have been published on how to conduct value chain analysis as an input for the design of VCD interventions. However, the proliferation of guides has taken place in an environment where key conceptual and methodological elements of value chain analysis and development are still evolving. For example, no universal definition for ‘value chain’ exists and there is limited evidence on the impacts of interventions, thus limiting opportunities for debate on the effective design of VCD. This report presents the results of a review of 11 guides for VCD. The review compares the concepts and methods endorsed and assesses the strengths and limitations of the guides for steering development practice. Overall, the guides provide a useful framework for un- derstanding markets and engaging with chain stakeholders, with a strong emphasis on strengthening institutions and achieving sustainability of interventions. However, the guides often lack discussion of the conditions necessary at different levels for VCD to advance de - velopment objectives and achieve sustainability. The guides are designed to be implemented largely independently of the specific context, in which the chain is situated, despite the major implications context has for the design of interventions and overall success of the chain. Attention to mutual learning, whether related to tool design or the outcomes and impacts of VCD interventions, is limited. More critical reflection and debate is needed on the design of guides for VCD. We suggest three areas for this reflection and debate: 1) concepts, methods and tools for addressing the needs of the poor in value chains; 2) tools for deepening analy- sis and addressing variations in the context; and 3) mechanisms for mutual learning on the design and implementation of VCD. The report concludes with various recommendations for guide authors and donors that support VCD.

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