Value Chain Analysis and Development Training

CAFOD/TROCAIRE/SCIAFLivelihood program

Value Chain Analysis and Development Training

Teshale EndalamawNovember, 2012

Adama

Value Chain approach in implementing our Livelihood program

Joint office of CST, Ethiopia

Objective of this session

1. To develop common understanding on what does Value Chain (VC) mean among our selves

2.The value chain approach as a means in our LH Program

1.What do we mean by Value chain?

• A value chain links the steps a product takes from the farmer to the consumer.

• It includes research and development, input suppliers and finance (market and fin. Institutions).

• Our targeted Pastoralists/small farmers combines these resources with land, labour and capital to produce commodities.

continued

• It is more than increasing production and create access to market.

• Is a means and it is not an end by itself

2.The value chain approach as a means in our LH Program.

• In our current LH program cycle, we do not think only increasing production and productivity but we emphasize also on value adding.

• It is put as one implementation strategy in the PPD and reflected as

“Increasing incomes through Value chain promotion”

continued

• The detail strategies are put in the PPD as follows:

-Promoting environmentally sustainable VC such as aloe Vera production, cactus, gums and incense production

-Encouraging sustainable rural-urban linkages-CB in Product processing-improving market access

continued

-improving rural storage and processing facilities (e.g. Grinding mills)

-promoting indigenous knowledge and skills-promoting use of appropriate technology in

product processing-encouraging the role of cooperatives

Sub Sector Analysis

Sub Sector Analysis – STEPS

1. Establish Initial Understanding of the Sub Sector1. Collect data

2. Draw a preliminary sub sector map

2. Refine Your Understanding1. Refine the sub sector map

2. Quantify dimensions of particular interest

3. Analyse constraints and opportunities in the sub sector

3. Select Value Chain for Analyses & Development1. Analyse constraints and opportunities in the chain

2. Explore opportunities for leveraged interventions

Difference between a sector, sub-sector, cluster and value chain

Alternative Selection Criteria

High Competitiveness Potential

• Gender• NRM• HIV/AIDS

Competitiveness

ImpactCross-cutting Issues

• Employment• Income• MSME potential • Income distribution• MSME growth• Livelihood and Security

Selection Process

Group Work

• Conduct a sub-sector analysis for your intervention area

Other Selection Criteria

Competitiveness

• Market Share

• Market Growth

• Competition (Global

threats)

• Industry Leadership

• Substitutes

• End Markets

(Opportunities)

• Supporting Markets

• Enabling Environment

• Infrastructure

• Policy

ImpactImpact

• MSE participationMSE participation

• Income generationIncome generation

• Employment Employment

generationgeneration

• MSME growthMSME growth

• Livelihood and Livelihood and

securitysecurity

• Sustainability Sustainability

Cross-cuttingCross-cutting

• Natural Resource Natural Resource

ManagementManagement

• GenderGender

• Trafficked Trafficked

womenwomen

• HIV/AIDSHIV/AIDS

Value Chain (VC) Concept

Value Chain Concept

• Exercise 1: opening exercise- Human Chain – Human Chain exercise reflection- (photo)

• Participants experience & brainstorming– Real life – examples –

• two or three from participants• Mango example – see next slide

IndiaIndia

India India

Middle EastMiddle East

Awassa SMAwassa SM

Asseffa WifeAsseffa WifeAwassaAwassa

Mango JuiceMango Juice

FriendsFriends

Arba MinichArba Minich

Addis AbabaAddis Ababa

SidamaSidama

AA WholesalersAA Wholesalers

ShasmeneShasmene

A Value Chain is: a vertical alliance of enterprises (collaborating in various degrees)

- -

involving all stages, from conception to disposal

defined by its raw material and market segment

Value Chain: The full range of activities that are required to bring a product or service from its conception to its end use

actors actively seek to support each other to increase efficiency and competitiveness

Invest time, effort and money, and build relationships to reach a common goal of satisfying consumer needs

Définition of Value Chainpr

oduc

ts

Small producers

Small traders

Big traders / Exporters

Industry – processing

Market Consumersin

form

ation

Environment

. Policies. Banks

. Support services

Etc…

Sellers of resources & services

Steps in VCA & Development

Value Chain Selection

Value Chain Intervention

Plan

Value Chain Analysis

Learning & Innovation

Intervention plan Implementation

Monitoring performance & Assessing demand

Economic MappingSub-sector Analysis

CHAIN ACTORS

CHAIN SUPPORTERS

CHAIN CONTEXT

Three levels of the value Three levels of the value chainchain

Global Enabling Environment

National Enabling Environment

ProducersFinancial (cross cutting)

Input Suppliers

Sector-specific providers

Cross-cutting providers

Wholesalers

Exporters

National Retailers

Processors/Traders

Global Retailers

Value Chain Lens

Value Chain Analysis

What is Value Chain Analysis?

• Value chain analysis is a process for understanding the systemic factors and conditions under which a value chain and its firms can achieve higher levels of performance.

Why VCA?

When using value chains as a means for fostering growth and reducing poverty, the analysis focuses on identifying ways to contribute to two objectives:

i) improving the competitiveness of value chains with large numbers of small firms, and

ii) expanding the depth and breadth of benefits generated.

Value Chain Analysis

– Data collection

– value chain mapping

– Assess constraints and opportunities

– Identify potential interventions

– Special focus points

• Gender sensitive value chain analysis

• Governance & power issues

– Common mistakes in conducting a VCA

Data collection & value chain mapping

A number of tools and techniques are used to conduct value chain analysis such as:

1. in-depth studies: involving the use of a combination of

tools such as sound desk researches, interviews, and focus

group discussions are key information collection strategies

2. participatory form of subsector/value chain analysis

etc.

What is Participatory Value Chain Analysis (PVCA)?

• Is a process conducting a VCA through the participation/consideration of different actors in the value chain.

• There are different activities and actors with different levels of understanding of the market and points of view.

• This makes it necessary to involve all stakeholders to have a clearer picture of the market.

PVCA Rationale

Promotes dialogue and accountability between Value chain participants Promotes the direct involvement of stakeholders

in solving problems on there own/independently

identification of bottlenecks and appropriate intervention

Develops a sense of ownership among stakeholders

Sustainability of the impact of suggested solutions a and efforts

PVCA involves: Mapping Quantitative and

qualitative research

Key dimensions Mapping the chains, networks and systems Mapping the geographical spread Identifying the key stakeholders Measuring the relative value accruing Identifying the governance structures Mapping the interventions directly

targeting different levels of the chain, network or system

Clarifying the direct, indirect or unintended impacts

Exploring the different alternative levels of intervention or strategy

.

Cont….

Key stages Scoping the analysis:

clarification of questions and investigation strategy

Preliminary value chain mapping

Participatory value chain analysis

Setting up sustainable structures for sectoral and inter-sectoral accountability.

Cont….

Principles Stakeholder participation Visual and diagram mapping - accessible to all

stakeholders Dialogue between stakeholders & mutual

understanding and respect for their different opportunities and constraints.

Equity and empowerment Incorporation of poverty and gender analysis

throughout the process Ensuring participation of the most vulnerable and

supporting their information and action needs Formation of sustainable systems for ongoing

accountability of enterprise and chain governance

.

Additional Variables to be considered gross output values, net output values (that is, gross output,

minus input costs) the physical flow of commodities along the chain the flow of services, consultants and skills along the chain employment, where relevant distinguishing between

permanent (on payroll) and temporary (off payroll) staff, gender, ethnicity

destination of sales - for example to wholesalers and retailers; concentration of sales amongst major buyers; number of buyers, imports and exports, and to which region

Cont….

Special Focus Points

Gender sensitive value chain analysis model

Not to overlook gender dimension

(1) all information will be disaggregated by gender in all possible cases,

(2) activities that include and exclude women will be identified for emphasis,

(3) economic, social, political, psychological factors which caused for the situation will be assessed and

(4) caution will be made in intervention selection to select gender sensitive value chains and intervention points

Governance & power issues

Governance describes which firms within a value chain set and enforce the parameters under which others in the chain operate. Embedded in governance are inter-firm relationships, power dynamics and the distribution of benefits.

• Governance and power relationship are important issues

– To understand the governance and power relationship

– To empower the target actors

Governance & power issues

Common mistake in VCA

• Failure to Consider the End User’s Requirements• Assuming a Fixed Industry Structure and Static

Relationships among Stakeholders• Inattention to Learning and Information Flows• Inadequate Attention to Relationship Dynamics • Failure to Verify Data• Failure to Filter Constraints• Opportunities and Constraints are Identified that

are Not the Most Important

Value Chain Mapping

What is VC Mapping

• Is an illustrative presentation of linkages in a value chain and the different actors/ stakeholders so as to create a clear understanding of relationships, activities and what is seen and encountered

• It is a vital step that follows the initial selection of value chains and

• Guides the analysis of selected value chains

Mapping – the reasons

To assist us in understanding the sub sector To assist us in communication (in/external) To identify actors, roles and relationships To identify markets (segments) To identify channels (product flows)To identify trends (dynamics)

Objectives of VC Mapping

To gain a basic overview of the value chain to guides the full value chain analysis to be

undertaken Identify constraints and possible solutions at

different levels in the value chain Identify the location and position of the poor in the

value chain Visualize networks to get a better understanding of

connections between actors and processes Demonstrate interdependency between actors and

processes in the value chain

Types of VC Map

Basic Map• Functions– Product life cycle from

conception to end use• Participant(s) at each

function• Linkages between the

participants–horizontal and vertical

Detailed Map• Added value or gross

margins of each function• Number of firms

performing each function• Volumes moving between

levels

VALUE CHAIN MAPPING: BASIC MAP

Four steps:1. Identify the functions2. Identify the participants3. Complete the work sheet4. Draw the initial map

STEP 1: IDENTIFY FUNCTIONS

Functions– Retail– Wholesaling– Processing– Assembly– Production– Input Supply

STEP 2: IDENTIFY THE PARTICIPANTS

ParticipantsVillage StockistsInput Supply CompaniesSmall Scale ProducersProducer AssociationsMedium-scale and Commercial ProducersOil ProcessorsWholesalersRetailers

STEP 3: PARTICIPANT FUNCTION WORK SHEET

VALUE CHAIN MAPPING: DETAILED MAP

1. Identify the functions2. Identify the participants3. Complete the work sheet4. Draw the initial map5. Analysis of overlays

– Number of actors performing each function– Volumes moved between one level to another– Value added/gross margins

An important overlay:Simplified Gross

Margin (SGM)

Selecting market

Simplified Gross Product (SGP) andSimplified Gross Margin (SGM)

• SGP = Turnover (gross sales) – direct cost

• SGM = SGP-T (sales) x 100 T (sales)

• Simplified gross margin:• profitability of actors in the chain• make comparison between functions and actors horizontally and vertically• comparing or benchmarking with other VCs

SGP

T = Turnover (sales)

SGP

SGP

SGP

SGM

F3

F2

F1

Critical Success Factor (CSF) Selecting market

Group work:

Select potential chain from one of the sub sectors selected from previous exercise

2. Secondary actors Research institutions

Government organizations non-government organizations

3. Facilitators

Draw a draft map

1. Main actors input suppliers Producers collectors bulking processors Wholesalers Retailers Consumers

VC Program Formulation

Different donor approach

1. A “comprehensive planning approach” based on detailed analytical value chain mapping

and market analysis preceding interventions; it uses different methodologies: to map the physical flow of commodities along

the chain, output values at different stages of value chains, export market potentials, the regional spread of value chains, inter-firm cooperation, production efficiency, etc.

Different donor approach

2. Participatory workshop- centered tools for value chain analysis with less academic rigor and stakeholder workshops as a key element;

3. Incentives for private sector-driven projects whereby donors leave the conception and implementation of initiatives to corporate value chain leaders

4. Hybrid (common)

Approach comparison

Comprehensive planning approach

Participatory workshop-centred

Incentives for private sector-driven projects

USAID (PVCA), GTZ (Valuelinks), FAO (Commodity SCA for pro-poor rural growth), ILO, FIAS

ITC (SHAPE), Mesopartner (PACA)

GTZ (PPP), USAID (Global Development Alliance), DFID (Business Linkage challenge fund), Dutch & Danish fund

most complete picture of the structure and potentials of a value chain,

appropriate to draw on stakeholder experiences, it is more flexible and less costly,

the least bureaucratic option as it actively involves private change agents and ‘governors’ of value chains

Costly and tends to be donor- rather than private sector-driven;

Provides less systematic information;

it implies a certain risk of subsidizing private gains rather than public goods, it may restrict the participation of other stakeholders, and it makes independent performance measurement difficult.

VC upgrading strategies

Upgrading Strategies 1

1 Process improvement (efficiency) :A Between the actorsB Within one actor• Logistics: e.g. reducing the time-to-market• Quality: e.g. standardisation and consistency• Costs: e.g. reducing inputs• Capacities: e.g. increasing volumes

2 Product innovation :A By one actorB Cross functional teams• Improving existing products• Designing new products• Creating marketing & design capacity

Upgrading Strategies 2

3 Functional upgrading :A Adding functionsB Changing functions• Adding sorting, grading & packing functions• Reducing production and adding exporting

Upgrading Strategies 3

4 Moving to other VCs:A changes upstreamB changes downstream• Identifying more interesting suppliers• Identifying more promising market segments

Upgrading Strategies 4

Value Chains and Finance

Some key concepts

A Sub-Sector System: comprised of multiple value chains

Support Products/ Services Markets

Enabling Environment

• Business

• Political/regulatory

• Socio-Economic

A Value Chain System

Support Products/ Services Markets

Enabling Environment• Business

• Political/regulatory

• Socio-Economic

Inputs

Production

Trading / Processing

Distribution

Final Consumers

Value Chain

Local Markets

What elements do we Analyze in a Value Chain

System?• Actors in the value chain and those that support chain (can be private, public or civil society)

• External environment, or the broader legal / national / socio cultural / infrastructure / context in which the chain operates

• Dynamics of the value chain and service markets: individual and firm behaviors, power structures, and how these affect the functioning of the chain

• Supply and Demand of the market and the chain including volumes, cost and pricing, numbers of actors, consumer preferences

What are we looking for in our analysis?

• Constraints affecting the Target group, e.g.:o Limited Access to inputso Lack of information about market demando Insufficient finance to grow business

• Opportunities for the target group, e.g.,:o Growing market demando Potential for increased efficiencies and qualityo New varieties available

• Leverage points or new models

Leverage Points and New Models

• Ways to upgrade the value chain system (to the benefit of the target group) that are targeted, efficient and cost effective

• Do not try to fix everything (triage)• Identify positive deviants and variations that

are working• Design value chain programs around these if

possible

Value Chain Financing

Financial flows

Product flows

Financial Services

Trading / Processing

Inputs Production Distribution Consumption

Value Chain Financing – external and internal financing, largely credit Value Chain Financing – external and internal financing, largely credit

Support services

Example Value Chain Actors and Financial (Credit) Needs

Large and Medium Exporters and Wholesalers

Working CapitalLine of credit / Overdraft

Long term investment loans

ProcessorsWorking capitalLine of credit / Overdraft

Investment loans

Traders / Dealers Trade credit

Producer GroupsInvestment loans for seasonality

Working capital

FarmersSavings

Working capital

Input SuppliersTrade credit

Seasonal credit

Producer / Association Model: example, direct finance and producer association repayment

Producer AssociationBanks/ SACCOs/ FIs

Grower

Grower

Grower

Finance

Finance

Finance

Bac

kwar

d an

d fo

rwar

d

linka

ges

Back

ward

and

forw

ard

linka

ges

Back

war

d an

d fo

rwar

d lin

kage

s

Repayment of loans on behalf of farmer

Lead Firm Model: Example, buyer borrows money, finances chain

Wholesale Buyers

GrowerGrower Grower Grower

Finan

ce

Prod

uctio

n

Flow of finance

Flow of products

Processors / Aggregators

Banks / FinancialInstitutions

Buyer ‘Guarantee’ Model: Example, buyer confirmed; finance direct to grower

Grower Grower Grower Grower Grower

Banks / Financial Institutions

Processor /Supermarket

Fina

nce

Finance

Inputs, Technica

l Assi

stance

Sale of products

Flow of Finance

Flow of products and services

Repayment

Finance

Out grower/ Marketing Coop

Facilitator Driven VC Model: wholesaler / producer group agreements

Buyers

Producer Associations

Banks

Services AgreementsFacilitators

Producer

Facilitators

Flow of finance

Flow of services

Flow of facilitation

Service Provider

Example Financing InstrumentsCategory Example Financing instrument

Agricultural product based • Input supply credit

• Buyer credit

• Contract farming finance

• Direct credit to farmers

Physical asset based • Warehouse receipt system

• Re-purchase agreements

• Leasing for production, processing etc.

Risk mitigation • Insurance

• Futures

Financial enhancements • Loan Guarantee

VC M and E

Targeting & Monitoring & Evaluation Impact !

VC performance

Company performance

Household changesBDS performance

Institutional changes

Monitoring is an ongoing activity!

• Projects and Programmes need to follow-up their progress

• Successes and failures need to be looked at while projects and programmes are running

• Monitoring is an internalised process of team communication, continuously undertaken while implementing, whereas

• Evaluation is an act of stopping implementation to reflect past activities (but drawing from information from monitoring).

The World of Impact Monitoring

Performance Monitoring Impact Monitoring Impact Assessment

Input Monitoring

Activity Monitoring

Implementation Monitoring

Process Monitoring

Output Monitoring

Impact Chain

Impact Model

Impact Indicators

Result-based Monitoring

Outputs ImpactsBenefits

Outreach

Evaluation

Outcome

What to monitor in projects – Performance & Impact Monitoring

Performance

• Observing outputs against planned activities

• Providing information for project management

• Day-to-day activity

To trigger short-term adjustments in operation

Impact

• Focussing on effect of outputs: impacts!

• Observing the direct benefit of outputs

• Strategic steering of implementation

To self-evaluate whether activities contribute to objectives

Impacts are ...

... changes that have a causal - or at least a ... changes that have a causal - or at least a plausible - link to a project/programmeplausible - link to a project/programme

... a change of circumstances as a consequence of ... a change of circumstances as a consequence of an intervention, it can be intended or an intervention, it can be intended or unintended, positive or negative.unintended, positive or negative.

... there: from the first moment of intervention and ... there: from the first moment of intervention and they continue to occur all the time.they continue to occur all the time.

... rather the result of social interaction than a ... rather the result of social interaction than a straight-forward interventionsstraight-forward interventions

... the result of complex interactions and thus, a ... the result of complex interactions and thus, a complex matter to deal with! complex matter to deal with!

ProjectUse of OutputDirect BenefitIndirect Benefit

Engel, P., The Social Organization of Innovation, 1997

Model of Interaction

GTZ

Input

Use of Outputs

Poverty Alleviation

Direct Benefit(Goal)

Outputs

Indirect Benefit

Activities

The GTZ Impact Model (II)

Attribution?

Partner

Observation !

Illustration: which of the 100 Bricks did we donate?

Impact Models: A chain of changesWhat do we expect to happen in value chain promotion?

SpecificInputproviders

Primaryproducers Traders

Final Con-sumers

Logisticscentres,Industry

SpecificInputs

Trans-formation

Trade ConsumptionProduction

C H A N G E !

Intervention; i.e. extension

Trans-formation

Trade ConsumptionSpecificInputs

Indicators in Value Chains

Some examples:

• Customer satisfaction

• Repeated customers

• Number of enterprises demanding a service

• Satisfaction with last service purchased

• Percentage of women-owned enterprises

„There is increasing interest in, and use of, private sector tools for performance and impact measurement; i.e. consumer market research tools for measuring changes in markets and private sector business tools for measuring service provider performance.“

Group work1. Group one – AVH, CCGG and ASE

(Shara)2. Group two – GPDI, AFD, SOS Sahel,

EAPDA (Mango)3. Group three – GPDI, AFD, SOS Sahel,

EAPDA (Banana)

Instruction for field work • Map and analyze the value chain for the

main commodity you selected 1. Functions2. Operations3. Number of actors per function4. Relation between actors 5. Volume per operation6. SGM per actor7. Critical Success Factor for selected commodity8. Support actors and their functions9. Strength and weakness 10.Factors affecting primary production11.Macro environment influence

Guideline for presentation

• Value chain map• Value chain analysis:

• What are the main bottlenecks in the chain• What are the opportunities to strength the

chain• What are the opportunities to promote the

local product

• Conclusion• What are the potential contribution of this

particular Value chain for HH livelihood and Food Security

Market Information

Brainstorming points

1. What do you understand from market information?

2. Where do you get market information?3. How do you get market information?4. Do you get market information timely?

Definition: ‘Any information used or required to support marketing decisions’

•It can range from simple averageIt can range from simple average priceprice to information liketo information like;;

•long long termterm priceprice trend trend

•Quality Quality of produce, of produce,

•VolumesVolumes of supply and demand, of supply and demand,

•Weather conditionsWeather conditions from areas where commodities are coming from areas where commodities are coming

from,from,

•LocationLocation

•New New crop varietiescrop varieties in the market, in the market,

•Product Product supplierssuppliers and and potentialpotential buyersbuyers and their characteristics and their characteristics

•Production and Marketing Production and Marketing costscosts

•Seasonal tendenciesSeasonal tendencies like harvest or planting time, etc like harvest or planting time, etc

• In principle market information is a business resource that contributes to the know – how and increases the chances for agricultural chain actors to manage prevailing situations and plan for the future market opportunities.

• In business, market information influences two functions of business that is Production and Marketing.

• The information obtained will assist them to verify the following perimeters in either production or marketing;-

Cont…

Cont …

Production Marketing

To Determine : To;

-Quantities produced for given market

Support the farmers/trader to sell more to the current buyers

-Quality desired by buyers Support the sourcing and research for better markets

-Time of demand (variations in seasons)

Secure medium and long term markets for sustainable production

The allowed transaction cost Secure market that offer the best prices.

Cont…

• All business activities involved in the movement of commodities from production to consumption is marketing. [Referred to as a supply chain]’

• Therefore farmer’s market information needs are those that enable them make rational and relevant decisions.

• Market information offers essential pivoting resources to the chain actors with a view of making them competitive and better players in the market.

• Agricultural Market information essentially fulfils some of the key facts of market chain actor’s competitiveness in the market by;-

– Become better informed than the competitors or suppliers

– Be able to dictate terms of purchase or supply

– Maximize the bargaining power

– To enable appropriate planning within give supply chain and season

– To make enough money from each harvest at the time of sale.• Market information services have the function of collecting and processing

market data systematically and continuously, and of making it available to market participants in a form relevant to their decision making.

Cont…

Market information needed by small scale farmers include:

• Information on: – product planning

– price details of seeds, fertilizers, pesticides and their availabilities

– current prices.

– forecast of market trends

– sales of timing

– improved marketing practices

– the product season predictions based on weather patterns

– group marketing opportunities

Possible Forms of disseminations

People based Electronic Media Print MediaDevelopment field staff FM radios Newsletter

Contact farmers Television Public Notices boards

School teachers, religious leaders, opinion leaders

SMS- Mobile Newspapers

Private sector agribusiness Internet Posters

Extension workers Emails Pamphlets

Marketing animators Info village booths

Challenges and Constraints in Agricultural Marketing Information Disseminations

ChallengesAccessibility Interpretation Storage Usability

Two major constraintsCost of acquisition Knowledge of availability

Different tools to obtain Market Information

• Internal records and reports

• Conducting market research

• Through a deliberate design of market intelligence systems and marketing

information models to provide marketing insights and support the decision

makers

• Informal networking and sharing; many of the organizations, entrepreneurs,

and farmers gain marketing knowledge and insights in such ways

• Organizing meetings, workshops, visits for various purposes among business

partners and stakeholders (eg. MSPs, business arrangement meetings, etc)

• Attending trade fairs

Market Information and VCD

Markets (intl/ domestic)

Distribution channels (export/import/

domestic)

ProcessorsTraders/collectors

ProducersInput suppliers

Market InformationMarket Information

Price

Quality

Quantity

Availability

•Knowledge of the marketKnowledge of the market

• helps to identify opportunities, challenge and helps to identify opportunities, challenge and

requirements for successrequirements for success

• helps stakeholders make informed decisions on their helps stakeholders make informed decisions on their

production and commercial activitiesproduction and commercial activities

• helps to implement strategies and adoption of helps to implement strategies and adoption of

innovations to maintain the competitiveness of the innovations to maintain the competitiveness of the

business and the value chainbusiness and the value chain

• ccontributes to market transparency: levels the ground ontributes to market transparency: levels the ground

for players -impacts governances for players -impacts governances

The value chain Information DivideVC Segment Inputs Production Processing/exporters Logistics Consumer

PrimaryActors

Traders manufacturers,

public and private input

providers

Small scale farmersLarge scale farmers

Farmer GroupsSMEs /Local private

companies,Regional Processors

MNCs

RetailersWholesalers,

brokersTransporters,Warehousing

Households

SecondaryActors

Financiers, Government, Donors, Researchers, Quality and Standards Bodies, Info service providers, BDS

InformationRequired

PricesStandardsVolumesMarket

Profitability

Input Costs/ ServicesProfitability

Level of DemandMarkets/ Weather etcStandards/ improved

technology

Sources of supplyCapacity utilisationTrends/ Markets /

ProfitabilityStandards

Volume/Capacity

Utilisation/Profitability/quality

requirements

AvailabilityQualityPrice

Value for Money

InformationSources

Own recordsOrders/

ContractsSector studies

Govt bulletins/Group Meetings/

Radio/ Mobile/ ContractsTraders/other farmers

Own recordsOrders/ Contracts

Sector studiesMarket research

Producers/ Traders/information

service provides (public or private)

Orders/ ContractsOwn records

Sector studies/Traders/information service

provides (public or private)

MarketingCampaigns

News/ Press Own experience

Access to Information by VC actors

• Traders and processors/exports have their own networks to access up-to-date market information and are keen on investing to acquire the right information

• On the other hand producers (small scale farmers) are commonly isolated and suffer from lack of information.

Brain storm on the reasons why farmers lack market information compared to other actors in the value

chain?

Market Information System

An MIS is a public or private service, which regularly collects information on markets and

communicates it timely and on a regular basis through various media to farmers, traders,

companies, government officials, policymakers and other interested persons

Types of MIS

Different types of MIS Strengths Weakness

Public (Government-run

MIS)

Example: common in most developing countries under the ministry of Agriculture

•Are independent and unbiased

•Offer information over several years

•Provide information that can be used to help farmers get better prices and plan for production

•Free

•Do not always reach the smaller farmers

•May not be up-to-date or may be made available too late to be of any use

•May not be very accurate

•Provide little analysis

MIS by Non-governmental Organizations (LINKS by ILRI, Market Node by CARE)

•Unbiased

•Accurate

•Free

•Accessible by small holders

•Not sustainable

•Only reach small groups

Cont …

Type of MIS Strengths Weakness

BDS providers

(‘Reuters Market Light’ in India)

-up-to-date

-not biased

-not comprehensive

-costly

-may not be easily accessible

Traders, agro-processors or exporters(EPOSPEA, EHBPA, contract farming)

-up-to-date information

-semi-accessible

-sustainable

-might be biased

-costly

Stakeholders initiated MIS -is based on needs of actors

-un biased

-accessible

-up-to-date and accurate

-highly dependant on

stakeholders commitment

(Producer groups, or individual Farmers)

-easily accessible

-highly accepted /trusted source

-may not be accurate

-is not comprehensive

Summery of challenges of Existing Public MIS service in Ethiopia

Main tips for designing an MIS

• Start small and grow big later on: Experience shows that it is always better to start the MIS small and expand it later, according to resources and skills needed for gradual management and reinforcement.

• Focus on priority and essential information • Use already available information sources to

avoid duplication• Find ways of simplifying and reducing charges

for collecting and processing.

Exercise

• For each value chain1. List out the information need (gap)2. Identify existing structures and information sources

available3. Make recommendation on how to build on existing

initiatives to put in place better MIS in the sector?

Tip…

Business Development Service

Business Development Services (BDS)

are services that improve the performance of the enterprise, its access to markets, and its ability to compete.

is a wide array of business services, both strategic and operational.

are designed to serve individual businesses, as opposed to the larger business community.

Is the wide array of non-financial services critical to the entry, survival, productivity, competitiveness, and growth of SEs.

include training, consultancy and advisory services, marketing assistance, information, technology development and transfer, and business linkage promotion.

A distinction between "operational" and "strategic" business services.

• Operational services are those needed for day-to-day operations, such as information and communications, management of accounts and regulations.

• Strategic services are used by the enterprise to address medium- and long-term issues in order to improve the performance of the enterprise,

• Access to markets, and its ability to compete. • For example, strategic services can help the enterprise to identify

and service markets, design products, set up facilities, and seek financing.

Specific areas of BDS service

• Market information• Entrepreneurship training• Market research• Facilitate & linkage with technologies• Advisory support & technical services• Provide non financial services • Consultancy service on the areas of marketing and agricultural

entrepreneurship promotion • Introduce and sell new technologies such as – equipments,

tools, ideas etc • Provide Technical service • Sample Business plan format

Business plan (BP)• A BP is a written document

– carefully prepared by an entrepreneur or a business development service provider that describes

• the objective of the business,• the proposed action with the necessary steps to enable

the business to reach those objectives.• Planning is thinking & working out

– what to do, how to do & when to do relevant activities• A BP is a profile of your business made up of partly words and

partly numbers.– The word describe about your business, products and or

service, customers, competitors, operations, sales, marketing, etc.

– The numbers estimate your cash flow, income & expenses, balance sheet, break-even analysis, etc.

Entrepreneurship

What is Entrepreneurship?

• What comes in your mind when you listen to the word Entrepreneurship?

or

• How do you understand Entrepreneurship?

Entrepreneurship

What are the characteristics of entrepreneurs’ ?

Entrepreneur is a person

• Who organizes, manages and assumes risk of running an enterprise

• Who owns a business– sell of manufacturing (any product), Trading (buying & selling), Service

business at profit

• Who Does new things or does in new ways– Have high drive and higher activity level

– Constantly aim to achieve goals and guided by their goals and work hard

– Know their strength and weakness and resources and constraints while striving for their goals

Entrepreneurship and IGA/Self Employment

– A women running a small business establishment & looking after her business all alone is said to be self employment

• When a women starts a small business & employs few to keep it running but manages the enterprises

• Is who initiates & establish econ. Activity/enterprise

• All entrepreneurs are self employed but all self employed aren’t entrepreneurs.

Self Employment /IGA Entrepreneur

What are the differences between characteristic of an entrepreneur and self employed?

Process of Entrepreneurial dev’t

( three features)

2. Development

3. Support

1.Initiation

Process of Entrepreneurial

Dev’t

Identification, selection,

Motivation, developing economic insight , promoting managerial skill, confidence, information, etc

Establishing and running an enterprise (finance, working place, machinery, power, incentives, etc)

What are the factors that influence entrepreneurship?

Gov. policyFinancial

availabilityInfrastructureEcon. Dev’tExternal env’tSocio cultural

factors

What are the steps that an entrepreneur will take to set up and manage her business?

Developing women entrepreneurs

Plenary discussion

Describe the role of women

Plenary: What are the typical gender challenges of women

entrepreneurs?

• Gender biased and self imaging

• Balancing work & family responsibility

• Gender stereotyping

• Physical and psychological intimidation

• Lack of opportunity for decision making

Group work: Problem tree analysis

• Pictorial and symbolic presentation of a tree

• Instructions for Problem Tree Analysis

• What are the factors that hinder women business owners from success?

• Use a picture of tree & include the following

1. Choose a problems in starting an enterprise: social (family, community, religious, etc); economic and Gender

2. What do women would like to achieve/see in society: Specific results/benefits - leaves

3. Social supports (gov’t & non-gov’t inst.) -Trunk

4. Roots causes responsible for limiting women to achieve what they want: Beliefs, values/attitude

See the possibility of being responsible for the risks involved in the establishment of the enterprise

What are the major challenges in Enterprise development?

• Access to adequate and timely support• Perception of the society

– bias against women:- acceptance of women as entrepreneur; dilemma women’s role as mother & entrepreneurs; lack decision making opportunity, etc

• What can be done?– entrepreneurial attitude & behavior

competencies

Summary: Why Women Entrepreneurship development

The main objectives

• To increase HHs income and ensure alterative livelihood options – build effective/successful enterprise

• To motivate and reinforce the entrepreneurial traits & abilities - Behavioral inputs and build confidence to overcome fear of failure

• To facilitate decision to setup new enterprise /expand existing ones - Business opportunity input

• To develop required managerial skill & competencies for making enterprise successful -Information inputs, Technical/commercial inputs, Managerial input

Developing personal entrepreneurial

competency (PEC)

1. Initiatives 2. See and Acts on opportunities

3. Persistence

4. Information seeking

5. Concern for high quality, innovation and efficiency

6. Commitment to work contract

7. Systematic planning

8. Problem solving 9. Self confidence

10. Persuasion

11. Use influencing strategies

12. Goal setting

13. Risk taking

Personal Entrepreneurial Attitudes and traits (PEC)

PEC

Professor David McClelland, 1983 research on Personal Entrepreneurial Behavioral Competencies(PEBC)

The importance of PEC in each stages of Enterprise development

Facilitation Skill

What does facilitation mean?

• Facilitation:

– Is to help others to use their potential not our potential

– Is providing information not teaching

– Supporting not directing

– Understanding how it is for others

– Inquiring – not interrogating

Good facilitation requires the following

• Creating safe environment for people to share experiences, make mistakes disagree with you

– Make sure they have enough space for self responsibility, initiative, risk/possibility, etc.

– Appreciate contributions & those sharing challenges– Help people to solve their own problems – do not be tempted

to give solution by yourself– Celebrate success and congratulate on failure – see it as

opportunity to learn about self– Let others know that you understand their feelings and

statements

Cont…

• Be a role model

– Give easy access to info., clear advice & ensure by paraphrasing

– Recognize with courtesy & listen with full presence – all ideas are valid

– Assess congruence of conversations on meetings

– Make sure that you declare lessons you learnt at each meeting & complement

– Maintain tone of respect, express your feelings clearly

– Admit your mistakes publicly – say it out

– Invite your people to give you feedback, appreciate it and complement