Value Chains, Donor Interventions and Poverty Reduction: A Review of Donor Practice

Value Chains, Donor Interventions and Poverty Reduction: A Review of Donor Practice IDS Research Reports March 2010 108 pages.

Value chain interventions are increasingly popular amongst donors aiming to promote market-oriented growth and poverty reduction. Based on the reflections of the community of practice itself and extensive desk research, this review critically examines the causal models underlying value chain interventions and asks how and to what extent their poverty alleviation impacts have been systematically investigated.

Concentrating on a selection of 30 donor-led value chain interventions, the review finds two main patterns of engagement: (a) one which funnels assistance by partnering with lead firms in the value chain – lead firm projects; and (b) one which works with chains without a lead firm – value chain linkage projects.

Targeting of the poor seems more effective in value chain linkage projects and in those lead firm projects where beneficiaries are identified in both the chain’s suppliers and distributors.
Controversially, despite a wealth of positive anecdotal evidence, the vast majority of projects did not carry out an impact assessment of their poverty alleviation objectives and it is therefore unclear whether the value chain intervention: (a) is responsible for the improvements observed; (b) benefits the poor disproportionately; and (c) is more cost effective than other alternative approaches.

Assessing the poverty alleviation effects of individual interventions in a rigorous way is costly and challenging but necessary to ensure long term effectiveness of the interventions as well as optimising the use of public funds.

There is a need to carry out systematic impact assessment at the programme level to develop a strong evidence base. Finally, this review provides some guidelines for designing and managing value chain interventions, particularly regarding the identification of situations in which the value chain approach is most appropriate and those where other private sector-oriented approaches (such as Business Development Services and Making Markets Work for the Poor) may be more suitable or complementary.

The World Council of Credit Unions supports small farmers to produce stevia, a natural sugar substitute

Credit unions in Kenya have introduced financing for a new cash crop well-suited for production in small farm plots characteristic of rural poor farmers in Kenya. Recent years have seen the reduction of demand for tea as younger generations consume more soft drinks and less tea. Small farmers who used to harvest tea have found it harder to support their families by selling the tea leaves. Finlay Tea introduced new crops that could be grown on small plots of land by poor farmers in western Kenya. The World Council of Credit Unions (WOCCU) introduced, with Ndege Chai SACCO Ltd a Medium size Society based in Kericho, financing for small farmers to produce stevia, a natural sugar substitute.

The majority of poor people in Kenya are still in the rural areas; small landholders are producing for subsistence and trying to find a crop to sell for additional household income. Stevia has a strong demand. It is also simple; the poorest and least trained farmers can produce it sustainably and profitably on their small landholdings. The challenge is reaching the scale that the market offers to these farmers. The largest purchasers on the worldwide sugar market are soft drink producers, such as Pepsi Cola and Coca Cola. Consequently, they are also the largest interested purchasers of stevia. But to respond to their demand requires the delivery of very large amounts of the crop. Stevia has also an aftertaste similar to artificial sweeteners (even though it is all-natural). So you may need to get used to this. When combined with real sugar, the aftertaste is minimized.

Related:
Antimicrobial Activity of Stevia Rebaudian. Faculty of Pharmacy, University of Benin,  Benin City, Nigeria

Under what conditions are value chains effective tools for pro-poor development?

Under what conditions are value chains effective tools for pro-poor development? Authors: Don Seville, Abbi Buxton and Bill Vorley, International institute for environment and development (IIED).

Understanding the benefits, costs and risks when connecting small-scale producers to formal markets is critical to informing companies, farmers, NGOs and donors in their decisions. This paper (IIED, 2011, 50 pages) seeks to address key questions based on a review of literature and experiences in Africa and Latin America.

Understanding how to link poor producers successfully to markets, and identifying which markets can benefit what kinds of producers, are critical steps for the development community.
Formal markets have requirements – including quality, consistency, traceability, food safety and third-party certified standards (Fairtrade, Rainforest Alliance) – that necessitate direct communication and coordination along the supply chain.

While these requirements of formal markets raise the barrier of entry for new producers, particularly those with fewer assets, they also present potential opportunities for diversification, income generation and professionalization.

Some poor households can benefit from participation in formal supply chains not just as smallholder producers, but also as wage laborers in production or processing, and as providers in the service markets that support value chains.

The purpose of this paper is to draw together preliminary conclusions and open questions based on experience of IIED and a broad literature review of the impact of participation in formal value chains on the livelihoods of poorer producers. This is a critical topic for donors and NGOs as they consider the effectiveness of investment strategies.

African parliamentary support for agriculture

African parliamentary support for agriculture. Final Report for the Pilot Programme. Association of European Parliamentarians with Africa. 29 pp.


This is the final report of a pilot programme which investigated how parliamentary agriculture committees can be supported to help to provide better oversight on programmes looking at such things as achieving sustainable agricultural growth, food security and economic empowerment of smallholder farmers. It covered Ghana, Kenya, Rwanda and Tanzania.

The programme looked at ways in which agricultural committees can be assisted to develop and implement a strategic approach to support agriculture in their respective countries and constituencies.

The report acknowledges that much more work needs to be done to develop the link between MPs and government agricultural services such as the extension services at constituency level.

It also suggested that any future programme would need to put more emphasis on strengthening (or in some cases establishing) the links within a parliaments; between parliamentary committees and the executive; between different houses of parliament (two of the four countries have or will have senates as well as assemblies); and between parliamentary committees and other stakeholders such as farmers' organizations and research institutions.

DFID backs extra year of RIU activity

Ian Maudlin
RIU Director

A 12-month extension (to June 2012) to the RIU has been agreed with DFID in order to allow certain key activities more time to generate additional knowledge outputs and provide greater and more in depth evidence of impact.

RIU aspires to:

• Strengthen innovation capacity


• Explore patterns of partnerships, alliances or networks that span research, social, economic and policy activity


• Tackle local problems in a global context


• Undertake learning-orientated monitoring, with reorientation of RIU in the light of emerging experience


• Recognize that risk is an unavoidable part of innovation


• Champion governance arrangements that facilitate a pro-poor orientation


• Recognize of the vital role that women play in agriculture


• Be flexible to pursue unexpected but promising outcomes


• Engage at different levels and scales; for example local/global or technical/policy


• Promote new ways of working

RIUtv 
Within the RIU website RIU has its own television channel -RIUtv. This enables RIU to place short, specially-made films throughout the website, wherever they are most relevant. In August 2010 RIUtv News was added to the website, this is a monthly web-cast news bulleting and it is supported by RIU Highlights which is a listing of all the news from RIU. 


RIUradio
RIUradio gives RIU an opportunity to share stories across Africa, where radio is often the most important and powerful medium.

RIUradio works closely with the programme AGFAX produced byWRENmedia and a wide network of journalists. and funded by DFID, to get the messages out to radio stations across Africa. Each month, AGFAX distributes free-of-charge a pack of ready-to-broadcast radio features and interviews covering the latest information and news in farming, agricultural science, and rural development to more than 80 radio stations in Africa. The packs provide an audio interview, transcript and supporting information that the programme maker might need, for example a suggested introduction and closing announcement for each interview, and contacts for further information.

RIU feeds a news story each month to AGFAX. These are produced very cost-effectively by repurposing the audio tracks from RIUtv’s films. The stories are also available as podcasts via the RIU website. 


2011
Climate change

• Cassava - the drought beater
  June 2011 (07:57)

2010
Post-harvest

• Group storage to earn more from maize
  November 2010 (07:05)


• Protecting cowpeas in storage through triple bagging
  October 2010 (06:30)

Livestock

• Jos plateau partnership for animal health
  August 2010 (04.41)


• A business model for village chickens
  July 2010 (07.42)

Fish

• Fast growing fish for farming
  June 2010 (07.42)


• Kenya's one-stop fish farming shop
  March 2011 (05.09)


• Aqua Shops - serving commercial fish-farming
  April 2011 (04.22)

Bio-pesticides

• Interviews with maize farmers in Western Kenya
  March 2010 (05:54)


• New weapons to fight armyworm
  June 2010 (07:50)

Communications

• Interviews with the ShujaazFM team
  April 2010 (06:09)


• RIU Best Bets - win funding to put research into use
  January 2010 (01:12)

Seeds

• Making seed and fertiliser affordable
  February 2010 (04:13)

Farm mechanisation toolkit: Guideline to bundling of demands and supply of mechanised services

This is a practical toolkit [24 pp., available in English and Kiswahili of the Research Into Use Programme (RIU)] aimed at helping smallholder farmers and providers of farm mechanisation services to develop a sustainable system for increasing access to mechanisation.

It describes, step-by-step, how farmers and machinery owners can bundle demands and supply of mechanisation services and benefit from the resultant economies of scale. The guide is designed to help farmers, tractor owners, village, ward, district or regional authorities and other stakeholders in the agricultural system understand and engage in the process and make mechanised services accessible to smallholder farmers.

Identifying Market Opportunities for Rural Smallholder Producers

This new English version of the methodological tool kit developed by CIAT’s Rural Agroenterprise Development Project (Copyright © 2007 Centro Internacional de Agricultura Tropicahas / Reprint edition published by Catholic Relief Services, Baltimore, 2008) (109 pages) has been extensively updated based on feedback.

The goal of this work is to enable service providers to empower rural communities with skills to engage more effectively in the marketplace so as to increase their income, their CAPACITY TO INNOVATE and ultimately improve their livelihood options.