Iddo Dror, Diana Brandes – van Dorresteijn

Abridged Rapid Value Chain Analyses Training

CRP Livestock and Fish Planning Meeting, Naivasha, Kenya, 24-28 March 2014

Training Outline

• Why think in terms of value chains?

• How are value chains relevant for livestock?

• How to represent a value chain?

• Issues in value chain assessment(s)

• Illustrating different results of value chain analysis: Tanzania

2

The CGIAR L&F research program operates in how many value chains?

A. 7B. 8C. 9

7 8 9

0%0%0%

Which value chain do you primarily work in?

A. BangladeshB. Burkina FasoC. EgyptD. EthiopiaE. IndiaF. NicaraguaG. TanzaniaH. UgandaI. Vietnam

0% 0% 0% 0%0%0%0%0%0%

What is your background?

A. EconomistB. Value Chain CoordinatorC. Animal

Health/Breeding/Feeding Specialist

D. Cross practice Specialist

Economist

Value Chain Coord

inator

Animal H

ealth/B

reedin...

Cross

practice

Specia

list

0% 0%0%0%

6

Role of Livestock in Developing Countries• > 40% total agricultural GDP• 70% of world’s livestock (18.5 billion “head”)• One billion people earning <$2 a day depend on livestock: 600 million in South Asia; 300 million in sub-Saharan Africa

• Provides food for >830 million food-insecure people: many poor have little access to nutritious animal-source foods

• Small-scale mixed crop-livestock farmers offer opportunities to prevent disease outbreaks, close yield gaps etc.

Source: Better Lives through Livestock, ILRI Strategy 2013-2022, ILRI, Nairobi and 2000 – 2030 figures, FAO, 2011.

Value chains for Livestock Development Using a value chain framework can help better evaluate smallholder livestock systems to:

• Understand the poverty implications of the value chains

• Design, prioritize policy interventions and to assess the impact of technology decisions on livestock systems

• Formulate (and measure impact) of technological, marketing and organizational innovations

• Evaluate, capture and learn from the overall value chain performance and its actors

• Promote a holistic approach 7

A piecemeal traditional approach to agricultural interventions can be defined as….

A. Breaking a complex task into several smaller pieces so that various teams can work on all parts of the value chain in parallel

B. Working on some parts of the value chain in a single country but not on others

C. A traditional manner of preparing meals into smaller parts

D. Working on all parts of the value chain in a single country by dividing work into pieces Bre

aking a

complex ta

sk...

Work

ing on some parts

o...

A trad

itional manner o

f ...

Work

ing on all parts

of ...

0% 0%0%0%

Inputs & Services Production Processing Marketing

Consumers

Inputs & Services Production Processing MarketingConsumers

...in Country A

Inputs & Services Production Processing MarketingConsumers

Inputs & Services Production Processing MarketingConsumers

...in Country D

...in Country C

...in Country B

9Source: Tom Randolph, referred to in CRP L&F proposal, 2012

Piecemeal traditional approach to agricultural interventions

Feed

Medicines

Services

Breeding and intermediate

rearing animals

+/- Markets+/-Middlemen

Farms - many types

Manure, waste and by products

Other food and consumer productsMilk, Eggs, wool/

fiber

Manure, waste and

by products

Meat

+/- Markets+/- Middlemen

Consumer

Retailer

Wholesaler

+/- Markets

+/- Middlem

en

Abattoirs

+/-Processors

Animals+/- Markets

+/- Middlemen

+/- Markets

+/- Middlem

en

Baker, 2007: “A value chain is the set of actors, transactions, information flows, institutions that enable value to be delivered to the customer.”

Source: Tom Randolph, referred to in CRP L& F proposal, 2012

A visualization

How does the Livestock and Fish Research value chain approach differ from the traditional “piece meal” approach?

A. The program adopts an integrated “solution-driven research with development” approach by working together with key partners and stakeholders

B. The program takes a holistic approach towards implementing value chain interventions

C. Crosscutting areas like Knowledge Management, Communications, Partnership and Capacity Development play prominent roles in the global value chains

D. All of the above

0% 0%0%0%

Livestock & Fish research interventions addresses value chain holistically:

Strategic cross-cutting areas such as KM/Comms, Partnership and Capacity Development Technology GenerationMarket InnovationTargeting, Gender, Learning and Impact

Inputs & ServicesProducti

on

Trader/distribut

or

Processing

Marketing

Consumers

Value chain development team + research partners

GLOBAL RESEARCH PUBLIC GOODS

INTERVENTIONS TO SCALE OUT REGIONALLY

Major intervention with development partners

12

Po

licy

Source: Tom Randolph, referred to in CRP L&F proposal, 2012

Value chain analysis approach: Research for Development

Small Group Exercise

13

Briefly discuss what the gaps are in our “holistic” value chain approach (5-10 min.) and draw out (5-10 min.) the main elements that need to be considered in a (dairy) value chain mapping

Three levels of value chain mapping

Understand the context in which the system operates

Understand how the different business links function together as a system

Identify and assess the relationship, leverage points, capacities and resources of partners including support services and stakeholders

14Source: Lundy, M. and others. LINK Methodology. A Participatory Guide to Business Models that link Smallholders to Markets, 2012

Purpose: • Identify value chain actors, services and enablers; main market

channels (relative importance, requirements, geographical spread); visualize linkages; demonstrate interdependencies

Level one: Core Processes

Source: Lundy, M. and others. LINK Methodology. A Participatory Guide to Business Models that link Smallholders to Markets, 2012 15

Level two: Organizational & partner network

Incl. support services & other stakeholders

Source: Lundy, M. and others. LINK Methodology. A Participatory Guide to Business Models that link Smallholders to Markets. 201216

Level three: Institutional landscaping

Source: Lundy, M. and others. LINK Methodology. A Participatory Guide to Business Models that link Smallholders to Markets, 201217

Most important issues to consider in value chain analysis

• Governance, formal and informal power structures, political economy

• Value chain upgrading opportunities to create job opportunities and create incomes, organization and business development

• Favorable environment for (investment in) innovation

• Measuring impact of overall chain performance

• Local versus global-oriented value chains18

Which of these issues do you consider the most important?

A. Governance and PowerB. VC upgrading

opportunitiesC. Enabling environment

investment in innovationD. Measuring ImpactE. Local versus Global VC

Govern

ance an

d Power

VC upgrading o

pportunities

Enabling enviro

nment i...

Measu

ring Im

pact

Loca

l versu

s Global V

C

0% 0%0%0%0%

Value chain analysis – tools, techniques

Value chain analyses are more than pretty pictures or maps.

What else would it include?

• Individual surveys of value chain stakeholders• Using sampling/detailed questionnaires, group

interviews to identify practices, costs and prices• Using statistical tools to extract (data) trends • Partner scoping studies

20

• Reliable value chain mapping: geographical mapping of chain actors and marketing channels

• Solid Market analysis: quantify product and information flows, prices and costs along the chain

• Value creation: quantify and analyze value created through,- and along the chain

• Sound models for value chain analysis: to understand contribution of various factors in value creation and chain participation

• Constraints and opportunities identification• Policy and business recommendations formulated

21

Results from value chain mapping and analysis

Illustrating different results of value chain analysis

Case from Tanzania

23

Case: Tanzania Dairy

“Maziwa Zaidi”

Goals (10-12 years)Three principle goals:

• Smallholder farmers have reliable and consistent access to quality inputs and services in order to efficiently achieve high milk productivity

• Smallholder famers have access to reliable, well-coordinated, and efficient dairy products marketing arrangements with resultant improvement in household income and livelihoods

• Poor consumers have improved access to quality, safe, and nutritious dairy products at affordable prices to increase per capita consumption of the dairy products

24

Impact Pathways (10-12 years)

Long term impacts through four main pathways:

• Institutional innovations for reliable and consistent access to inputs and services

• Innovative strategies for consistent and reliable access to artificial insemination materials and services, forage, and water

• Generation of evidence for achieving impact at scale and influencing policy

• Innovative strategies for increasing the consumption of dairy products

25

Project sites

26

Producers

Households outside village

Restaurants outside village

Milk vendors

Collection centers

Households in village

Restaurants in village

Auction market in & outside village

Agro- vet shops outside village

Mobile agro-vets

Agro-vet shop in urban centres

1

6

2

5

4

3

Government/Research institution (AI, Breeding management, vaccines)

Processors

<--------------------------------------------Mostly commercial / intensive & semi-intensive producers---------------------------------->

<---- Mostly pre-commercial/extensive producers producers------>

Key: 1-6 = channels in order of preference by producers across 8 typical villages in Morogoro and Tanga. These also reflect decreasing price gradient that ranges from TSh 1000/liter for direct sales down to TSh 300/liter for sales to vendors collection centers.

Dairy Value Chains in Tanzania

27

Milk processing in Tanzania has been declining since 1990

28

Milk Processing is declining

Huge seasonal fluctuation in milk supply from traditional herd

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec0

500100015002000250030003500400045005000550060006500700075008000850090009500

100001050011000115001200012500

Milk collection by a small scale processor from traditional herd in Morogoro, 2009

Average/month Total supply

Month

Vo

lum

e o

f m

ilk (

litre

s/m

on

th)

29

Reported Yields

30

Farmer groups are strugglingin most places except in Tanga

Performance of milk collection at Nnronga women dairy co-operative Society, Hai

Kilimanjaro and CHAWAMU-Muheza Tanga (1994-2007)

050000

100000150000200000250000300000350000400000450000500000550000600000650000700000750000

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

Year

Volu

me

of M

ilk (L

itres

)

Nnronga

CHAWAMU-Muheza

31

Four inter-related problems faced by resource-poor milk producers

1. Smallholders produce small volumes for direct sales: no economies of scale

2. Inadequate credit facilities for basic inputs/services/working capital: lack of investment opportunities to improve productivity

3. Lack of appropriate organizational models for pre-commercial producers (complex cooperative models and technology-driven solutions have largely failed)

4. Seasonality of rainfall and related effects on production are strong

32

What do you consider to be the most important constraints faced by resource-poor milk producers ?

A. Production: No economies of scale

B. Inadequate access to finance/credit

C. Lack of organisation(s)D. SeasonalityE. PoliciesF. Other

0% 0% 0%0%0%0%

Distribution Channels

34

Milk marketing outlets (NBS, 2003)

Milk Buyer %

Neighbours 86.1Local market 5.5Secondary market 0.5Processors 1.4Large scale farms 0.2Trader at farm 4.5Other 1.7TOTAL 100.0

Milk processing installation 1995-2000. (Total approx. 315,000 l/day)

Processor name Installed capacity (litres/day)

1 Azam Dairy 3,0002 Tommy Dairy (Hakifanyikazi) 15,0003 Tan Dairies 15,0004 Tanga Fresh Ltd 40,0005 Ammy Brothers Ltd 2,0006 Brookside (T) Ltd (Hakifanyikazi) 45,0007 International Dairy Products 5,0008 Mountain Green Dairy 1,5009 Arusha Dairy Company 5,000

10 Kijimo Dairy Cooperative 1,00011 Longido (Engiteng) 50012 LITI Tengeru 50013 Terrat (Engiteng) 50014 Orkesumet (Engiteng) 50015 Naberera (Engiteng) 1,00016 Nronga Women 3,50017 West Kilimamnjaro 1,00018 Mboreni Women 1,00019 Marukeni 1,00020 Ng'uni Women 1,00021 Kalali Women 1,00022 Same (Engiteng) 50023 Fukeni Mini Dairies 3,00024 Kondiki Small Scale Dairy 1,200

25 Musoma Dairy 40,00026 Utegi Plant (Ex TDL ) (Hakifanyikazi) 45,00027 Makilagi SSDU 1,50028 Baraki Sisters 3,00029 Mara Milk 15,00030 Mwanza Mini Dairy 3,00031 Kagera Milk (KADEFA) 3,00032 Kyaka Milk Plant 1,00033 Del Food 1,00034 Bukoba Market Milk Bar 50035 Bukoba Milk Bar - Soko Kuu 50036 Mutungi Milk Bar 80037 Salari Milk Bar 80038 Kashai Milk Bar 80039 Kikulula Milk Processing Plant 1,00040 Kayanga Milk Processing Plant 1,00041 MUVIWANYA 1,00042 SUA 3,00043 Shambani Graduates 400044 New Tabora Dairies 16,00045 ASAS Dairy 12,00046 CEFA Njombe Milk Factory 10,00047 Mbeya Maziwa 1,00048 Vwawa Dairy Cooperative Society 90049 Gondi Foods 600

Less than 5000 litres/day

5000-30,000 litres/day

More than 40,000 litres/day

Key

26

12

16

6

7

8

12

9

4

5

10

3

11131415

17

18

19

20

2122

23

24

42

45

25272829

3031

32

3233

34 35 3637 38 39

4041

43

4647

48

49

46

D.R.C

Pemba

Unguja

LINDI

RUKWA

TABORA

IRINGAMBEYA

RUVUMA

SINGIDA

MOROGORO

KIGOMA

PWANI

ARUSHA

DODOMA

SHINYANGA

TANGA

MARA

KAGERA

MANYARA

MTWARA

MWANZA

MANYARA

KILIMANJARO

DAR ES SALAAM

I N D

I A N

O C

E A

N

KENYA

UGANDA

RWANDA

BURUNDI

ZAMBIA

MOZAMBIQUE

Milk processing installation 1995-2000. (Total approx. 315,000 l/day)

Processor name Installed capacity (litres/day)

1 Azam Dairy 3,0002 Tommy Dairy (Hakifanyikazi) 15,0003 Tan Dairies 15,0004 Tanga Fresh Ltd 40,0005 Ammy Brothers Ltd 2,0006 Brookside (T) Ltd (Hakifanyikazi) 45,0007 International Dairy Products 5,0008 Mountain Green Dairy 1,5009 Arusha Dairy Company 5,000

10 Kijimo Dairy Cooperative 1,00011 Longido (Engiteng) 50012 LITI Tengeru 50013 Terrat (Engiteng) 50014 Orkesumet (Engiteng) 50015 Naberera (Engiteng) 1,00016 Nronga Women 3,50017 West Kilimamnjaro 1,00018 Mboreni Women 1,00019 Marukeni 1,00020 Ng'uni Women 1,00021 Kalali Women 1,00022 Same (Engiteng) 50023 Fukeni Mini Dairies 3,00024 Kondiki Small Scale Dairy 1,200

25 Musoma Dairy 40,00026 Utegi Plant (Ex TDL ) (Hakifanyikazi) 45,00027 Makilagi SSDU 1,50028 Baraki Sisters 3,00029 Mara Milk 15,00030 Mwanza Mini Dairy 3,00031 Kagera Milk (KADEFA) 3,00032 Kyaka Milk Plant 1,00033 Del Food 1,00034 Bukoba Market Milk Bar 50035 Bukoba Milk Bar - Soko Kuu 50036 Mutungi Milk Bar 80037 Salari Milk Bar 80038 Kashai Milk Bar 80039 Kikulula Milk Processing Plant 1,00040 Kayanga Milk Processing Plant 1,00041 MUVIWANYA 1,00042 SUA 3,00043 Shambani Graduates 400044 New Tabora Dairies 16,00045 ASAS Dairy 12,00046 CEFA Njombe Milk Factory 10,00047 Mbeya Maziwa 1,00048 Vwawa Dairy Cooperative Society 90049 Gondi Foods 600

Less than 5000 litres/day

5000-30,000 litres/day

More than 40,000 litres/day

Key

26

12

16

6

7

8

12

9

4

5

10

3

11131415

17

18

19

20

2122

23

24

42

45

25272829

3031

32

3233

34 35 3637 38 39

4041

43

4647

48

49

46

Less than 5000 litres/day

5000-30,000 litres/day

More than 40,000 litres/day

KeyLess than 5000 litres/day

5000-30,000 litres/day

More than 40,000 litres/day

Less than 5000 litres/dayLess than 5000 litres/day

5000-30,000 litres/day5000-30,000 litres/day

More than 40,000 litres/dayMore than 40,000 litres/day

Key

26

12

16

6

7

8

12

9

4

5

10

3

11131415

17

18

19

20

2122

23

24

42

45

25272829

3031

32

3233

34 35 3637 38 39

4041

43

4647

48

49

46

26

12

16

6

7

8

12

9

4

5

10

3

11131415

17

18

19

20

2122

23

24

42

45

25272829

3031

32

3233

34 35 3637 38 39

4041

43

4647

48

49

46

D.R.C

Pemba

Unguja

LINDI

RUKWA

TABORA

IRINGAMBEYA

RUVUMA

SINGIDA

MOROGORO

KIGOMA

PWANI

ARUSHA

DODOMA

SHINYANGA

TANGA

MARA

KAGERA

MANYARA

MTWARA

MWANZA

MANYARA

KILIMANJARO

DAR ES SALAAM

I N D

I A N

O C

E A

N

KENYA

UGANDA

RWANDA

BURUNDI

ZAMBIA

MOZAMBIQUE

D.R.C

Pemba

Unguja

LINDI

RUKWA

TABORA

IRINGAMBEYA

RUVUMA

SINGIDA

MOROGORO

KIGOMA

PWANI

ARUSHA

DODOMA

SHINYANGA

TANGA

MARA

KAGERA

MANYARA

MTWARA

MWANZA

MANYARA

KILIMANJARO

DAR ES SALAAM

I N D

I A N

O C

E A

N

KENYA

UGANDA

RWANDA

BURUNDI

ZAMBIA

MOZAMBIQUE

Milk processing installation

35

Gender: Women participation in milk related tasks

36

BREEDS

• Dearth of artificial insemination technicians due to restrictive certification system

• Unreformed sector (improved breeding bill not yet submitted)

• Breeding regulator and practitioner are one and the same

• Inadequate, disjointed service delivery, with different agenciesoverseeing animal registration, performance and genetic evaluation

• Brucellosis is not listed as a notifiable disease so testing and control are neither mandatory nor publicly funded

• No information systems to capture livestock identification, registrationand performance for breed improvement and animal traceability programs

FEEDS, HEALTH – WHAT ABOUT GENDER ?

Policy constraints

Livestock & Fish research interventions addresses value chain holistically:

Strategic cross-cutting areas such as KM/Comms, Partnership and Capacity Development Technology GenerationMarket InnovationTargeting, Gender, Learning and Impact

Inputs & ServicesProducti

on

Trader/distribut

or

Processing

Marketing

Consumers

Value chain development team + research partners

GLOBAL RESEARCH PUBLIC GOODS

INTERVENTIONS TO SCALE OUT REGIONALLY

Major intervention with development partners

38

Po

licy

Source: Tom Randolph, referred to in CRP L&F proposal, 2012

Value chain analysis approach: Research for Development

CGIAR is a global partnership that unites organizations engaged in research for a food secure future. The CGIAR Research Program on Livestock and Fish aims to increase the productivity of small-scale livestock and fish systems in sustainable ways, making meat, milk and fish more available and affordable across the developing world.

CGIAR Research Program on Livestock and Fish

livestockfish.cgiar.org