Why value chains development needs a paradigm shift?

Meeta Punjabi Mehta and Pratyoosh Kashyap from Creative Agri Solutions write on the need for a paradigm shift in value chain development

Why value chains development needs a paradigm shift?

Meeta Punjabi Mehta and Pratyoosh Kashyap from Creative Agri Solutions write on the need for a paradigm shift in value chain development

There is a growing buzz around Value Chains Development (VCD) as the approach has been widely recognised as a major catalyst to rural and agricultural sector development. However, there is limited clarity on the actual concept and practical approach to value chains development. For many, value chain development means processing of products or linking to processors and supermarkets.

In simple terms, VCD requires a sound understanding of requirements of the end markets and aligning the activities throughout the chain to meet the market requirements. The difference from the traditional approach is that the traditional value chains are “supply driven” whereby all the agents in the chain focus on production and pushing the produce to the next level. In VCD, “market pull” incentivizes agents to meet the market requirements.  

For example, the farmer in Jharkhand who sells local variety (thick) okra at the local rural haat has no information that the final market for his produce is Patna, where consumers prefer thin variety. Consequently, they end up getting a lower price. If the farmers were aware of the volume, seasonality and quality of requirements at the market, their efforts and hence the returns would be different. .

  • VCD impacts farm incomes by lower cost, higher productivity and quality along with improved market linkages.
  • Agribusinesses engage in VCD to tap the emerging quality market for exports, processing and retailing.

Challenge 1: Bringing Together All Players in the Chain
While the concept of Value Chains Development is relatively straightforward, the implementation on the ground in engaging all participants in the value chains is a challenging task. There is a multitude of stakeholders operating at various levels in the chain – seed and input manufacturers, traders, farmers, processors, and many other service providers for irrigation, finance, etc.

In practice, stakeholders along any chain rarely interact jointly together on a common platform. This makes coordination and communication at each level a critical aspect of any value chain development project. To this effect, bringing together all stakeholders in the region at a common platform to have a joint understanding and vision of Value Chain Development will help generate the required momentum for successful implementation.

Challenge 2: Gap in Technical Training on VCD Resulting in Sub-optimal Impact
Very often an army of young professionals at the state, district block level are deployed for VCD project implementation. The high enthusiasm is not always accompanied with the necessary technical expertise. Investing heavily in human resources without the requisite technical capacity leads to inordinate delays in the process leading to poor impact and inefficient use of resources, often times also demotivating the young professionals engaged in value chain development projects. Technical expertise and training along with practical learnings from other initiatives combined with high enthusiasm can deliver impactful results.

Practical Approach to VCD
Creative Agri Solutions organised a workshop on ‘Practical Approach to Value Chains Development’ in March 2019 in New Delhi with the very purpose of bringing together agricultural value chain stakeholders and project agencies from all levels, discussing the needs and nuances of value chains development and creating a platform for dialogue, discussion and cross learning.

Creative Agri Solutions delivered a module aimed at practitioners explaining the various aspects of and in developing value chain development projects, drawing from her years of work in agricultural value chains.

Workshop Focus Areas
Clearing the Concepts: Defining concepts and components of agricultural value chains, value chains analysis, strategies for value chain development, implementation and monitoring and evaluation.
Experience Sharing: Experts from International Fund For Agricultural Development (IFAD), the World Bank, PRADAN, and National Commodity and Derivatives Exchange (NCDEX) shared their views and experiences of their respective projects.
Learning from Innovations: Value Chain innovators took stage to discuss the innovative approaches for high impact represented by – United Phosphorus Limited (UPL), All Fresh Supply, Eden Horti, Synergy Technofin and Hester Biosciences.

(The views express in the article are authors’ own.)

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