Reflective Statement on Value ChainsDescribe:
These examples of Value Chains were developed with farmers in the Bolivian Altiplano and adjacent valleys. Each value chain depicts 4 distinct phases: the primary production stage, the gathering or pooling of production phase, the processing or value added phase and, finally, commercialization. The purpose of using a value chain approach was to help farmers see how what they produce fits into local and national markets. Using cost benefit analysis, farmers analyze the risks and benefits of integrating themselves into values chains and entering into formal agreements with buyers. Farmers usually have to modify their actual agricultural practices to meet strict buyer specifications, but these new practices, increase the value of their production and therefore their household income. Usually, in order to be effective, farmers needed to ensure a minimum amount of production. Therefore, most participants formed and affiliated themselves with farmer associations composed of their own neighbors. They all needed to adhere to strict guidelines for the value chain to work effectively. My teams, external consultants and even buyers themselves provided necessary technical support for farmers to comply with industry specifications. Analyze: One of my core beliefs is that extremely poor farmers are much smarter than often given credit for. Whether they own their own land, or share crop someone else’s, they are accustomed to adversity and do their best to prepare for and cope with it. Why else, for example, do subsistence farmers in the Bolivian Altiplano plant 12 different varieties of potatoes on their very small plots of land? They are diversifying their risks. Each variety is better suited for drought, floods or rain. Similarly every farmer knows exactly how much money he or she spends to plant their crops and how much he or she makes on average with each harvest. As a consequence, they are very resistant to changing what they do, or incurring additional costs, without understanding the potential dividends. By in large though, they are not familiar with the technical requirements of buyers or how to ensure that their product meets specifications—this became one of the key responsibilities of my agricultural staff. Appraise: Seeking viable market opportunities and negotiating with buyers and inspectors, especially in the beginning, can be very daunting for inexperienced participants. My staff assumed the role of a “neutral broker” or an independent agent, who was neither buying nor selling goods himself. One particularly gifted staff member identified potential niches for farmers in our intervention areas and made initial overtures to potential buyers to explore the feasibility of prospective partnerships. We found out if a buyer was willing to extend contracts at a guaranteed price to producers, and what specifications they in turn would need to fulfill. Those farmers that chose to participate in the venture, received technical assistance so that they could meet these specifications (e.g. hygiene requirements, organic certification, fruit size, or milk quality, etc.). Most importantly my staff helped farmers analyze the cost benefits of different interventions, for example constructing stables for dairy cows permitted year round milk production and increased milk yields. In short, we found that conducting participatory cost benefit analysis was both a feasible and desirable approach for working with farmers regardless of the size of their landholdings. Transform: Often agricultural extension programs target farmers of sufficient means to meaningfully engage in proposed interventions (e.g. participants need minimal landholdings or earnings to be eligible to participate). Our program instead targeted the poorest of the poor, subsistent farmers. In facilitating the creation of value chains for dairy milk, peaches, apple tea, vegetables, potatoes, and maca (an Andean equivalent to Viagra), my team and I became convinced that demand driven interventions and participatory cost benefit analysis were not only feasible but the most desirable approach to rural development. Household farm incomes in our intervention area increased 309% from $539 to $2,316 annually. Furthermore, many of the value chains begun in our Title II Food Security program continue to this day, more than five years after the life of project. This approach was so successful that it garnered the attention of local government resulting in a high cost-share from them, contributing to the sustainability. Post life of project some Municipalities opened up municipal positions to maintain this type of technical assistance and Save the Children staff we hired permanently by their offices. |