Value Chains for Poverty Alleviation

Thursday 16.08.07

Kusyana Frederick Shindika , Director of Scott Enterprise Ltd., Tanzania, introduced the 120 participants of the second seminar day to the world of cotton production, describing his experiences as a producer, trader and newly established entrepreneur - working hand in hand with small producers. Please click here (WMV, 3824 KB) to watch Frederick’s interview.

The experience of Bangladesh, presented jointly by Manzurul Hasan , Katalyst – Swisscontact and Shirin Biswas , Programme Officer Intercooperation Bangladesh, highlighted the good results reached by combining livelihood and market development approaches. This combined support resulted in producer groups being able to sell larger quantities while reducing their costs, and trader groups improving their supply, both in terms of volume and quality. Both target groups generated increased profits. In addition, resource farmers, who sell technical know-how services, play a relevant liaison role between producers and traders.

Carola Amezaga , National Coordinator APOMIPE Programme, Intercooperation Peru, explained how a number of enterprise networks in Peru have increased their income and created employment. The confidence within the network is one of the key success factors, as are the opportunities to rationalise production costs, to build capacities, to increase product volume and quality, to innovate and to strengthen good relationships between stakeholders.

Commodities supply, natural resource conservation and decentralised settlement are the three main pillars of Swiss agriculture, as stated in the national agriculture policy under sustainability and multi-functionality. Herbert Karch , Director of the Association for Small and Medium Farmers described how the few big food distributors get the biggest share of the value created in the chains. In order to increase their share of the added value, farmers have a few options, notably in niche products (organic), regional products or local specialities.

In the afternoon examples of interventions strengthening certain value chains steps were presented at market stalls:

-   Production and processing of soft fruit in Kosovo

 

-   Production (harvesting from the forest) of pine-nuts in Pakistan

 

-   Processing of jute in Bangladesh

 

-   Processing of organic fruits and goods in Central America

 

-   Marketing and trade of cotton in Tanzania



-   Marketing of certified tropical wood from Congo in Switzerland




At the final plenary session, three observers gave us an insight in three key questions about the issue of the day:

1.   Poor producers and global markets: How do market literacy and innovation make a difference? We are all players in a global market - this is a fact. The market competition makes it essential for any player wanting to optimise his business to be well informed and innovative. This is even truer for poor producers, who are more vulnerable due to a more difficult access to market information. They are thus unlikely to be involved profitably in developing value chains without a better understanding of the whole chain.

2.   Power and governance: Can the poor become value chain players? The key for strengthening bargaining power is organisation. The poor are often not aware that by becoming organised they can gain influence in commodity chains (quality and quantity), prices and marketing.

3.   What role for the private and the public sector in the growth of value chains? The public sector is certainly needed for its role as a regulator and business environment enabler. Public subsidies can also be required for entering a market, although such interventions must be carefully analysed to avoid perverse market distortions.