Part 1: Describe the agricultural value chain system and its essential services |
Map the value chain structure, including segments, key stocks and flows of resources, institutions, and other interacting systems. | For an example of a standard value chain analysis and mapping, applied to the Kenyan dairy value chain, see USAID, 2015 [47]. Key segments include a range of farmers, traders, processors, retailers, and consumers in rural and urban Kenya. |
Identify the essential services that the value chain provides to consumers/customers, value chain actors, and their stakeholder communities. | African dairy value chains may provide a number of services, including: employment of women and youth in production and processing; remunerative incomes along the chain; food and nutritional security (protein and micronutrients) for consumers; regulation of ecosystem services; multiplier effects and improvements to national trade balance. |
Identify crucial value chain components upon which the value chain directly depends, including physical, natural resources, and financial resources, and capacities. | Services may depend on natural resources (e.g., grazing lands, water, feed supplements); productive herds; traditional tacit knowledge alongside technology in herd management and processing; veterinary services; reliable market infrastructure (roads, means of transportation, electricity, cooling and refrigeration facilities); packaging to protect products and signal quality; consumers’ purchasing power; liquidity; and trust among trading partners. |
Describe the any key rules governing access to and use/withdrawal of crucial components, and to what extent they are effective. | Laws governing access to grazing lands, product quality standards, and competition may exist, but are often poorly enforced. Coordination structures (e.g., cooperatives and contracts) specify private rules regarding product standards and access to inputs. |
Part 2: Identify disturbances that threaten the value chain system |
Reflecting on the last 10 to 50 years, identify the major disturbances that have affected crucial components of the value chain. Describe these disturbances, in terms of their probable causes, whether they were discrete “shocks” or more gradual “stressors,” and their frequency of occurrence. | Past disturbances have included recurring droughts (shock), some caused by atmospheric events such as La Niña and El Niño (stressor). Since the 1990s, liberalization and privatization (stressor) have restructured market participation along the chain (e.g., privatization of services, inflow of foreign investment). Urbanization and rising incomes are driving increases in demand for dairy products and preferences for quality (stressor). |
Describe the effects of each disturbance on the value chain, in terms of the different segments and functions, the provision of essential services, and the estimated time required for the value chain to recover from each disturbance. | Taking drought as one example, such a disturbance limits herd access to water and feed, and can force farming households to sell off cattle as a coping mechanism, thus negatively affecting milk supply and increasing the price of local milk. Processors and retailers could respond by substituting imported milk product for local milk. Full recovery could take several years but would depend on the type of dairy production systems in use, policy, and the intervention of safety nets, among other factors. |
Identify and describe other future disturbances that could potentially affect the value chain system and its essential services. | Climate change may increase temperatures and weather volatility. Globalization may continue to shape competition, standards, demand, and preferences. Public health disasters (e.g., livestock disease outbreaks; product contamination) could tarnish value chain reputations. War or terrorism could damage infrastructure and affect services. |
Part 3: Analyze system dynamics |
Assess whether the value chain is currently in a state of growth, stability, or decline, and identify the indicators that suggest this state. | Some dairy value chains may still be in an emergence stage, while others in high growth, as measured by rates of change in sales and product and market diversification. |
Compare this current state to any previous ones, assessing desirable and undesirable features of each. | Value chains in high growth might be compared to nascent stages using the above metrics. Features of the early stages may include a greater level of participation in the value chain by women, better access to pasturelands, lower barriers of entry, and less uncertainty. Features of growth might include opportunities for greater productivity and higher profits, but greater import competition and restrictive market standards. |
Describe the transitions between states, assessing when they took place, whether they were gradual or sudden, what caused them, and whether they are reversible. | Participants could analyze available macro data (e.g., prices, yields, supply quantities) to assess transitions and their drivers. Long-time stakeholders should be consulted regarding how and why the structure and conduct of value chains have changed over time. Structural causes might include trends related to urbanization, globalization, and technological innovation, and ecosystem changes. |
Consider any other potential states that you can imagine, comparing them to current and past states and describing their probable causes. | Systems in high growth or maturity stages risk crossing irreversible thresholds into stages of rapid decline, which could be caused by any combination of the past or potential disturbances cited above. Alternatively, value chains that are in emergent or growth stages could switch to paths of slower but more sustainable growth, conditioned on regulation reforms, enhanced value chain coordination, changes in consumer preferences, etc. |
Part 4: Assess the resilience of the value chain resources and governance |
Describe any actions that are currently being taken to keep the value chain from transitioning into a worse state or improving the current state, including those reflecting each of the seven resilience principles. In what segment, and against what types of disturbances, does the action build resilience? Consider any other positive effects or negative trade-offs that the action has on other actions and dimensions of value chain performance. | Participants might identify ongoing instances of diversification in terms of the types of value chain actors, production systems, dairy products and segments, and market channels; connectivity in terms of tighter market linkages and infrastructure development; market information systems and famine early warning systems that enable the monitoring of some slow and fast variables; and research, development projects, and market information systems that encourage learning. |
Based on the resilience building principles, describe any other actions that could be adopted to keep the value chain from transitioning into a worse state or improving the current state, considering again where and how the action builds resilience and any other effects. | Upgrades might include better access to a diverse base of input and output markets (diversity, redundancy, and connectivity); protecting the inclusion of women and small-scale actors (participation and diversity); and integrating additional metrics (e.g., cattle breed diversity, product safety, participation rates of marginalized groups) into strategic decision-making and policymaking (complex adaptive systems thinking); and strengthening farmer cooperatives, building value chain councils, and enforcing laws that provide reasonable regulation of natural resources, product safety, and market competition (polycentricity). |