‘ICTs are only as good as the information they communicate.’ Andrew Shepherd, consultant with CTA’s value chain development programme
At the heart of the value chain concept is the idea of farmers, traders, processors and distributors working to produce and deliver goods and services to consumers, adding value at each stage. The difference between this and a traditional marketing chain is that value chain activities are coordinated, with considerable collaboration throughout the process.
Farmers who sell their vegetables at the side of the road are not part of a value chain. Farmers who grow vegetables using seed supplied by a buyer, and harvest their produce at the time and in the quantities requested by the buyer are, on the other hand, very much part of a value chain. Similarly, traders who buy at the side of the road and sell at a wholesale market are not part of a coordinated chain. But buyers who work with farmers to meet the needs of supermarkets, processors or overseas importers are. It is the coordination that differentiates value chains from traditional marketing practices.
In ACP countries, many improvements are being introduced to chains by small and medium-sized enterprises (SMEs), often in coordination with all those in the chain. Such improvements include strengthening links with farmers, working with overseas buyers to better meet their requirements, promoting product innovation, improving logistics and developing new markets.
Analysing value chains requires the consideration of all factors that affect the ability of farmers and fishers to access markets profitably. In the past, a donor may have decided to support just one stage. For example, post-harvest problems may have been diagnosed because losses were high, when the real problem was the lack of a market. Many ‘white elephant’ processing facilities were built as a result of a failure to consider in detail the capacity and willingness of farmers to produce the quantities required, or to fully consider the market potential of the processed products.
Improving chains is all about coordination. And coordination requires communication. While working at FAO 25 years ago, I was involved in publishing a manual on horticultural marketing. The author, Grahame Dixie, insisted that the cover photo should be of a farmer standing in a vegetable plot talking into a phone. Many FAO colleagues thought that to be a strange idea for a cover photo. But both Grahame and the farmer were ahead of their time. Nowadays, it is almost essential for farmers who are involved in value chains to have phones. They can liaise with buyers, check prices, find out when inputs will be delivered, receive extension advice and even check if payments have been made to their bank accounts.
ICT developments are moving so fast that it is difficult to predict how value chains will be using them in the coming years. What seemed ridiculous to some people 25 years ago is now commonplace. What may seem ridiculous now may be commonplace in less than a decade. In 2020, will value chains all be coordinated through Twitter or Facebook? Will a carton of flowers packed in Kenya be traced by GPS all the way to a buyer here at the headquarters of CTA in Wageningen, in the Netherlands?
However, we must be wary of being totally seduced by what technology has to offer. ICTs are only as good as the information they communicate. Cell phones can be used to transmit market prices to farmers very quickly, but that achieves nothing if the information being sent is inaccurate. Rural internet access can be improved, but we must make sure that the information that is available to farmers over the internet is accurate, useful and relevant to their location. That, perhaps, is the bigger problem.