Reforming the approach to the analysis of value chains

The reporting of price margins in value chains is problematic. Prices provide a vague measurement because the source of information varies. Furthermore, price margins vary along the chain and investment decisions in off-farm inputs are not made on the basis of margins. Nor does the reporting approach provide a road map for interventions to improve the efficiency of the chain. The reform approach used in Balochistan, Pakistan, has evolved through working on value chains for different agricultural products in countries in the Pacific and Asia. It uses a simple three-stage chain of “production”, “marketing”, and “the bit in the middle” that links the two with the clear intention of increasing returns to growers. Over twenty elements have been identified in the three stages that are applicable to a host of rural products in the horticultural, agricultural and livestock sub-sectors. The principle elements in each of the three stages are outlined along with their associated generic interventions to improve performance. A case study of the Balochistan grape industry is used to illustrate the usefulness of the reform approach. The approach has resulted in improved returns to growers of around 30%.