Final Documentation

Value Chains and BDS Development: Linking Communities to Mainstream Markets in Mindanao, SDCAsia, 2002-6

    On the right hand side are the final report (the newest document posted) and 2 case studies of SDCAsia's value chain and BDS market development project in Mindanao Philippines. The final report summarizes the entire project, describing interventions and progress in the following fruit and vegetable value chains: kaong, mango, strawberry, nipa palm and an overall quality seal for public markets.

    The 2 case studies describe the strategies SDCAsia used to improve relationships in the processed kaong value chain and to facilitate MSE growth and subsector competitiveness via a focus on building long-term, mutually beneficial business relationships between indigenous semi-processor communities, traders, and processors. Non-farm income like kaong semi-processing helps smooth the flow of income over the cropping cycle and stabilize it by spreading risk through diversification.

    An initial assessment determined that it would take longer to build semi-processor capacity to meet market requirements for an end product than for a partially processed product. SDCAsia and community stakeholders decided that a strategy to 1) strengthen community semi-processing activities and 2) build on the traditional trading system would produce the quickest and most beneficial results for all players. The focus on semi-processed products was also in line with the need to sustain economic activities and, it was hoped, increase incomes. The decision to work with traders was premised on the fact that they had experience in dealing with larger enterprises and "city people" and the necessary infrastructure. And, since their transaction costs were low, they could be spread among other cash crops.

    The second case study, "Bridging the Gaps in the Kaong Subsector" was written in October, 2005 (one year after the first) and is somewhat briefer than the first case study.

    Summary of results
    The project reached over 5,000 microenterprises, connecting them up to higher value markets and helping them increase profits. Impact from the project includes:
    On value chains:
    - improved coordination and relationships among value chain players
    - BDS providers innovating new services and payment mechanisms
    - rural producers' wide spread compliance with GMP standards
    - greater market resilience
    On microenterprises:
    - lower rejection rates
    - higher prices
    - from seasonal to year round production
    On poor people:
    - increased and more stable incomes
    - improved access and more control over resources
    - biodiversity and environmental conservation

    Lessons in the case studies include:
    - The best way to convince commercial businesses to work with communities and microenterprises is to prove that production systems and practices including quality and volume capacity have improved.

    - The issue of trust highlights the importance of facilitating supply chain governance and continuous dialogue among all parties to ensure that alliance objectives are being met and no one member tries to benefit at the expense of others. Third-party, demand-led facilitation during formative stages help build trust by ensuring that pertinent information is exchanged.

    - Facilitating win-win relationships entails in-depth understanding of the nature of the value chain and markets that are important to resource-poor enterprises, the way they serve the poor, their structure, and the stakeholders, their institutions, and dynamics.

    Associated Activities and Documents
    Programme Design
    »Swisscontact, USAID, Philippines, Developing BDS Program Market Design & Implementation Plan, 2002
    »Developing Value Chains and BDS Markets in Mindanao - SDCAsia , SC, USAID, 2002-06
    Impact Assessment
    »Developing the Kaong Value Chain in Mindanao, Philippines, SDCAsia 2005
    Synthesis Documents
    »Sixth Annual Service Markets Seminar, Turin, September 2005 (English/French/Spanish)