Building Competitiveness in Africa's Agriculture

AGRICULTURE AND RURAL DEVELOPMENT
Building Competitiveness
in Africa’s Agriculture
A GUIDE TO VALUE CHAIN CONCEPTS AND APPLICATIONS
C. Martin Webber and Patrick LabasteBuilding Competitiveness in
Africa’s AgricultureAGRICULTURE AND RURAL DEVELOPMENT
Seventy-five percent of the world’s poor live in rural areas and most are involved in agriculture. In the
21st century, agriculture remains fundamental to economic growth, poverty alleviation, and environmen-
tal sustainability. The World Bank’s Agriculture and Rural Development publication series presents recent
analyses of issues that affect the role of agriculture, including livestock, fisheries, and forestry, as a source
of economic development, rural livelihoods, and environmental services. The series is intended for practi-
cal application, and we hope that it will serve to inform public discussion, policy formulation, and devel-
opment planning.
Titles in this series:
Agribusiness and Innovation Systems in Africa
Agricultural Land Redistribution: Toward Greater Consensus
Agriculture Investment Sourcebook
Bioenergy Development: Issues and Impacts for Poverty and Natural Resource Management
Building Competitiveness in Africa’s Agriculture: A Guide to Value Chain Concepts and Applications
Changing the Face of the Waters: The Promise and Challenge of Sustainable Aquaculture
Enhancing Agricultural Innovation: How to Go Beyond the Strengthening of Research Systems
Forests Sourcebook: Practical Guidance for Sustaining Forests in Development Cooperation
Gender and Governance in Rural Services: Insights from India, Ghana, and Ethiopia
Gender in Agriculture Sourcebook
Organization and Performance of Cotton Sectors in Africa: Learning from Reform Experience
Reforming Agricultural Trade for Developing Countries, Volume 1: Key Issues for a Pro-Development Outcome
of the Doha Round
Reforming Agricultural Trade for Developing Countries, Volume 2: Quantifying the Impact of Multilateral Trade
Reform
Shaping the Future of Water for Agriculture: A Sourcebook for Investment in Agricultural Water Management
The Sunken Billions: The Economic Justification for Fisheries Reform
Sustainable Land Management: Challenges, Opportunities, and Trade-Offs
Sanagement Sourcebook
Sustaining Forests: A Development StrategyBuilding Competitiveness in
Africa’s Agriculture
A GUIDE TO VALUE CHAIN
CONCEPTS AND APPLICATIONS
C. Martin Webber and Patrick Labaste© 2010 The International Bank for Reconstruction and Development / The World Bank
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ISBN: 978-0-8213-7952-3
eISBN: 978-0-8213-7964-6
DOI: 10.1596/978-0-8213-7952-3
Library of Congress Cataloging-in-Publication Data
Webber, C. Martin.
Building competitiveness in Africa’s agriculture : a guide to value chain concepts and applications / C. Martin Webber and
Patrick Labaste.
p. cm. — (Agriculture and rural development)
Includes bibliographical references and index.
ISBN 978-0-8213-7952-3 (pbk.) — ISBN 978-0-8213-7964-6 (electronic)
1. Agricultural industries—Africa. 2. Agriculture—Economic aspects—Africa. I. Labaste, Patrick, 1952-
II. World Bank. III. Title.
HD9017.A2W43 2009
338.1096—dc22 2009019928
Cover photographs: Tea-picker in Rwanda by Günter Guni, ©iStockphoto.com / guenterguni; vegetable garden in rural
Kwa-Zulu Natal, South Africa, by Trevor Samson / World Bank.
Cover design: Critical Stages, based on a template by Patricia Hord Graphik Design.
Building Competitiveness in Africa's Agriculture is available as an interactive textbook at http://www.worldbank.org/pdt. The
electronic version allows communities of practice and colleagues working in sectors and regions, as well as students and
teachers, to share notes and related materials for an enhanced multimedia learning and knowledge-exchange experience.CONTENTS
Acknowledgments ix
Acronyms and Abbreviations xi
Section 1: Introduction and Overview 1
Section 2: Concepts and Definitions of Value Chains and Supply Chains 9
Section 3: Review of Existing Literature on Vy Chains 15
Section 4: Discussion of Individual Tools 25
Tool 1 Choosing Priority Sectors for Value Chain Interventions 29
Case Study 1 Prioritizing Value Chains by Using Comparative Analysis—Value Chain Selection
in Mozambique 33
Case Study 2 A Structured Value Chain–Based Approach to Designing a Strategy of Agricultural
Competitiveness and Diversification in Mali 37
Tool 2 Designing Informed Strategies across the Value Chain 41
Case Study 3 Understanding the Value Chain and Integrating Information into Strategy—Nigerian
Domestic Catfish 49
Tool 3 Conducting Benchmarking and Gap Assessments of Value Chains 55
Case Study 4 Ugandan Floriculture—Benchmarking and Gap Analysis 61
Tool 4 Upgrading and Deepening the Value Chain 69
Case Study 5 Kenyan Green Beans and Other Fresh Vegetable Exports 73
Tool 5 Identifying Business Models for Replication 77
Case Study 6 Identifying and Implementing Replicable Business Models—Mozambican Cashews 80
Tool 6 Capturing Value Through Forward and Backward Integration 85
Case Study 7 CaValue through Integration—The Ghanaian Pineapple Industry and
Blue Skies Holdings Ltd. 91
Tool 7 Horizontal Collaboration—Creating and Taking Advantage of Economies of Scale 95
Case Study 8 Creating and Taking Advantage of Economies of Scale—The Ghana and
Côte d’Ivoire Experiences in Fresh Pineapple Exports 97
Case Study 9 Creating and Taking Advantage of Economies of Scale within the Mozambican
Cashew Value Chain 100
Tool 8 Positioning Products and Value Chains for Greater Value and Competitiveness 105
Case Study 10 Value Chain Strategies for Market Repositioning—Rwandan Coffee 109
vTool 9 Applying Standards and Certifications to Achieve Greater Quality 115
Case Study 11 Ugandan Nile Perch Quality Management and Certification 122
Tool 10 Identifying Needed Support Services for the Value Chain 129
Case Study 12t Services fValue Chain—Zambian Cotton 134
Tool 11 Improving the Operating Environment by Promoting Public-Private Dialogue 139
Case Study 13 Improvironment through Public-Private Dialogue—Botswana Cattle
Producers Association 144
Tool 12 Achieving Synergies through Clustering 151
Case Study 14 Achieough Clustering—Kenyan Avocados 155
Tool 13 Monitoring Achievements in Value Chain Performance 161
Bibliography 167
Index 179
BOXES
4.1 How to Choose Value Chains for Intervention: The Example of Senegal’s Projet
Croissance Economique 31
4.2 Ugandan Benchmarking Constraints in the Coffee Industry 56
4.3 Tanzanian Cotton—Benchmarking Costs 58
4.4 Upgrading the Value Chain—Mongolian Meat Industry 70
4.5 Deepening the Value Chain: Glass Jar Production in Armenia 71
4.6 Replicable Business Models—Rwandan Coffee Washing Stations 78
4.7 Identifying and Replicating Business Models within the Value Chain—Dairy Pakistan 78
4.8 Benefits of Vertical Integration—ZEGA and Zambia’s Horticulture Value Chain 88
4.9 Bulgarian Wine—Integrating Operations to Secure Sourcing of Raw Material 89
4.10 Ecuadorian Cacao—Positioning the Value Chain for Greater Value and Competitiveness 106
4.11 Thailand GAP Cluster—Positioning Products (and the Value Chain) for Greater Value and
Competitiveness 107
4.12 Thailand GAP Cluster—Use of Standards and Certifications to Upgrade Value 118
4.13 Ecuadorian Cacao—Improving Quality at the Producer Level to Achieve Higher Market Prices 119
4.14 Ugandan Cotton—Enterprise-Linked Extension Services Model 129
4.15 Sri Lankan Cinna