Livestock Thematic Paper, Tools for project design: Value chains, linking producers to the markets

Abstract

The livestock value chain can be defined as the full range of activities required to bring a product (e.g. live animals, meat, milk, eggs, leather, fibre, manure) to final consumers passing through the different phases of production, processing and delivery.1 It can also be defined as a market-focused collaboration among different stakeholders who produce and market value-added products. Value chain analysis is essential to an understanding of markets, their relationships, the participation of different actors, and the critical constraints that limit the growth of livestock production and consequently the competitiveness of smallholder farmers. These farmers currently receive only a small fraction of the ultimate value of their output, even if, in theory, risk and rewards should be shared down the chain. Access to markets and distribution of risks and gains along different steps of livestock value chains varies also according to the gender of producers (e.g. rights to income generated from livestock); processors (access to processing technologies and information); market agents (access to transportation, safe market spaces and overnight accommodation, risk of sexual harassment and abuse); and according to the economies of scale (bringing women together to improve their market position). Traditional marketing channels with ad hoc sales are being gradually replaced by coordinated links among farmers, processors, retailers and others. In this context, the question is not whether, but how to include the different actors in the value chains, including women, applying a balanced approach that takes into account both competitiveness and equity issues.2 The result, combining the strengths of value chain analysis with the needs of poor livestock keepers, should be a market-based, commercially