VALUE CHAIN

PRO-POOR VALUE CHAIN DEVELOPMENT

Pro-poor value chain development is a market-based solutions that will bring the producer/enterprises either it is micro, small or medium scale enterprises to the upper level. Other than that it also can increases the income and also the job. The impact of this pro-poor value chain was in long term and does not distort the local market. The lead firms can increases competitiveness and support the development of other stakeholder in their value chain. Other than that lead firms also have a broad networks within the market and can apply market-based solutions to a greater scale much faster than a development project. There is two major strength to approach the presented first is the effective in generating benefits for a program's targeted beneficiaries and second is, it help ensure sustainability of the impact. It is difference from "traditional aid" it supply goods/services directly to target beneficiaries in the market, or otherwise takes on a market player role, which usually does not continue after aid funding ceases.

In pro-poor value chain there is certain thing that need to know such as what is a value chain, who are targeted producers/enterprises, what is a 'market-based solution', what is market actor, and what is a lead firm. 

Value chain is the full range of activities and associated market actor that are require to bring product from its conception to its end use and beyond, it also defined by a particular finished product or services. Target producer/ enterprises refer to target group that have a potential commercial relationship with other market actor in the value chain. Market-based solution is a way of addressing constraints facing targeted producer/enterprises in the value chain. Market actor is an individual or company participating in a market or value chain. Lead firms are dynamic market actors that have existing or potential commercial relationship with the development program's targeted producer/enterprises,to whom they provide important goods and services. 

There is six steps to approach a pro-poor value chain program 

Step 1 ; value chain selection

Step 2 ; value chain analysis 

Step 3 ; identification of market-based solution

Step 4 ; assessment of market-based solution

Step 5 ; identification of facilitation activities 

Step 6 ; structuring collaboration and monitoring performance

Five tools for collaborating with lead firms

INITIAL LEAD FIRMS IDENTIFICATION 

• Value chain analysis 
• Newspaper advertisement 
• Expression of interest from lead firms 

STRUCTURED INTERVIEW

• Write-up of structured interview with lead firms 
• Initial due diligence

INVITATION FOR APPLICATION 

• Application from lead firms

DUE DILIGENCE AND PLANNING 

• Site visits 
• Inquiries 

AGREEMENTS TO SUPPORT LEAD FIRMS INITIATIVES

• MOU and addendum 
• Strategic planning sessions 
• Capacity building activities 
• Monitoring

Principle to guide implementation

1. Promote sustainable relationships among market actors an the value chain
2. Establish good collaboration with lead firms
3. Professionalism, confidentiality and neutrality 
4. Understand private sector, business principles, and lead firm risks
5. Ensuring the sustainability of impact