These are the slides that Sharad Rai (Markets and Livelihoods Program, Practical Action, Nepal) used to present his ideas on how to make value chains more inclusive. His presentation benefited greatly from inputs of MaFI members Ravinder Kumar, Gianluca Nardi, Erwin Rathnaweera, Jason Wolfe, Rajiv Prahan and Lucho Osorio

1. Making Value Chain Inclusive
TIME & RESOURCES : FOCUS AREAS OF INTERVENTIONS
Sharad Rai, 11 November 2010, ICIMOD

2. Topic Re-phrased to the “Focus
Areas” rather than the “Amount”
Rationale
• Markets are dynamic, have different characteristics,
function differently and respond differently to different
incentives.
• Same value chain may differ in different time and
space.

3. Making Value Chain Inclusive:
Market Perspective
• Considering the vulnerability factor, obvious that more
strategic amount of resources is required.
• Fact is: typical market does not seek ‘who’ produces or
supplies. Rather it seeks:
- competitive advantage and commercial viability
of value chains/product/commodity
• Hence, market is not a typically pro-poor or inclusive
• Few exceptions: Body Soap, Star Bucks, Fair trade
products (but too little scope for all to work with this
proposition)

4. Key Areas of our Focus (in terms
of time and resources)
(i) Understanding the Market System Vis-à-vis Target
Beneficiaries
• Which comes first – Beneficiaries or the value chain? (target
group centric approach Vs. Market systems/value chain
centric approach )
• Is there sufficient economical as well as social incentive for
these target groups to engage in this value chain?
• Are we involving the target groups/beneficiaries sufficiently
in the market/value chain analysis process? – Scoping study,
PMM, joint proposal development events.
• Power structures within target groups: Have we got adequate
knowledge in this? (eg: widows Vs. other women in the same
community/caste – Fisherfolk, India)

5. Key Areas of our Focus (in terms
of time and resources)
(ii) Project implementation:
Besides many,
• Investments to help practitioners to develop their facilitation
skills
- More marginalised the target population, more multi-
disciplinary and better the practitioner
- Empowerment of the excluded/vulnerable target
groups previous to engagement with other market actors
- Promoting relationships between market actors (and
not between us and them)
- Successfully demonstrating models of market
transformation and building tangible evidences

6. Key Areas of our Focus (in terms
of time and resources)
• Assess the specificities of the local culture, especially
in the case of indigenous groups (Eg: easier working
with settlers rather than Indeginous group, Amazon).
• Focus on the strength, i.e. the competitive advantage
that a target group has in the production /
commercialization of a certain product / service
- eg: Smallholders represent a large share of
productions, and a large demand exists for the product
(e.g. cocoa in Ghana)

7. Key Pointers
• The more excluded, the more non-market work you
may have to do (e.g. phycological recovery, conflict
resolution, collective identity and self-esteem) and the
more subsidies you may need to use.
• Difference between working with the poor below
poverty line: with and without access to basic needs.
- latter case usually requires stronger initial investment,
longer time horizon
- success when it is embedded within a larger development
programme

8. Key Pointers
• The more excluded, the more non-market work you
may have to do (e.g. phycological recovery, conflict
resolution, collective identity and self-esteem) and the
more subsidies you may need to use.
• Difference between working with the poor below
poverty line: with and without access to basic needs.
- latter case usually requires stronger initial investment,
longer time horizon
- success when it is embedded within a larger development
programme

9. Key Pointers
• Value chain should be appropriate for marginalised people to
engage as easy as possible (sometimes we ask too much
from them)
Case: Segmentation approach
Vrutti Livelihoods Resource Centre, India
• Intervention planned on 8 value chains:
(i) Smallholder farmers with less than 5 acre of land in
two different blocks identified – Mustard and yellow gram
(ii) Unskilled and semi-skilled youth identified for Mason
value chain interventions
(iii) Scheduled caste and backward caste women
identified for dairy and small livestock value chain
interventions.
• Target group centric approach and market centric approach
are not mutually exclusive (build on approach above).

10. Key Pointers
• PMSD (Participatory Market Systems Development)
approach brings out not just systemic bottlenecks
within the value chain but also specific constriants and
needs of the target group)
• Certifications are no substitute of quality – even for
“inclusive categories” (eg: Bad quality products is not
the answer to fairtrade and/or organic products)
• Balance power structure in the market system. -
Conflict sensitivity is of paramount importance.

11. ACKNOWLEDGEMENT
• ICIMOD
• Deepak D Khadka, Team Leader – Markets &
Livelihoods (Practical Action Nepal)
• Lucho Osorio (International Coordinator, Markets &
Livelihoods (Practical Action Nepal)
• MaFI Market Facilitation Initiatives (MaFI) members:
global e-forum @“Linkedln” Groups – JOIN IN!!.
Contact:
luis.osorio@practicalaction.org.np
OR
sharad.rai@practicalaction.org.np
THANK YOU!!