Beyond the Value Chain: Sector Governance

Speakers: Bill Vorley, IIED; Willem Molenaar, Aidenvironment

How do sector governance instruments influence sector wide capabilities that promote sector performance and influence producer performance?

 Value chain projects frequently result in islands of success while leaving behind persistent problems at the landscape/sector level such as unreliable product quality, poor security of supply in the short term and continued reputational risk. Turning ‘islands’ to ‘seas’ may not be achieved by doing more of the same value chain pilots. When does it makes sense to scale up pilots or look to sector governance to achieve landscape level impacts and make value chain work more sustainable?

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Quote: Bill Vorely, IIED “We can’t talk ‘inclusion’ if value chain projects result only in a few islands of the better capitalised, better accessed, better organised farmers.”

We see examples in cotton in Zimbabwe and vanilla in Madagascar where poor sector performance undermines value chain work.

What can be learned from good sector governance:

  • A coordinated sector governance approach seems better suited to achieve sector-wide impacts on value capture by farmers, price stabilization and raising overall quality than in a liberalized economy.
  • Sector governance models seem to have been less effective in ensuring sector-wide service delivery, marketing and sustainability
  • The highest sector performance is where market dynamics (buying, selling, price discovery, competition, market entry) can prevail, but within the (strict) boundaries set by the government or coordinating body

Different crops, different regions, different contexts will require different sets of actors and different drivers to arrive at good sector governance.

As a next step in sector governance work, participants suggested building a decision tree to lead private and public sector actors towards an understanding of when poor sector performance requires sector transformation to achieve supply and sustainability goals.screen-shot-2016-12-08-at-9-25-19-amscreen-shot-2016-12-08-at-9-25-35-am

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