Concepts and methods for changing value chains:innovative tree-crop-based agroforestry systems

This book deals with ‘value chains’ and ‘value change’ – similarly sounding words that are not often used in combination. Value chains describe a stepwise transformation of A) land to vegetation that supports harvestable yield, B) use of land, labour, knowledge and inputs to harvest raw materials, C) convert raw materials to tradable (standardized) commodities, D) make branded products out of commodities, E) provide appreciated services, and possibly to F) create unique and lasting experiences. A standard example describes coffee beans in each step of this chain, often crossing borders in the process. Along the chain the volume gets reduced, by selection of high quality components, losses due to transport or storage, and/or wastage due to logistic limitations. This reduction in volume is more than compensated by the increase in price per unit active ingredient. The way the net (volume time price, minus costs of acquisition, processing, transport and wastage) surplus of value to the next step in the chain is shared between the partners involved depends on power, existing institutions and individual negotiation skills. Typically, farmers at the start of a value chain get only a small share of the net surplus as part of their farmgate price, as they can be interchanged for others, while traders and processors may hold monopolies (or monopsonies) and claim larger shares. Changing existing value chains (innovation) is generally done to obtain a larger share of an increased (or at least not smaller) pie. Innovations can be technical in nature (e.g. yielding more volume per unit land, or new ways of converting raw materials to branded products), social (e.g. farmer groups with grading skills and greater value capture)

• View from World Agroforestry website