1.4.4. Design and Implementation - Overview
Design and implementation is the fourth phase of the project cycle, subsequent to value chain selection, value chain analysis and designing the competitiveness strategy. While is it useful to separate these phases for the purposes of discussion, in practice many of the techniques and skills used in selection, analysis and strategy development are continually applied during implementation. Further, while these stages of the project cycle are sequential, they are not linear: it is essential that analysis continues during the implementation phase, in order to guide modifications to the competitiveness strategy in response to changes in the market, the enabling environment or the chain itself.
The competitiveness strategy that informs project design is not just a plan for helping individual firms become more profitable, it is a road map for moving an industry toward higher, sustained rates of growth. It provides a vision of competitiveness and an upgrading plan for the industry that helps us understand what needs to be done to upgrade the industry, who the relevant stakeholders are and what each of them needs to do, and how the industry will attain the vision.
Many value chain development programs in the past have focused on alleviating specific constraints by introducing improved production technology, providing financial and business support services or improving the policy environment. The aim of the value chain approach articulated here is to facilitate actions that build capacity internal to the value chain to enable private-sector stakeholders to become and remain competitive without continued external support. To achieve this, value chain programs must draw on the vision of competitiveness to develop:
- An industry pathway to guide interventions in support of this vision,
- A knowledge management system to enable deviations from the pathway to inform ongoing and future interventions, and
- A plan for scaling up impact and removing support prior to exiting.
All interventions should flow from a project's goals and objectives, and for value chain projects the goal is increased competitiveness that benefits MSEs and the poor. The aim of a project intervention should therefore be to result in one or more of the following:
- An increased number of actors building broader and deeper commercially grounded networks: Will the intervention encourage existing value chain actors and new entrants to establish effective relationships in the value chain, supporting markets and/or enabling environment?
Example: By assisting commercial agricultural input firms to test and roll out more appropriate business models for targeting the smallholder market a USAID project in Zambia was able to get 12 input firms to establish over 1,200 new relationships with rural smallholder communities resulting in smallholder investments of over $1 million in their farms in 2008.
- Increased competition based on upgrading and innovation: Will the intervention increase the number of value chain or support market actors that are constantly upgrading?
Example: A project in India helped several supermarket chains to move beyond a price-only strategy for local sourcing of fresh produce. The new focus on product quality drove farm-level upgrading and encouraged investments in the production of specialty produce.
- Improved credibility of and confidence in market mechanisms through transparent and reasonable benefit flows: Will the intervention increase the transparency and appropriateness of benefit flows to all contributing actors in the value chain and supporting markets?
Example: As grafting and pruning services began to generate demand among smallholder avocado growers in Kenya, the industry realized that a self-accreditation program was necessary to set apart trained service providers who used only certified and labeled quality scions from more unscrupulous and untrained "quack" service providers. Accreditation guaranteed a set of minimum standards for service delivery, such as the commitment to provide an additional free grafting should the first service fail, thus ensuring that smallholder farmers benefited from the services they received.
- Improved key end market factors that will increase competitiveness--in terms of product, operations and branding: Will the intervention improve the specific value chain products, operations and/or branding strategies required to increase the capacity of the industry to differentiate itself from its competitors?
Example: USAID interventions in the dairy sector in Pakistan ensured coordination among different segments of the industry so as to increase overall competitiveness. Farm-level upgrading that raised milk yields was timed to coincide with the establishment of a quality-controlled supply channel (cold chain) to facilitate a win-win relationship for the private sector firms and dairy farmers.
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- USAID/India – Growth-Oriented Microenterprise Development Program (GMED)