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Guideline for the Development of Biodiversity-based Value Chains to Support Livelihood Improvement
and Biodiversity Protection inASEAN Member States
Guideline for the Development of Biodiversity-based Value Chains to Support Livelihood Improvement
and Biodiversity Protection inASEAN Member States
Edited by Rita Pilarca1 and Bianca Schlegel21International ValueLinks Association, 2GFA Consulting Group, BBP project
TABLE OF CONTENTSAcknowledgements .......................................................................................................8
1 Summary ..................................................................................................................92 Introduction ............................................................................................................ 113 Steps in the development of biodiversity-based value chains .........................13
4 Understanding biodiversity and value chains ....................................................14 4.1 What is biodiversity ........................................................................................14 4.2 Biodiversity-based Products (BBP) and Value Chains (BBVC) ......................14 4.3 Why promote biodiversity-based value chains? .............................................16 4.4 Goalsandbenefitsofbiodiversity-basedvaluechainpromotion ...................17 4.5 Goal dimensions in biodiversity-based value chains......................................18
5 Scoping and selecting biodiversity-based value chains ...................................20 5.1 Systemboundariesofthebiodiversity-basedvaluechain .............................20 5.2 Selecting the biodiversity-based value chain to promote ...............................21 5.2.1 Environmental criteria ...........................................................................22 5.2.2 Criteria to assess the economic potential .............................................23 5.2.3Criteriatoassesspotentialsocialbenefits ............................................25 5.2.4 Institutional and pragmatic criteria ........................................................26 5.3 Compiling decision criteria and developing a decision matrix ........................27 5.4 Examples on biodiversity-based value chain selection ..................................28
6 Analysis of biodiversity-based value chains ......................................................31 6.1 How to analyse biodiversity-based value chains............................................31 6.2 Structural analysis – Biodiversity-based value chain mapping ......................32 6.3 Environmentalanalysisofbiodiversity-basedvaluechains ...........................35 6.3.1 The three steps on an environmental analysis ......................................36 6.3.2 Selecting the “right” input to balance biodiversity and economics ...................................................................37 6.4 Economicanalysisofbiodiversity-basedvaluechains ..................................38 6.4.1 Market studies .......................................................................................38 6.4.2Sizeofendmarkets–totalvaluegenerated .........................................39 6.5 Socialanalysisofbiodiversity-basedvaluechains ........................................40 6.5.1 Poverty analysis ....................................................................................40 6.5.2 Gender analysis ....................................................................................42
7 Development of objectives and strategies ..........................................................44 7.1 Importanceofvisioningandobjectivessetting...............................................44 7.2 Economic objective ........................................................................................45 7.3 Environmental objective .................................................................................45 7.4 Social objectives ............................................................................................45 7.5 Strategic considerations in biodiversity-based value chains ..........................45 7.6 Strategicoptionsforsustainablebiodiversity-based value chain development ...............................................................................46
7.7 Toolsforstrategydevelopmentandprogramming .........................................47
8 Implementing biodiversity-based value chain projects .....................................50 8.1 Clarifyingtherolesofthevariousactors ........................................................50 8.1.1 The lead actors in biodiversity-based value chain development .....................................................................51 8.2 Steering BBVC development .............................................................................52 8.2.1 Steering structure .................................................................................53 8.2.2 Permanent steering by associations/business community...................53 8.3 ManagingprocessofBBVCdevelopment .....................................................54 8.4 Joint strategy development ............................................................................55 8.5 ConflictmanagementinBBVCs .....................................................................56 8.6 Supportprocessesandfacilitationinstruments..............................................57 8.6.1Roleofvaluechainfacilitators ..............................................................58 8.6.2Someprinciplesinvaluechainfacilitation.............................................58
9 Business environment for biodiversity-based value chains .............................59 9.1 Business Models ............................................................................................61 9.1.1 The Business Model concept ................................................................61 9.1.2 Business Model canvas ........................................................................62 9.2 Business linkages ..........................................................................................63 9.2.1 Introduction on types business linkages ...............................................63 9.2.2 Vertical linkages — Business contracts ................................................63 9.2.3 Horizontal linkages – Business cooperation .........................................63 9.3 Servicesforbiodiversity-basedvaluechains .................................................64 9.3.1Typesofservices ..................................................................................64 9.4 Valuechainfinancing .....................................................................................66 9.4.1 Financing needs and gaps ....................................................................66 9.4.2 Financing solutions ...............................................................................67 9.5 Quality and standards ....................................................................................68 9.5.1 Product quality ......................................................................................69 9.5.2 Product standards .................................................................................69 9.5.3 Sustainability standards in BBVCs ........................................................71 9.6 Policyforvaluechains ...................................................................................73 9.6.1ThebusinessenvironmentofBBVC .....................................................73 9.6.2 Property rights .......................................................................................77
10 Monitoring the impact of the biodiversity-based value chain ...........................78 10.1 Provingeffectiveness .....................................................................................78 10.2 Impactpathwayofthevaluechain .................................................................79 10.3 What and how to monitor in BBVC .................................................................79
11 Conclusion .............................................................................................................8312 Selected Literature ................................................................................................85
LIST OF FIGURES
Box 1 A biodiversity-based value chain ....................................................................15Box 2 Why biodiversity-based value chains .............................................................16Box3 BenefitsofpromotingBBVC ..........................................................................18Box4 GoaldimensionsofBBVC ..............................................................................18Box5 Micro-Meso-MacrolevelsofBBVC ................................................................19Box 6 Scoping biodiversity-based products .............................................................20Box7 Tool–Guidingquestionsandindicatorsfor key environmental criteria ..............................................................................22Box8 Tool–Guidingquestionsandsuggestedindicatorsfor economic key criteria .....................................................................................24Box9 Tool–Guidingquestionsandsuggestedindicatorsfor social key criteria ............................................................................................25Box10 Tool–Guidingquestionsandindicatorsforkeyinstitutionalcriteria ..............27Box 11 Steps in BBVC selection ................................................................................27Box 12 BBP selection template ..................................................................................28Box 13 SWOT template ..............................................................................................31Box 14 Sample BBVC map (horizontal arrangement) ................................................32Box 15 Sample BBVC map (vertical arrangement) ....................................................33Box16 BBVCmapforbamboo/rattanhandicraftinNorthernVietNam .....................34Box 17 Local ecosystems in a biodiversity-based value chain...................................36Box18 Environmentalimpactanalysisof/ona biodiversity-based valued chain .....................................................................37Box19 Concept–DistributionofvalueaddedalongtheBBVC.................................39Box20 Povertymappingofthevaluechain ...............................................................40Box21 Povertymappingofvaluechainwithdifferentgroups ....................................41Box 22 Poverty and Competitiveness ........................................................................41Box 23 Poverty and vulnerability ................................................................................42Box 24 Gendered BBVC map ....................................................................................42Box25 Concept–ObjectivesofBBVCdevelopment.................................................44Box 26 Three strategic considerations .......................................................................46Box27 SWOTanalysisofmedicinalteainVietNam .................................................47Box28 TextmodulesofanobjectiveofBBVCdevelopment .....................................48Box29 Concept–Classifyingvaluechainactors ......................................................50Box30 ExampleoftheBBPProjectSetupwithACB-GIZ-GFA (ACB in lead role) ...........................................................................................52Box31 Concept–BasicsteeringmodelsforBBVCdevelopment .............................53Box32 Concept–Therelationofvisioningandimplementationprocesses in value chain development ............................................................................54Box33 Pre-conditionsforsuccessfulBBVCdevelopment .........................................56Box34 Concept–Aspectsofconflictmanagementalongthevaluechain development project cycle ..............................................................................57Box 35 Constraints, gaps, and opportunities and possible upgrading solutions ..........................................................................59Box36 Concept–Theplaceofsolutionsinthevaluechainsystem .........................60
Box37 Application–Theplaceofsolutionsinthevaluechain ..................................61Box38 Concept–Thebuildingblocksofthe“businessmodelcanvas” ....................62Box39 Concept–Examplesofoperationalservices .................................................65Box40 Concept–Examplesofsupportservices .......................................................66Box 41 Financing needs in a biodiversity-based value chain .....................................67Box42 Sampleclassificationsofsustainabilitystandards .........................................71Box 43 Tool – Policy Instrument Matrix ......................................................................76Box44 Concept–TheContinuumofLandRightsApproach(simplified) (Source: ValueLinks 2.0) ................................................................................77Box45 Concept:Impactlogicofabiodiversity-basedvaluechain ............................79Box46 Tool–Monitoringmatrixforbiodiversity-basedvaluechain...........................80Box 47 Tool – Social parameters ................................................................................81Box 48 Tool – Economic parameters ..........................................................................81Box 49 Tool – Environmental parameters ..................................................................82
LIST OF CASE STUDIES
CaseStudy1NationalPlantopromote‘socio-biodiversity’ value chains in Brazil ............................................................................21CaseStudy2SampleSWOTanalysisinVietNam ......................................................28Case Study 3 Sample BBP selection results Cambodia ...............................................29CaseStudy4SamplemapofbamboovaluechaininLaoPDR ...................................30
Acknowledgements
ThisGuidelineisbasedontheValueLinksManual,developedbyDeutscheGesellschaftfür InternationalZusammenarbeit (GIZ)GmbH.FromthefirstValueLinksseminarsandthefoundingoftheInternationalValueLinksAssociatione.V.in2009,arevisedversion,ValueLinks 2.0, was published in 2019 which particularly addressed the sustainability issues in value chain analysis, strategy formation, and program implementation. ThisGuideline isnow takinganevencloser lookonspecificbiodiversity-basedvaluechaindevelopmenttobalanceeconomicdevelopmentandbiodiversityprotection.Partsoftheextensive ValueLinks 2.0 module was adapted and shortened in this concise Guideline, pairedwithpracticalexperiences from thefield implementationunder theBBPProject.TheValueLinks2.0describesthedifferentstepsofvaluechainsinmuchmoredetail—weextractedrelevantpartsandadaptedthemwithrelevantexperiencesfromtheBBPProjecttogiveaconciseoverviewfortheset-upofbiodiversity-basedvaluechains.
Wewould like to sincerely thank theKingdom ofCambodia, theGovernments of LaoPDR,andtheSocialistRepublicofVietNamfortheirwillingnesstopilotbiodiversity-basedvaluechainswiththeBBPProject.OursincerethanksbelongtotheMinistryofAgricultureandForestryinLaoPDR,theMinistryofEnvironmentinCambodia,andtheBiodiversityConservationAgencyunder theMinistryofNaturalResourcesandEnvironment inVietNam for theiractivesupport.Aspecial thanksbelongs to theparkmanagementof thedifferentNationalParksandASEANHeritageParksnamelyHoangLienNationalPark,BaBeNationalPark,NamHaNationalProtectedArea,andPhnomKulenNationalPark,without their networks and daily support it would not have been possible to establish trusted relationships with the local communities and private sector business partners and implement the numerous project activities in a relatively short time.
Furthermore, we would like to express our thanks to the international ValueLinks Association for theircooperationandofcoursefor theexcellentValueLinks2.0Manual,particularlyMrs.RitaPilarca,whonotonlyprovidedstronginputforthedevelopmentofthisGuidelinebut also conducted active training to all project partners.
Thisdocumentprovidesguidanceforthoseinterestedinthedevelopmentofbiodiversity-basedproducts.Complementary,werecommendtoconsulttheValueLinks2.0Manualformorein-depthinformationandguidancethatisnotonlyvalidforthedevelopmentofvaluechains in general, but biodiversity-based value chains in particular. From the implemented BBPProject,theACBhostsseveralknowledgeproducts,otherrelevantreferences,valuechain development expertise available for theAMS, and other organisations who areinterestedinthefieldofbiodiversity-basedvaluechaindevelopment.
Dr. Theresa Mundita S. LimExecutive DirectorASEANCentreforBiodiversity
Bianca SchlegelBBP Project ManagerGFA Consulting Group GmbH
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Summary
The ASEAN Member States (AMS; namely Brunei, Cambodia, Indonesia, Lao PDR,Malaysia,Myanmar,thePhilippines,Singapore,Thailand,andVietNam)accommodateabout18percentofthefloraandfaunaspeciesoftheEarth;threeofthe18megabiodiversitycountries;about35percentoftheglobalmangroveforests;and30percentofthecoralreefs.Thiswealth inbiodiversity posesopportunities for theeconomicdevelopment ofthe region.TheAMS intend touse thiseconomicpotentialby furtherdeveloping traderelations for bio-products at the national, regional, and possibly global level.However,thepotentialofBiodiversity-basedProducts (BBPs),especially for the local indigenouspopulationinbufferzonesofprotectedareasintheregion,isnotyetsufficientlyanalysedandtheirmarketpotentialoftenunknown.
Fully harnessing the benefits and potentials of natural resources through sustainablemeansiskeytoachievingtheglobalgoalofsustainabledevelopmentwhichencompassesthree important dimensions: environmental, economic, and social aspects. It is vital to acknowledgetheroleandpotentialofbiodiversityforthesocio-economicdevelopmentofa country and to convince the public and private sectors that biodiversity can be conserved onacommercialbasisifmanagedcorrectly.
TopromoteASEANnationalpoliciesonconservation,particularlyintheframeworkoftheUnitedNations(UN)ConventiononBiologicalDiversity(CBD),theASEANhasestablishedtheASEANCentre for Biodiversity (ACB), an intergovernmental institution, to addresstheprotectionof biodiversity ona regional level, and todevelopanddisseminate jointstrategies as well as to explore win-win opportunities, merging biodiversity protection with livelihood.
Against this background theASEAN-German cooperation project entitled Biodiversity-based Products as an Economic Source for the Improvement of Livelihoods andBiodiversity Protection was launched. On behalf of the German Government via theDeutscheGesellschaftfürInternationaleZusammenarbeit(GIZ)GmbH,theBBPProjectis implemented by GFA Consulting Group GmbH in cooperation with the ACB. The BBP ProjectwasoneofthreemodulesoftheGerman-ACBCooperationProgramProtectionofBiologicalDiversityintheASEANMemberStates.Thefour-yearprojectcontributestotheoverallProgramObjective,butalsohasitsspecificProjectObjectiveandrespectiveimpactindicators.ThespecificProjectObjectiveoftheBBPwasfortheACBtosupporttheAMS in thepromotionofBBPs for the improvement of livelihoodsandbiodiversityprotection, according to their needs.
The biodiversity-based value chain (BBVC) approach, which is promoted and expounded in this guideline, is geared towards economic growth and likewise prioritises the protection andconservationoftheenvironment,recognisingitastheprimarysourceofrawmaterialsfor livelihood and businesses. In the BBVC approach, a functioning ecosystem is keyto exploring the opportunities of natural resources and biodiversity for the economy.An uncontrolled process of economic growth almost inevitably causes environmentaldamages. Sustainable BBVC development therefore includes controlling the negativeeffectsofbusinessactivitiesonlocalecosystemsattheproductionlocationsandonglobalresources, especially climate change. Hence, the processes and activities in these value chainsare results-oriented,both foreconomicandenvironmentalgoals.Alsocrucial toits success are the participation and cooperation of various chain stakeholders, from
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various cross-sectoral government entities, the private and public sectors, and to local communities. Biodiversity-based value chains encompass various products and services suchascosmetics,furniture,carboncredits,andecotourism,amongotherswhichmakesitspecificallyinterestingforeconomicdevelopmentinremoteareasaroundnationalparkswith limited economic potential.
Atthepolicylevel,biodiversity-basedvaluechainswillcertainlybeinterestingfornationalgovernments since they help address several of the Sustainable Development Goals(SDGs; forexample,SDG1 -EndPoverty;5 -GenderEquality;8 -DecentWorkandEconomicGrowth;12-ResponsibleConsumptionandProduction;and15-LifeonLand).TheapproachalsosupportsvariousstrategicgoalsoftheAichiTargetsoftheConventionon Biological Diversity (CBD). These efforts support themainstreaming of biodiversityacross sectors. Some sectors are often said to be very contradictory,mainly betweeneconomic development and environmental protection.
The multi-sectoral development of biodiversity-based products brings these sectorstogether to balance economic and biodiversity growth. In a biodiversity-based value chain, thedifferentsectorshavetoworktogetherandtakeoverindividualroles,fromEnvironment,Forestry, and Agriculture to Trade, Health, and Science and Technology. Rural development isoftenattachedtoagriculturalofficeswhileprotectedareamanagementismostlywithForestry andEnvironmental offices.Certification schemesplayan important role, be ithealthcertificatesforfoodsafetyorotherqualityassuranceschemeswhichareissuedbyIndustryandCommerceoffices,whilescienceoftenplaysacross-cuttingrole.
Sincetherolesofallthestakeholdersinavaluechainareorganiseddifferentlyineachcountry,thereisnoone-fits-all-solutionthatthisguidelinecanprovide.ThisguidelinecanonlyserveasguidancesinceitwasnotpossibleintheframeworkoftheBBPProjecttoexplorein-depthallopportunities,andlargelyfocusesonbiodiversityproductsandlesson services.
Usingthelogicalframeworkapproach,thisguidelineprovidesastep-by-stepintroductiontothedevelopmentofabiodiversity-basedvaluechain,fromselectingtherightproducttotheinvolvementandrolesofthedifferentstakeholders.ItcapturesthelessonslearnedandexperiencesworldwideandspecificallyfromtheBBPpilotprojectsinCambodia,LaoPDR,andVietNam.Itpresentstheentireflowofthedevelopmentofabiodiversity-basedvaluechain,startingfromselectionoftherightproduct,tothestagesinthedevelopmentofabiodiversity-basedvaluechain,uptothemonitoringframeworknecessaryinensuringitseffectiveness.Elucidationsoftheprinciples,stages,processes,andactivitiesinvolvedinthedevelopmentofabiodiversity-basedvaluechain,andreal-lifeexamplesandstrategiesfromthefieldarethekeyfeaturesofthisguidebook.
ThisguidelinefollowstheValueLinks2.0Manual.ValueLinksdistinguishessixmajorfieldsofchange:businessmodels,businesslinkages,services,valuechainfinancing,qualityandstandards,andpolicyinstruments.Allthesearelikewiseapplicableforthedevelopmentofbiodiversity-basedvaluechains.Thelastchapteraddressestheimportanceofmonitoringthebiodiversity-basedvaluechaintoprovidedecision-makerswithprofoundinformationand knowledge base not only to monitor and steer the implementation but also to extract clear data on results and successes.
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Introduction2ASEAN’s rich natural resources and biodiversity offer significant potential for theregion’ssocio-economicdevelopment.Nowmorethanever,itisvitaltounderstandandacknowledgethevalueofbiodiversity.TheASEANMemberStates(AMS;namelyBrunei,Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and VietNam)accommodateabout18percentofthefloraandfaunaspeciesoftheEarth;threeofthe18megadiversecountries;about35percentoftheglobalmangroveforests;and30percentofitscoralreefs.Thiswealthinbiodiversityposesopportunitiesfortheeconomicdevelopmentoftheregion.TheAMSaspiretomakethemostofthiseconomicpotentialbyfurtherdevelopingtraderelationsforbiodiversity-basedproducts(BBP)atthenational,regional,andpossiblygloballevel.However,thepotentialofBBP,especiallyforthelocalindigenouspopulationinbufferzonesofprotectedareasintheregion,hasnotyetbeensufficientlyanalysed;theirmarketpotentialisoftenunknown.InthepromotionofBBPfortheimprovementoflivelihoodsandtheconservationofbiodiversity,theAMSdonotgetsufficientsupport.
TheBBPProjectisimplementedwithafour-yeardurationfromMarch2015toJune2019,withpilotsinCambodia,LaoPDRandVietNam.ItformsoneofthethreemodulesoftheGerman–ASEANCentreforBiodiversity(ACB)CooperationProgramentitledProtectionofBiologicalDiversityintheASEANMemberStates.TheprojectcontributestotheoverallProgram Objective, but also has its specific Project Objective, and respective impactindicators.
Thespecificobjectiveof theBBPProject is for theAMS tobe “supportedby theACBin thepromotionof biodiversity-basedproducts for the improvementof livelihoodsandbiodiversity protection, according to their needs.”
AspartoftheBBPProject,theGIZValueLinksmethodologyonpromotingpro-poorgreenvalue chains is utilised. In cooperation with other biodiversity-related projects around the world,aspecificguidelineonBBPwasdevelopedwhichmayguidefurtherdevelopmentsofabiodiversity-basedvaluechain(BBVC)intheASEAN.
ThisGuidelineon theDevelopment ofBBVCshall serveasa referencedocument fortheinstitutionsintheAMSthataresupportedbytheACBinthepromotionofBBPfortheimprovementoflivelihoodsandbiodiversityprotection.ThisGuidelineismainlybasedonthe ValueLinks Manual and the ValueLinks methodology and processes were adopted fromtheexperiencesofdifferentpilotprojects.
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Setting boundaries
Scope of BB value chain development
Solutions for improving the
biodiversity value chain
BB Value Chain analysis
Managing data & monitoring
Business models
Business linkages
Services
BBVC Financing
Regulations
Quality and standards
BB Value Chain upgrading strategy
Programmes and projects
Chain analysis and strategy
BBVC upgrading solutions
Monitoring
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Steps in the development of biodiversity-based value chains 3Below are some general steps in the development of BBVCs in the selectedASEANHeritageParks(AHPs).Thedetailsofthisprocessshallbecoveredinsucceedingchaptersofthisguideline.
Understanding the conceptofbiodiversityand value chains and its relevance to the AHPs/ protected areas
PlannersandimplementersofBBVCsshallbesensitizedontheconceptofbiodiversityandvaluechainsandhowthe value chain approach shall support their mandate ofprotectingbiodiversityandprovidinglivelihoodforthecommunity around the AHPs and/or protected areas.
Scoping and selecting the BBVCs
Aftergettingthebuy-inoftheplannersandimplementers,the communities and other relevant actors have to be involvedintheselectionprocessfordevelopingBBVCs.Here, they have to agree on the selection criteria and go throughtheprocessofselection.TheBBVCtobeselectedmust be supported by all the relevant actors, especially the community members.
Analysing the BBVC As soon as BBVCs are selected through a participatory process,themorein-depthanalysishastofollow.Althoughprioranalysiswasdoneevenbeforetheselection,thisprocess shall start with mapping the BBP and its value chainandanalyseitfurtherbylookingattheeconomic,environmental, and social dimensions. A practical tool to be used in this step is the SWOT analysis to analyse the strengths,weaknesses,opportunities,andthreatsofthevalue chain.
Formulationofvision,objectives, and strategies fortheBBVC
Whenthe“StateoftheBiodiversity-basedValueChain”orthefactsandfiguresabouttheBBPanditsvaluechainiscleartoall,thereisaneedtocomeupwiththevisionforthefutureoftheBBVCandcorrespondingstrategiestobeformulatedbasedontheresultsoftheanalysis.
Planning and implementing the BBVC
Theresultsoftheanalysisandtheagreedvision/objectivesandstrategieswillbethebasisforplanningandimplementingtheBBVC.Therolesofallthedifferentactorsshallbeclarifiedandupgradingsolutionsshallbeagreedbasedontheconstraintsandneedsoftheindividual BBVC.
BusinessenvironmentforBBVCs
AnenablingandsupportiveenvironmentiskeyforasuccessfulbusinessestablishmentfortheBBP.Thesixmajorfieldsofchangeare:businessmodels,businesslinkages,services,valuechainfinancing,qualityandstandards, and policy instruments.
Monitoringtheimpactofthe BBVC
Based on the agreed objectives and indicators, there isaneedtomonitortheimpactoftheBBVCs,whetherithascontributedtotheprotectionofbiodiversity,andprovisionoflivelihoodtothecommunityaroundtheAHPsor protected areas. In return, implementers want to be sure that the business development along BBVCs has no negative impact on the environment.
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4.1 What is biodiversity
Biodiversityreferstothenumberorabundanceofdifferentspecieslivingwithinaparticularregion. It represents the wealth of biological resources available to us. It is all aboutsustainingthenaturalareamadeupofacommunityofplants,animals,andotherlivingthings that start to decline at a steady rate due to human activities.
Biodiversity is the diversity of life. It provides ecological life support to the functioningecosystems thatsupplyoxygen,cleanairandwater,pollinationofplants,pestcontrol,wastewatertreatment,andmanyotherecosystemservices.Itisasourceforlivelihoodformanypeople,especiallyinandaroundprotectedareas,andanoftenunknownbasisforeconomic activities.
There are interactions between biodiversity and poverty. Biodiversity is under threat due to habitat degradation through overexploitation and human/agriculture expansion, land tenure issues, and humanwildlife conflict which progressively reduce the uniquebiodiversityfoundinmanyareas,evenaroundprotectedareas.
This results in poor living standards for communities who are dependent on naturalresources;theirpovertyinreturncontributesfurthertodegradationofthenaturalresourcesandbiodiversityintheirattemptstomakealivingfortheirfamilies.
It is therefore important tounderstand thevalueofbiodiversityand itsopportunities tosupport sustainable economic development.
4.2 Biodiversity-based Products (BBP) and Value Chains (BBVC)
BBPs include natural cosmetic, pharmaceutical and food products, additives, leather,textiles,flowers,fishproducts,handicrafts,andotheragriculturalandforest-based(non-timber) products.
BelowaresomepossibleclassificationsofBBVCs:
• Collectedandcultivatedfoodproductssuchasfruits,herbs,andnuts• Biologicalmaterialssuchaspartsofplants,resins,oils,fibres,aromas,etc.• Pharmaceutical products (phytomedicine)• Cosmetics and personal care products• Agrochemicals, especially biological control agents• Handicraftsusingbiologicalmaterial• Ecotourism services around natural attractions such as bird watching and
recreational hunting
Understanding biodiversity and value chains4
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• Paymentforecosystemservicessuchascarbonsequestrationcertificates,water,etc.
• Bioprospectinggeneticresourcesofscientificandcommercialvalue
The market potentialofaBBPdependsonitscharacteristicsaswellasthetypeofvaluechain.
ThekeyimportantdistinctionforaBBVCliesinthefocusontheinterplaywithnatureandbiodiversity;theeconomicdevelopmentofaBBPshouldnotleadtomore environmental degradation(e.g.throughoverexploitationorharmfulproductionprocesses).Thiswouldnot only hamper the actual BBVC, which depends on the biodiversity resource, but might to lead to other severe and negative environmental and social impacts.
ThedevelopmentofaBBVCisthesequence of related business activities (functions)from the provision of specific inputs (rawmaterials) for a particular product to primaryproduction, transformation, marketing, and up to final consumption of a BBP. It alsoincludesasetof(community)enterprisesthatperformsthesefunctionsi.e.theproducers,processors,traders,anddistributorsofaBBP.
Box 1 visualises the interrelation between the BBVC with the management of localecosystemsfromwhichtherawmaterialsareextracted.Naturalresourcemanagementisintegrated into the value chain.
Box 1 A biodiversity-based value chain
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4.3 Why promote biodiversity-based value chains?
Theconnectionofvaluechaindevelopmentwithaparticularecosystemresourceistheprincipleof“useitorloseit.”Ecosystemsandbiodiversitycanbeprotectedmoreeasilyif they have economic value. The economic utilisation of resources― its sustainableextractionandsale―generatesincomeforthepeoplelivinginprotectedareasandthuscreatesaneconomicincentiveformanagingandprotectingthemasasourceofincome.Marketingecosystemproductsandservicesalsogeneraterevenuestopayformeasuresto protect natural resources.
The“useitorloseit”principlecombinestwotypesofsystemsthinking:valuechainsystemson one side and ecosystems on the other. Both the economic logic and the ecosystem logichavetobeobserved.Thefollowingtwosectionslookatwaystomanagethetensionbetweeneconomicandecosystemlogic.ABBVCincludesaseriesofactivitiesthataddvalue to theproduct tomake itmarketableand competitive.Thereareaddedbenefitsarisingfromthecommodificationofbiodiversitythatwillmotivateallvaluechainactorstoimplementamoresustainableconservationofbiodiversity.Italsoenhancestheawarenessontheimportanceandvalueofbiodiversityofthestakeholdersinvolvedinthevaluechainprocess,whichstartswithsustainablesourcingoftherawmaterial.
Many national parks and natural resource management programs engage in activities fosteringtheeconomicuseoftheecosystemtohelpprotectit.
Ecosystemshavethepotentialtodelivereconomicvaluethroughthefollowing:
• Forest ecosystems providing in situ habitats for diverse wild plant and animalspecies;
• Forestsandwetlands regulating localclimaticconditions,supplying freshwater,andprotectingwatersheds;
• Carbonbindingcapacity;• Attractivenessoflandscapes,scenicbeautyandwildlifeforecotourismservices;
and• Forestsprovidingdifferentplantspeciesforvariouseconomicuse.
Why Biodiversity-based Value Chains?
• Development of value chains that generate income from biodiversity can help alleviate poverty and conserve biodiversity
• Contribute to achieving several of the Sustainable Development Goals (SDGs), e.g. SDG 1 (end poverty), SDG 8 (inclusive and sustainable economic growth), and SDG 15 (sustainable use of terrestrial resources and halt biodiversity loss).
• Contribute to the Aichi Biodiversity Target Strategic Goal B to: ‘Reduce direct pressure on biodiversity and promote sustainable use’
Box 2 Why biodiversity-based value chains
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Thedifficultywithavaluechainisthatitisdefinedbyacommercialproduct.Thevaluechaintransformsecosystemelementsandpropertiestofitthecommercialmarketlogic.Inthecaseoffoodproductssuchfruits,theconnectionisstraightforward.Localcollectorsextracttheproductintheforestandsellittobuyers.Thesituationcomesclosetoagriculturalproductswheretherawmaterialdoesnotundergomuchprocessinganddefinesthevaluechain.
Developmentofvaluechains thatgenerate income frombiodiversitycanhelpalleviatepoverty and conserve biodiversity. The value chain development benefits from theexistenceofnaturalecosystemsasasourceofrawmaterials.Productsfromnaturehaveconsistentlyhighgrowthratesifnotdisturbednegativelybyhumaninterventions.Tropicalforestsandotherhabitatsofferrarenaturalproductsandarethereforeasourceofproductinnovation.
PromotingBBVCcontributestoachievingseveraloftheSustainableDevelopmentGoals(SDGs), e.g. SDG 1 (end poverty), SDG 8 (inclusive and sustainable economic growth), and SDG 15 (sustainable use of terrestrial resources and halt biodiversity loss). It also contributes to the Aichi biodiversity target strategic goal B to “Reduce direct pressure on biodiversity and promote sustainable use.”
Is a series of activities that adds value to the product to make it competitive without harming the environment
versus
Added benefits arising from the commodification of the biodiversity will motivate all value chain actors to implement more sustainable conservation of the biodiversity
4.4 Goalsandbenefitsofbiodiversity-based value chain promotion
ThegoalofBBVCpromotionistoaddvaluetonaturalproductsby:
• improvingproductquality;• addingprocessingsteps;• improvingsupplychainefficiency;• innovatingnewproducts;• applyingmodernpackagedesigns;• fulfillinginternationalstandards;and• branding the products.
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• Environmental sustainability
• More jobs• More
investments• Higher export
earnings
Benefits of biodiversity-based value chain promotionResulting in...
• Biodiversity conservation (through reduction of pressure on natural resources)
• Higher income for craftsmen/farmers (through new income source, better prices and/or increased efficiency)
• New markets for exporters or traders (through improved quality, product innovations or branding)
• Stable trading relations (through better linkages with local, regional and/or international buyers)
Box3BenefitsofpromotingBBVC
4.5 Goal dimensions in biodiversity-based value chains
In promoting BBVCs, there are different dimensions that need to be considered:environmental protection, economic development, and social inclusion.
Box 4 Goal dimensions of BBVC
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The environmental dimension takes into consideration that natural resources and biodiversityareutilisedandmanagedsustainably,generatinga“oneplanetfootprint”andpromotes“greengrowth.”Economicgrowthisattainedbyincreasingtheincomeofalltheoperators inthevaluechainthroughincreasingsalesvolumeand/orpricesof theBBP.Socialinclusionisaboutpoorpeoplebenefittingatleastequallyoraboveaveragefromtheincomegeneratedfromnaturalresources/biodiversity,thuspromotinginclusivegrowth.
Box 5 Micro-Meso-Macro levels of BBVC
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5.1 System boundaries of the biodiversity-based value chain
BeforeplannersproceedtoselectingaBBVC,thealternativeoptionsmustbeclear.Thisistheideaofscopingi.e.determiningtheproductsandmarketstowhichaBBVCrefersto and delimiting its size accordingly. It means setting boundaries around the BBVCs consideredforpromotion.
Basically, there are two possibilities of setting boundaries around a value chain.Mostimportant is the horizontal boundarywhich refers to the type of products andmarketsserved by the BBVC. A second boundary delimits its outreach towards end markets, i.e. the verticalboundaryor‘length’ofthevaluechain.Althoughitnormallyreachesendmarkets,thereareexceptions.Forexample,itisusefultosetaverticalboundaryforexportBBVCsatthenationalborderoftheexportingcountry.
A thirdaspect is thespatialextensionof thechain.Staple foodvaluechainsoftenarespread out everywhere. A regional development project will be mainly interested in the potentialwithinitsowngeographicalboundaries.Nevertheless,thespatialdelimitationofthe value chain should still build on the existing economic linkages. Planners should locate themajorproductionzonesandconsumptioncentersonageographicalmap todefinethespatialextensionof theBBVCexactly.The identificationandselectionofeconomicopportunities in thecontextofbiodiversityprotectionshall start in theASEANHeritageParks(wherethenaturalresourcesaretheinputs)andendsinthemarketofthatBBVC.
Scoping Biodiversity-based products
SECTORAgriculture/Food/Medicine
Furniture & Handicraft
Tourism
FlowersHerbs, SpicesDifferent plants
BambooRattanClimbing fern etc.
EcotourismBeach tourismINPUT
e.g. Food...Organic honey, medicinal bath herbs...
e.g. BambooBamboo furniture
e.g. EcotourismHiking in national parks, animal watching, homestay...
CHAIN
according to end product/marketing system- e.g. organic honey sold to supermarkets
according to marketing system- e.g. sold to households; local/regional market; trade fairs
according to individual service and attraction- e.g. cabin for hikers, facilities for birdwatching
CHANNEL
Box 6 Scoping Biodiversity-based products
Scoping and selectingbiodiversity-based value chains5
2020
5.2 Selecting the biodiversity-based value chain to promote
TheselectionofaBBVCtobesupportedisthestartofanyvaluechaininitiative.Thisistrueforgovernmentprograms,developmentagencies,andprivatecompaniesalike.Decision-makershavetopickthosevaluechainsfromasetofalternativesthatofferthegreatestpotentialforachievingthedesiredimpact.TheyshouldmakeaninformeddecisionbasedonatransparentmethodforselectingthemostpromisingBBVCsidentifiedinthescopingprocess.
TherearethreekeycriteriaforBBVCselectionorganisedaccordingtotheenvironmental,economic,andsocialdimensionsofsustainabledevelopment.InBBVCs,theenvironmentaldimensionshallbegivenprioritysinceoneoftheobjectivesofdevelopingBBVCsistoprotect biodiversity. In addition, the decision-making process uses information on theinstitutionalframeworkaswellassomepoliticalandpragmaticcriteria.
TheBBVCselectionprocessisaseriesofvaluechainstrategicanalyses.Thedecisioncriteriaalwaysmeasure thepotential for change.Assessingcriteriameans formulatinghypotheses about the possible impacts of an intervention. Although the amount ofresourcesdedicatedtotheselectiondecisionislimited,theassessmentofthealternativesthuscanbenefitfromthemethodsforvaluechainanalysesandstrategyformulation.
CASE STUDY 1 National Plan to promote ‘socio-biodiversity’ value chains in Brazil
In 2008, Brazil’s government launched the National Plan for Promotion of Socio-Biodiversity Product Chains – a joint effort by the Ministries of Agricultural Development, of Environment, and of Social Development and other public agencies. Its goal is to develop ‘socio-biodiversity’ value chains generating income for traditional people from the collection and cultivation of native species. The economic activity builds on local knowledge and practice, improves the living conditions of local communities, thus protecting their environment and respecting their traditional rights.
The four main action areas are: the promotion of sustainable extraction activities; development of industrial processing; organisation of markets; and the strengthening of local social and productive organisations. The key concept is the productive inclusion of poor communities. This concept emphasises the importance of supporting the self-organisation of communities and community-based networks of medicinal herb gatherers, producers, and healers, in partnership with public research institutes, and providing a mix of social assistance and productive support, particularly for those communities located in poor and underserved areas. In turn, BBVCs benefit from the local knowledge. Source: ValueLinks 2.0; National Government of Brazil; Lal and Sorte, 2011
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5.2.1 Environmental criteria
When applying environmental criteria to BBVC selection, planners should refer to theentirelifecycleofaproduct,startingwiththesourcingoftherawmaterialsfromtheforest/biodiversity sources up to product use.
The environmental criteria are organised according to the three types of interactionbetweenvaluechainsandtheenvironment:theenvironmentalimpactofthevaluechain;itssusceptibilitytoresourcedegradationandclimatechange;andtheeconomicopportunitiesofferedbyBBPs.The respective criteriaarepresented in theBoxbelow togetherwithsome guiding questions and possible indicators.
Guiding questions Suggested indicatorsKEY CRITERIA 1: Impact of the value chain functions on the environment1. Which are the environmental hotspots of the
value chain?2. Whatisthelevelofrawmaterialuse?3. What practices are used in collecting/
gathering raw materials? (e.g. slash and burn, overextraction)
4. What isthetypeandlevelofenergyuse?5. Does the value chain impact on land and its
futureproductionpotential?6. Which impact has the value chain on water?
(consumption, pollution, quantity/quality)7. Does the value chain cause (low/high levels
of)airpollution,emissions,andwaste?8. Does the value chain impact on biodiversity?
(abundancy, etc.)
• Useandoriginofrawmaterials(biodiversity sources)
• Existingpracticesofcommunityin harvesting/collecting biodiversity raw materials
• Energy (non-renewable) consumption levels
• Levelofsoilorsoilfertilityloss• Water consumption or water
pollution• Air pollution level• Greenhouse gas (GHG) emission
level• Carbonfootprint• Impact on biodiversity
KEY CRITERIA 2: Impact of the environment on value chain functions; vulnerability of the value chain to degraded environment and climate change
9. How vulnerable is the value chain to climate change and a degraded environment?
10. What is the impact of extremeweather, hightemperature,andreducedrainfallonthechain?
11. To what extent is the value chain able to cope withimpactsofclimatechange?
12. Are the value chain actors able to adapt?
• Level ofvulnerabilityofvalue chain sections to rising temperatures, reduced water availability,lessreliablerainfall,etc.
• Adaptivecapacityoftheactorsinvalue chain
KEY CRITERIA 3: Green opportunities13. What is thepotential forproductsorservices
thatareconduciveforagreeneconomy?14. What is thepotential forproductsorservices
thatcompensateforGHGemissions?
• ListofconcretenewproductsorserviceswithlowlevelsofGHGemissions, pollution, waste, resourceuse;orusingthecradle-to-cradle concept
Box 7 Tool: Guiding questions and indicators for key environmental criteria
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5.2.2 Criteria to assess the economic potential
Decision-makersalwaysstartbyassessingtheeconomicgrowthpotentialofaBBVC.Itisdeterminedbythemarketdemandfortheproductsofthevaluechainononeside,anditscompetitiveness on the other.
The issues to consider on the demand side are the current market trends, unmet domesticandexportmarketdemand,andchangingconsumerhabits.Thisinformationisgeneratedthroughmarketresearch,analysisofnationalstatistics,orwebsitesofbusinessassociations.
ThesecondpointisthecompetitivepositionoftheBBVCathand.Itgoeswithoutsayingthattheexpectedeconomicgrowthhastoprovideopportunitiesforadditionalemployment.Anotheraspecttoconsiderismarketfailuresaffectingtheprospectsofgrowth,especiallyalackofcoordinationandtransparencyalongtheBBVC.Asinthecaseofthecompetitivenesscriterion, the question is how severe the problem is and whether it can be solved. The existenceofaconstraintcanbeanargumentinfavorofselectingtheBBVCifthevaluechain initiativehas the timeandresources toovercome it.Similarly,deficiencies in theorganisationofentrepreneursandbusinesslinkagescanberatedproorcontrachoosingaBBVCforpromotion.
ForaBBVC,productsthatpromoteprotectionandsustainableuseofnaturalresourceshave the priority as well as the reinforcement of positive impacts on biodiversity andecosystems (e.g. pollinationbyhoneybees).Nevertheless, aspects like seasonality ofproduct, its lifecycle, harmful effects like over-exploitation of one product or resource,monoculturesorpromotionofnon-nativespecies, infrastructure limits,etc.,need tobetakenintoaccount.Thereisnouseforavaluechainproductifitcannotreachthemarket.
Someguidingquestionsaswellasindicatorsfortheeconomiccriteriaarepresentedinthe Box below.
Guiding questions Suggested indicatorsKEY CRITERIA 4: Market demand prospects of BBPs1. Whataretheprospectsformarketgrowth?2. Is there (seasonally) unmet market demand?
Are traders/customerswilling to buymore ofthe product/service?
3. Istherescopeforimportsubstitution?
• Volumeandvalueof(localandexport) market demand in the last fiveyears
• Volumeofunmetmarketdemand• Priceofproducts(andvariations
during the year)• Volumeofproductionand
consumption• Share(%)oftheBBVC/sector
in Gross Domestic Product and export value
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Guiding questions Suggested indicatorsKEY CRITERIA 5: Opportunities for employment creation
4. Howmanypersons(male/female)arecurrently(self-)employed in the value chain (sector)?(estimation)
5. Has(self-)employmentinthesectorinthelast5 years increased, decreased or remained the same? And what are the drivers/causes?
6. Which are the growth prospects and opportunitiesforemploymentcreation?
• Employment generated by the BBVC
• Employment growth rate
KEY CRITERIA 6: Comparative advantage of production; level of competitiveness (in comparison with competing producers)
7. What are the production costs per unit relative to the benchmark? Can the product be supplied to buyers at attractive prices?
8. Whatare thecomparative(dis)advantagesofthe product/value chain in national and export markets?(e.g.productdifferentiation,productquality, standards/labelling, image, proximity to markets)
9. Which competing imported products can be foundonthemarkets,forwhichprice/quality?Can local products substitute imports? How?
10. Are infrastructure, qualified labor force, rawmaterialsandinputssufficientlyavailablefrombiodiversity sources?
11. Do enterprises in the sector have the management and technical capacity forupgrading and innovation?
• ProductioncostsofsimilarBBVCs
• Marketperformanceofthebiodiversity based products
• Importdataofbiodiversity-basedproducts
• Numberofexistingassociations/organizations supporting the BBVC
Box 8 Tool – Guiding questions and suggested indicators for economic key criteria
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5.2.3 Criteriatoassesspotentialsocialbenefits
ForBBVCs,thepotentialtogeneratesocialbenefitsforthecommunitylivingaroundtheheritageparks/protectedareaswillbegreater,providing them thesourceof livelihoodswhile protecting the biodiversity. The key social criteria to be observed are listed in the Box below.
Guiding questions Suggested indicatorsKEY CRITERIA 7: Prospects for inclusion of disadvantaged groups (poor, women, youth, refugees, minorities, handicapped, etc.)
1. Do poverty groups (communities around the heritage parks/protected areas) have the potential to become active in the BBVC?
2. What is theshareofpovertygroups thatareactive/employed in the value chain?
3. Do they have the necessary skills and conditions to participate?
4. Which assets do they control?5. What are the barriers to entry for poverty
groups?
• Businessopportunitiesofthecommunity around the heritage parks/protected areas
• PositionofcommunityintheBBVC
• Accessandcontrolofbiodiversityresources and assets
• Skills requirements vis-à-vis availableskillsofpooranddisadvantaged groups in the community
• Typeandlevelofbarriers,andavailabilityofsolutions
KEY CRITERIA 8: Working conditions6. What are the health and safety risks for
entrepreneurs and workers at the differentchain stages?
7. Is there freedomofassociationandhow is itregulated?
8. Is child or forced labor present in the valuechain? If so, at what level and in whichactivities?
• Healthandsafetyrisks• Worker perceptionsofphysical
and mental well-being• Existenceoffreedomof
association/collective bargaining regulationsandlaws;actualcoverage
• Share ofchildorforcedlabor
KEY CRITERIA 9: Impact of the value chain on surrounding communities
9. Are the right to food, right to health, right toproperty (land) and right to water (access and use)ofcommunitiesrespected?
10. Any risksofthevaluechaincausingorbeingsubjecttoconflict?
11. Do individuals, workers or communities have access to a complaints mechanism?
• Risksforandtypeofrightviolations(food,land,water,health) in surrounding communities
• Potentialconflictsbetweenvaluechain actors and communities
• Politicalconflictsimpactingthevalue chain, such as ethnic tensionsanddiscriminationofminorities
Box 9 Tool – Guiding questions and suggested indicators for social key criteria
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5.2.4 Institutional and pragmatic criteria
Theinstitutionalcriteriarefertotheenablingenvironmentandincludefavorablepoliciesand a regulatory environment promoting or hindering green and inclusive development. TheinstitutionaldimensionofBBVCdevelopmentdeterminestherulesofthegamethatshapemarketoutcomesandallowsvaluechainactorstomakeuseoftheopportunitiesofferedbythemarket.Theinstitutionalcriteria,thecorrespondingguidingquestions,andsuggestedindicatorsarepresentedinthefollowingBox.
Guiding questions Suggested indicatorsKEY CRITERIA 10: Reason(s) and need for public investment1. Where are the limits to market governance
and private investment? Why is public investment needed?
• Listofconstraints(andtypeofconstraints) that cannot be solved bythemarketitself
KEY CRITERIA 11: Evidence of private sector, government, and/or donors having plans for investment in the value chain2. Do private sector, donors or governments
have realistic plans to invest in the value chain?
• Relevant value chain support programs
• Volumeofbudgetallocatedbylead actors
KEY CRITERIA 12: Sector (promotion) policies and regulations are in place and effective3. Are policies and regulations in place?4. Does the government provide support or can
this be expected?5. Do producers have access to markets? Are
there physical, regulatory or other obstacles to enter the market?
• Government statements and policies
• Quality ofimplementationmodality
• Rankingineaseofdoingbusinessreport;listofmostandleast important constraints
• Enablingenvironmentforgreenand socially inclusive business opportunities
KEY CRITERIA 13: Chain actors/government/donors/support organisations’ readiness to change, collaborate, and align interventions6. Are chain actors open to cooperation?7. Whatisthepotential(win-win)forincreased
cooperation between the value chain actors?8. Do anysharedstrategiesforvaluechain
development exist? How do government objectives relate to donor interventions?
• Openmindandattitudeforexchange and cooperation
• Numberandtypeofvaluechaininitiatives
• Contribution (budget or services) by donor and value chain support organizations
• Sizeorvolume(budget)ofjointinitiatives or actions
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Guiding questions Suggested indicatorsKEY CRITERIA 14: Feasibility of the intervention9. Have the intended innovations been tested
and validated?10. Istheorganisationalcapacityofactors
sufficientforthetasksahead?11. Are business development services and other
support services available?12. Are sufficientprogramfundsavailable?
• Availableevidenceoftestedandvalidated innovation
• Listofservicesandpricesofservices
• Demandfortheservices• Project budget secured
Box 10 Tool – Guiding questions and indicators for key institutional criteria
5.3 Compiling decision criteria and developing a decision matrix
The boxes above present the key criteria for BBVC selection.They provide the basisforBBVCselection,takingintoaccountallthreesustainabilitydimensionsaswellastheinstitutional environment.
Planners have to construct a decision matrix to compile the criteria and prioritise the value chainalternatives.Thecriteria tobe includedand thematrixhave tobedefined inanearlyphaseofthedecision-makingprocess.Itisimportantthatthedecisionmatrixdoesnotincludeoverlappingcriteria,andthatthecriteriaareclearlydefinedtoavoiddifferentinterpretations by those collecting, analysing, and comparing the data. To meet resource andtimelimitations,thenumberofcriterianeedstobekeptmanageable.
Trade-offs among the sustainability dimensions are a common reality. By assigningdifferentweights,certaincriteriacanbeemphasisedinlinewiththeconditionsofthecase.To compare and rank the value chain alternatives, planners have to attach scores to the criteria.Scoringassignsvaluessuchaslow-medium-highornumericscoresrangingfrom1 to 10. The boxes below show the steps in value chain selection and a sample template.
Steps in BB Value Chain Selection
1. Agree on the criteria to be used in Biodiversity-based products selection (e.g. income opportunity, availability, biodiversity impact, potential for value adding/upgrading etc.)
2. Assign a weight for each criteria3. Come up with a list of potential biodiversity products (BBP, such as honey,
cardamom, bamboo, medicinal herbs...) in AHPs4. Assess each BBP and give a score for each criteria (e.g. score from 1 to 10,
lowest to highest)5. Compute for the weighted score (weight x score)6. Rank the BBP according to the weighted score7. Select the BBP with the highest weighted score
Box 11 Steps in BBVC selection
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Biodiversity-based Product Selection Template
Criteria Weight BBP 1 BBP 2 BBP 3100% Score
(1-10)Weighted Score (5)
Score(1-10)
Weighted Score
Score(1-10)
Weighted Score
Criteria 1 25%Criteria 2 25%Criteria 3 25%Criteria 4 25%Weighted scoreRank (6)
Box 12 BBP selection template
5.4 Examples on biodiversity-based value chain selection
Viet Nam
Toapplysomeofthecriteriamentionedabove,theVietNamBBPTeamcameupwithaSWOT(Strength,Weaknesses,OpportunitiesandThreats)analysisforthelistofpossibleBBVC they will develop. From the analysis, the potential BBPs are ranked according to selected criteria.
Value Chain Selection on BBP (medicinal tea) in Viet NamSTRENGTHS WEAKNESSES
• They are available in nature.
• They are indigenous species that are adaptable to local natural condition.
• They can help prevent diseases and improve health
• Theworkforceforplantingandharvestingis available
• Lackofsustainableharvesttechniques
• Sourceofseedlingisnotavailable
• It isdifficulttodistinguishspeciesofGiaoCo Lam
• Lack oftechniquestoprocessGiaoCoLam
• Lackoflinkageamongharvesters
• ThereisnotyetlocalbrandingofGiaoCoLam tea.
OPPORTUNITIES THREATS• IncreasingdemandofGiaoCoLam
medicinal tea
• IncreasingnumberoftouristsinBaBe
• Potentialsupportfromprojectsandgovernment programs
• Potentialforjobcreationandincomeincrease
• Disease
• Compete with products in other places
• False advertising
• MixtureofdifferentspeciesofGiaoCoLam during processing and packaging
CASE STUDY 2 Sample SWOT analysis in Viet Nam
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Cambodia
In thecaseofCambodia, theselectionprocessstartedwith listingspecificcriteriaandplacing a score for every promisingBBP.The scoreswere agreed after analysing thepromising BBPs.
CASE STUDY 3 Sample BBP selection results Cambodia
(Sample selection results)• Annualincomeforlocalvillagers• Asignificantvolumeofproducts• Availabilityofinputmaterials• Poor people participation• Technologyapplicableandsampleprocessingfacility• Productswithnoharmtoenvironmentandsustainableforestmanagement• Gender participation
Figure below indicates the top three scoring products which have been selected, namely: 1) Zingiberaceae (Prateal Thleum Chake), 2) Bamboo handicraft, and 3) Honey.
Selecting Promising BBPs in Cambodia
Lao PDR
InLaoPDR,specificallyinNamHaAHP,bambooisanabundantresourcewhichsofarisunderusedsincepeopleonlyusedtosellyoungbambooshootsasfood.Afteridentifyingconstraintsandopportunities,selectedmeasureswereidentifiedtodevelopthebamboovaluechainfromcollectiontoprocessing,trading,andconsumption.
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CASE STUDY 4 Sample map of bamboo value chain in Lao PDR
BB Collectors
Bamboo producers:- 4 Handicraft
producer groups- 4 Bamboo
furniture producer groups - Company
- Foreign customers
Wholesaling3 existing shops in Luang Namtha Wholesaling/
Retail ShopsAll provinces in Lao PDR and 1 in Thailand and China
Consumption within LNP Vientiane Capital
WholesalingLinking with BTA in Vientiane Capital
BBVCdevelopmentfocusesonintentionaleffortstobuildwin-winrelationshipsbetweenor among two or more chain actors (producers, distributors, processors, wholesalers, retailers). The stronger the resulting win-win outcomes, the more likely the business relationships are to endure and thrive over time. The enabling conditions must be right — strongseasonality,noroadsorotherinfrastructure,andmissingpossibilitiestoestablishmarketlinkagewillresultinanunsuccessfulBBVC.
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Analysis of biodiversity-basedvalue chains6
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6.1 How to analyse biodiversity-based value chains
The value chain concept is used as a model to describe the socio-economic reality. All chainactorsneed tounderstand thevaluechain theyareapartof, its functioningandfailures,andtheirownpositionandroleinit.Theresultsareusedtopreparedecisionsonobjectivesandstrategies.Producers/enterprisescandevelopavisionofchangeanddeterminecollaborativestrategiesbasedonasharedviewonthestateofthevaluechain.Governmentsandpublicagenciesusevaluechainanalysistoidentifyandplansupportiveactionand tomonitor impact.Apart from itsuse inadevelopmentcontext,valuechainanalysis also helps individual producers and enterprises in making business decisions.
ABBVCanalysis isasituationanalysisofaspecificBBVCatstake.Themethodologycombinesanalyticalandproceduralaspects.Thequestionsofwhoshouldtaketheleadand who is to be involved, the right timing, resources to be invested into the analysis, and thepossibleexternalsupportarevery importantpoints thatshouldbeclarifiedupfront.InthecontextofBBVCs,theorganisationswhohavethemandatetoprotectbiodiversitymusttaketheleadinanalysingthevaluechain,withtheinvolvementofotherorganisationswhohavethemandatetodevelopthefullpotentialoftheBBPs.TherearefourelementsinBBVCanalysis,asfollows:
1. Structural analysis or mapping the BBVC2. Environmental analysis 3. Economic analysis4. Social analysis
In theend,afterconductingalldetailedanalyses, theaim is tohaveaconciseSWOTanalysisoftheplannedvaluechain:
SWOT Analysis of Selected BBVC
STRENGTHS WEAKNESSES
OPPORTUNITIES THREATS
Box 13 SWOT template
6.2 Structural analysis – Biodiversity-based value chain mapping
ThestructuraldescriptionofaBBVC,thatisvaluechainmapping,isthefoundationandpivotalelementofvaluechainanalysis.Valuechainmapsnotonlyprovideanoverviewofthesystemidentifyingthepositionofvaluechainactors,theyalsohelpinvisualisingmanytopicsofvaluechainanalysisandstructuringtheinformationaccordingtothefunctionsandstagesofachain.Valuechainmapsreducethecomplexityofeconomicrealityintoacomprehensible visual model. Thus, they serve both an analytical and a communication purpose.
ABBVCcanbecharacterisedbyeightgenericelements,fiveofwhichconstitutethebasicvalue chain map at the micro level:
• ThemarketedproductorgroupofproductsdefiningtheBBVC• The end market in which the product is sold to customers• TheseriesofBBVCstagesthroughwhichtheproductreachestheendmarket• The enterprises or chain operators conducting the business operations• The business linkages between these operators
The remaining three elements in a BBVC map are:
• Selected business linkages with subcontractors and operational service providers• The support service providers at meso level• Publicagenciesperformingaregulatoryfunctionatmacrolevel
BASIC CONCEPTS
Biodiversity-based Value Chain Functions
Categories of actors in BBVC and their relations
SpecificInputs
Provide- equipment- inputs
ClassifyProcessPack
TransportDistributeSell
ConsumeGrow, Harvest, Dry, Sust. mgt.
CommerceTradeProduction Transfor-
mationConsump-tion
SpecificInput providers
Primary producers
Packers, Industry
Traders (sales pt.)
Consumers(the market)
Box 14 Sample BBVC map (horizontal arrangement)
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SpecificInput providers
Primary producers
Packers / Industry
Wholesalers
Retailers
Consumers(the market)Consumption
Wholesale
Transformation
Production
Specific Inputs
Retail (final sales point)
In relation to biodiversity
Support service provider 1
Support service provider 2
Box 15 Sample BBVC map (vertical arrangement)
Asidefromthevaluechainoperators,mostvaluechainsalsoembraceactorsthatarenotdirectly involved in production and marketing but provide regulatory and support services toparticulargroupsofoperatorsortothevaluechainbusinesscommunityatlarge.Thebasicvaluechainmapthereforeiscompletedbyinformationonselectedindustry-specificactors, including:
• Industry associations, business membership organisations, and public agencies suchastechnologyortraininginstitutesrepresentingthecollectiveinterestofthebusiness community and providing support services to the business community at large (value chain supporters)
• Selected governmentunitsandpublicagenciesperformingregulatoryandenablingfunctions(valuechainenablers)
Theseactorsarepartofthevaluechainmaptotheextentthattheyperformanimportantroleforitsfunctioning.Theyareconsideredasthemesoandmacrolevelsofthevaluechain,respectively.Whereaschainsupportersaremostlychain-specific,publicagenciesnormallydonotcoverspecificvaluechainsbutentiresubsectorssuchasagricultureorfisheries,orhaveregulatorytasksfortheeconomyasawhole.
AnotherexampleisthebambooandrattanhandicraftvaluechaininVietNam(Boxnextpage).Thedarkgreenareashowsthelocationofproducersindifferentprojectdistricts.The light green area indicates the provincial level, while the white area locates enterprises operating nationwide.
VC map for bamboo/rattan handicrafts in project communes in Nghe An and Thanh Hoa in Northern Viet Nam
Box 16 BBVC map for bamboo/rattan handicraft in Northern Viet Nam
ThefollowingarethebasicstepsinBBVCmapping:
• AnalysingthepotentialofaBBP• Analysing the chain stakeholders and their capacities• Determining the end product• Identifyingandsegmentingmarkets• Definingthesequenceofstagesofthevaluechain• Depicting operators and business models• Mapping business linkages• Differentiatingthechainintoseveralchannels• Mapping operational service providers• Mapping support service providers and government institutions
AgoodBBVCmapmustmeetthefollowingcriteria:
• Has a clear purpose and message• Avoidsinformationoverloadanddoesnottrytoincludealldatainonelargemap• Is comprehensible to people who were not involved in drawing it up
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6.3 Environmental analysis of biodiversity-based value chains
Developing BBVCs is about protecting biodiversity and natural resources while adding valuetobiodiversityandusingitsustainablyatthesametime.Theeconomicperformanceofthevaluechain isthebasisof itssuccess,butthatsuccessisnotsustainable if it isharmfultothenaturalenvironment.Economicorfinancialaccountingisonlyonepartoftheequation.Financialfiguresneedtobecomplementedbyanassessmentoftheimpactofproductionandconsumptiononnaturalresources,onchangesinecosystemstability,andonclimatechange.Atthesametime,producersandenterpriseshavetobeawareoftherisingenvironmentalandclimaterisksthreateningtheirsourceoflivelihood.
AllBBVCsarerootedinthenaturalenvironmentwithoutwhichtheproductionofgoodsandserviceswouldnotbepossible.Operatorssourcematerialsandenergyinputsfromnatureandfeedthemintothebusinessprocesses.Inaddition,theybenefitfromecosystemservicesthatareprovidedforfree.Marketablegoodsandservicesarenottheonlyvaluechainoutput.Otheroutputsarethepotentialwastesandemissionsofoperators,withtheirmultipleimpactsonecosystemsofareaswheretheyarelocated.
Wecandifferentiatetwomaintypesofenvironmentalimpacts:
• Negativeenvironmentalandclimaticimpactsofvaluechains(type1)• Impactsofclimatechangeandenvironmentaldegradationonvaluechains(type2)
Vulnerability Analysis - Environmental Risks on the BBVC(Environmental Impact on the BB Value Chain)
Input/raw material availability
Primary Production Processing Marketing/
SalesDroughtWater availabilityWater pollutionLand pollution/erosionLack of raw materialBiodiversity depletion/destabilisation of the ecosystem (slash & burn practices, overexploitation, unsust. harvesting...)Climate change impacts
Hot Spot Analysis for Commodity BBVC (Biodiversity Impact of the Value Chain)
Environment & Resources (where BBVC operations has impact on; extent of impact)
Input Provision
(raw material)
Production Processing Marketing/Sales
Availability of natural resourceContribution to biodiversity protection (in situ, ex situ)Material consumption of the natural resourceForest/land (overexploitation, degradation, pollution, erosion)WasteWater pollution
The environmental analysis also places the value chain into an ecosystem context to identifynegativeenvironmental impactsof thevaluechainon theenvironmentaswellas,viceversa, the impactofnaturalresourcescarcityandclimatechangeonbusinessoperations. A clear view on the environmental problems along the value chain is also thebasisforidentifyingnewbusinessopportunities(likebiodiversity-basedproducts)thatcomewiththeneedtotransformbusinessestobuilda’green’valuechain.Eachtechnicalprocessbehindproductionandmarketing takesmaterialsandwater fromecosystems,burns fuel, anddischargesemissionsandwaste.Thesequenceof valuechainstagesgoes up to the final consumption stagewhich can also consumeenergy and producewaste.Theprincipleoftheanalysis,apartfromanalysingtheactualbiodiversityinput,istoshowthesequence‘fromthecradletothegrave’oftheendproductinlinewiththelife-cycle concept.
Since for biodiversity-based value chains thenatural rawmaterial is the key inputsource, special attention has to be given to the resource assessment, which has to include not only stock taking of existing resources but also the calculation ofsustainableoff-takesinordertoavoidoverexploitationandthereforethedepletionofthe value chain input material.
TheBoxbelowshowsanexampleof local ecosystems inaBBVC.Dependingon theactual product or service, the local ecosystem can expand over the whole value chain, evenincludingtheendmarketifitisforexampleaservicelikeecotourism.
Box 17 Local ecosystems in a biodiversity-based value chain
6.3.1 The three steps on an environmental analysis
Toundertakeanenvironmentalanalysis,thescopeandstructureofthevaluechainhaveto be clear and the value chain map available. The environmental analysis has three steps:
1. Biodiversity/resource assessment - makes an assessment on the resource availabilityandcalculationofsustainableoff-takesasrawmaterialsourceandinputforthevaluechainaswellasanalysestheimpactofthevaluechainonbiodiversityandenvironment,impactoftheenvironment/climatechangeonthevaluechain,andthe opportunities to develop BBPs or services.
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2. Formulation of BBVC objectives from both perspectives (income/livelihood andbiodiversity protection) – objectives include protection of biodiversity, sustainablemanagementpractices,andexpansionofsharesofBBPs.TheseasonalityofaBBPmayimpactitseconomicviabilityandsocialimpactforincomecreation.
3. Identifying and implementing BBVC, upgrading strategies and actions to reach the objective – includes biodiversity-based business development, pro-poor inclusive growth,aswellassustainablemanagementofnaturalresources/biodiversityandthepolicy/regulatory environment.
BBVC Analysis, Objectives, Upgrading Interventions
Steps in the Methodology
Environmental Impact of the
Biodiversity Value Chain
Environmental Impact on the Biodiversity Value
Chain
Products and services for a Biodiv. Economy
BBVCResource Assessment
• Environmental costs along the value chain (further deforestation, unsustainable harvesting, etc.)
• Availability of resources• Market risk of
environmental degradation
• Climate change
• Market opportunities for biodiversity product/service
• Contribution to biodiversity
Formulation of BBVC Objectives
• Biodiversity protection targets
• Sust. production• Waste
Management
• Sust. management of biodiversity
• Pro-poor inclusion• CC adaptation
• Expansion of market shares of biodiversity-based products
BBVC upgrading strategy and actions
• Biodiversity-based business development• Pro-poor inclusive and sustainable management of natural resources/
biodiversity• Policy and regulatory environment
Box 18 Environmental impact analysis of/on a biodiversity-based valued chain
Insomecases,thepotentialimpactsofclimatechangecanorshouldbeincludedintheimpact matrix presented above, especially when climate change is expected to have a heavy impact on the resource, and therefore limiting the future productivity or evenexistenceoftheproductofservice.Dependingontheavailabledata,eachstepcanbedeepenedandrefinedbyusingadditionalanalyticalandvaluationmethods.
6.3.2 Selecting the “right” input to balance biodiversity and economics
Aspecialfocusshouldalsobegiventotheimportanceofnaturalresourcesforbiodiversityimpact. Many country regulations prohibit the promotion of invasive species. In somecaseshowever,thecommercialisationofaninvasivespeciescanactuallyhelptocontrolits expansion. An example are the water hyacinths at Lake Tana in Ethiopia which are very harmfulforthelakebuttheuseoftheseplantsforhandicraftproductsorexperimentingwith it for making charcoal helped to control its population, thus providing livelihoodalternatives.
The promotion of beekeeping for example has a very positive effect for pollination inandaroundnationalparksandthereforeanencouragingimpactongeneralbiodiversitypromotion. BBVCs can also help promote nearly extinct species by giving them a commercialvalue, thusproviding incentives for further insituand/orexsituplanting inforestareasand/orhomegardens.ThesefactorsshouldbeconsideredwhenanalysingpotentialresourcesforselectingasuitableBBVC.
6.4 Economic analysis of biodiversity-based value chains
Valuechainisshortfor‘valueaddedchain’,whichpointstothefactthatthevaluechainisasystemthatcanaddvalueateverystage,startingwiththevalueoftherawmaterialscollectedfromtheforestuptotheprocessingandtothefinalproductreadyforuse.Thesubject of theeconomic analysis is the creation of valueand its distribution along thechain.
Theeconomicanalysisofthevaluechainincludes:
• Thecalculationoftotalvalueadded• ItscompositionofvalueaddedalongtheBBVC• Theassessmentofparametersofchaincompetitivenessandefficiency
EconomicanalysismeansattachingnumberstotheelementsoftheBBVCmap―endmarkets, operators, and business linkages. The numbers can be placed into the BBVC mapasanoverlayofquantitativeinformation.Obviously,thispresupposestheavailabilityofdata.Asimportantaseconomicanalysesare,theyareoftenchallengedbytheneedforharddatathataredifficulttocomeby.Inanycase,economicanalysesthatareusedtopreparebusinessdecisionsbearingincomerisksfortheoperatorsshouldbelefttotrainedspecialists.
6.4.1 Market studies
Manyvaluechainmethodologiesincludeendmarketstudiesasaspecifictoolofeconomicanalysis. There is no doubt that market studies are very important to BBVC development. Marketorientationisatthecoreofthevaluechainapproach.Theassessmentofmarketdemandtrendshastobetakenupattheverybeginningofanyvaluechainproject,evenbeforeavaluechainisselectedforpromotion.
Therefore,marketstudiesarenotjustpartoftheeconomicanalysis.Marketsareacriticalissue in value chain analysis that is taken up at many points in BBVC projects.
ItisimportanttoanalysethesizeandmarketshareoftheBBPindomestic(andpotentiallyregional or global) markets, which includes:
i) Productionandconsumptionfigures(growthprospect)ii) ShareoftheBBVCinthetotalvolumeandvalueiii) Opportunityforemployment/incomegeneration
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6.4.2 Size of end markets – total value generated
Economicanalysisstartsbydeterminingthevalueaddedcreatedbythechain;thisisalsocalled‘totalvaluegenerated.’Thecalculationisbasedonthesalespriceandthevolumesold.Theformulatocalculatethetotalvaluegeneratedisstraightforward:Itisthevolumeofproducesoldintheendmarketmultipliedbythepricepaidbycustomers.
Total value generated (or value added) is the single most important number in the economic analysisofvaluechains:
Value = Price x Units
(Total value generated) = (end price of product per unit) multiplied by (number of units sold)
Tobeclear,incomeorprofitsmakeuponlypartofthevalueadded.Alargeshareinvalueadded does not automatically imply high income since the expenditures along the chain (thecostsforprocessing,transportetc.)havetobetakenintoaccountaswell.
Thefollowingexampleusestheprincipletoshowhowvalueaddedisdistributedbetweenthe value chain stages and between the value chain operators on one side and external providers on the other.
Box 19 Concept – Distribution of value added along the BBVC
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6.5 Social analysis of biodiversity-based value chains
Thepublicpromotionoftheprivatesectorisonlyjustifiedifitgeneratessocialbenefitsandcontributes to reducing poverty. Value chain development seeks to support market-driven economicdevelopmentthatisinclusiveofthepoorandothervulnerablesocialgroupsandprovides them with better income opportunities.
The social analysis of a value chain startswith getting to know the vulnerable groupsin and around the value chain― the people below the poverty line, women, and theyoung. Each of these groups has different disadvantages in economic life and facesdiscriminationfordifferentreasons.Thissectionprovidestoolstodetectanddescribethemaingroupsaffectedbysocialexclusionanddiscriminationinvaluechains.Thefirstpartcovers poverty groups in general, the second looks at the gender dimension and poor women in particular. A chain-wide social assessment shows that conditions and patterns ofeconomicexclusionoftencoincide.
6.5.1 Poverty analysis
Developing BBVCs is about providing livelihood to the communities around the heritage parks.ThereisaneedtoidentifypovertygroupsandpovertyproblemsinthecommunitywheretheBBVCwillbedeveloped.Thetaskistoanalyseanddescribevaluechainsfromasocialperspectiveassessingtheincidenceofpovertyinavaluechainaswellasaroundit, i.e. poor people not actively participating in the value chain activities but living in regions where the chain operators are located.
TheboxesbelowaresamplesofpovertymappingoftheValueChain.
Box 20 Poverty mapping of the value chain
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Box21Povertymappingofvaluechainwithdifferentgroups
Constraints of the poor actors in the value chain
The needs/gaps and the constraints of the poor or the vulnerable groups have to beidentified; thesewillserveasreferencewhenstrategiesandactionswillbeformulated.Thefollowingboxesshowsomecommonconstraintsofthepooractors.
Constraints of poor producers
Access to resources/funding/limited capacities• Limited access to productive resources• Lack of capital for start-up• Limited knowledge on product potentials
Access to Market• Absence of services and products for poor producers• Inefficient markets - high cost of transaction, little trust• Weak position of farmers/SMEs/no knowledge of market/excessive
buyer power• Unfavorable contracts
Productivity/Scalability• Small scale, informality• Barriers to scaling up production• Seasonality
Box 22 Poverty and Competitiveness
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Constraints of poor producers
Financial stability• High price volatility• Exclusion of small suppliers when product demand is low• Vulnerability of the poor during the economic crises
Access to Market• Pollution and depletion/overexploitation of natural resources (specially
in short-lived product boom)
Social sustainability• Conflicts over the use of natural resources and/or conflicts between
commercial and subsistence production• Conditions of employment
Box 23 Poverty and vulnerability
6.5.2 Gender analysis
ThesocialstatusofactorsinaBBVCalsodependsontheirgenderandage.Thepovertyriskofwomenisgenerallyhigherthanthatofmen,especiallyiftheyaresinglemotherscaringforsmallchildren.
Thegenderanalysisofthevaluechainincludesgendermapping,theanalysisofgenderrolesandgenderdivisionoflabor,theassessmentofthepositionofwomeninthechain,andtheinstitutionalandlegalframework.Itspurposeistodisaggregatethevaluechainstructureandquantificationaccordingtogenderdifferences.
The tool to visualise gender roles in a value chain is gendermapping of value chainfunctionsandactivitiesorofchainoperatorsandserviceproviders.Thegendermappingofvaluechainsusesandbuildsonthegeneralvaluemapdevelopedearlier.
SpecificInput providers
100% men
Primary producers80 % men, 20% women
Furniture 100% menHandicraft 80% women
Wholesalers90% women, 10% men
Retailer100% women
Consumers(the market)Consumption
Wholesale
Transformation
Production
Specific Inputs
Retail (final sales point)
In relation to biodiversity
Support service provider 1
Support service provider 2
Box 24 Gendered BBVC map
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Onceavaluechainmaphasbeen’gendered’,thenextanalyticaltaskistocreateprofilesofthedifferentgendergroupsinthevaluechain.Thefollowingboxpresentsanumberofquestionsguidingtheanalysisoftheeconomicpositionofwomen.Belowaresomeguidequestionstoassesspowerdifferencesofmenandwomeninavaluechain.
Guiding questions for the gender analysis
(1) General questions• Who owns the enterprises and companies in the chain? Who owns the productive assetswithinafarmorenterprise,disaggregatedbygender?
• How is income distributed according to gender groups in the value chain?• Howistheproportionofmaleandfemalebusinessleaders/managersinenterprises?• Do gender-specificindustryassociationsexist?Howarewomenrepresented?• Arethereanygender-specificeconomicpolicies?
(2) Positionofwomen-ledenterprises• Whatisthenumberandmarketshareofwomen-ledenterprises?• Howistheaccessofwomen-ledenterprisestoservices,technology,andinformation?• Do women-ledenterprisesexperiencespecificdisadvantagesandobstacleslimiting
their competitiveness and growth potential?• Towhatextentdoestheongoingupgradingandmodernisationofthevaluechainaffect gender groups differently, such as by replacingwomen-led enterprises bymale dominated businesses?
(3)Positionoffemalewageworkersandemployees• Whatarethesocialbenefitsaffordedtofemaleandmalepersonnel(e.g.maternityleave)?Arefemaleworkersdiscriminated?
• How are gender wage gaps?
BBVCdevelopment is aligned to the2030AgendaofSustainableDevelopment of theUnitedNations. It adheres to the key conceptof equal considerationof theeconomic,ecological, and social dimensions of sustainable development― caring for prosperity,planet, and people simultaneously. The box below summarizes what the sustainable dimensionscouldmeanforBBVCsandpresentsgenericobjectivesofsustainablevaluechain development.
Sustainability dimensions Generic objectives of value chain developmentEconomic - Economic growth — more value generated and
capturedforthecommunityaroundtheheritageparks- More jobs- Newproductsforthemarket
Environmental - Protectionofbiodiversityandecosystems- Adding value to biodiversity - Improvedenergy,waterandmaterialefficiency,lower
pollutionSocial - Business models that integrate poor micro-
entrepreneurs and workers specially the local communities
- Enhanced economicopportunitiesforwomenandyoung people
- Enhanced marketaccessforpoorerpeople
Box 25 Concept – Objectives of BBVC development
7.1 Importance of visioning and objectives setting
Valuechainactorsshallundergotheprocessofvisioningandobjectivesettingduetothefollowingreasons:
• Visioningfocusesonstrategicconsiderations• Visioning provides strategic direction
◦ Howshouldthevaluechainlookfiveyearsfromnow?Unlessthisperspectiveisclear,itisdifficulttoprioritizeactionandstayfocused.
• Visioningisthebasisforconsensusamongchainactors ◦ Unlesschainactorssharetheviewonthefuture,theywillnotbemotivatedtocooperate.
◦ Unlessbenefitsarisingfromthecommodificationofbiodiversitycanbeadded,all value chain actors will be little motivated to implement more sustainable conservationofbiodiversity.
Development of objectives and strategies
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7.2 Economic objective
Theeconomicobjectiveofvaluechaindevelopmentisnotthemonetarysuccessperse,but a holistic and inclusive growth in which ecology, economy, and social capital build on each other. This means that economic growth has to be both environmentally sustainable and socially inclusive.
Thegrowthobjectiveismeasuredintermsofthechainrevenue.Thetotalvaluegeneratedbythechainisthevolumeofproductunitssoldinfinalmarketsmultipliedwiththesalesprice per unit. The objective is to increase value added, that is a higher sales volume or betterpricesobtainedinfinalmarkets,andthatotheroperatorsinthevaluechainshallshareinthebenefits.
7.3 Environmental objective
ThegeneralobjectiveoftheBBVCistoprotectbiodiversitywhilecreatinglivelihoodoutofthenaturalresourcesorenvironmentalservices.Whilethevaluechainapproachshallpursuevalue-addingactivitiesandfulfill therequirementsof themarket, thisshouldnotleadtotheover-extraction/discriminateharvestingofnaturalresourcesfromtheheritageparks. For BBVCs, environmental considerations play a special role since the value chain and final product depend on the environmental resources and services; unsustainablepracticeswill harm thewhole value chain and product.A sorrowunderstanding of thedependencyontheenvironmentfortheactualmarketableproductisthereforekeyforallchain stakeholders.
7.4 Social objectives
SocialobjectivesofBBVCdevelopmentexpecteconomicgrowthtotranslateintohigherincomes for poor farmers, microenterprises, and wage workers in the value chain.Growthiseconomicallyinclusiveifitleadstothecreationofadditionaljobsforlow-skilledunemployedpoor,especiallywomenand theyoung,and thepoorat thebottomof thepyramid.Valuechaindevelopmentalsoseekstheinclusionofpoorproducersandlaborersatfavorableterms.Poorconsumersareexpectedtogetbetteraccesstoessentialgoodsatlower prices. In a BBVC, the community around the heritage parks must get the economic benefitswhileworkingonthevaluechain.
7.5 Strategic considerations in biodiversity-based value chains
In order toachieve the three-dimensionalobjectivesof thevaluechain, therearealsothreetypesofstrategicconsiderationsinimplementingavaluechain,asshownintheboxbelow.
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Three types of strategic considerations
Strategic considerations for environmental sustainability• What is the impact of the BB value chain on the environment/
biodiversity?• How will environmental changes affect the BB value chain? And how
will the BB value chain change the environment?• How can the BBVC support biodiversity conservation?
Strategic considerations for economic growth• What are the market trends related to BBP value chains?• How competitive is the biodiversity value chain?• What has economic potential not yet realised?• What are the reasons for the stagnation or hampering the economic
growth?
Strategic considerations for pro-poor growth• How can poor people benefit from growth and be included in the BBVC
development? How can “elite capturing” be prevented?• How does economic development affect the livelihoods, food security,
women, and the marginalised sectors?• What precautions need to be taken to safeguard vulnerable groups?
Box 26 Three strategic considerations
7.6 Strategic options for sustainable biodiversity-based value chain development
ThelistsbelowaresomeoptionsonstrategydevelopmentforBBVCs.Thestrategiestobeadoptedshallberelevanttotheneedsofthevaluechainandwillbeinresponsetotheconstraintsandgapsidentifiedintheanalysis.
Environmental• Promotionofbiodiversity-friendlyproduction,processing,andmarketingthrough
environment-friendlypracticesandtechnologies• Adding value to nature products through product development • IncreasingthemarketshareofBBPsintargetmarkets• Sustainableforestmanagementandbiodiversityprotection
Economic• ProductandmarketdevelopmentofBBPs• BBVC upgrading and innovation• Addressing special growing market – extra added value as biodiversity product
and/orplaceoforigin
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Social• Businessmodelsforthebenefitofthecommunity,especiallypoorcommunities
around protected areas• Poorpeoplebenefittingatleastequallyoraboveaveragefromtheincome
generatedfromnaturalresources/biodiversity• “Gendered” BBVC development projects and programs• Supportingtheentrepreneurshipofwomen
7.7 Tools for strategy development and programming
TheprinciplesandfeaturesofagoodstrategyapplytoallactorsofBBVCdevelopmentprogrammesandprojects.However,therearesignificantdifferencesbetweenthetypeofleadactors―government,companies,anddevelopmentagencies―involvedinBBVCdevelopment:whileprivatecompaniesareoftencontentwithdefiningabudgetandsettingannual objectives, the public sector is bound to much more detailed programming and reporting.EachtypeofBBVCdevelopmentleadactoroperationalisesandcodifiesitsownstrategydifferently.Donorsofdevelopment fundsask fordetailed,quantified indicatorsthatmaydifferfromprivatecompaniesandthegovernment.
ThefollowingtoolsareapplicabletoBBVCdevelopmentstrategyformationbydifferentorganisationsandwithindifferentdecision-makingandplanningsystems.Thetoolsprovidepossibilitiesforstructuringthedecisionproblems.Theyhavetobespecifiedineachcase.
SWOT Analysis
Strategic synthesis is not the product of applying one tool. Nevertheless, the SWOTanalysis can prepare a synthesis and facilitate decisions. The SWOTmatrix compilesstrengths, weaknesses, opportunities, and threats and is used to provide a synoptic overviewofimportantstrategicinformation.Itisawidespreadandwell-knowninstrumentthat summarises the insights gained by strategic analyses. Below is a sample SWOT AnalysisofaBBP(medicinaltea)inVietNam.
STRENGTHS WEAKNESSES• They are available in nature.• They are indigenous species that are
adaptable to local natural condition.• They can help prevent diseases and
improve health• Theworkforceforplantingandharvest-
ing is available
• Lackofsustainableharvesttechniques• Sourceofseedlingisnotavailable• Itisdifficulttodistinguishspeciesof
Giao Co Lam• LackoftechniquestoprocessGiaoCo
Lam• Lackoflinkageamongharvesters• ThereisnotyetlocalbrandingofGiao
Co Lam tea.OPPORTUNITIES THREATS
• IncreasingdemandofGiaoCoLammedicinal tea
• IncreasingnumberoftouristsinBaBe• Potentialsupportfromprojectsand
government programs• Potentialforjobcreationandincome
increase
• Disease• Compete with products in other places• False advertising• MixtureofdifferentspeciesofGiaoCo
Lam during processing and packaging
Box 27 SWOT analysis of medicinal tea in Viet Nam4747
Formulating a value chain development objective
Withsomanyinformationgeneratedandthedifferentargumentsprovidedbythestrategicconsiderations,thishastoleadtotheformulationofavaluechaindevelopmentobjective.There isnoformula that translates theprosandconsofastrategicdiscussion into the‘right’objective.WhatcanbeofferedarehintsonhowtophraseaBBVCdevelopmentobjective. The Box below provides a template that may help with this task. It provides an exemplarywordingfromwhichtotextmodulesmaybecopied.
Most likely, a BBVC development objective will start with economic growth moving on toincludetheenvironmentalandsocialdimensions.Theobjectiveandstrategyofvaluechain development has to be subject to revision and improvement. This means that implementersshouldnotonlycheckfortheresultsachievedbutalsoreflectontheoriginalstrategicconsiderationsthatgaverisetotheformulationofthestrategy.
Text modules of an objective of value chain development
Value added of the industry (= prices obtained or volumes sold)- For the product (specify type, quality, etc.)- In the ... market (specify segment and product)- Increased by ... $$ by ... %- In the year ... (e.g. five years from now)
By...- Protecting biodiversity as source of raw materials- Improving or innovating the product (quality)- Reducing cost (of production or marketing)- Expanding capacity (in different chain links)- Innovating the business models- Improving market regulations
While...- Maintaining the quality of the ecosystems …- Reducing resource (water, energy, material) input by ... %- Observing environmental standards …
And...- Generating…number of jobs in … businesses- Enhancing the profits of … small enterprise business models by ... %- Reducing the average market price of the end product to …
Box 28 Text modules of an objective of BBVC development
BBVC solutions: The building blocks of value chain strategies
BBVC development is an innovation process that leads to changes in the way business is done. Essentially, the value chain strategy seeks solutions at all points where the value chain needs to improve. These include improved business models, stronger business linkages,betterservices,financialarrangements,andanappropriateregulatoryframework.Thestatement“Achainisonlyasstrongasitsweakestlink”necessitatestoaddressallofthechainchallengesinacoordinatedandstrategicmanner.Forexample,amarketfailureproblemisaddressedthroughbettercoordinationandorganisationofoperators; limited
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competitivenessofmicro-enterprises through contract linkagesand improvedbusinessmodels;andexcessivewater consumptionandpollution throughbusinessmodels thatutilisewater-saving technologies, technical services, and new financing solutions. Themanypossiblechanges for improvingavaluechaincanbeclustered into the followinggenericfieldsofvaluechainsolutions:
• Improvedbusinessmodels;• Verticalandhorizontalbusinesslinkages;• Technicalandsupportservicearrangements;• Financialarrangements;• Qualityandsustainabilitystandards;and• Regulatory and support policy instruments.
The list of upgrading solutions shall be discussed in the succeeding chapters of thisdocument.
Operationalising the strategy: Choosing BBVC solutions
Each BBVC solution suggests concrete changes in business models, linkages, and other fieldsthatavaluechainprogramwouldtakeon.Tooperationalisethestrategy,plannershavetoarriveatthespecificBBVCsolutionstoworkonanddeterminetheactionneeded.This means synthesising the strategic analyses and turning the considerations into proposed actions.
The following are the criteria to assess BBVC upgrading solutions:
Criteriaregardingthesignificanceofsolutions• Relevance: Does the proposed solution actually contribute to the vision and to the
objectives? Is it a necessary improvement?• Effectiveness: Is the solution likely to produce results? This includes checking
whether it addresses intermediate objectives or long-term strategic objectives: Howfarintothefuturearewelooking?
• Feasibility:Is it in linewithavailableresourcesandwiththecurrentcapabilityofenterprisesandagencies?Determinethefeasibilityofachaindevelopmentprojectaccording to market and upgrading potential.
Criteria regarding the correlation of solutions
• Comprehensivenessandconsistency:Invaluechaindevelopment,weareoftenfaced with interrelated issues such as cutting cost plus marketing or qualitymanagementalongthechain.Isthecombinationofactivitiessufficientlycompleteto reach the objective? Are the proposed actions complementary and do they support each other?
• Correct sequencing:Dothesolutionsbuildoneachotherinaprocessofincrementalimprovements?
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When all the value chain analysis are done and the objectives and strategies are formulated,thenextstepishowtoimplementtheBBVCproject.FromthemomentthedecisiontoimplementaBBVCwasmade,therelevantstakeholdersforthespecificvaluechainwerealreadyinvolved.Theyalreadyparticipatedintheselectionofthevaluechain,theanalysis,anduptoobjectiveandstrategyformulation.Thefollowingdiscussionwillcovertheareaofprojectimplementation.
8.1 Clarifying the roles of the various actors
Value chain development is a collaborative venture and involves various chain actors. Private enterprises, public and private support service providers, government, and even donoragenciesconstituteacooperationsystemand theyperformdifferent functions invaluechainimplementation.Itisimportanttoclarifytheirrolesinordertobeclearonthedivisionoftasks.
Todeterminerolesinvaluechainsandinvaluechaindevelopment,wemustfirstgetanoverviewofwhoinvolved.Theboxbelowclassifiestheactorsaccordingtotheirrolesinthe value chain.
VC - Internal actors VC - ExternalPrivate Public
Operators Private enterprises (community) Leadfirms(buyers)
State-owned enterprises
n/a
Supporters Associations, Chambers, BMOs
Government service agencies
Development agencies
Enablers/Regulators
n/a Government agencies (MAF, MonRE, MoCI)
n/a
Box 29 Concept – Classifying value chain actors
ToclarifytherolesoftheseactorsinBBVCdevelopment,wehavetodeterminewhowilldowhatinvaluechaindevelopment.Theprincipleisthatthosewhobenefitfromthevalue chain should be engaged with its development and contribute actively.
Ingeneralterms,thisishowthegroupsofchainactorsshouldbehave:
• Private enterprises, large or small, perform the production, processing, andmarketingoperations,assumetherisk,andpayforthecost.Thisappliestostate-ownedenterprisesaswell.Privateoperatorsprimarilycreatebenefitsforthemselves―theviabilityof theirbusiness is the foundation for thecompetitivenessof thevalue chain. Still, large companies do have an incentive to contribute to value
Implementing biodiversity-based value chain projects 8
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chain development because they benefit from the performance of other valuechain actors.
• Private industry associations and business membership organisations provide supportservicestogroupsofvaluechainoperatorsorfortheentirevaluechainsuch as export promotion or contributions to regulatory decisions.
• Public researchandtraininginstitutesandspecialisedunitsofpublicadministrationprovide information and other support services to the business community andassist enterprises especially the small ones.
• Government organisations comprise of national as well as regional ministriesanddepartments relevant for the value chainat stake.Their role is to regulateandsuperviseproductionandtradeintheinterestofemployment,environmentalsustainability (protection ofAHPs), and to provide basic infrastructure such asroads, in the public interest at large.
• Donor-fundeddevelopmentagenciesareexternaltothevaluechainsystem.Theirmain role is to facilitate value chain development andprovide support to valuechain actors, in the global public interest.
8.1.1 The lead actors in biodiversity-based value chain development
In principle, all stakeholders listed above can and should contribute to value chain development.Enablingparticipationneedsleadershipandastructureforcooperation.
Among the stakeholders, some are in position to take over a leadership role. We call them ‘leadactorsinvaluechaindevelopment.’Thetermreferstoorganisationsassumingtheresponsibilitytoorganiseanddrivevaluechaindevelopmentwithinacertaintimeframe.Lead actors set up value chain development initiatives, projects, and programs seeking thecooperationofotherstointroduceinnovationsandchainsolutionsinpartnership.
InthecontextofBBVCprojects,theleadrolecanbehandledbythefollowingactors:
• Donor implementing agencies (e.g. GIZ, GFA, and ACB) in partnership withnational government agencies like theMinistry ofAgriculture and Forestry andMinistryofNaturalResourcesandEnvironment.Thissetup isapplicable in thepilotstageof introducingthevaluechainapproachtoprotectbiodiversityandtoprovide livelihoods to the community around the AHP.
• As soon as the pilot project is terminated, the national government agencies and the associations supporting the specific value chain that have the mandate toprotect biodiversity shall take the lead role in the development and implementation ofthevaluechainproject.
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Box 30 Example of the BBP Project Set up with ACB-GIZ-GFA (ACB in lead role)
8.2 Steering BBVC development
BBVC development is centered on the cooperation between chain actors. Many innovations canonlybe introduced ifallconcernedvaluechainactorsget involvedandcoordinatetheir investment. The subject of BBVC steering is the collaboration of chain actors indevelopment processes. Steering brings out their common interests and goals, seeks a shared value chain strategy and agenda, creates ownership, and organises collaborative decision-makingandaction.Steeringandfacilitatingvaluechaindevelopmenthavetobekeptapart.Whilesteeringisdefinedastheorganisationofcollaborativeimplementation,facilitation refers to accompanying and supporting the implementation process. Thecreation of steering structures follows the requirements of the BBVC developmentstrategy.Thescopeandambitionand theavailable funds forcollaborativevaluechaindevelopmentdetermine theset-up. Inweaklydevelopedor fragmentedvaluechains, itismostly externally funded value chain development programs that introduce steeringstructures;inmorematureindustries,valuechain-specificprivateassociationstakeover.The long-termobjective is to institutionalisethesteeringfunctionenablingtheactorstopursue value chain development on a permanent basis.
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8.2.1 Steering structure
AnadequatesteeringstructureforBBVCdevelopmentshouldfulfillthefollowingcriteria:
• InclusionofallstakeholdersrelevanttotheBBVCdevelopmentagenda• Sufficientincentivessothatthecostofcollaboratingiscompensated• Efficiencyofthesteeringstructuretoperformthetasksatthelowestcostpossible• Perspectiveforconsolidatingandfinancingvaluechaindevelopmentsteeringon
a long-term basis
Steering model Character / Description Steering tasksNational stakeholder forum or conference
Meetingofgovernmentand donors at national level, local community/government and/or industry representatives, ―motivatedbypublicorprivate investment plans
• Seek agreement on BBVC development goals and strategic directions
• Coordinate BBVC developmentprogramsofgovernment and external donors
National or regional BBVC committee
Body representing groups ofoperatorsatdifferentstagesofthevaluechain.
There should be just one BBVC committee per BBVC. Wherever two or more regional BBVC committees exist, they need amechanismforexchange
• Assess development potential and problems oftheBBVCthatareofcommon interest to the value chain business community
• Keep an overview and followupontheissues
Regional or local value chain working group
Taskforceofenterprisesand support service providers working on a specificissue,thegroupisdissolved once the issue is resolved
• Jointly develop and implementasolutionforaproblemareaidentifiedatahigherlevelofsteering
Box 31 Concept – Basic steering models for BBVC development
8.2.2 Permanent steering by associations/ business community
Steeringstructuresareofteninitiatedbygovernmentagenciesonbehalfofanexternallyfunded value chain development program. To secure continuity, the responsibility forpromotingthedevelopmentofanindustrymustbeanchoredinthebusinesscommunityitself. As external supporters withdraw, a long-term institutional solution is needed infostering theownership, responsibility,andcollectiveactionofvaluechainactors.Thisideaofsteeringisatthebasisofseveralmodelsofnationalvaluechainpolicymaking.
A typical institutional arrangement is the subsector council ― industry-wide formalcommittees of major institutions of an important subsector, often having their ownsecretariat. It can also be a producer organisation/association or similar groups, depending on the country-context and respective regulations.
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8.3 Managing process of BBVC development
BBVCdevelopmentisachangeprocessthatgoesthroughasequenceofstepsthattaketime to accomplish. Innovation can only be achieved in a step-by-step manner. Consensus needstobebuilt,partnershipsestablished,andtherulesforcollaborationagreedon.ForaBBVCdevelopmentprojecttobeeffectiveandefficient,thedifferentpartnershavetodeliver their contributions in a coordinated manner and at the right time. Unless these processesarewellmanaged,theleadactorsrisklosingcontrol,andtheenergyforchangewill be diminished.
Tobeclear,thefollowingconsiderationsrefertoprocessesofvaluechaindevelopment—i.e.thevaluechaindevelopmentprojectprocesses—nottotheregularprocessesofvalue chain operations that a value chain development project aims at improving. This part ofprojectmanagementknow-howisimportantforallactorsinvaluechaindevelopment,butofparticularrelevancetoleadactors.
The box below shows the relationship between the analysis and visioning process and theimplementationprocess.Itmeansthatthechoiceofupgradingsolutionsandprojectplanningshallbealignedtotheanalysisofconstraints/gapsandopportunitiesorfromtheSWOTanalysisofthevaluechain.
Box 32 Concept – The relation of visioning and implementation processes in value chain development
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8.4 Joint strategy development
Thevisioningprocessrequiresaseriesofmeetingsandconferencesusingtheformatsandprinciplesofmulti-stakeholdercollaboration.Thesizeofastrategyformulationtaskdependsonthenumberofpartnersandthescopeoftheendeavor.Thereisnoruleonhow many actors to include. As the intention is to generate consensus and prepare action, organisingthevisioningprocessequalsthecreationofatemporarysteeringstructureforvalue chain development. The main planning steps can be combined in one main multi-stakeholderworkshopaswell,withanumberofconsultationsbeforetheworkshopandtheelectionofavaluechaincommitteeforfurtherconsultationsaftertheworkshop.
Procedures using the chain map to derive an action plan
• Identifytheneeds:Whatneedstochangeinthevaluechaininordertoarriveattheobjectivesforvaluechaindevelopment?
• Identify and assess constraints and opportunities: Which constraints need to be removed, which opportunities should be developed?
• Indicate the points in the chain map: Organise needs, constraints, and opportunities, placing them in to the map close to the chain stages, operators, linkages, and supporters concerned
• Prioritise: Select the most critical points among the issues and discuss alternative solutions to addressing them
• Solutions:Identifyandclassifypossiblesolutions
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Conditions of successClear roles Allchainactorsunderstandandassumetheirroleseffectively
Leadership Changeagentstakethelead,othersfollow
Ownership Enterprises act upon their own interest, individually and collectivelyChainactorsassumeresponsibilityfromthestart
Win-win situation Allactorsbenefitfromupgrading,leavingotherspartofthegains
Will to advance Positiveandnegativeexperienceistakenasabasisforprogress
Box 33 Pre-conditions for successful BBVC development
8.5 ConflictmanagementinBBVCs
Valuechaindevelopmentisaffectedbyaconflict-pronesocietyandcanhaveaneffectontheevolutionofconflictsatthesametime.Threedifferenttypesofinteractionbetweenaparticularvaluechainandconflictcanbeidentified:
(1)Conflictswithinavaluechain(2)Impactofconflictenvironmentsonavaluechain(3)Impactofvaluechaindevelopmentonconflictsintheenvironment
Value chain development cannot be expected to advance smoothly at all times. The interests of suppliers and buyers often are in conflict, as are the interests of privateoperatorsandpublicadministration.Competitionisthefoundationofthemarketeconomy,anddistributionalconflictshavetobeexpectedasoperatorswillalwaysseektoincreasetheir incomes,possiblyattheexpenseofothers.Onlyincasethesedisputesaremoresevere than the normal disagreement among chain operators within a market economy, thenthesituationisperceivedasaconflictwithinavaluechain.
Theseconflictsrevolvearoundthecontroloverinputsandrequiredresources,thequalityor frequencyofsupply,or thedistributionof thecostsandrisksofupgradingwithinthechain.Whilethoseconflictsinmostcasesdonotturnviolent,theycansignificantlyincreasetensionsandthewillingnessofvaluechainactorstocooperateforthebenefitofthechainandthey“likelyimpactnegativelythewaypartnersandbeneficiariesperceiveandaccepta project.”
Addressing open or concealed commercial conflicts within the value chain requiresbringingtheconflictpartiestogether.Thiscanbeachallengeintheabsenceofabasicwillingnesstocooperateandaminimumleveloftrust.Facilitatorscanhelpmitigatingorevenresolvingaconflictwithinavaluechainbycreatinganegotiationsituation.Therearetwomainprinciplesonnegotiationinconflicts:
(1) Makingtheconflicttransparent(2) Engage parties in dialogues
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Ifthepartiesdonotfindcommongroundandtheconflictcannotbereconciled,theideaofacollaborativevaluechaindevelopmentprojecthastobeabandoned.Theonlywayoutistoredefinethescopeofthevaluechaindevelopmentproject.Ideally,aconflictisovercomebyidentifyingawin-winsolutionforthepartiesinvolved.Thepointistochangetheconflictsituationbygeneratingnewincentives.
Selection of value chains for promotionEnsurethatselectedvaluechainsdonotfeedpreexistingconflictdynamicsandpossiblyhavemitigatingeffectsonconflictimpactsofcauses.
Value chain analysisComplementvaluechainanalysesbyconflictanalysis(seetoolsforPCA),thusidentifyinginfluenceoftheconflictonthevaluechainandviceversa.
Strategy formationConsiderfiveapproachestomodifyvaluechaindevelopmentstrategiesinconflictsituations,i.e.conflict-sensitiveandrelevantapproaches.
Value chain development project managementDesignandreadjustprojectimplementationaccordingtoconflict-sensitiveprinciples.
Monitoring and evaluationMonitortomitigateriskandsupportearlywarning;thusenablingappropriateandtimelyresponsesandvaluechainactorstoworkinwaysthatpromotepeacefuloutcomes.
Box34Concept–Aspectsofconflictmanagementalongthevaluechaindevelopment project cycle
8.6 Support processes and facilitation instruments
Strategyformationandimplementationprocessesneedtobesetapartfromthesupportprocessesfacilitatingthevaluechaindevelopmentprocess.Incontrasttotheupgradingactivitiespursuedbythevaluechainactors,facilitationisnotapermanentfunction.Itismostly taken up by external development agencies as a task limited in time. However, development agencies are not the only ones to lead value chain development support processes.Governmentandbusinessmembershiporganizationsalsotakeonfacilitationfunctions. The precondition for starting any support process is the explicit interest ofthe actors engaging in value chain development. Unless there is a clear decision and commitmenton thesideofoperatorsandserviceproviders, there isnoneed forvaluechaindevelopmentsupportprocessesandnoroleforfacilitatorseither.
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8.6.1 Role of value chain facilitators
Externalagenciesfacilitateupgradingbycollaboratingwithappropriatepartnerswithinthevalue chain.
TheyshouldNOTdirectlyworkonupgradingthevaluechain.
Facilitatorsperformthefollowingroles:• Create awareness, enhance understanding and trust• Help stakeholders get to know each other and to exchange• Helpbuildingajointvisionofthefutureandupgradingstrategy• Enhance business linkages• Enhance new business transactions and investment• FacilitatejointlearningofBBVCstakeholders&processinnovation• Capacity development and institution building
8.6.2 Some principles in value chain facilitation
Thefollowingaresomeprinciplesinvaluechainfacilitation:
• Build on own initiatives of private enterprises/communities andworkwith chainleaders as partners (“champions”)
• Stick to cleardivisionofworkbetweenprivateandpublicactorscontributing toBBVC development
• Treat BBVC development as a learning process • Goforquickvisibleresultstogainmomentumwhilebeingpreparedforlong-term
support (resulting in organised communities producing and selling biodiversity productsandreductionofpressureonforestsandbiodiversity)
• Movefromsimpleimprovementstomorecomplexstructuralchange• Make sure this is a “win-win game” • Ensurecoordinatedeffortsofdifferentstakeholdersalongthechain
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Business environment forbiodiversity-based value chains 9This chapter shall present some options or proposed solutions in upgrading the value chain.Thesixmajorfieldsofchangeare:
1. business models2. business linkages3. services4. valuechainfinancing5. quality and standards 6. policy instruments
ThestrategicvisionisthebasisforidentifyingconstraintsandneedsaswellasanynewopportunitiesfortheBBVC.Fromhere,valuechainsolutionsandactionsshallbeagreedtoaddresstheconstraintsandopportunitiesinordertoachievethestrategicvisionofthevalue chain.
Theboxbelowshowsthelistsofconstraints/gapsandopportunitiesandthecorrespondingsolutions to address them.
Constraints/needsand opportunities
translated into value chain solutions
see module
Production technology and processes, byproducts, lossesProcessing capacity
Lackofcapital
Market accessCoordination,(mis)trust,conflictMarket power
Stabilityofsupplies,accesstoinputs
Access to operational servicesInformation,skills
ProductqualityandsafetySustainability problems
Resources degradation, pollutionEmployment conditions, wagesInfrastructure
Improved business model(s)Investment plan(s)
Financialproducts/VCfinance
Vertical business linkagesHorizontal cooperationBusiness membership organisationsNewsupplylinkages
Service arrangementsNeedsorientedsupportservices
Traceability&certificationAdoptionofastandardsystem
Environmental policyEconomic and social policiesPrivate-public dialogue
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6
8
7
9
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Box 35 Constraints, gaps, and opportunities and possible upgrading solutions
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Overview of value chain solutions
Asseenabove,thereareaboutsixcategoriesofsolutionsinrelationtotheelementsofthevaluechain.Thesolutionscanbeclassifiedasfollows:
• Valuechainsolutionsatthemicrolevel.Theserefertotheoperatorsandtheirlinkagesand includes business model solutions and linkage solutions.
• Service solutions. These include the arrangements for providing operational andsupportservicesandthefinancinginstrumentsandarrangements.
• Governance solutions. These concern all value chain actors alike. These include collaborative quality management systems along the value chain, and the standard systems regulatingandcertifyingsustainability criteria inparticular.Another fieldofgovernancesolutionsispublicpolicyregulationsoftheindustry.
Box36belowshowstheconceptonthesolutionswhileBox37istheapplicationoftheconcept to the Bamboo VC Project in Laos.
Box 36 Concept - The place of solutions in the value chain system
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Box 37 Application - The place of solutions in the value chain
9.1 Business Models
9.1.1 The Business Model concept
Businessmodelisdefinedasaspecificcombinationofproduct/markets,internaloperationsand technology, and supply and marketing links that an enterprise uses to succeed and grow (“the rationale of how an individual firm creates, captures and delivers value”).Theconceptappliestoanytypeofenterprise,fromsmallfarmsandenterprisestolargecompanies.Allenterprisescanbedescribedintermsoftheirbusinessmodel,eveniftheownerofthebusinesshasnotspelleditoutexplicitlyandmaynotevenhaveitpurposefullydesigned.Anybusinessmodelimprovementisanimportantfieldofinnovationinavaluechain,and is thefirstandforemost ‘VCsolution.’An improvedbusinessmodel ismoreproductive,hasasmallerecologicalfootprint,andenablesownersandworkerstomakea decent living.
For BBVCs, all business operators like the community enterprises or the cooperative performingthecollectionofrawmaterialsuptoproducingintoproducts(bamboofurniture,handicraft,honey,medicinaltea)anduptomarketinghavetheirownbusinessmodels.
Thesebusinessmodelscanbechangedorimprovedinordertoachievetheobjectiveoftheir value chain.
9.1.2 Business Model canvas
The business model of an enterprise “describes the rationale of how an organizationcreates, delivers, and captures value” (Osterwalder and Pigneur, 2010). The creation and deliveryofvaluedependsonthetypeandqualityoftheproductorserviceoffered,onthetargetcustomers,theproductiontechnologyandprocesses,thetypesandsourcesofrawmaterial, inputs, and services used and the delivery channels. These elements need to be specifiedsothat,takentogether,theyconstituteaviablesystemenablinganoperatortoserve its market with a product according to demand and at a price that covers costs. The conceptappliestoalltypesofenterprises,bigandsmallalike.
Themostwidespreadconceptforsystematisingbusinessmodelsisthe“businessmodelcanvas”, developed by Osterwalder and Pigneur (2010). The “business model canvas” describesanenterpriseasasystemofnineinterrelatedelements—the“buildingblocks”that explain the business idea.
Theboxbelowpresentsthebuildingblocksofthecanvasandthecorrespondingstoriesoftheenterprise.
Building blocks … and the story they tellCustomer Segments The enterprise serves one or several customer segments.
(Buyersofthebiodiversity-basedproducts)Value Propositions Itseekstosolvecustomerproblemsandtosatisfycustomer
needs with value propositions.(Natural,organicproductsforthehealthconsciouscustomers)
Channels Value propositions are delivered to customers through com-munication, and distribution and sales channels.(SoldforexamplethroughAssociationsandNetworks)
Customer Relationships
Customer relationships are established and maintained with each customer segment.
Revenue Streams Therevenuestreamsresultfromvaluepropositionssuccessfullyofferedtocustomers.(income/revenuefromsalesofbiodiversity-basedproducts)
Key Resources Keyresourcesaretheassetsrequiredtoofferanddelivertheproducts and services according to the value proposition.(useofbiodiversity-basedrawmaterialsfromtheheritageparks)
Key Activities Key activities are the necessary business processes. They utiliseadefinedtechnology.(Productionandprocessingofbiodiversity-basedproductsusing the equipment/technology introduced to the community enterprise)
Key Partnerships Some activities are outsourced and some resources are acquired outside the enterprise.(Trainingsprovidedbyserviceproviders/partners;processingofrawmaterialmaybehandledbyprofessionalcompany)
Cost Structure The resources acquired, and the key activities result in the cost structure.(costsforrawmaterialcollectionfromtheparksandprocessingactivitiesforqualityproductsforfinalmarket)
Box 38 Concept — The building blocks of the “business model canvas”
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9.2 Business linkages
9.2.1 Introduction on types business linkages
Business linkages are the transactions between value chain operators. Linkages are verticalwhen the transaction takes place between operators at different stages of thevalue chain. Essentially, vertical business linkages are contracts between sellers and buyersofintermediateandfinalproducts.Anothertypeofverticalbusinesslinkageisthedeliveryofservicessuchastransportormaintenanceandrepairservices.Thevaluechainmap visualises business linkages by arrows connecting the operators with each other and with the service providers.
Bycontrast,horizontalbusiness linkages refer to the transactionsbetweenenterprisesoperatinginthesamechainlink;itisthecollaborationbetweenenterprisespursuingthesameorsimilarbusinessmodels.Cooperation linkagescomprise, forexample,of jointpurchase and production activities or joint marketing. Producer groups or cooperatives regulate their internal cooperation in a business contract as well, in this case binding the membersofthecooperativeventure.
9.2.2 Vertical linkages — Business contracts
ThecoordinationbetweendifferentchainoperatorsisatthecoreoftheBBVCconcept.
Promoting vertical linkages has some advantages. It reduces transactions costs and promotes systemic competitiveness. Costs are reduced since enterprises are now directly connectedtoeachother,thuseliminatingtheunnecessarymiddlemenortraders.Inflowsmovedirectlybetweensuppliersandbuyers.Competitivenessof theBBVC isassuredsincealloperatorsshallcomplywithallthequalityrequirementsofthefinalbuyer.
There is also cooperation between big and small enterprises.
Bigfirmscooperatebecause:• itenhancestheirflexibilityandreducesthetimeforrespondingtoorders• it reduces their costs(lowerinventories,betterpossibilitiesforadjustingtodifferent
scalesofproduction)
Smallfirmscooperatebecause:• it provides access to biggermarkets and thus facilitates growth (e.g. for large
domestic demand or even exporting)• it allows them to specialise in particular activities• it facilitateslearningandgrowth
9.2.3 Horizontal linkages – Business cooperation
Horizontal linkage is collaboration between operators working at the same stage. Actors withinthesameBBVCfunctioncollaboratetoachieveeconomiesofscaleortoshare/operatecommonservicefacilities.
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Thefollowingaretheadvantagesofhorizontallinkages:
a. Speeds up business development• More buyers and suppliers (when in group)• Strongernegotiationpowerforprices• Facilitatesexchangeofmarketinformation(quality,standards,prices)• Makesfast,transparent,andcleardecisions
b. Overcomes the scale problem• Cheaperprocurementofinputs/supplies• Easieraccesstoinformationandservices• Marketaccess(organizedgroup/associationmayevenbeapreconditionfor
support)• Facilitates investment in larger scale operations
9.3 Services for biodiversity-based value chains
Thecompetitivenessofthevaluechainsdependsontheavailabilityofservices.Servicesarethekeytoprovidingaccesstoinputs,knowledgeandinformation,andskillsnecessaryfor value chain upgrading. As economic development advances, business modelsdifferentiatemoreandmore,addingnewandsometimesdemandingbusinessprocesses.Expanding production or investing into new machinery regularly requires additional information, improvedtechnology,betterskills,better logistics,andmanyotherprocessand product innovations. To have access to these improvements, operators depend on specialised technicians. On their own, they will rarely be able to improve their business models.
However,enterprisesoftenhavenoaccesstotherequisiteservices.Therearetwotypesofproblems:Firstly,offersofessentialservicessuchas inputdelivery,maintenance,ortransportareoftensimply insufficient. If theservicemarket isnotdeveloped,operatorshavedifficultiesfindingtherightservicesintermsofquantity,quality,andprice.Servicemarketfailuremeansthatservicecostsaretoohigh,thuslimitingeconomicandtechnicalefficiency.
Secondly,theexistingpublicserviceagenciesandinstitutesoftenlacktheincentiveandtheunderstandingfortheserviceneedsofthebusinesscommunity.Weoftenfindpublicservice providers still pursuing a supply-driven approach.
9.3.1 Types of services
Therearetwotypesofservices:operationalservicesandsupportservices.Operationalservicesdirectlysupportorperformoutsourcedbusinessoperationsofenterprises.Theyare part of the businessmodels of chain operators. Support services, in turn, provideservicesthatbenefitgroupsofoperatorsorthevaluechainasawhole.
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Operational services
Operationalserviceprovidersperformcertainbusinessoperationsonbehalfofenterprises.Theseservicesare“operational”becausetheycorrespondtothefunctionalsequenceofthechain.Transportisaclassicexample;iffarmerstaketheirproducetothemarket,theycaneithertransporttheloadthemselves,orhireatransportserviceiftheydonothavetheirownmeansof transportation.Similarly, theywillneedmaintenanceandrepairservicesif theycannotperform these tasks themselves.Box39showsexamplesofoperationalservices.
Value chain-specific operational services (specialised service functions only relevant for the value chain in question):
• Technicalservices(installationofequipment,maintenanceandrepair,equipmentlending,packaging,labtestingofsafetyparameters,etc.)
• Technicaloperationsagainstpayment,suchasmechanisedfieldpreparation,loanmillingordryingofrawmaterial
• Provision of environmentally-friendly packaging material (in fresh producechains)
• Product and process certification to fulfill market requirements (food safety,quality standards, organic,…)
• Input procurement• Individual technical, market, and business advice
Generic business services (independent of the value chain, used by a broad range of clients operating in different final markets):
• Transport, shipment, and handling
• IT services(telecommunication,informationservices)
• Insurance
• Management consultancy (business development, accounting and legal advice)
• Advertising and marketing
Box 39 Concept – Examples of operational services
Support services
Thesecondcategoryofservicesissupportservicesdeliveredbyprovidersatthemesolevel.Supportservices refer togeneral investmentandpreparatoryactivitiesbenefitingall chain operators collectively who together share the interest in a thriving industry. Contrarytooperationalservices,supportservicesdonotdirectlyperformorcontributetoperformingbasicfunctionsinavaluechainandthereforearenotcontractedindividually.Box40enumerates the typical support services.Mostof thesupport services listed intheboxarehighlyrelevant forchainupgrading. In fact, theyareefforts toenhancethecompetitivenessofthevaluechaintheyseektosupportandcanbeseenasservicestofacilitateupgrading.
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Support services are provided by private business associations or by public agencies. Especiallyinthelattercase,arrangementsmainlydifferintermsoffundingmechanisms,fromconventionalbudget tomixed funding.Theclientsofsupportservicesaregroupsofoperatorsor thechain “community”asawhole.Accordingly,mostof theseservicesare “public goods” providing advantages from which no participant in the value chaincanbeexcluded:trainedstaffcanbehiredbyanyone,everyoperatorbenefitsfromtheestablishmentofaregionaltrademark,andadvocacyeffortsimplythevaluechainasawhole.Nevertheless,intheidealcase,agivenvaluechainshouldbeabletocoverthecostsofitssupportservices,eitherdirectlyorindirectlythroughtaxpayments.
Support services include:• Sector-specificvocationaltrainingandeducation• Applied research and technology development• Publicationofmarketandpricedataandothersector-specificgeneralinformation• Servicesofsharedtechnicalfacilities,e.g.referencelaboratories• Exportpromotion,tradefairs,exhibitionsandbusinessdelegations• Publicrelationsandjointmarketingofproducts• AdvocacyforcommoninterestsoftheBBVCbusinesscommunity
Box 40 Concept — Examples of support services
Both operational and support services shall be made available to the BBVC in response to theneedsandgaps identifiedearlierduringtheprocessofvaluechainanalysisandstrategicobjectivesformulation.
Insomevaluechainprojects,servicesarestrengthenedbysupportingorfacilitatingthedevelopmentofbusinessservicestothevaluechain.
9.4 Valuechainfinancing
BBVC development aspires to generate sustainable economic growth by upgrading technology and products and/or by expanding productive capacity and marketing. Inevitably,thishasfinancialimplications.ThefinancialdimensionofBBVCdevelopmenthas two levels. One is the chain operators who have to make sure that their business modelsarefinanciallyviable.Theotheristhevaluechainatlarge.Toreachscale,wehavetoadduptheindividualfinancialneedsoftheindividualenterprisesandtheinvestmentintochain-widepublicinfrastructureandservices.
9.4.1 Financing needs and gaps
Beforeengaginginanyfinancialsolution,analystsfirsthavetounderstandthefinancialneedsandconstraintsof theoperators that takepart invaluechaindevelopment.Thefirst task is toassess thefinancingneeds related to thebusinessmodelsat stake, forinvestment as well as working capital.
The financing needs do not necessarily constitute a problem for BBVC development.Operatorswhocanfinancetheirbusinessviatheservicesofafunctioningfinancialmarket
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donotneedtolookforspecificsolutions;theycansimplyrelyonmarketoffers.Thesituationisdifferentwhereoperatorscannotsatisfytheneedsandencounterafinancinggap.InsomeBBVCswherethecommunitygrouporassociationhasnoaccesstofinancingfortheir production, this becomes a problem.
Wecandistinguishtwofinancialsituationsthatcallforaction.Specificfinancingsolutionsarerequiredif:
• Upgrading requires additional investmentthathastobefinancedandnosourcesoffinancemaybeimmediatelyavailable,and
• Thefinancingofbusinessoperationsisalreadyinsufficientinthepresentstateofthevaluechain,especiallyifitlacksliquidity,currentfinancingmechanismsarecostlyandatleastsomeoperatorsdonothavesufficientaccesstofinancialservices.
Financial Needs
Do financial needs increase with upgrading?
Long-term financing
needs
• Land / buildings / irrigation• Tree crop development• Machinery / equipment
•Infrastructure• Equipment
• Start-up costs• Inputs / materials• Salaries• Advances to suppliers• Transport• Other Costs
• Operations• Salaries
Short-term financing
needs
...of BBVC actors - private enterprises
...of public support service providers
Box 41 Financing needs in a biodiversity-based value chain
9.4.2 Financing solutions
Allsolutionsforvaluechaindevelopmenthaveafinancialside.Findingsolutionstoclosethefinancinggapsisakeytaskinvaluechaindevelopment.
Inprinciple,banksandotherfinancial institutionsofferstandardproductsrespondingtothetypicalfinancingneedsofenterprises.Totheextentthatconditionspermit,commercialproductsare thesolutionofchoice.However,manysmall-scaleoperatorsdonothaveaccess to them.
Thesearchforfinancingsolutionshastotakeofffromamuchwiderrangeofinstrumentsand arrangements. The value chain approach makes it possible to seek arrangements that integratebusinessmodel,linkage,andfinancingsolutions.BBVCfinancenotonlycoversthefinancingproblemassuchbutalsoaddressestherelatedconstraintsatthesametime.The reference to thevaluechainalsohelps tosee theconnectionsbetweenfinancing
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needsatdifferentpointsinthevaluechain.Solvingthefinancingproblemsofonegroupofoperatorsmaynotbesufficient. If therearenosolutions toclose thecorrespondingfinancinggapsofbusinesspartnersupstreamanddownstream,thebottleneckremains.
Sourcesoffinancing
• Self-financingoftheenterprise(community,club,etc.): ◦ Thisincludessavings,retainedearnings,informalloansfromfamilyandfriends
andremittancesoffamilymembers.• Standardenterprisefinancingproducts:
◦ These are loans from any formal financial institution – banks,microfinanceinstitutions, cooperative banks or leasing companies providing individual lending.
• Financingfrombusinesspartnersinthevaluechain(BBVCinternal): ◦ Here, the enterprise receives financing frombusiness partners in the value
chain (suppliers and/or buyers),most of the time embedded in commercialtransactions.
• Financingfromfinancialinstitutionsviabusinesspartners(BBVCexternal): ◦ Formalfinancialinstitutionsprovidecreditbasedonthecommercialcontracts
between enterprises within the value chain, organized as a triangle between thefinancialinstitutions,abigcompanyanditssmallersuppliers.
• Financingfromdevelopmentorganizations(donoragencies) ◦ This applies when the groups supported specially in a BBVC has no resources
noraccesstoavailoffinancialservicesthroughexistingstructures(orduetomissing structures in the country).
9.5 Quality and standards
Product quality is an important aspect in BBVC development strategies, whether they aimateconomicgrowthoratenvironmentalandsocial improvements.Thequalityofamarketablegoodnotonlyrelatestotheproductfeaturesbutalsototheprocesssideofthevaluechain.Apartfromtheintrinsicaspectsofproductqualitysuchasthematerialsusedandtheprocessingquality,thecharacteristicsofbusinessprocessescount:resourceefficiency,thetechnologiesused,conditionsofemployment,andotherfactorsallcontributetothequalityassessmentofaproduct.Therefore,mostdevelopmentstrategieshavetocareforthequestionofquality.
Thefollowingarethequalitybenchmarks:
• Legalrequirementsregulatingtheminimumlevelofproductsafety• Industry-specifictechnicalnormsandqualitygradesfacilitatingcontracts• Qualitycriteriadefinedbyindividualenterprisestopositionaproductinthemarket• Sustainabilitystandardsonawidevarietyofissuesofsocialandpoliticalinterest
Thefirst twopointsconstitute thebasic rules foranykindofbusinessactivities.Everyenterprisefirsthastocomplywiththecurrent lawsandregulations,both inthecountryofproductionandinthecountrywheretheproductissold.Technicalnormsandgradesare necessary to facilitate business linkages.Any producer that plans to penetrate anewmarket,facesthechallengetocomplywiththeapplicablelegal,trade,andindustry
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standards.Thisisparticularlydifficultforsmallenterprisesinlessdevelopedeconomieswhich seek integration into global value chains. Unless operators in exporting countries are able to implement the standards applied in the US, Europe, and some emerging markets effectively, they will hardly be able to enter these markets. Sometimes even nationalstandards,beitfoodsafety,qualityetc.,havetobemetfirstinordertobeabletoselltheproduct at all.
Justcomplyingwiththebasicqualityrequirements isnotenoughtobesuccessful.Thethirdbulletpointabovereferstotheindividualqualitystrategiesofvaluechainoperatorsandtheirbusinessmodels.Operatorshavetochoosethequalityleveloftheirproduct(s)toachieveasuccessfulpositionintheendmarket.Choosinganddifferentiatingproductqualityisacompetitionfactor.
The fourth bullet point refers to the growing concern for the environmental and socialproblems of economic development. Non-governmental organizations, policy makers,and even the business communities themselves increasingly call formore sustainableconditionsofproductionandmarketing.ThisiswheretheBBVCplacesanemphasison-apartfromenvironmentalcriteria,socialcriteriaareequallyimportantwhenselectingthepotential products and setting up the BBVC.
9.5.1 Product quality
Productqualityisdefinedinaholisticmannerbothastheintrinsicqualityofamarketableproduct that refers to the product itself, and its extrinsic quality which refers to thecharacteristicsoftheprocessesusedtoproduceandmarkettheproduct.
Generally, the demands on product quality are continuously on the rise. Globalisation, international sourcing, changing consumer behaviour, and the growing concern forsustainabilityallinducechangesintheperceptionofquality.Tocompeteandbesuccessful,operators have to deliver quality products to their target markets.
9.5.2 Product standards
A standard is a set of rules describing product and process quality. Standards are“documents established by consensus and approved by a recognized body that provide, forcommonandrepeateduse,rules,guidelines,orcharacteristics foractivitiesor theirresults,aimedattheachievementoftheoptimumdegreeoforderinagivencontext.”
Standardsspecifythecharacteristicsexpectedofaproductandoftheprocessofmakingit.Thisincludesalltypesofattributes.Standardsdefineandregulateproductqualityforthebenefitmarketactorsandconsumers.
Functions of standards
Standards create public goods serving private objectives as well as public concerns. They benefitoperatorsandconsumersbyfulfillingseveralfunctions:
• Regulation. Standards operationalise the quality, safety, and sustainabilityconcerns of consumers, civil society, and government. They create a commonunderstandingof the issuesatstakeandassuresafeandsustainablebusinesspracticesbyenforcingcompliance.
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• Market transparency and efficiency. Standards make the behaviour of marketpartnersmorepredictable.Theysupportrealisticexpectations,facilitatecontracting,andthusreducethecostofmarkettransactions.
• Quality management of enterprises. Value chain operators use standards as an operational guide to integrate quality and sustainability considerations into their core business processes. Standards suggest concrete and measurable steps to improve quality management.
• Risk management.Companiesincreasinglyfacereputationalrisksiftheydonotcontrolenvironmentalimpactsandsociallyharmfulpracticesassociatedwiththeirbusinessoperationsandthoseoftheirsuppliers.Standardshelptolowertheriskby introducing systems to detect critical points. Traceability mechanisms allow keepingcontrolofsuppliers.
• Communication.All market participants need information about the quality ofproductsand thesustainabilityofprocesses.Standardssimplifycommunicationbetween businesses (B2B) and between producers and consumers (B2C). Standards enable companies to demonstrate and prove the quality of theirproducts and assist marketing. B2B standards do not utilise labeling. They create transparency vis-à-vis business partners and serve to increase the number ofsuppliersfromwhichtoprocure.
• Alevelplayingfield.Standardscreatea‘levelplayingfield’becausetheycreateequal conditions for doingbusiness.Theyallowenterprises to pursue commoninterests in a pre-competitive environment.
Belowaresomeexamples for leadquestions toassess thesignificanceofastandard,takenfromtheValueLinks2.0Manual:
Assessment of target markets • Whatarethespecificrequirementsofthetargetmarket?• What are the current demand and demand trends?
Assessment of standard objectives • Which are the hot spots addressed by a standard? • Cansmallproducersexpectaneconomicbenefitfromadheringtothestandards?
Assessment of performance and credibility of the standard • Howlikelywilltheimplementationofthestandardachievepositivesocial,
environmental, or economic impacts? • Howdoesthestandardperformincomparisonwithotherstandards?
Assessment of market access capacities • Cansmallproducersmeetthestandardsofthesenewmarkets?• Which capacities need to be strengthened along the chain to meet the standards,
and at what cost?
Identificationofleveragepointsandinterventionstrategies• Which constraintsandopportunitiesarecriticalforimplementingthestandard?• Which technicalorfinancialassistanceisnecessarytoinitiateandstrengthenthe
implementationofthestandard?
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9.5.3 Sustainability standards in BBVCs
ThefollowingisasummaryofsomekeypointsrelevantfortheBBVCs.However,giventheutmostimportanceofthistopic,itisrecommendedtotakeadeeperlookintherespectivechapter in the ValueLinks 2.0 Manual. The international awareness is growing that economic activitiesmostlypresentthreatsfornaturalresourcesandthewell-beingofpeople.Withthe BBVC, these perceived contradictory sectors — economy and environment — are broughttogether.Nevertheless,itrequiresgoodandstrongmanagement,especiallywhenitcomestoenvironmentalmanagementstandards,whichareprerequisitesfortheBBPs.Many private sustainability standards were developed that operationalise the sustainability conceptforpracticalapplicationintheeconomicworld.Privatebusinessassociationsandmulti-stakeholder initiatives have taken up the idea and claim to contribute to sustainable development.Certifiedproductsareincreasinglybecomingimportant.Ontheotherhandinthepastdecades,hundredsoflabelshavebeendeveloped,notjustinternationallybutalso nationally, and with varying criteria. Hence, when developing BBVCs, it is important to evaluate the respective standards which may be mandatory or voluntary according to the product and the target market.
Fromthepublicpointofview,theethicalaspectsofqualitydeserveparticularattention.Theyconcernproductsafetyprimarilyplus,increasingly,thesustainabilityofvaluechains.There is a growing worldwide consensus that production technology should not harm the environmentordestroyresources,thatlabourersbetreatedfairly,andchildrenkeptoutofcommercialbusiness.Sustainabilitystandardsthereforehavebecomemoreandmoreimportant and occupy an increasing market share. Today, most global commodity value chainsaresubjecttoanemergingschemeforsustainabilitygovernance.Determiningtherequirementsofthesustainabilityagendathereforegoesbeyondlookingforthecurrentmarket demand.
AstheSouth-Southtradeincreases,qualitystandardsbecomeincreasinglyimportantforexporterswithintheregionaleconomiccommunitiesinAfrica,ASEAN,andLatinAmericaaswell. Initiativestocreatespecificstandardsabound, includingfoodqualitystandardssuchasASEANGAPorspecificallyVietGAP,forexample.
Scope of Sustainability Products
Particular Sustainability Issues
Sustainability Agenda
- Fairtrade standards- Ecolabels-Bird-friendlycoffee-Dolphin-friendlytuna
-SA-8000codeofconduct (on socially acceptable practices in the workplaces)- Ethical Trading Initiative-Non-GMOproject
UNGlobalCompact-RainforestAlliance- ISEAL standards: FSC, MSC, BCI, etc.
Particular product / VC Economy at large
Box42Sampleclassificationsofsustainabilitystandards
Starting at the upper left box of the table inBox42,we find standards that cover theenvironmental or social sustainability dimension and applying them to particular commodities and value chains. This group also includes standards for special issues,such as biodiversity.
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Somespecificmarketstandardsrelevantforbiodiversity-basedvaluechains
Organic food standards
Organic farming practices based on the principles of Organic Agriculture. Organic agriculture “is a production system that sustains the health of soils, ecosystems, andpeople. It relies on ecological processes, biodiversity, and circuits adapted to local conditions rather than the use of inputs with adverse effects.” Although the share ofcertifiedorganicagriculturehasincreasedsteadilyoverrecentyears,itstillremainsanichemarket with customers mostly in developed countries. However, in developing countries, organic farming of export crops is slowly growing. There are numerous standards fororganic agriculture, both private and public. By now, 119 countries have set minimum legalrequirementsfororganicproductionandprocessing.ThisincludestheECEcoBasicRegulationoftheEuropeanUnion(EU),NationalOrganicProgram(NOP)intheUS,andthe Japan Organic Regulation (JAS) in Japan.
Protected designation of origin certificates
Aninterestingtypeofproductcertificationisthe“protecteddesignationoforigin”(PDO).More and more consumers are looking for regional produce and food produced intraditionalways,andattachinggreaterimportancetothequalityoffoodtheyeat.IntheEU, the agricultural producers and manufacturers that produce traditional or regionalspecialties carrying protected geographical indications and designations of originmustcomplywithandbecertifiedaccordingtoCouncilRegulation(EU)No.1151/2012.Wellknown products with protected origins are the Italian Parmigiano-Reggiano (Parmesan) cheese,andFrenchchampagne.ThePDOisaqualityfeatureandmarketinginstrumentoutside the EU as well.
Within BBP pilot projects in the ASEAN region, certification schemes supported thefulfillmentofcertainqualitystandardsaswellasbettermarketaccess.Forexample,BoKhai vegetable andGiaoCo Lam tea in Vietnam had to receive the “Safe vegetable”certification by theMinistry of Health as a prerequisite to be sold towidermarkets inHanoiandtoenhancefoodsafety. InLaoPDR,theOneDistrict,OneProduct(ODOP)certification was awarded in cooperation with the Ministry of Industry and Commercetothebambooproducergroups,recognisingtheproducts´quality, the localsourcingofraw material under systematic management, and providing the producer groups with the opportunity forwidermarketing of the products.Nevertheless, the project faced somedifficulties,mainly inthefieldsoftimeandcosts.Manycertificationschemesareratherexpensive(e.g.GlobalGAP)andverytime-consumingtoachieve,oftenbeyondthescopeofadevelopmentcooperationproject.
Dependingonthetypeofproductandtherespectivevaluechain,differentstandardsmightbe relevant to ensure proper market access, or market access at all. Usually, the larger thetradescalegets(fromnationaltoregionaltointernational),thestricterthestandardsbecomeandcovermoreaspects,fromenvironmentaltosocialtoeconomic.Forexample,forcoffee,tea,cocoa,palmoil,etc.,themajorityofthesesystemshaveastrongfocusontheproductionstage,withfewerrequirementsalongtherestofthevaluechain,e.g.thedeforestationfreesupplychains.InaBBVC,theenvironmentalstandardsplaynaturallyastronger role, given its dependence on natural resources.
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9.6 Policy for value chains
Publicpolicyhastwosides:oneisregulationinthesenseofputtingrestrictionsonresourceuseandtheuseofeconomicpower;theotheristhecreationoffavourableconditionstosupport any environmentally and socially desirable business activity. Policies have to be restrictive on one side and enabling on the other. In any case, sustainable value chain developmentneedsstrongcollectiveactionandaclearfocusonprotectingandpromotingcollective goods.
BBVCswillcertainlybeinterestingfornationalgovernmentssincetheyhelptoaddressseveralof theSustainableDevelopmentGoals (forexampleSDG-1EndPoverty,5 -Gender Equality, 8 Decent Work and Economic Growth, 12 Responsible Consumption andProduction and15Life onLand), and support various strategic goals of theAichiTargetsoftheConventiononBiologicalDiversity.Theseeffortssupportthemainstreamingof biodiversity across sectors. Some sectors are often said to be very contradictory,mainly between economic development and environmental protection. The multi-sectoral developmentofBBPsbringsthesesectorstogethertobalanceeconomicandbiodiversitygrowth.InaBBVC,thedifferentsectorshavetoworktogetherandtakeoverindividualroles, from Environment, Forestry and Agriculture to Trade, Health and Science andTechnology.Rural development is oftenattached toAgricultural officeswhileprotectedareamanagementismostlywithForestryandEnvironmentaloffices.Certificationschemesplayanimportantrole,beithealthcertificatesforfoodsafetyorotherqualityassuranceschemeswhichareissuedbyIndustryandCommerceoffices,whilescienceoftenplaysacross-cuttingrole.ThismeanstheirpoliciesmayneedtobereviewedifandhowtheyfacilitatethedevelopmentandsupporttheimplementationoftheBBVC.
Since the rolesofall thestakeholders inavaluechain isorganiseddifferently ineachcountry,hencethereisnoone-fits-all-solutionthatthisguidelinecanprovide.ThisguidelinecanonlyserveasguidancesinceitwasnotpossibleintheframeworkoftheBBPProjecttoexplorein-depthallopportunitiesandlargelyfocusesonbiodiversityproductsandlesson services.
9.6.1 The business environment of BBVC
Thetransitiontosustainablebiodiversity-friendlyeconomiesissometimesreferredtoasBiodiversityBusinessConcept,whichdefinesitas“commercialenterprisesthatgenerateprofits through production processes which conserve biodiversity, use biologicalresourcessustainably andshare thebenefits arisingout of this useequitably”(Bishopetal,2008).Thereareseveralinitiativesthatfocusnowonpromotingbusinessactions for biodiversity-friendly production and commercialisation, mostly targeting theagriculture,forestry,fisheriesandtourismsectors.Thereisneedtodevelopthese“newbusinessmodelsandmarketmechanismsforbiodiversityconservation,whilealsoraisingawareness and persuading the public and policy-makers that biodiversity can be conserved on a commercial basis” (Barna 2008).
Political intervention is necessary wherever private business decisions create the risk ofnegativesocialandenvironmentaloutcomesorifmarketmechanismsfailtoachievesustainable economic development.Well-functioning and coordinated national policies,regulations, and institutional frameworks are crucial to provide a healthy business
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environment. Whether or not (community) enterprises are able to realise their market potentialdependsonthegeneralconditionsofdoingbusinessintheeconomyasawholeand on the particular conditions in each BBVC.
ListedbelowarecriticalfactorsinthebusinessenvironmentofBBVC.
Generalframeworkconditionsofthebusinessenvironmentinthecountry(investmentclimate):
• Macro-economic policies and conditions (monetary policy, interest rates, customs dutiesonimportsofintermediategoods,taxationetc.)
• Lawsandregulationsforbusinessregistrationandlicensing,employment,associations and cooperatives
• Contract securityandenforcement• Extensionandqualityofroadandrailnetworkandportinfrastructure• Availability andcostofutilities• Laws onprotectionandsustainablemanagementofbiodiversityandnatural
resources • Especially forbiodiversity-basedproductsrelevant:AccessandBenefitSharing
(ABS) and BioTrade
Sector-specificframeworkconditionsfordoingbusinessinthesubsectororvaluechain:
• Existence(orabsence)ofgradesandstandardsregulatingthemarketoftheproduct
• Subsector-specificlegalandadministrativeregulationsuchaslandandwaterrightsinagriculture,foodlaws,sector-specifictradepolicyorproduct-specifictaxes and levies
• Existence(orabsence)ofspecificsupportservicesfundedbygovernmentsuchas specialised research, technology, and education institutions
• Marketfailurewithinthevaluechainsuchasalackofcoordination,informationasymmetry, opportunistic behaviour, and mistrust
Subsector/valuechain-specificpolicies
To support the value chain, below are some policies and areas to be considered:
1. Market regulation through grades and standards • Productgrades,foodstandards,certification• Ecologicalandsocialstandards,certification
2. Sector-specificlegalregulations• Sustainable,communityforestmanagement• AccessandBenefitSharing• BioTrade
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3. Providinginfrastructureandfacilities• Roads,portfacilities• Facilities at market places
4. Strengtheningofpublicsupportserviceproviders• Research and technology institutes• Export promotion• Professionaleducation,skillsdevelopment
The policy instrument matrix
Apartfromthetypesofpolicyinstrumentsandtheirgeographicalscope,wecanalsodistinguishpolicyinstrumentsaccordingtopolicyfields.Here,weconsiderthreemajorfieldsofpolicymaking,inlinewiththesustainabilitydimensions:
• Economic policies • Environmental policies • Social policies
Thisgivesusthreecriteriaforclassifyingpolicyinstrumentsandthuspolicysolutionsforvalue chain development.
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Box 43 Tool – Policy Instrument Matrix
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Source: ValueLinks 2.0
9.6.2 Property rights
EspeciallysinceBBVCsareoftenoperatingaroundenvironmentallysensitivespacessuchas protected areas, property rights play an important role and is worth highlighting here at leastbriefly(moreinformationcanbefoundasusualintheValueLinks2.0Manual).Landandwaterbutalsoforestresourcesare important for thedevelopmentofBBVCs,or infactforanydevelopment,andaccessisoftenregulated.Populationgrowthandclimatechangearetakingtheirtollsontheseresources,oftenleadingtofiercecompetition.Delin-eatingrightsofprivateactors,forexamplebydefiningprivatepropertyrightsoverlandandwater,canbeapowerfultoolfornationalgovernmentstocreatenewmarkets.Bysettingrules for long-term tenureagreements for landholders or implementing comprehensiveland registration programs, states can create new land or housing markets. Tenure holders canstartinvestingintotheirland;newlandownerscansellthelandormortgageittotakeinvestment loans.
Allinvestorsheavilydependonthesecurityoftheirpropertyrights,whethersmallfamilyfarmsorlargeindustryfirms.Farmerswhocannotbesurewhethertheycanstilltilltheirlandinafewyearsareunlikelytoimprovetheirlandandinvestintofacilitiessuchasir-rigation.Manycountrieshaveidentifiedsecurepropertyrightsoflandasakeyfactorindevelopment.
Introducing such regulatory policy instruments is costly and time consuming as it requires asystematicapproach.Therefore,manypractitionersadoptedthecontinuumoflandrightsapproachdevelopedbytheGlobalLandToolNetwork(GLTN).
The continuum approach is an inclusive, pro-poor, and gender-responsive approach that incorporates documented and undocumented tenure rights, formal aswell as informalrights,individualsorgrouprights,andmanyotherforms.
Informal land rights
customary tenure
group tenure
leases
registered freehold
Formal land rights
Box44Concept–TheContinuumofLandRightsApproach(simplified)(Source: ValueLinks 2.0)
Securingsuchrights,whetherinformalorformal,arekeychallengesformoststates.Whatpolicyinstrumentstochooseandhowtoimplementthemwillhavestrongeffectsontheeconomyandsocietyatlarge.EspeciallyforBBPdevelopmentwhichoftentakesplacein or around protected areas with local communities, access and property rights can be a criticalissueforthesuccessfuldevelopmentofavaluechain.
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ThischaptershallpresentsomeinsightsonmonitoringtheimpactofaBBVC.Just likeany project, the planners must come up with a data collection and monitoring system that will provide relevant data throughout the whole BBVC development and implementation process, from the first analysis to the strategy, for implementation and monitoringprocessesoftheBBVC.Everystepneedstobeunderlinedwithsufficientdatatoallowinformeddecision-makingand tocapture the resultsof theBBVC implementation.ThedatagatheredintheBBVCanalysisandinthestrategicobjectiveformulationshallbethepointofreference(baseline)formonitoringandevaluatingtheeffectivenessoftheBBVC.
10.1 Provingeffectiveness
Evidence-based public policy and development action have gained considerable importancewiththeseriesof‘HighLevelForaonAidEffectiveness’andthepublicationsofthe OECD on the topic. In its guideline on “results-based decision making in development cooperation”, the OECD Development Assistance Committee (DAC) demands that “policies, strategies and thematic and country programs must be grounded on evidence ofoutcome.”Donorsaskforconcreteresultsthatshowfactualevidenceoftheprogressachieved.Theprivatesectorconceptof“impactinvestment”issimilar:Itseekssocialorenvironmentalprogressthroughfinancialinvestmentandthereforeexplicitlydemandsameasurablesocialimpactthatinvestorscancomparewiththefinancialreturns.
Many value chain programs have to deal with unreliable and inconsistent value chain data.Still, theyneed toproduce factsheetsandgenerateclear reports.Assessing theimpactandsustainabilityofthesupportprogramsisakeytaskinchaindevelopmentbuttheexecutionofthistaskisoftenchallenging.Datacollectionneedstimeandresources,humanand financial, aswell as skills to track and analyse the development correctly.Acertain levelof trustbetween thechainstakeholders isalsoessential toproduce therequiredandcorrectdataandshareitfreely.Notmanyfarmerswanttosharetheirpersonaldata(e.g.on income).Nationalstatisticsas informationsourcearenotoftenreliableorincomplete; the internetprovidesa lot of databutnotalwayswitha clear source,etc.Althoughitisoftenchallenging,itispossibletosomedegreetogeneratesufficientdatatoallowacertain“before-aftercomparison”.Forsomeaspects,especiallylargerimpactsandoccurredchangesduetoaspecificintervention,ithastobeacceptedthattherewillbe an “attribution gap”. Although also challenging, it will always be easier to collect socio-economicdataofparticipatinghouseholdsandtheirincreasedincomethentoassesstheexactimpactofthedevelopedBBVConthesurroundingbiodiversityofaspecificnationalpark.ThefollowingsummarisestheimpactpathwayforBBVCsandsomekeyelementsthat need to be monitored.
Monitoring the impact of the biodiversity-based value chain 10
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10.2 Impact pathway of the value chain
BBVC development is a change process. All actions and interventions shall lead to a desired impact. In a BBVC, the intended impact is sustainable development by protecting biodiversityandcreatingor improvinglocal livelihoods.ThefollowingBoxhighlightstheimpactlogicframeworkforBBVC.
Stages Levels of project results in BBVC development
Impact Visionforchaindevelopment:Biodiversity protection and sustainable livelihood creation
OutcomeObjectiveofaBBVCproject:increased sales, value-added, higher income and employment of the community, sustainable resource management practised
Output
StructuralchangeoftheBBVC:Value chain solutions implemented such as changes in business models, new productions created or old ones upgraded, linkages, better understanding on natural resource management, the organisation of operators (e.g. bamboo association), services and/or financing arrangements
Activities/InputsExternal support activities/private and public investment(trainings, association formation/strengthening, equipment, marketing, etc.)
Box 45 Concept: Impact logic of a biodiversity-based value chain
10.3 What and how to monitor in BBVC
In monitoring, everything starts with the baseline data. These baseline data were ideally, gathered earlier in the BBVC development process during the selection, analysis, and in thestrategydevelopment.Theboxonthefollowingpagepresentsasamplemonitoringmatrix.
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Stages Indicators Sources of Verification Assumptions
IMPACT
Biodiversity protection and sustainable livelihood creation for the community around the heritage parks
• Reduction in practices ofover-harvesting/exploitationoftheforest
• Community involved have sustainableincomefromBBPs
• Agencies protecting biodiversity
• Feedbackfromthe community members
• Satellite data, e.g. on reduced logging or reduced expansionoffarmlandintopark area
increased income through new livelihoods will reduce the pressure on the national parks and its natural resources
OUTCOME/OBJECTIVE
Increased sales of the BBPs and income of the households
• Increase in sales by xx% compared to the sales at thestartoftheBBVC
• Increase in income by xx%ofthehouseholdsparticipating
Own analysis and survey data
Income and sales data are known and will be provided by all stakeholders
OUTPUTS
Value chain solutions developed and implemented
• Public support agency offers(n)newservices
• Membership in cooperatives has moved upfrom(n)membersinyear 1 to (n+x) members in year y
• Productivityofoperatorsusing improved technologygoesupfromxx in year 1 to xx in year yy
• Increase in sales by xx% compared to the sales at the start oftheBBVC
• Increase in incomebyxx%ofthe households participating
Initial economic frameworkconditions do not deteriorate
Weak operators are able to realize the required business model change
Financing solutions materialize
ACTIVITIES/INPUTS
Facilitation and sup port activities of the biodiversity-based chain project
Such as…• provide marketing, information,andadvisoryservices
• identify technical innovations
• trainstaffofpublicagencies
Annual work and budget plans
Good cooperation relation established with partners willing to take over responsibility
Box 46 Tool – Monitoring matrix for biodiversity-based value chain
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While this sample monitoring matrix looks relatively easy, it can be very complicated to generate reliable and complete data if themonitoring system is not in place from thebeginningoftheBBVCdevelopmentandallstakeholdersareawareoftherequirements.Otherwiseitcanhappenthatcommunitystakeholdersdonottakenoteoftheirsalesfiguresorjustmakeaverageassumptionsattheendofamonths,forexample.Alsooftenonecanfindvagueindicators,like“ParticipantshaveanincreasedawarenessonthetopicofBBVC”.Here,ithelpstoclearlydefinewhatthatmeansandanevaluationmethodneedstobefoundwhichcanmeasurethis.
Belowaresomesamplesforsocial,economic,andenvironmentalparameters.
Group of Partners Metrics
Sizeofgroupsinthe value chain
• Numberofhouseholds• Numberofpeople(no.ofmale&no.offemales)
Income and economicstatusofpoor producers
• Averageincomeofpooroperatorsin$permonth• Ownershipofproductiveassetswithsecurepropertyrights
Income and economicstatusofworkers
• Averagewagesin$perday,weekormonth• Total incomein$permonth
Livelihoods / living conditionsofsocialgroups in the chain
• Nutritionalstatus(weight/age)• Number/valueofarticlessatisfyingbasicneedsconsumed
per week • Education level • Working ability in hours/week (taking into account physical
abilityandreproductivetasksofwomen)
Employmentoflow-skilled and poor people
• Numberofjobsinthevaluechain• Numberofjobsofexternalserviceproviders
Box 47 Tool – Social parameters
Group of Partners MetricsPrices • Retailpricesoffinalproduct(s)interminalmarkets
• Pricesofintermediaryproducts
Volumes and sharesofdifferentproduct variants
• Volumes(intonsorunits)producedandsoldatdifferentstagesofthechain,andinterminalmarkets
• Market shares (in volume or value) in terminal markets • Marketsharesofcertifiedandnon-certifiedproducts
Value added • Total value-added (prices * volumes) • Sharesofdifferentmarkets/marketsegments
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Group of Partners MetricsProductivity parameters
• Yield / production per ha • Production per labour day • Production capacity per day or per year
Operators and business models
• Typesandnumbersofoperatorsinthevaluechain• Sizeofbusinessesinturnover/year• Sharesofdifferenttypesofbusinessmodels(intermsof
valueorvolume)usingdifferentlevelsoftechnology
Technical ratios • Transformationratesatprocessinginpercentofrawmaterial• Loss rates
Box 48 Tool – Economic parameters
Group of Partners Metrics
Resourceefficiency • Numberofhouseholds• Numberofpeople(no.ofmale&no.offemales)
Local ecosystems • Sizeofareadivertedtothechaincommodityinhectare/yearorasapercentageoftotalarea
• Type,numberandsizeofecosystemsused/affectedbyproduction
Environmental hotspots
• Numberandtypesofenvironmentalimpactsofthevaluechainand on the value chain
• Numberanddegreeofseverityofenvironmentalhotspots
Green business models
• Green business models
Box 49 Tool – Environmental parameters
Conclusion11TheachievementsoftheBBPprojectemphasisedthefeasibilityofbalancingeconomicdevelopment and biodiversity protection through close cooperation between all actors in a biodiversity-based value chain. Biodiversity can be conserved on a commercial basis if it isdonecarefully.Uncontrolledeconomicdevelopment,also inabiodiversity-basedvalue chain,will alwaysharm theenvironment – in caseof aBBVC itwouldbe twiceasbadsince thiswoulddeplete thesourceof success, thenatural inputsasbasis fortheproductsandthebusinessoperations.Biodiversity-basedproductslikeorganicfoodandhealthproducts,handicraftsetc.orserviceslikeecotourism,areevolvingfromtheirreputationasnichemarketandunder-liningtheimportanceofbiodiversityforeconomies.Thisalsoopensthedoorformorerurallivelihooddevelopmentssuchascommunity-basedenterprises,butalsosupportsthepromotionofmorebiodiversity-friendlyeconomiesonalarge scale.
Itisaprerequisitethatallthedifferentchainactorshavetocooperateclosely–thisisalsoprobably the most interesting but also most challenging part in a BBVC: on governmental levelcross-sectoralcooperationiskey,beitfromAgricultureandForestrytoIndustryandTradetoScienceandTechnology,dependingonthesizeandscopeofaBBVCeverybodywillplayanimportantroleatsomestage.Marketaccessespeciallyforlocalcommunitiesisnoteasy,henceitisimportanttoevaluatetheoptionsforthemtodevelopandmarketownproductsortoestablishcooperation’swithprivatesectorpartners
The BBP project has shown that biodiversity-based product development along the value chainapproachisasuitablemeansforlocallivelihoodsupport,especiallyforcommunitiesin remoter areas around protected areas.
ThefieldsofactivityandresultsoftheBBPpilotscanbesummarisedasfollows:
On policy level:
• AdraftPolicyDocumenton“MainstreamingofBiodiversityAcrossRelevantSectorsthroughBiodiversityBasedValueChains”wassubmittedtoASEANWorkingGrouponBiodiversityandNatureConservation(AWGNCB)forfurtherrefinement.
• A policy workshop was conducted in Vietnam with the national partners the BiodiversityConservationAgency,fortheinclusionofBBPandBBVCintherevisedBiodiversity Law
• A draft sustainability strategy for further promotion of BBPs in ASEAN wasdevelopedandwillbediscussedwiththeACBGoverningBoardforfurtheractions
• A central information platform with Help Desk feature is online http://bbp.aseanbiodiversity.org/andisregularlyupdatedassourceofinformation.
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On national/ pilot site level in Cambodia, Laos and Vietnam:
• NurseriesforBoKhai,GiaoCoLamandmedicinalbathherbswereestablishedatParkmanagement,privatesectorandcommunitylevelsforseedlingsproductions.
• In situandexsituplantingmeasuresforbiodiversityconservationandsustainableuse:specificpromotionofhomegardenplanting to reduce thepressureon theforestsfromunsustainablewildcollection;reforestationinareaswherenaturalrawmaterial was depleted.
• Organizationalstrengtheningofthehouseholdsintoclubsorassociationsincludingestablishmentandapprovaloforganizationalby-lawsandregulations
• Capacity building for local communitymembers in groupmanagement, gender,business planning, marketing and labelling, as well as in sustainable management ofnaturalresourcesasmeanstomanagetheirrawmaterialinput.
• In LaoPDR, bamboo furniture and handicraft are being produced and sold byvillagersaroundNamHaAHP.TheOneDistrictOneProduct(ODOP)certificationforthebambooproductswasawardedinearly2019.ThevillagersareverysatisfiedwiththeincreasedandaboveallmorestableincomecomparedtoNTFPcollectionintheforestbefore.
• In Vietnamtherangeofbiodiversityvaluechainsincludehoney,giaocolamtea,bokhai vegetable and medicinal bath herbs. Sales-purchase agreements with private sector partners in Ba Be AHP and Hoang Lien AHP provide secured sales to local householdsandinputmaterialforprofessionalproducers,oftenatpremiumpricecompared to the local market. Villagers contributed strongly to replanting measures andsustainablemanagementofthenaturalresources.
• In Cambodia, black ginger medicinal tea and vine handicraft products weredeveloped with local producer groups from Phnom Kulen National Park/ SiemReapinpartnershipwiththeprivatesector(teaproducerandAngkorHandicraftAssociation) and are marketed between Siem Reap and Phnom Penh. The new BiodiversityBusinessesprovide improved income to thevillagers,especially forsome marginalised group members such as women and elderly people who have new employment now.
• Video documentation of the BBP pilot measures was produced and promotionmaterialdeveloped,allavailableontheonlineplatform.
• Diverse capacity-building measures were conducted to promote knowledge and understanding of biodiversity value chain development among ACB and CLVprojectstakeholdersandpartnersthroughtrainingoffacilitators,workshops,andlearning visit.
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Selected Literature12Barna,Cristina(2008):“Re-thinkingontheroleofbusinessinbiodiversityconservation”,
Spiru Haret University, Faculty of Marketing and International Business, Romania,Bucharest.Onlineathttp://mpra.ub.uni-muenchen.de/12596/MPRAPaperNo.12596,posted 9. January 2009
DeLeeuwJ,CarsanS,KoechG,YayéAD,NyongesaJ,(2017).Areviewofbestpracticesforselectedbiodiversity-basedvaluechainsthatpromotespro-poorconservationintheHornofAfrica
InternationalUnionfortheConservationofNature(IUCN)(2012):“AnExplanatoryGuideto theNagoyaProtocolonAccessandBenefit-sharing”, IUCNEnvironmentalPolicyandLawPaperNo.83,Gland,Switzerland:IUCN.
Osterwalder, A. and Pigneur, Y. (2010): “Business model generation: A handbook forvisionaries”,Hoboken,NewJersey:JohnWiley&Sons.
Springer-Heinze, Andreas (2018): ValueLinks 2.0. Manual on Sustainable Value Chain Development,GIZEschborn,2volumes(hereanextensivebibliographycanbefoundwhich shall not be repeated)
Online resources:
BBPPlatform:http://bbp.aseanbiodiversity.org GlobalLandToolNetwork:https://gltn.net/
International ValueLinks Association: www.valuelinks.org OECDonaideffectiveness:www.oecd.org/development/effectiveness/
D.M.LanticanAvenue,UniversityofthePhilippinesLosBaños,Laguna, Philippines 4031
TelephoneNos.:+6349536-2865,+632584-4210
www.aseanbiodiversity.org
bbp.aseanbiodiversity.org