Attachment 1. Designing Nutrition-Sensitive Value Chain (NSVC) Projects: Overall Project Description

Transcription

1 Attachment 1. Designing Nutrition-Sensitive Value Chain (NSVC) Projects: Overall Project Description This document provides background information on the overall project, Designing Nutrition-Sensitive Value Chain Projects. With funding from the Government of Germany, IFAD is carrying out this project to provide IFAD country programs and design teams with evidence- and experience-based guidance on how to design nutrition-sensitive value chain (NSVC) projects. This guidance is being developed in three phases: Phase 1: Develop an analytical framework and propose a design process for NSVC projects from a smallholder perspective Phase 2: Carry out fieldwork to test the approach o Implement the proposed design process in two countries (Nigeria and Indonesia) o Analyze and learn from the experiences, in order to improve the proposed guidance Phase 3: Synthesize country results and develop the manual The analytical framework paper (Phase 1) is now being finalized. Based on an extensive review of literature, it presents some fundamental concepts about value chains, nutrition and smallholders and develops a framework for analyzing impact pathways and points of entry for interventions. A summary is presented below, and a complete draft will be provided soon. Phase 2 is getting underway with the commissioning of the study and report on Nutrition Assessment and Commodity Selection in the accompanying Terms of Reference. Phase 3 will build on findings from both these earlier phases. See below for more detailed descriptions of these three phases. Phase 1: Develop the Analytical Framework: Nutrition-Sensitive Value Chains from a Smallholder Perspective (summary) IFAD finances many projects that develop smallholder value chains. Their main objective is to increase income through more productive links of smallholders with markets. IFAD is now looking at how to make these value chains also work to improve nutrition. Essentially, this means developing value chains for nutritious foods (crops, livestock or small animals, or fish) in ways that make sense from a business perspective and also improve the nutrition of project beneficiaries. As will be explained in more detail below, nutrition can be improved through systematic development of nutrition-sensitive value chains (NSVC) that improve availability and access to nutrition foods, including by increasing diversity and quality of foods that farmers or fisherfolk consume out of own production and by raising incomes. A fundamental concept underlying the development of NSVCs is that actions should help to shape the food value chain towards achieving a nutrition objective. Potential interventions should aim, therefore, to alleviate the constraints in supply and/or demand of specific foods related to nutrition problems of the target population. This emphasis on consumption, rather than solely financial outcomes within the chain, is a significant shift from the traditional focus of value chain development. A key innovation that the NSVC approach brings is a focus not only on the supply side of the value chain but also on the demand side: consumption. The NSVC approach helps to make a clear link between nutrition problems in target populations and possible constraints in supply and demand of specific foods. The constraints or opportunities that affect the value chain s potential to address these problems, and improve nutrition, can then be addressed through specific value-chain interventions (See Gelli et al [Attachment 3] for more detail). 1 1 Gelli, A., C. Hawkes, J. Donovan, J. Harris, S. Allen, A. de Brauw, S. Henson, N. Johnson, J. Garrett, and D. Ryckembusch Value Chains and Nutrition A Framework to Support the Identification, Design, and Evaluation of Interventions. IFPRI Discussion Paper Washington, DC: IFPRI. [Included as Attachment 3.]

2 2 Impact pathways and target groups The analytical framework responds to this idea and highlights the pathways through which development of NSVCs can improve diets, and therefore the nutrition, of smallholders. There are three main impact pathways that are particularly relevant for smallholders: - Income pathway. Developing value chains for particular commodities can raise producer incomes, improving diets by allowing the household to purchase food of higher quality and in more appropriate quantities. The target group of this pathway is mainly composed of stakeholders engaged in the value chain (producers and other value chain actors) whose incomes are expected to rise through value chain development. - Own-consumption pathway. Their own agricultural production (including fish and forestry) can be a source of food for producer households. The producer household is the main target group of this pathway. - Market pathway. Developing value chains for more nutritious foods may catalyze improvements in the food environment. More, and more diverse, foods may be made available in the market, for instance, at reduced prices. This pathway benefits consumers, which can be the stakeholders engaged in the value chain (producers and other value chain actors) as well as the wider set of consumers in the community. A key mediator of impact across the three pathways is women s empowerment. Women are in a unique position at the nexus between nutrition and agriculture, with significant engagement in production, processing, and marketing as well as consumption. The effectiveness of these impact pathways depends on an adequate level of nutrition awareness (transformed into adequate knowledge, attitudes and practices) that will lead to healthy food choices and diets. Without this, increased income will not result in better diets; producers may sell the more nutritious foods instead of consuming them; and increased market availability of more nutritious foods may not result in better diets. To achieve impact on nutrition, there will therefore generally need to be interventions on the demand side of the value chain, say through nutrition education or behavior change communication campaigns. Strategies and Interventions Based on this understanding of the importance of both supply and demand to the development of NSVCs, and taking the impact pathways into account, there are three potential strategies a NSVC project could adopt: 1. Strategies to enhance the supply of nutritious food. If interventions aim to alleviate constraints on the supply side, project designers may focus on a standard value chain development strategy. In a typical value chain project, IFAD considers three possible upgrading strategies 2 : Product and process upgrading: interventions that improve producers capacity to meet market and value chain requirements in terms of volume of production, quality, consistency, efficiency, etc. Functional upgrading: interventions that move the target group (producers) along the value chain towards higher value-added activities, such as processing, transport, and marketing. Upgrading of coordination and business models: interventions that improve linkages among value chain actors, be it in the same value chain segment (e.g., linking farmers to cooperatives) or vertical linkages among actors that undertake different roles in the value chain (e.g., contract schemes between farmers and buyers). 2. Strategies to add nutrition value along the chain. If the intervention aims to address specific value chain constraints related to nutrition (nutrient/food loss, food contamination, etc.), the strategy would focus on increasing value for nutrition, especially in terms of food safety and nutrient preservation. Promotion of biofortified crops would also fit in this category. 3. Strategies to enhance demand of nutritious food. If a lack of demand for nutritious foods is identified as the main constraint, the strategy would focus on creating market demand. The focus would be on the downstream stages of the value chain such as promotion (social marketing, behavior change campaigns, etc.), preparation and consumption (cooking classes, etc.). 2 IFAD How to Do Commodity Value Chain Development Projects. Rome: IFAD. [Included as Attachment 4.]

3 3 Figure 1 illustrates how the different strategies for improving nutrition connect with the supply and demand constraints and help to make a value chain more nutrition sensitive (and so respond to the nutrition problem, as mentioned above). Figure 2 provides details on those strategies and identifies potential entry points and specific interventions. Figure 1. Typologies of Supply/Demand Constraints in NSVCs Source: Gelli et al., 2015 Figure 2. NSVC strategies and potential entry points and interventions

4 4 Phase 2: Carry out fieldwork The fieldwork will carry out the design process proposed below as a means of testing the approach in a realworld context. This exercise is intended to resemble what a typical IFAD design team would do. The fieldwork will apply the proposed approach in support of two IFAD-funded projects, one in Nigeria (CASP) and the other in Indonesia (SOLID). This way the project can identify challenges and opportunities that arise at each step of the process and adjust the guidance as needed. It is important to note that at IFAD, project design for investments is usually carried out by a design team composed of various thematic experts. The team usually spends a total of about four weeks in country, conducting field visits and consultations with stakeholders. Design team members need to rapidly assess the situation and propose feasible, effective interventions. They are not expected to carry out significant research but rather propose interventions based on available knowledge and experience as well as stakeholders consultation. They may conduct limited field visits to ground truth the proposed interventions, and they may need to carry out or commission certain background studies in order to provide context and inform design choices. The Proposed Design Process: Overview Drawing on the framework and analyses proposed by Gelli et al. (2015) [Attachment 3] combined with a typical IFAD design process for value chain development (see IFAD. 2014) [Attachment 4], the approach described in the analytical framework paper suggests carrying out two key background studies. These studies would provide key information for selecting and shaping NSVC intervention options. These studies would be: 1. Nutrition assessment and commodity selection o Identifies nutrition problems of the target population as well as the commodities (types of foods) that can address these problems. 2. Nutrition-sensitive value chain analysis o Identifies constraints in supply and/or demand of these commodities. On the basis of these studies (combined with additional interviews, information, and their own knowledge and expertise), team members should be able to identify appropriate interventions. The proposed design process takes into account the level of effort expected from a typical design team; however, considering that designing nutrition-sensitive value chains is a new field, we have not yet identified the main constraints or problems that may arise in design of NSVC projects, and we will likely need further information about what may work and what may not, and under what conditions, when proposing interventions. Thus, this project has added activities that will help test and learn from the proposed process as it is being carried out in Indonesia and Nigeria. For example, consultants conducting these studies and simulating the design process will be asked to assess the strengths and weaknesses of the process, including adequacy of approaches, methods, and tools and availability of needed data. And, based on this experience, they should identify gaps in the knowledge and information needed to produce reliable studies and select, design and implement appropriate interventions and policy options. The Design Process: Background Studies Step 1: Nutrition Assessment and Commodity Selection Nutrition Assessment. Identify the nutrition problems to be addressed, including nutritional status and food consumption patterns. The characterization of diets will provide information on the relative contribution of key foods to the overall diet and highlight the specific gaps in diets, pointing towards a list of commodities (foods or bundles of foods) that hold the potential to address nutrition problems. Commodity Selection. The list of commodities should be evaluated against three criteria: (i) potential to improve nutrition of project beneficiaries (how commodities respond to nutritional needs); (ii) potential for market growth (whether markets exist or could reasonably be created for the commodities, including for processed commodities, and whether producers can respond to the demand, considering, for example, input and output market characteristics, agronomic conditions, and their own capacities); and (iii) potential to

5 5 generate income and reduce poverty for project beneficiaries, considering, among other factors, the percentage of smallholders engaged in the production of these commodities and barriers to entry. Given that the fieldwork is linked to IFAD-funded projects that have already identified a set of commodities to work with in the project areas, these commodities should be included in the commodity selection exercise along with the foods or bundles of foods identified as most suitable for addressing nutrition problems. The analysis may also identify other commodities as well. The accompanying Terms of Reference for Nutrition Assessment and Commodity Selection cover these two issues, whereas more in-depth value chain analyses will then be conducted under a separate consultancy in the next step for the commodities that are selected. Step 2: Nutrition-Sensitive Value Chain Analysis The following step in the process would be a NSVC analysis, a standard value chain analysis that broadens focus by applying a nutrition lens. Such an analysis should cover three dimensions: Supply Status. A standard value chain analysis including: o characteristics of supply, at each point, and of the structure of the value chain, including margins, value-added constraints and opportunities, comparative advantages of the commodity being analyzed, current supply and demand trends o mapping of all value chain actors from production to consumption and their relationship with smallholders, behaviors and motivations (incentives), constraints and opportunities, etc. o potential for smallholder involvement (challenges, opportunities, impacts) o characterization of the institutional, economic, political, policy and regulatory environment Nutrition and food safety. Expand the analysis to identify the main points where food or nutrients are lost or food safety risks arise along the chain. Demand status. Applying a nutrition lens, the analysis of demand trends in terms of market and growth potential will be covered through the value chain analysis detailed above. The analysis of demand status will focus on the barriers that limit the consumption of the selected commodities by the target population. This includes: o Affordability: Assessing whether there are income or price constraints that limit the consumption of the selected commodity in the target population. o Availability: Analyzing the constraints that households face when accessing the commodity in the market in terms of distance, transportation, seasonality, etc. o Acceptability: Assessing the socio-cultural factors that may limit consumption, including nutrition awareness, gender roles, tastes and preferences, cooking time, preparation, perceived social status of foods, etc. Assessing the Design Process and Identifying Knowledge Gaps Because we want to analyze and learn from the experience with the proposed approach, the consultant chosen for the studies will also produce reports that assess the process and identify knowledge gaps. Such knowledge gaps could include appropriate methodologies for carrying out the studies or issues around intervention, design and operation (e.g., the acceptability by producers, traders and consumers of biofortified or other new products, or policies needed to promote interest and promote investment by producers or traders in more nutritious commodities). Step 3: Additional Studies to Address Knowledge Gaps As noted, the concept of nutrition-sensitive value chains is an area where there is currently limited field experience and little systematic assessment. The studies undertaken in Steps 1 and 2 of Phase 2 will highlight areas where more in-depth study is needed to address design needs (particularly around selection of interventions). The project will then undertake a series of small additional studies to address these knowledge and information gaps. The specific issues to be studied as well as the research methods needed will be determined once the knowledge gaps have been identified. Phase 3: Synthetize country results and develop the manual The last phase of the project will focus on extracting lessons learned from the fieldwork phase, adjusting the analytical framework to the realities on the ground and developing the manual for design and implementation of nutrition sensitive value chains.