GUIDELINES FORVALUE CHAINSELECTIONIntegrating economic, environmental,

social and institutionalcriteria

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Edited by Hans Joachim Zinnkann, Birgit Seibel (GIZ)Callie Ham, Merten Sievers, Matt Ripley (ILO)

AuthorsJochem SchneemannTrude VredeveldFair&Sustainable Advisory ServicesHamburgerstraat 28 a, 3512NS Utrecht, Netherlands www.fairandsustainable.nl

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GUIDELINES FORVALUE CHAIN SELECTIONIntegrating economic, environmental, social and institutional criteria

Jochem Schneemann and Trude Vredeveld,

Fair and Sustainable Advisory Services

This study has been commissioned by Deutsche Gesellschaft fr Internationale Zusammenarbeit (GIZ) GmbH on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ) and the International Labour Organisation (ILO)s Market Systems Development for Decent Work project the Lab, funded by the Swiss State Secretariat for Economic Affairs (SECO).

Acknowledgements

These guidelines are based on the experience of practitioners working in value chain development, specifi-cally with GIZ and the ILO, in various different regions, and would not have materialised without their contri-butions.

Many thanks go to those interviewed, who provided invaluable support in the development of the guidelines: Ahmed Abou El-Yazeid Mohamed, Daniel Bagwitz, Ralf Barthelmes, Horst Bauernfeind, Marc Beckmann, Frank Bertelmann, Mathias Braun, Amani Choubani, Sandra Doempke, Veronika Hofinger, Wolfram Jaeckel, Shameer Khanal, Naomy Lintini, Ricarda Meissner, Petra Petry, Claudia Polzer, Marita Riedel, Christina Rosendahl, Carlos Salas, Thomas Schneider, Merten Sievers, Annabella Skof, Volker Steigerwald, Mattia Wegmann, Christian Widmann, Reiner Woytek, and Gah Yunirwan.

The review efforts and technical contributions of those experts who participated in the revision workshop are also gratefully acknowledged: Samira Abbu, Ralf Barthelmes, Kathrin Daum, Sandra Doempke, Rafik Feki, Firas Ghanem, Philip Madelung, Ayurzana Puntsagdavaa, Andreas Springer-Heinze, Stefanie Springorum, and Marco Weissler.

Finally, GIZ and the ILO would like to extend very special thanks to the authors, Jochem Schneemann and Trude Vredeveld from Fair and Sustainable Advisory Services. It is due to their exceptional work that this tool is made available.

iii

Guidelines for value chain selection

A separate excel document with the overall scoring matrix is available here or atwww.giz.de/privatesector or www.giz.de/valuechains andwww.ilo.org/valuechains.

Contents

I. Objectives and background of the guidelines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

II. Users guide: contents and structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

III. Linking economic, environmental, social and institutional dimensions . . . . . . . . . . . . . . . . . . . . 5

IV. Stakeholder engagement: why, who, when? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

V. Eight steps for value chain assessment & selection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Step 1: Starting point: scope and mandate of the programme . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Step 2: Screening and shortlisting of promising value chains . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Step 3: Development of matrix with dimensions & criteria, optional weighing and scoring . . . . . . . 12

Step 4: Desk study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Step 5: Instruction of field staff and local consultants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Step 6: Field investigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Step 7: Workshop for validation and recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Step 8: Findings review, analysis and recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

VI. Assessment tools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

VII. Practical considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Annex 1: List of key and additional criteria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Annex 2: Country cases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Annex 3: Environmental dimension (Hot Spot Analysis) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

Annex 4: Question guide . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

Annex 5: Sources of data for secondary literature review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

Annex 6: Additional tools and documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

Acronyms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

http://www.giz.de/privatesectorhttp://www.giz.de/valuechainshttp://www.ilo.org/valuechains

1

Guidelines for value chain selection

I. Objectives and background of the guidelines

An initial step in value chain development is to assess various potential sectors or value chains to determine in which the project might have the greatest impact through interventions according to specific development goals and project mandates. These guidelines are meant for use during the initial (design and formulation) phase of projects in order to compare and prioritise possible value chains for promotion.

ObjectivesThe Guidelines for Value Chain Selection: Integrating economic, environmental, social and instutional criteria offer a holistic and structured approach to value chain selection. They combine four different dimensions of value chains/sustainable development: economic, environmental, social and institutional. Since the four dimensions are interconnected, overlooking any one of them during value chain selection will affect the next phase of value chain analysis and development. Because currently no comprehensive or systematic ap-proach or methodology exists that combines these four dimensions, these guidelines have been developed to fill the gap.

The guidelines include clear criteria and a set of tools to aid in the selection process. Potential users are development practitioners, governments and private sector initiatives, who wish to make well-informed deci-sions about which sectors and value chains to intervene in for market development.

BackgroundThe guidelines are a joint product of BMZ/GIZ1 and the ILO. Development organisations are often tasked with selecting from a wide array of value chains and must have a strategy