Presentation to USAID and Aspen Institute on value chain upgrading (applied to Latin American trade programme COPLA) , Washington DC 2009.

1. Upgrading along value chains: strategies for poverty reduction? Wednesday 09 November 2009COPLA, Root Change and ANDE Event, Washington D.C.Jonathan Mitchell & Chris Coles, Overseas Development Institute

3. How can value chain analysis help?

4. What the COPLA studies tell us?

5. How can poor people upgrade their position?

7. The value chain: competitiveness, profit & income Coffee up to export, Tanzania Production Primary processing Transport Secondary processing Packaging Transport Wholesale Transport Storage Export Producers Costs/kg Labour, $0.42 Inputs, $0.26 Transport/processing, $0.32 Revenues Price/kg parchment, $1.57 Gross margin, 36% Sales, MT/season, 0.5 Gross profit/season, $285 Processors (curing) Costs/kg Local tax, $0.11 Transaction costs, $0.40 Packaging, $0.03 Processing, $0.06 Revenues Price/kg green beans, $2.24 Gross margin, 3% Sales, MT/season, 36,000 Gross profit/season, $2.52m Exporters Costs/kg Transport, $0.09 Clearing & forwarding, $0.18 Warehousing, $0.03 Interest, $0.21 Revenues Price/kg green beans, $2.85 Gross margin, 4% Sales, MT/season, 7,200 Gross profit/season, $1m

9. Importance of lead firms

10. Difficulties of sustaining vertical links

11. Unsustainable development interventions

12. Influence of business and enabling environment

14. What have we learned? 1. Clear rationale for sub-sector and value chain selection Rigorous diagnostic - identify key rents - understand barriers to entry Appropriate interventions In practice, VCA is an art as well as science

15. What have we learned? Upgrading strategies are inter-related and sequential Gaps in our knowledge (beyond producers & agriculture) Differentiated level of outcome

16. Thank you! http://www.odi.org.uk http://www.cop-la.net