1.1 Introduction
Agriculture is and will continue to be the centrepiece of the economies of most developing countries, especially those in Africa. This assertion is in line with the empirical literature that the economies of countries in Sub-Saharan Africa (SSA) are largely dependent on agriculture, which employs over 60% of the labour force and accounts for about 35% of Gross National Product (GNP) as well as 40% of foreign exchange earnings (Fulginiti et al., 2004). Thus agriculture is a major sector, which provides livelihoods, especially in rural Africa. This is particularly so because majority of the population in Africa resides in rural areas, with an estimated 70% of the workforce being engaged in agriculture for survival (Fan et al., 2009). Diao et al. (2007) argued that growth in agriculture is one of the most effective ways of reducing poverty, improving rural livelihoods and promoting economic growth in Africa. However, the inherent risks associated with the sector make populations that hitherto depended on agriculture diversify their livelihoods into non-farm activities such as petty trading (Akudugu, 2011) and small-scale mining, which is fast becoming an important livelihood activity in rural Africa including Ghana (Banchirigah, 2006, 2008; Hilson, 2002).
The central role of the agricultural sector in the pursuance of sustainable socio-economic development in SSA with the overall objective of poverty reduction and improvement in livelihoods can only be attained with improvement in productivity performance in the sector. Enhanced crop and agricultural productivity is thus seen to be critical for the overall socio-economic and politico-cultural well-being of the people of SSA, especially those in the rural areas. A number of multi-country studies (Examples include Block, 1994; Dewbre & Borot de Battisti, 2008; FAO, 2000; Frisvold & Ingram, 1995; Fulginiti et al., 2004; Lusigi & Thirtle, 1997; Rao & Coelli, 1998; Suhariyanto et al., 2001; Thirtle et al., 1995) have therefore been conducted over the years to look at how crop and general agricultural productivity performance across countries in SSA can be enhanced for sustainable livelihoods and socio-economic development. Despite the fact that these studies are different in terms of geographical coverage and timings, the central point is that there has been little variation in their findings. According to Fulginiti et al. (2004), almost all studies conducted in the region over the past decade report productivity gains in the 1960s, productivity losses or stagnations in the 1970s and recovery to productivity gains in the 1980s and early 1990s with varying degrees of influences on livelihoods. To sustain the positive gains in productivity, there is the need to harness the vast natural resource base of the region to ensure that agriculture continues to play its expected roles in the regional development agenda.
African governments have generally shown their commitment to improving rural livelihoods by putting the agricultural sector at the top of their development priorities (Dewbre & Borot de Battisti, 2008). That notwithstanding, the sector is said to be underperforming (InterAcademy Council, 2004) and this has left many people who largely depend on agriculture for their livelihoods in abject poverty. This is consistent with Dewbre and Borot de Battisti (2008) who reported that large percentages of people who depend on farming for a living in SSA are still in poverty. According to them, there are widening income gaps between farmers and non-farmers and rural populations continue to suffer from food insecurity, malnutrition and social exclusion.
In the book entitled, Building Competitiveness in Africaâs Agriculture: A Guide to Value Chain Concepts and Applications, Webber and Labaste (2010) noted that there has been a strong resurgence of interest by actors in the African agriculture and agribusiness sectors in promoting value chains as an approach that can help design interventions geared to add value, lower transaction costs, diversify rural economies and contribute to increasing rural household incomes in SSA countries. The authors further argued that enhancing value chain competitiveness is increasingly recognized as an effective approach to generating growth and reducing the rural poverty prevalent in the region. This has been the long held view of practitioners who often argue that there is the need to look at agriculture differentlyânot just as a means of survival, but as smaller or larger commercial businesses linked to domestic and global marketsâand of the need to identify and tap into new sources of potential growth and value addition in the sector. This might only be possible with effective and efficient supply chain management in African agriculture. This book is therefore particularly designed for those who want to know more about innovative approaches to commodity value chains for sustainable and inclusive development in Africa. It focuses on commodity value chain-based approaches, and how to use them in ways that can contribute to sound operational decisions and results for enterprise and industry development, as well as for policy-making with respect to doing business, stimulating investment and enhancing trade in the context of African agriculture.
1.2 Methodological Approach to Commodity Value Chain Profiling
There are varied methodological approaches for profiling value chains and these range from complicated and strict quantitative modelling based on positivist epistemological stance to a more flexible approach based on constructivism. It is important to note that commodity value chain profiling must be done in a manner that captures the interests, objectives, goals and aspirations of all actors. The methodological approach that does this well in our considered opinion is the participatory approach based on pragmatism. This methodological approach uses participatory tools and techniques to capture the key issues at each segment of the value chain within the socio-economic, politico-cultural, technological and climatic circumstances that actors operate.
In using the participatory methodological approach to value chain profiling, the process is divided into phases. The first phase of the process focuses on reviewing the empirical and grey literature on the specific commodity value chain that is being profiled. The second phase is a Community-based stakeholderâs consultative process, which allows us to map the inflows and outflows generated by actors along the value chain. This approach follows the Coady International Institute (2012) leaky bucket concept, which includes producer-led market mapping, market exploration, identification of key actors, identification of opportunities and bottlenecks and listing of potential interventions/activities.
The fact that the participatory methodological approach is inspired by the pragmatistsâ epistemological stance means that quantitative and qualitative tools and techniques could be freely drawn for commodity value chain profiling. These may include the use of surveys, key informant interviews and stakeholder/focus group discussions. The key benefits of using a participatory methodology for the profiling include farmersâ empowerment and increased understanding of the commodity value chain among actors. This methodology creates the awareness among actors along the commodity value chain on the need to reflect on their individual/group situations within the value chain; providing the opportunity for actors to identify activities that could be taken up at individual, group, community and national levels to strengthen the weaker segments and/or sustain the stronger segments of the value chain, with or without any external support and resources. The methodology is made of six main steps briefly described in the following subsections.
1.2.1 Cluster and Products Identification (Step I)
The first step is to among other things identify the clusters and products of interest (e.g. fresh tomatoes, onions or cabbage for hotels). The identification of clusters and products must be based on empirical literature and stakeholder consultations. Commodity leaky buckets are then used to capture the inflows and outflows at each segment or actor level along the value chain. This involves highlighting outflows, which capture the expenses incurred in producing the commodity of interest (e.g. buying seeds, fertilizers, chemicals, fuel for irrigating the land, labour, etc.) and inflows, which captures the money earned through the sales of output to different market channels. This is done through individual interviews and focus group discussions with stakeholders and key industry actors. The product âleaky bucketâ concept is then used to investigate the markets for inputs, services and outputs in the next step.
1.2.2 Market Map for Inputs, Services and Outputs (Step II)
The second step is to develop a market map for inputs, services and outputs using results from the first step. This process involves finding out where the inputs for growing the specific commodity come from and where the outputs are sold. To do this, stakeholders, particularly farmers are asked to indicate the sources of each of the inputs and services, picking one at a time from the product âleaky bucketâ in Step I. The output markets where farmers sell their produce are also mapped. The markets in most of Africa may include roadside retailers who buy dire...