3.2.1. Preparing for Value Chain Analysis

Once the selection process is complete and the implementing agency has evidence that the selected value chain has growth potential and will impact poverty reduction, the next step is the process of value chain analysis. To ensure a smooth process, the value chain analysis team needs to agree on basic start-up issues. This may require a preparatory meeting and a brief document outlining the following:

• objective and mission of the analysis—is the analysis to inform a policy/regulation-focused project, to increase exports, adjust to a new market trend, or to update a previous value chain analysis?
• size and composition of the core analysis team—ideally, the assessment team is led by a team leader skilled in value chain analysis, and includes an industry expert with private-sector experience, and 2-4 local researchers trained in information collection and value chain analysis.
• a clear statement about the depth and duration of the data collection period and an idea of the budget (travel/lodging) available for each analysis phase
• agreement on a draft and data collection plan that balances qualitative data (based mostly on interviews and secondary sources) and quantitative data (based mostly on surveys at the macro and micro levels)—this will largely be determined by the objective and intended beneficiaries of the analysis. For example, USAID generally favors qualitative data, while still requiring quantitative information to back up findings. Conversely, the World Bank favors quantitative data in a value chain analysis, but gathers qualitative information to reinforce the numbers. Quantitative data requires more time to research and is more appropriate for public-sector interventions.
• a review by the whole team of the approach, framework and tools of the analysis to ensure all are in agreement with the desired outcome.
• degree/scope of participatory approach in each step—that is, who should be brought into the process and at what phase?