Value Chain Development (VCD):
Key issue here is commercialization of the agricultural sector. This is achieved through strengthening the efficiency and effectiveness of prioritized value chains through establishment of operational partnerships and strengthening of horizontal and vertical value chain (VC) stakeholder bodies at the County and cross-County levels. The program also advocates for smallholder producers shifting from subsistence to production for the market. Key support areas are:
- Identifying & removing factors that constrain value chain production, processing, financing and marketing
- Supporting the growth of public and private investments in production-related infrastructure and value chain production, processing and marketing
- Supporting the identification and application of innovative value chains and technologies.
Sub-component 3.1: Inclusive value chain organizations developed
This component aims at first, building the capacity of value chain organizations to engage with other actors in a value chain from a position of strength; and second, supporting the identification and promotion of value chains that can generate equitable employment, increased incomes and ensure food security and nutrition. Deliberate effort is made to ensure that vulnerable value chain actors, men and women, participate in Value chains that offer maximum potential for the achievement of food security and equity objectives, while at the same time contributing to the commercialization of the agricultural sector. The direct impact here is increased participation of actors in value chains in the short run and ultimately better functioning VCs for increased benefits to actors. Two sets of actions are employed:
- Horizontal integration: Strengthening the capacity of value chain actors to identify their enterprise-related interests by function in the value chain.
- Vertical integration: Developing trust and understanding among value chain actors to achieve improved product flow, quantity and quality along the chain.
Sub-Component 3.2: Public and private investment in value chain development increased
A two-pronged approach to enhancing investments in VC production, processing and marketing is engaged which first explores options for increasing VC investments by both the government and private sector and secondly identifying the possibility of public private partnerships (PPPs). The Objective is to improve investment capability by VC actors, increase the number of PPP investments and ultimately increase flow of public and private funds towards VC development. Support to local, national, regional and international markets as need arise is envisaged to strengthen markets across the country in and reduce inefficiencies and strengthen the cash-based economy.
Sub-Component 3.3: Equitable access to markets increased
With proper functioning VC organizations and enhanced production and processing, there follows the need to increase market access through support to “soft” market access interventions, e.g. improved market information, support to building the technical capacity of producers and other actors in pre- and post-production management, etc. as a means to reduce product losses and improve pre- and post-production efficiencies along the chain. With functional and accessible marketing systems improved business for VC actors is the objective leading to increased returns for VC actors.
Sub-component 3.4: Access to affordable financial and insurance services for value chains actors improved
ASDSP facilitates accessibility and availability to financial services to enable value chain development by helping to expand and/or strengthen existing facilities, provide linkages and capacity building and support the development of new services. Partnerships with financial institutions, credit guarantee funds is key in order to support development of innovative models for providing inclusive commercial credit facilities to all VC actors e.g. with small-scale services of ‘M-Pesa’ type, as well as new products that offer opportunities for new groups to expand their business and lead to increased lending portfolio to agricultural value chain actors.
Sub-component 3.5: Innovative and inclusive value chains and VC technologies up-scaled and out-scaled
Main focus is strengthening of institutional mechanisms tasked with the responsibility to evaluate, further develop and disseminate information about promising ideas and concepts, and support mechanisms for funding and providing technical advice to entrepreneurs and producers who decide to take on new technologies with the objective of enhanced capacity of actors to identify promising VCs and VC technologies, generate, disseminate and apply new technologies and have increased productivity and efficiency of VCs.