Value chain evaluations compiled by BFAP’s industry specialists provide an industry-wide analysis, with the aim of unpacking the entire value chain – from farm and input level through to consumption of the final product. Unpacking the value chain in this way provides an in-depth understanding of the relative performance drivers at various stages of the chain. The value chain analysis program considers the specific industry as a whole, evaluating competitiveness, challenges and sustainability at various levels of the value chain.
Further economic modelling in the value chain provides an indication of relative cost shares and margins within the chains, as well as providing a key tool for scenario analysis within the specified industry. With key cost drivers identified, the impact of different scenarios related to these drivers can be quantified across the entire chain or isolated at a specific point within the value chain.
Unpacking the complex interactions within the value chain, not only from an empirical perspective, but also from an institutional perspective (where the general sentiments and interaction of role-players in the industry are taken into consideration), provides insight into the real tangible issues. These sentiments are captured and used to identify the critical drivers that have to be considered for the development of turnaround strategies in the industry or governing bodies.
A full study, giving the example of a typical value chain (the Groundnut value chain), can be downloaded at (www.bfap.co.za).