Stacked Value Chains

Value chains

The DFM project will primarily build on value chain analysis, however we would be engaging in a much more nuanced and enriched understanding of the value chain framework by linking to it to other approaches such as social wellbeing, feminist approaches to gender, and political ecology.

Value chains are networks of actors whose activities enable the production and distribution of goods or services to consumers. All value chain actors use assets to transform inputs into goods or services (outputs). These become inputs when used by other actors further ‘downstream’ in the value chain. For example, fishers use boats and nets (assets) and labor, fuel, ice and credit (inputs), to ‘make’ an output (raw fish). Raw fish is then used as an input by fish processors.

Value chains can be conceived of as being made up of three segments – the upstream, the midstream, and the downstream. In the dried fish value chain, the part of the value chain specialized in producing raw materials (i.e. fishing) is the ‘upstream’ segment. The part of the chain that specializes in transforming fresh fish into dried fish and aggregating dried fish (i.e. processing and trading) is the ‘midstream’ segment. The part of the chain that specializes in distributing dried fish to consumers (i.e. retail) is the ‘downstream’ segment.

In reality, there are many other types of actor in addition to those highlighted in Table 1 who also perform important roles in the chain, or who are outside the chain, but exert influence over it. For example, logistics (transport services, packaging, licensing for exports, etc) plays important linking or supporting functions for actors in most chain segments. Producers of inputs such as boats, nets, ice, salt, charcoal and pots for fermenting fish all feed into the dried fish value chain. External actors, such as government agencies or NGOs, may influence the way the chain functions – for example, by passing laws or regulations (e.g. by banning certain types of fishing gear), levying taxes, building infrastructure, or providing training or credit.

Table 1 – Key actors and their roles in dried fish value chains

Actor	Chain ‘segment’	Assets	Inputs	Making	Outputs	Notes
Fishers	Upstream	Boats, nets	Ice, fuel, labor, credit	Catching fish	Fresh fish	May employ family or hired labor, may use credit from traders
Processors	Midstream	Land for drying/fermenting/ smoking etc., drying racks, pots for fermenting. Etc.	Salt, pesticide, fuel, labor, credit	Sorting, gutting, salting, drying, fermenting. Etc	Dried fish	Processors and fishers may be separate, or may combine functions, may use family or hired labor, may use trader credit, and/or provide credit to fishers
Traders	Midstream	Capital, warehouses, shops, vehicles	Dried fish from processors or other traders, labor, credit	Aggregating dried fish	Dried fish	Many different types of trader –e.g. ‘collectors’ buy directly from processors at production site and sell to larger traders in markets; ‘wholesalers’ buy from collectors, processors etc., sell to smaller wholesalers, retailers; ‘brokers’ coordinate sales between sellers and buyers to earn a commission (e.g. by organizing auctions)
Retailers	Downstream	Shops, vehicles	Dried fish from traders, labor, credit	Sourcing and distributing dried fish	Dried fish	Many types, from ‘traditional’ retailers in wet markets and mobile ‘hawkers’ to ‘modern’ retail – e.g. supermarkets,

Conventional approaches to value chain analysis

Most conventional value chain analysis concentrates on one of two areas:

1)     Structure, conduct, and performance. This originates from studies of the industrial organization of firms.

2)     Value chain governance. This originates from studies of how transnational (global) companies coordinate their activities. Key features of these approaches are summarized below, with additions that reflect the interests of the DFM project.

Structure, conduct, performance

‘Structure’ refers to the distribution of actors in each segment of the value chain in terms of geographical location, number, size, social identity, and degree of concentration (or dispersion) in ownership of assets and market share.

‘Conduct’ refers to the behavior of value chain actors as they acquire inputs, ‘make’ something with them, and sell the outputs. We are interested to broaden conduct to also include factors such as taste, local social and political relations, or preferences that shape conduct.

‘Performance’ refers to how well a whole value chain, or a value chain segment, or a set of value chain actors, performs. Performance can relate to a range of attributes, including inclusiveness, product quality, economic efficiency, or ecological sustainability.

Value chain governance

Most value chain analysis focuses on two aspects of governance: 1) the role of powerful ‘lead firms’ in setting the conditions under which other actors in the chain operate; 2) the role of standards and certification in regulating the behavior of value chain actors. DFM is interested in these issues, but also governance more broadly conceived to include, for example, relations between companies, community-based organizations, and government actors.

How DFM’s ‘stacked’ approach is different to conventional value chain analysis

The approach to value chain research adopted by DFM is adapted from the “stacked value chain analysis” (SVCA). The SVCA differs from most conventional value chain analysis by generating statistically representative primary data from each segment of the value chain. “Stacked” surveys are stacked in two senses:

(1)   They are based on several phases of research that each build upon one another.

(2)   They capture information on the value chain at all scales (from individuals, to segments, to the whole chain).

The DFM project extends the SVCA approach by examining how value is created in the dried fish economy at all stages of activity, from production through processing, exchange, and consumption in the context of social, ecological, cultural, historical, political, and other factors.

The values produced by dried fish value chains are thus not fixed, but vary over space and time. We use the idea of social economy to stand for this context-sensitive approach to dried fish value chains.

The below cross-cutting themes will inform research across different the different segments of the value chain:

• Governance (looking at the formal and informal institutional framework around the dried fish economy)
• Food quality (nutritional and cultural aspects of dried fish)
• Social wellbeing (how the social relations, satisfactions from, and economic and nutritional benefits of dried fish contributes to the wellbeing of the populations that depends on it).
• Gender
• Labor relations