Strengthening value chains in primary and agro-industrial products

236 Pages·2017·2.52 MB·English

Rural industrial
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RAMÓN PADILLA PÉREZ
Editor
Rural industrial policy
and strengthening
value chains
Ramón Padilla Pérez
Editor
Economic Commission for Latin America and the Caribbean (ECLAC)
Santiago, August 2017
ECLAC Books
145
Alicia Bárcena
Executive Secretary
Antonio Prado
Deputy Executive Secretary
Hugo Eduardo Beteta
Chief, ECLAC subregional headquarters in Mexico
Ricardo Pérez
Chief, Publications and Web Services Division
This book was edited by Ramón Padilla Pérez, Chief of the Economic Development Unit of
the ECLAC subregional headquarters in Mexico. The chapters were prepared by Stefanie
Garry, Carolina Gomez, Ramón Padilla Pérez and Francisco Villarreal, staff members of
ECLAC subregional headquarters in Mexico, and Verónica Quiroz Estrada and Nahuel
Oddone, ECLAC consultants.
ECLAC is grateful for the financial support of the International Fund for Agricultural
Development (IFAD) for providing technical assistance aimed at strengthening rural value
chains and for the publication of this book.
Cover design: María Luisa Avaria
United Nations publication
ISBN: 978-92-1-121953-1 (print)
ISBN: 978-92-1-058590-3 (pdf)
ISBN: 978-92-1-358057-8 (ePub)
Sales No: E.17.II.G.13
LC/PUB.2017/11-P
Distr.: General
Copyright © United Nations, 2017
All rights reserved
Printed at United Nations, Santiago
S.17-00274
This publication should be cited as: Ramón Padilla Pérez (ed.), Rural industrial policy
and strengthening value chains, ECLAC Books, No. 145 (LC/PUB.2017/11-P), Santiago,
Economic Commission for Latin America and the Caribbean (ECLAC), 2017.
Applications for authorization to reproduce this work in whole or in part should be sent
to the Economic Commission for Latin America and the Caribbean (ECLAC), Publications
and Web Services Division, [email protected]. Member States and their governmental
institutions may reproduce this work without prior authorization, but are requested to
mention the source and to inform ECLAC of such reproduction.
Contents
Foreword .............................................................................................................11
Introduction
Ramón Padilla Pérez .............................................................................................15
Chapter I
Productive development challenges in the rural areas
of Central America and the Dominican Republic
Verónica Quiroz Estrada .......................................................................................25
Introduction .............................................................................................25
A. The rural environment...................................................................27
1. Defining the rural environment..............................................27
2. Characteristics of rural areas in Central America
and the Dominican Republic ..................................................29
B. Institutional challenges .................................................................35
1. Rules, conventions and coordination ....................................35
2. Policies and strategies ..............................................................37
C. Environmental sustainability challenges ....................................38
1. Adaptation to climate change .................................................38
2. Mitigation of climate change ..................................................41
D. Commercialization challenges .....................................................43
1. International commodity price volatility ..............................43
2. Market access and the role of intermediaries .......................44
3. Extraregional and intraregional trade ...................................45
4 Economic Commission for Latin America and the Caribbean (ECLAC)
E. Productivity and innovation challenges .....................................47
1. Productivity ...............................................................................47
2. Size and technological performance ......................................49
3. Education and training ............................................................51
4. Innovation activities .................................................................53
5. Financing ...................................................................................56
6. Value chains ...............................................................................58
F. Conclusions .....................................................................................60
Bibliography ............................................................................................62
Chapter II
Rural industrial policy
Ramón Padilla Pérez, Verónica Quiroz Estrada ...................................................69
Introduction .............................................................................................69
A. The rural environment...................................................................72
1. Definition ...................................................................................72
2. Importance of the rural environment ....................................75
3. Cross-sectoral interdependence and complementarity ......79
B. Definition and scope of rural industrial policy ...............83
1. What is rural industrial policy? ..............................................83
C. Rural industrial policy tools .........................................................87
1. Trade, competitiveness and competition policies ................88
2. Productive development policies ...........................................90
3. Environmental policies ............................................................95
D. Experiences with public strategies that can be
synchronized with rural industrial policy ..................................97
1. Chile ............................................................................................97
2. New Zealand ...........................................................................100
3. Costa Rica ................................................................................101
E. Conclusions ...................................................................................104
Bibliography ..........................................................................................105
Chapter III
Methodology for strengthening value chains
Ramón Padilla Pérez, Nahuel Oddone ...............................................................113
Introduction ...........................................................................................113
A. Value chains and structural change ...........................................114
B. Key definitions and concepts ......................................................116
1. Value chains .............................................................................116
2. Strengthening and upgrading...............................................118
C. Methodology for strengthening value chains ..........................120
D. Diagnostic ......................................................................................125
E. Roundtables ..................................................................................130
F. Good practices ..............................................................................133
Rural industrial policy and strengthening value chains 5
G. Strategies, implementation support and launch .....................135
1. Strategy development ............................................................135
2. Implementation support ........................................................137
3. Launch ......................................................................................139
H. Concluding reflections .................................................................139
Bibliography ..........................................................................................142
Chapter IV
Value chain selection and industrial policy
Caroline Gomes Nogueira, Ramón Padilla Pérez, Francisco G. Villarreal .........147
Introduction ...........................................................................................147
A. Why are value chains selected? ..................................................148
1. Do horizontal industrial policies really exist? ....................148
2. Market failures ........................................................................149
3. The challenge of comparative advantages
and creating winners ..............................................................150
4. Windows of opportunity .......................................................151
5. Structural change ....................................................................151
B. Selecting sectors in practice: tools and strategies ....................151
1. Identification of high-potential clusters in
Central America: Central American Institute
of Business Administration (INCAE) and
Harvard Institute for International Development .............152
2. Selection of priority sectors in Mexico by
productivityand growth potential .......................................152
3. Targeting efforts in Chile .......................................................153
C. Chain selection methodology .....................................................155
D. Developing the indicators on the basis
of the proposed meta-objectives ................................................158
E. Applying the methodology: chain selection in Mexico ..........159
F. Concluding reflections: strengths and challenges
of chain selection ..........................................................................163
Bibliography ..........................................................................................165
Chapter V
Strengthening value chains in primary and agro-industrial products
Ramón Padilla Pérez ...........................................................................................167
Introduction ...........................................................................................167
A. Defining meta-objectives .............................................................168
B. Value chains ..................................................................................170
1. The links in value chains .......................................................170
2. Value chain governance .........................................................177
3. Estimation of costs and margins...........................................178
4. Institutions and organizations that support and
regulate chains ........................................................................180
6 Economic Commission for Latin America and the Caribbean (ECLAC)
C. Bottlenecks ....................................................................................181
D. Strategies for strengthening rural value chains .......................185
1. Institutional strengthening ....................................................186
2. Agricultural development policy for value
chain strengthening ................................................................186
3. Rural industrial policy for value chain strengthening ...........188
E. Conclusions ...................................................................................192
Bibliography ..........................................................................................193
Chapter VI
Strengthening tourism value chains in rural settings
Stefanie Garry, Nahuel Oddone ..........................................................................195
Introduction ...........................................................................................195
A. Regional context for tourism ......................................................197
B. Meta-objectives .............................................................................198
C. Tourism value chains ..................................................................201
1. Tourists .....................................................................................203
2. Distribution .............................................................................203
3. Transport ..................................................................................204
4. Accommodation and gastronomy ........................................205
5. Excursions ................................................................................206
D. Bottlenecks ....................................................................................207
E. Strategies and public policy recommendations for
tourism value chains ....................................................................211
F. Concluding reflections .................................................................217
Bibliography ..........................................................................................219
Chapter VII
Conclusions
Ramón Padilla Pérez ...........................................................................................221
A. Strengthening value chains, rural industrial policy
and progressive structural change .............................................222
B. The creation of value chains .......................................................224
C. Strengths, challenges and future lines of work ........................227
Bibliography ..........................................................................................229
ECLAC recent publications ............................................................................231
Tables
I.1 Central America and the Dominican Republic: personal income
distribution in rural and urban areas, by quintile, for 2014
or the last available year ........................................................................31
I.2 Central America and the Dominican Republic: distribution
of the employed rural population, by type of employment,
2000 and 2014 ..........................................................................................35
Rural industrial policy and strengthening value chains 7
I.3 Central America and the Dominican Republic: constraints
on the implementation of agrarian reforms ........................................36
I.4 Central America and the Dominican Republic: average
yield of basic grain crops, 1980-2013 ....................................................48
I.5 Central America and the Dominican Republic: indicators
for science and technology in the agricultural sector ........................54
I.6 Central America and the Dominican Republic: the share of rural
credit in total lending by microfinance institutions, 2014 .................57
I.7 Central America and the Dominican Republic: examples of
constraints on the various links in rural value chains .......................59
II.1 Criteria for defining the rural environment ........................................72
II.2 Recent changes in the rural paradigm .................................................74
II.3 Latin America and the Caribbean (8 countries): agricultural
GDP as a percentage of total GDP at constant prices,
1990-1995, 2000-2005 and 2010-2015 ....................................................77
II.4 Latin America (8 countries): economically active rural
population as a percentage of the total economically
active population, 1990 and 2015 .........................................................77
II.5 Latin America and the Caribbean: contribution to value added
to GDP, by sector of economic activity, in selected years ..................81
II.6 Definition and examples of economic upgrading
in the rural environment ........................................................................85
II.7 Trade, competitiveness and competition policies ..............................88
II.8 Productive development policies .........................................................91
II.9 Environmental policies ..........................................................................95
II.10 Chile: examples of rural industrial policy tools and initiatives .......99
II.11 Costa Rica: examples of policy tools and initiatives
for strengthening rural tourism ..........................................................102
III.1 Value chains supported under the ECLAC-IFAD project
“Inclusive growth, rural productive policy and participatory
value chains in Latin America and the Caribbean”,
2014-2016 ................................................................................................115
III.2 Dialogue spaces: types and characteristics .......................................132
IV.1 Central America: high-potential clusters ..........................................152
IV.2 Sectoral approach ..................................................................................153
V.1 Estimation of costs and margins along the chains ...........................179
V.2 Bottlenecks in the value chains of primary products
and agro-industrial analysed ..............................................................185
V.3 Strategies for strengthening the rural value chains analysed ........191
VI.1 Tourism value chains in rural areas: link-specific restrictions .......209
8 Economic Commission for Latin America and the Caribbean (ECLAC)
Figures
I.1 Central America and the Dominican Republic: rural
population, 1985 and 2015 .....................................................................30
I.2 Central America and the Dominican Republic: portions
of the urban and rural populations living in poverty
or indigence, 2014 or the last available year .......................................31
I.3 Central America and the Dominican Republic: agricultural
GDP as a share of total GDP at constant prices, 1990-2015...............33
I.4 Central America and the Dominican Republic: employed
rural population, by major economic sector, 2014
or the last available year ........................................................................34
I.5 Central America and the Dominican Republic: distribution
of extreme events, by type, 1990-2015 .................................................39
I.6 Central America and the Dominican Republic: land area used
for farming and land area covered by forests, 1990 and 2015
or the last available year ........................................................................42
I.7 International basic grain prices, annual averages, 1980-2016 ..........44
I.8 Central America and the Dominican Republic: exports
and imports of agrifood products, 2015
or the last available year ........................................................................45
I.9 Central America and the Dominican Republic: average labour
productivity growth rates in the agricultural sector,
1990-2002 and 2002-2012 ........................................................................47
I.10 Central America and the Dominican Republic: distribution of
the rural economically active population (EAP) of 15 years
of age or older, by number of years of schooling,
2014 or the last available year ...............................................................51
II.1 Rural population as a percentage of the total population,
1990 and 2015 ..........................................................................................75
II.2 Agricultural value added as a percentage of total GDP,
1990-2014 ..................................................................................................76
II.3 Latin America (selected countries): employed rural population,
by economic activity, 1997, 2005 and 2014 ..........................................78
II.4 Latin America (19 countries): poor and indigent population
groups, by geographical area, 1990 and 2014 .....................................79
V.1 El Salvador: national tomato production and imports,
2000-2013 ................................................................................................170
V.2 Mexico: proportion of business units devoted to the preparation
of sausages and other preserved forms of livestock, poultry
and other edible animals, by size, 2004, 2009 and 2013 ..................173
V.3 Dominican Republic: estimated dairy production,
1980-2014 ................................................................................................174
VI.1 Central America and the Dominican Republic: international
tourism arrivals, 2007-2014 ..................................................................197
Rural industrial policy and strengthening value chains 9
Boxes
III.1 Baseline questions for the diagnostic .................................................126
IV.1 Mexico: meta-objectives and indicators for the pork sausages
and other cured pork products value chain ......................................160
Diagrams
III.1 General structure of a goods value chain ..........................................118
III.2 Methodology for strengthening value chains ...................................120
III.3 A systemic approach to value chains .................................................123
III.4 Diagnostic of the chain .........................................................................126
III.5 Process of good practice analysis .......................................................134
III.6 Process of strategy development ........................................................136
III.7 Matrix for comparing strategy costs, implementation
periods and impacts .............................................................................137
IV.1 Vertical and horizontal alignment ......................................................156
IV.2 Value chain selection process ..............................................................157
V.1 El Salvador: tomato and green pepper value chain .........................171
V.2 Mexico: pork sausage and other cured pork products
value chain .............................................................................................172
V.3 Dominican Republic: dairy value chain ............................................174
V.4 El Salvador: dried fruit snack value chain ........................................176
VI.1 A tourism value chain ..........................................................................202
VI.2 Tourism: certification process .............................................................212
VI.3 Governance of tourism value chains: key actors and their
role in developing new destinations or products ............................213
VI.4 Strategies for strengthening tourism value chains ..........................214
VII.1 Methodology for the creation of participatory chains .....................225
Maps
VI.1 Guatemala: Department of Sacatepéquez .........................................199
VI.2 Dominican Republic: the Province of Pedernales
and its protected area ...........................................................................200
VI.3 El Salvador: Department of La Libertad ...........................................201