DTI explains value chain approach towards strong business environment

By Susan C. Aro

Saturday 19th of May 2012

BAGUIO CITY, May 19 (PIA) -- The value chain approach is a way to go for a strong business environment and in heading towards competitiveness.

Department of Trade and Industry (DTI) Kalinga provincial director Grace Baluyan, stressed this as she explained the value chain concept to members of the economic development sectoral committee of the Regional Development Council-Cordillera.

Value chain is defined as the sequence of related business activities or functions from the provision of specific inputs for a particular product to primary production, transformation, marketing and up to final consumption. The set of enterprises that perform such functions are the producers, processors, traders and distributors of a particular product.

Through value chain already on the rise in the competitive market, Baluyan said, business environment constraints such as inefficiencies and cost disadvantages are identified, hence, reforms can be addressed either by policy makers or other concerned institutions.

In doing value chain, costs are reduced through logistics and quality is improved through chain-wide standards, said added.

One of the criteria in determining which sector to promote depends upon its strength – its growth potential and competitiveness. But the capacity of the firm should come into play. If there are weaknesses noted within, an institution or capability mechanism should be put in place in order for them to be competitive.

Other criteria include potential to reduce poverty in the area, the social benefits, prospects of success, outreach, and other program-related aspects should also be looked into in doing the value chain analysis, she explained.

The value adding portion in the product is also plotted. In order to fill the gap and for the farmer to have higher income, he has to be taught how to process or link him to a market that offers higher cost of fresh beans, she added.

Baluyan expressed hope that RDC will consider value chain as a tool. In doing so, she said the region has to establish a choice of opportunities such as vegetable production, coffee production or Information Communication Technology and its impact as to competitiveness in the provinces and the region as a whole.

During the presentation of the appreciation model for the value chain approach, some recommendations were arrived at such as doing water bottling business in barangays and involving local government units, promoting the three-in-one concept such as planting of coffee trees, Caliandra and anthurium including the raising of honeybees which help in the pollination process, inclusion of eco-tourism and other priority sectors for value chain analysis, cooperative sector to offer value chain training courses, passage of a resolution for the conduct of value chain facilitation workshops to be conducted by DTI, Department of Agriculture and Department of Tourism, and facilitate to work on coffee and showcase it for other sectors to adapt the value chain concept.(SCA-PIA CAR Baguio)