WAtM 6 - Building sustainable wealth
This stage involves:
1. Wealth assessment
The purpose of the wealth assessment is to identify the different forms of wealth that exist in and around the community and within the producers’ group and value chain. Wealth is not money, it’s the different forms of capital needed for decent life and livelihoods. Performing a wealth assessment helps identify resources that can be used to strengthen the value chain. For example, a wealth assessment may reveal that there are many people in the area skilled in animal husbandry because there used to be a ranch nearby until it closed due to drought. How could those skills strengthen a value chain? A wealth assessment also reveals weaknesses in various forms of wealth that can be strengthened by the value chain. For example, the soil in an area may be depleted due to continuous cropping of one crop and/or soil erosion. What are the production methods the value chain could use that would improve the health of the soil? A wealth assessment will also reveal gender differences in access and control of resources.
- Defining Wealth: Illustrating the Eight Capitals
- Spider Diagram: Assessment of the Eight Forms of Wealth
2. Building wealth by filling gaps and eliminating bottlenecks
Value chains operate in ways that create and sustain multiple forms of wealth. For example, an agricultural value chain could improve soil health through a change in production practices such as reduced tillage (natural capital); improve human health by eliminating the use of pesticides (individual capital); include value-added processing training and equipment (individual and built capital), create new relationships with buyers in new markets (social capital), and increase the savings of individual producers’ households and collectives (financial capital). This tool encourages producers’ groups to think about how they can fill gaps and eliminate bottlenecks in ways that create and sustain multiple forms of wealth that they and their communities own, control and/or benefit from.
- Flow Diagrams and Summary Wealth Matrix: Identifying Wealth-Building Opportunities and Understanding Impacts on Community Assets.
3. Using wealth to fill gaps
- Wealth Matrix to Fill Gaps
4. Identifying partners and investment opportunities
- Transaction partners - can fill gaps in the chain by providing functions that producers’ groups are not equipped to provide. For example, sharing a processing facility with a partner may expand the opportunities for a producer’s group to meet market demand without investing directly in additional equipment.
- Support partners - can offer support to the producer’s group or others in the value chain. These partners might include financial institutions providing credit and savings opportunities, extension services that providing training, media providing publicity, research partners solving problems in the value chain, product designers inventing new products or improving existing products, insurance providers reducing the risk to producers, etc.
- Indirect beneficiaries - The third type of potential partner is people or organisations that have a interest in the broad benefits that result when a value chain is successful. For example, school administrators may benefit from a value chain that provides healthy school lunches and local sustainably grown food and, as a result, students’ health, attention and performance in the classroom improves. Or a government institution may benefit because the value chain helps them achieve their mission. It is important to identify the people, groups, businesses, and institutions that would benefit from the value chain because they may be willing to support the value chain by investing time, energy, and/or money in its success, as long as the benefits to them are clear and compelling. Three useful questions to keep asking are:
- “What broader benefits will this value chain produce for those outside of the value chain?”
- “Who will benefit?”
- “What might they invest?”
Both transaction and support partners are considered inside the value chain system. We looked at transaction and support partners in Toolbox Section 4 and the Mapping the Value chain Tool. We also looked at value propositions (answering the question, “What's in it for me?”) in Toolbox Section 3.
- Identifying Benefits, Who Benefits
- Investment Matrix
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