How Sweet It Is: Value Chain Analysis in Tajikistan's Rasht Valley
by Jarrett Basedow
This summer I found myself fording a river in a bulldozer, sitting precariously next to the driver and holding on to a loose watermelon that had been rolling around the cabin. I had been told my REECAS studies would take me to far away places, but I am not sure riding an oversized machine next to a washed-out bridge in Tajikistan's remote Rasht Valley was exactly what they meant.
My ride occurred during my summer internship with Mercy Corps, an international humanitarian organization. I conducted a value chain study to examine how the organization could implement programming to improve the honey, rose hip and fruit markets in Rasht, a mountain valley area that was home to opposition forces during the country's 1992-1997 civil war. Post-civil war, it remains disconnected from the main political and economic centers. I interviewed buyers, wholesalers, retailers and producers to see how the market for each product works. It was fascinating, and although I found myself in the middle of a few swarms of bees, I managed not to get stung.
Earlier that week, I had interviewed a wholesaler who purchases dried rose hips from several jamoats (administrative areas) in the region. Since the valley is over five hours away from the capital of Dushanbe on varying road conditions, those who own larger vehicles can act as a wholesalers. Makhmad was very helpful; he explained his business and told me about his main contact in the northern city of Khujand to whom he sells all his goods. He also told me that the village of Pingon, in a nearby jamoat, provides him with up to 14 tons of dried rose hips each year. The interview went so smoothly that I was later startled to find out I had such good access to a man who was so elusive that the other villagers call him a phantom.
I wanted to verify price and other information from Makhmad, so I had set out for Pingon with Dodarjon, a member of our agricultural team, and our driver Iskander and his trusty and increasingly shock-free Niva. Iskander's taped-up MP3 player had an interesting selection of Tajik pop, Russian covers of Western artists and Enrique Iglesias. (I burned him some CDs, hoping to decrease the amount of time that the latter artist was in rotation.) We passed through the village of Shulmak, where I was unable to track down a phantom of my own - another truck owner that interviews had pointed me towards, but who was in Dushanbe this first time I had visited, and who was now in China.
Further down the road we encountered another obstacle - the bridge going to Pingon was washed out. Faced with the options of turning back or finding a footbridge, we decided to eat lunch. The head of the road crew offered us another route - fording a lower part of the river with his bulldozer. I was offered a place inside the cabin, and Dodarjon and Iskander held onto the sides. I held on to that loose watermelon that had been rolling at my feet.
After our alternative crossing, we walked 4 kilometers to Pingon to interview a sample of villagers who ascend to the mountains each fall to collect rose hips. I conducted the interviews in Tajik, but was still glad to have Dodarjon there to take further notes. Household income in Pingon is almost entirely dependent on the collection of rose hips and walnuts in October, which are brought down on donkeys or villagers' backs from higher altitudes a few kilometers away. Most villagers accept informal credit from buyers like Makhmad in the summer, which is based on a low price for the product they hand over in the fall. Other intermediaries appear in their village in November, and wholesalers and urban buyers remain a mystery to producers.
A lack of market information and a system of informal credit is typical for many regional products. Farmers in Jirgatol, a northern area where many ethnic Kyrgyz live, grow mainly potatoes and also rely on truck drivers that appear in their area. Accepting money and goods in the spring as an advance on their fall harvest, they inevitably fall into a deep spiral of debt due to problems with their harvest, or the exploitative low price wholesalers offer them.
The agricultural problems, debt issues and lack of jobs I encountered in the Rasht Valley are not atypical for many other areas of Tajikistan. The lack of overall economic opportunity has lead many, particularly young and middle-aged men, to migrate abroad to Russia and other countries in search of work. As the poorest of the former Soviet republics, poverty and migration rates in Tajikistan are high. The country ranks 122nd overall on the Human Development Index (out of 179 countries with data), and its GDP per capita of $1,609 ranks 143rd out of the 178 countries with data1.
In many of the villages I visited, over 70% of the men had left for Russia as labor migrants. Overwhelmingly, they are driven to migrate for economic reasons - poverty, a lack of opportunities and jobs at home, and a need to support their families. Out of a population of just over 7 million, official estimates place 600,000-800,000 Tajik workers living in Russia, most engaged in temporary or seasonal work but with a significant portion settled permanently. Estimates from international organizations put the number of labor migrants closer to 1.5 million2. Whatever figures are considered, a large portion of Tajikistan's workforce is engaged in migrant labor in order to provide for their households. Remittances have reduced household poverty and provided essential funds for many communities3. Many families depend on these funds to provide basic necessities, while for others it is their only means of improving their standard of living.
A lack of economic opportunity, market access and crop diversity throughout the country helps explain why many residents do not enjoy food security. Food security exists when all individuals at all times have sufficient physical and economic access to meet their dietary needs in order to lead a healthy and productive life4. Events since independence have wreaked havoc with food security and livelihoods for much of Tajikistan's population. And recent events have hampered the ability of Tajiks to recover from the devastating civil war that ended over a decade ago. Draught, hailstorms and the harsh winter of 2007-08 took a significant toll on agricultural harvests, particularly for poor mountain populations. Unusually heavy rains and hail further complicated planting in the spring of 2009. Despite some progress in improving infrastructure, much of the country is cut off from the capital and main economic markets during the winter.
One development intervention that is being considered to help local producers raise their income and enjoy better livelihoods and food security is called value chain programming. A value chain encompasses a set of activities, inputs and services required to bring a good from its initial conception to its final market. Value chain actors include input suppliers, producers, processors and buyers, who are often supported by a range of technical, financial and business service providers.
The process of chain analysis requires the use of a framework to identify the structure of the chain, including all individuals and firms that conduct business by adding value and helping move the product toward end markets, as well as the dynamics of the chain, which refers to the determinants of individual and firm behavior and their effect on how the chain functions5. Structural conditions include the identity of end markets, the current legal, political and infrastructural conditions that enable the business environment, horizontal linkages (links between firms), vertical linkages (links between producers and buyers, between firms of different sizes), and financial, legal and other markets that support the chain. Dynamic factors include the nature of relationships along the value chain and possible catalysts for technical upgrading.
The fundamental objective of value chain programming is to move poor individuals and households out of saturated, low-return activities and into higher-return, growing markets. This is done by linking poor producers to other private- sector actors who have access to growing markets and who have a clear business interest in partnering with poorer producers as part of their supply system6.
I found that there are many possibilities for increasing the effectiveness of value chains in the Rasht Valley and assisting local producers. Organizing groups of producers into associations helps them deal with buyers who will not interact with numerous small producers. Assisting local producers in making direct connections with these buyers can help the producers bypass often exploitative intermediaries. There also exist many simple solutions for improving products, from training collectors of rose hips on more effective drying methods to assisting potato farmers in fighting pests that ruin their crop. Additionally, there are potential markets for value-added products, such as rose hip juice and oil. In general, donor support for value chain programming is growing, and there are now many examples of programs worldwide that have increased producer income and improved the livelihoods of poorer producers.
Following our interviews in Pingon, we were walking back to find a footbridge when a car pulled up. A man who had just returned to the village heard that there had been a guest and insisted on giving us a ride to the river. This attitude is wonderfully pervasive throughout the region - guests are celebrated, welcomed and honored. After a few rickety footbridges spanning a fast-flowing river, it was back to the bumpy ride home and good conversation with Dodarjon about possibilities for increasing and diversifying household incomes in the region. Although he was clearly both amused and exhausted from a long and interesting day, as we approached his house he still insisted that I come in for a cup of tea.
You can find out more about Mercy Corps’s work at: http://www.mercycorps.org
- 2008 United Nations Development Programme Statistical Update: Tajikistan. http://hdrstats.undp.org/en/2008/countries/country_fact_sheets/cty_fs_TJK.html
- International Crisis Group. "Tajikistan: On the Road to Failure." Asia Report No. 162 - 12 February 2009. Pg. 9.
- "Migration Creates Challenges and Opportunities for Tajikistan, Says World Bank Report." January 22, 2007. http://web.worldbank.org
- USAID MicroLinks Wiki. http://apps.develebridge.net/amap/index.php/Chain_Analysis
- USAID MicroReport #105: A Synthesis of Practical Lessons from Value Chain Project in Conflict Affected Environments. May 2008. Pp. 4.