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“ANALYSING THE CHARCOAL SUPPLY CHAINS FOR SUSTAINABLE CHARCOAL

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					       “ANALYSING VALUE CHAINS FOR SUSTAINABLE CHARCOAL PRODUCTION,
      LIVELIHOOD DEVELOPMENT, RURAL ENERGY SECURITY & ENVIRONMENTAL
                                PROTECTION “


                                           I. INTRODUCTION

Charcoal is a major source of energy for a vast number of people in African countries as well as
a driving force of their economies. Various stages of the charcoal supply chain impact in
multiple ways on the economic, social, and environmental aspects of the MDG agenda.
However, a lot of problems still persist in this sector that hinders it from contributing to the
achievement of the MDGs. For instance, the unregulated/illegal setting and corruption in some
countries associated to inefficient conversion technologies and the free access to raw material
leads to deforestation and degradation of the forests which is one of the most prominent
problems faced by many African nations.
Hence, if the sustainable usage of forest resources is to be achieved and the charcoal production
and its use are to contribute to sustainable development and poverty alleviation, a different
approach to the charcoal sector has to be taken. Decision making processes and planning of
policies and actions to tackle problems related to this sector can not be done without a clear
understanding of the sector situation and the severity of the problems associated.
The value chain approach1 may be useful to this end as it may serve as a basis for decision
making and planning processes for these countries. This approach allows for a comprehensive
analysis of existing constraints, from ecological parameters to property/user rights to market
access. Additionally the value chain approach enables policy makers to create favourable
framework conditions which promote competitive enterprises, sustainable jobs and income for
local people. Furthermore, it allows impact-oriented monitoring of initiated policy actions
There are numerous examples and guidelines to value chain analyses but none of them specific
to the charcoal business, therefore adaptation to the specifics of the charcoal business is required
when using this approach.

Scope for Replication
As the charcoal production occurs all over the country and the neighbouring countries in Africa,
there is good potential to up-scale the study carried out to other regions of the country and
other countries to ensure better decisions are made.
In this regard, studies such as the one implemented as pilots by the IFAD project in
Mozambique and Ethiopia to map the value chain can serve as a basis to decision making
processes. They yield insights immediately relevant to policy-makers, civil-society stakeholders
and development agencies alike. These studies may help in understanding:
- Who the main stakeholders are as well as their roles;
- The main reasons that lead to the production, trade and use of charcoal;
- The incomes generated at different stages of the supply chain and the importance charcoal has
for these stakeholders families’ livelihoods


1
    Concept similar to the supply chain.
- The charcoal flows and the trends in deforestation due to charcoal production
- How the problems caused by charcoal production can be effectively addressed to curb
deforestation and global warming, including the promotion of alternative sources of energy and
promotion of other bio-energies.



                                   II. THE INSTITUTIONAL CONTEXT

Government institutions are responsible for development and implementation of policies,
legislation and other measures to ensure the sustainable management of the natural resources in
the respective countries including the forests and wildlife resources. They work at different
levels and play different roles to ensure the Government’s objectives are achieved. Apart from
the Government institutions, there may be NGOs working in the charcoal sector promoting the
legalization of community based organizations and producers associations to increase rural
incomes. These NGOs play an important role in disseminating good practices for the
management of the forest resources and raising of awareness for the consequences of over-
exploitation of resources for charcoal production. However, their efforts may sometimes
contribute little if not backed by Government institution.
Hence the joint implementation of studies like this facilitates the establishment of partnerships
and dissemination of information regarding the activities being carried out by each and various
stakeholders involved in the sector and discussions on the way forward for the existing projects.

Target Groups and Impact
The supply chain analysis targets both Government and non-government organizations as well
as all stakeholders involved in the supply chain. Apart from a better understanding of the
dimensions of the sector, the production/trade processes and the volumes involved, the value
chain analysis may facilitate the understanding of the problems that need to be addressed as
well as the urgency of actions to be carried out.
Also the joint implementation/analysis of the value chain may improve the partnerships and
collaborations between stakeholders and lead to more participatory planning processes.

III. IMPLEMENTATION: STEPS INVOLVED IN THE CHARCOAL VALUE CHAIN ANALYSIS


Facilitating the understanding of the magnitude of the charcoal supply chain enables a SWOT
analysis of the sector to be done showing where the efforts should be concentrated on if
resources’ sustainability is to be achieved. Additionally, the implementation of the supply chain
analysis involving all different stakeholders in the process is one way of bringing together these
stakeholders to analyze the sector problems and create a platform that enables them to
strengthen dialogue and relationship. The value chain analysis consists of a sequence of four
mutually related steps:

    1.   Reconstructing the value chain - this is the beginning for subsequent stages of the
         analysis and serves to visualise the links of a given charcoal supply chain. The result is a
         map which identifies both chain links (i.e. elements, or stages/functions of the charcoal
         supply process) and corresponding categories of stakeholders. Value chain maps are the
        core of any value chain analysis and therefore indispensable. An example is shown
        bellow.




        Chain mapping is not only analytical, but also a communicative exercise – one that
        benefits from stakeholder participation in workshops, interviews etc. Participatory value
        chain mapping provides the added value of stakeholder dialogue and may thus serve to
        build trust, correct misconceptions, and broaden the insight & awareness of policy
        makers.

   2.   Quantifying the value chain in detail - after identifying the elements and stakeholder
        categories, quantifiable data are added so as to (i) better understand the overall economic
        significance, (ii) identify and determine trends of development, and (iii) provisionally
        identify intervention priorities and opportunities. Quantifiable data typically include the
        number of stakeholders in each category, product volumes and their market shares,
        amounts of revenue accruing at different stages of the value chain etc. Additionally,
        political, legal-regulatory, administrative and societal framework conditions are added
        for the purpose of subsequent observation and analysis, as together constitute the wider
        context and “environment” of the charcoal business.
   3.   Preparing an economic analysis of value chains - this stage complements and deepens
        the quantification, with a distinct focus on economic efficiency. To this end, the flow of
        revenues accruing at various stages of the value chain is analysed in regard to (i) income
        and profit, prices, and quantities of the goods handled by the different actors; (ii)
        distribution of income and profit within and among the groups along the value chain;
        and (iii) the mechanisms which determine revenue generation and revenue sharing in a
        given setting.
   4.   In-depth analyses of selected factors - after reconstruction and quantification of the
        value chain, identification of relevant framework conditions and economic analysis, each
        chain-link must be scrutinised for the underlying causes and mechanisms which promote
        or inhibit sustainable development and poverty alleviation. Zooming in on individual
        parameters adds qualitative detail and provides explanations for the quantifiable facts
        observed. The selection of parameters for further analysis is guided by the dimensions of
        sustainability, i.e. ecological, economic and social aspects.

Findings and conclusions from the systematic analysis of a given value chain must be put to
practical use. They inform the development of coherent policies/strategies which allows for
flexible, implementation-oriented consideration of global public goods & policy goals, including
environmental services such as carbon sequestration and adaptation to climate change.
Optimising a value chain means amongst others: to promote stakeholder equity, and to empower
disadvantaged and marginalised groups. The aim is to involve stakeholders more evenly in
policy formulation, strategic planning, implementation and monitoring. Educating stakeholders
about their rights and responsibilities is just as important as the targeted improvement of the
political, legal-regulatory and administrative framework. Furthermore, it is necessary to enhance
stakeholder relations to prevent conflicts.

The value chain approach also includes the design of operational action-plans with clearly
assigned roles and mandates, impact-oriented results and corresponding provisions for
monitoring and evaluation, and resource allocation – a roadmap being the intended result.
Building a roadmap above all is a consultation & learning process. It benefits greatly from
institutionalised stakeholder participation in terms of more cost-effective and less conflict-prone
implementation, consequently more sustainable impact.

Building a roadmap involves a sequence of steps: (i) agreeing on a vision and strategy for
upgrading a given value chain (ii) analyzing opportunities and constraints (iii) setting
operational objectives, (iv) drafting actions plans which prescribe certain measure in detail,
ensure adequate coordination within and among thematic clusters (“fields of action”), and clearly
attribute responsibility to certain stakeholders. In any case, all activities must be monitored –
either continuously, or periodically, as required – with a view to verifying the realisation of
lasting impact over time.

Finally the value chain approach provides a useful and convenient tool for problem analysis,
strategic planning, operational planning, implementation and monitoring. In reality,
circumstances may vary from case to case, which means a careful adaptation of the approach is
needed. There are no straight forward formulas but the above can serve as basis for future
works.



                          SECTION THREE: USEFUL INFORMATION


Keywords:
Charcoal, value chains, planning, roadmap

Useful links:
www.inbar.int
http://ntfp.inbar.int/wiki/index.php/Main_Page


References:
Sepp, S. (2008).“Analysis of charcoal value chains - general considerations”. In Proceedings
of the Charcoal and communities in Africa. Maputo. Mozambique

				
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