Aid for Trade for exporting companies

(Originally posted on 5 November 2012)

How can Aid for Trade effectively reach the poor to help their participation in global value chains? This was the subject of a regular “ideas sharing” breakfast meeting held in ITC this week. The meeting shared approaches on how to reach these beneficiaries through sectoral development programmes. Colleagues gave examples from different sectors including food security crops (Liberia), traditional commodities (coffee in Uganda) non-traditional food export crops (Kenya and Zambia), natural products (Peru) and leather products (Chad). The types of interventions include capacity building on market access and supply, providing market information and support to strengthen export linkages with buyers.

ITC’s Trade and Environment Programme (TEP) funded by Denmark shared its approach to reach beneficiaries through providing targeted support to selected companies – ITC also focuses support at the policy and trade support institution levels.

The rationale for working directly with companies is the following: Companies are the direct link between smallholders and global value chain. If a programme strengthens capacity in companies, then the benefits (increased business) should accrue to employees and suppliers, notwithstanding issues relating to environmental, gender and employment practices. For example, in 2009, the TEP worked with a coffee company in Uganda and their lead farmers to include 3,000 farmers in an organic certification scheme. This is a market-led form of intervention.

Andrew Rugariza, Good African Coffee, Uganda
Andrew Rugariza, Good African Coffee, Uganda
Photo: Glenna Gordon/ITC

However, to know if this company orientated approach works, we need an evaluation framework. The five classic evaluation criteria are: effectiveness, efficiency, relevance, impact and sustainability. Below is a table I prepared using these criteria and sketching out in the third column what this means for running a project focused on supporting companies directly. As this is the basis on which a project will be evaluated, this can help in thinking about how best to design a project that is directly working with exporting companies.

Criteria Definition What this means for a company orientated project
Effective Achieve your objective The project results in increased sales; Improved skills; Improved market access
Efficient The outputs in relation to the inputs The project has low management cost – e.g. relatively low spend on travel and staff
Relevance Activity suited to the priorities of the target group The project focuses on activities relevant to the company growing its business e.g. providing market information, contacts with buyers, training on market access requirements
Impact Positive/negative changes to group The project leads to increased incomes of workers and smallholders
Sustainability Will the benefits continue when project closes The company does not rely on the project to remain operational and competitive
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