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Value Chain Thinking and Energy Projects ­ - A Problem-Centred Value Chain Approach to Energy Based Upgrading of Rice Farmers in the Philippines

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Innovating Energy Access for Remote Areas: Discovering Untapped Resources
About the International DAAD-Alumni Summer School, Sustainable Provision of Rural RE
Programme
Participants Presentations
Speaker Presentations
  • Presenter: Henrik Beermann, (International Joint Master Programme in Sustainable Development, Leipzig University)
  • Rapporteur: Max Morrison
  • Moderator:Sebastian Groh


Overview

This paper conceptualizes the link between value chain theory and productive use (PU) focused energy projects based on microfinance mechanisms. Its main argument is that all PU of energy projects focusing on micro, small, and medium enterprises (MSME) development can be interpreted as value chain upgrading attempts. It is argued that successful upgrading greatly depends on the MSMEs embeddedness in specific market contexts. For that reason, the context must be assessed to derive energy based intervention points that cause additional income for MSMEs and consequently development. Based on this rationale, a problem-centred value chain approach is proposed. A case study of the Philippine rice market illustrates the usability of the method by outlining some risks and opportunities the rice value chain context poses to energy based upgrading attempts of rice farmers[1].
File:Experience from First Solar Mini Grid Service in Bangladesh.pdf


Main Topic Discussed

​​► Please see the presentation.

  • Value chains allow investments which take the form of changes in market structure.
  • Value chain literature can be used to analyze markets in terms of energy use efficiency.
  • Each type of value chain upgrade requires certain market characteristics to be implemented profitably.
  • Initial questionnaire far to technical, informal interviews much more fruitful.
  • End market is primary concern. If the value chain upgrade is undertaken, the buyer has to agree that the product has more intrinsic value after upgrade.
  • Different end markets have different expectations and payment schemes.
  • Government intervention “dole out” weakens willingness to pay, and private sector interest in producing new technology.
  • Energy use angle not sufficient to justify PU projects. Market value must also be considered.


Questions Posed

  • What recommendation can you give from your analysis?
    • Microfinance institutions are not so interested in working with these farmers. Government intervention actually does more harm than good in our experience.
    • Regional variation in price/growing season offers an opportunity.
    • Dry rice can be stored and thus sold in a wider variety of locations.
  • Can you isolate the effects of the solar dryer?
    • The Rice Dryer must be accompanied by proper storage to get maximum effectiveness.
  • Have you looked at the energy efficiency of the value chain of milk in india?
    • No. The research focused on rice drying.


References

  1. Value chain thinking and energy projects – A problem-centred value chain approach to energy based upgrading of rice farmers in the Philippines. Henrik Beermann, Utz Dornberger, Ben Sebitosi, Sebastian Groh, Jonas van der Straeten.