Combining Agro-Value Chain and Cluster Development: a case study from Ethiopia

Enhancing productivity and growth in the agro-value chains in developing countries is a fundamental goal of national governments and international development agencies. A large part of the population in developing countries relies on agricultural production, and low productivity and food scarcity due to increasing demographic pressures represent a big challenge to actions aimed at poverty alleviation. In this report we first present a case-study based on a pilot project conducted jointly by UNIDO, FAO and ILO in Ethiopia sponsored by the MDG-Fund. This pilot project, focusing on value chain enhancement of the Ethiopian edible oil sector, highlights the importance and the critical aspects of an integrated approach where a value chain methodology is combined and integrated with a cluster development component and, hence, allows to simultaneously address several constraints which limit the development of the agro food sector in developing countries. In the second part of the report, we briefly discuss the case for a joint model for interventions aimed at promoting agro-value chain development.