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Value Chain Analysis for Policymaking: Methodological Guidelines for a Quantitative Approach. EASYPol Series 129

These guidelines provide users with the key notions required to carry out analyses of policy impacts by means of a value chain approach and show how to do it in a practical way by making use of relevant tools. In particular, the reader will find this material useful to:

  • Identify the basic units operating in a given value chain (=agents) and the activities they undertake;
  • Quantify the gross revenues, value added creation and profits of every agent;
  • Build different scenarios and measure changes in revenues, value added creation and profits for the different scenarios;
  • Build a Policy Analysis Matrix (PAM) and compute protection and competitiveness indicators, such as: the Nominal Protection Coefficient (NPC), the Effective Protection Coefficient (EPC), the Domestic Resource Cost (DRC).

This material is conceived for staff of ministries, policy makers, researchers and all those who have a role and interest in assessing the socio-economic effects of policy measures for given value chain. It can be used for personal knowledge development, as a professional and operational reference, as well as a set of ready-to-go group capacity development sessions. Some notions of economics allow the user to fully benefit of this material. However, most of the content is accessible also to people without such background. 

These methodological guidelines are organized in ten units, each one supported by a set of slides to ease the presentation of the material and a number of exercises complemented by spreadsheet and FAO Value Chain Analysis (VCA) files. 

Download the FAOVCA analytical tool and user manual:

This paper is part of the FAO Policy series: EASYPol-Resources for policy making (in agriculture, rural development and food security). You can find other EASYPol series' resources in the Resources section of this website, typing "EASYPol" in the free text search.