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1.2 The Economic Analysis
The analysis of the contribution of the value chain (VC) to economic growth and its inclusiveness will use standard tools of economic analysis. These tools are called for to estimate the profitability of the activities for the actors involved in the VC, the impact of the VC within the national economy (GDP, balance of trade, public finance...) and its competitiveness.
The economic analysis helps answer the two framing questions:
- What is the contribution of the value chain to economic growth?
- Is this economic growth inclusive?
Each framing question is divided into a number of core questions and related quantitative indicators. Economists will answer them and then use them as a basis for their economic analysis and appraisal of the economic sustainability of the value chain.
Framing Question 1:
What is the contribution of the VC to economic growth?
CQ1.1. How profitable and sustainable are the VC activities for the entities involved?
CQ1.2. What is the contribution of the VC to the GDP?
CQ1.3. What is the contribution of the VC to the agriculture sector GDP?
CQ1.4. What is the contribution of the VC to public finance?
CQ1.5. What is the contribution of the VC to the balance of trade?
CQ1.6. Is the VC viable in the international economy?
CQ1.7. Which risks may affect the economic performance of the VC?
Framing Question 2:
Is this economic growth inclusive?
CQ2.1. How is income distributed across actors of the VC?
CQ2.2. What is the impact of the governance systems on income distribution at various steps of the VC?
CQ2.3. How is employment distributed in the VC?
The software AFA, developped by one of the Agrinatura centres, will support the economist in the calculations of indicators.