Can Value Chain Development Do More for Smallholders?
This interview was originally published on the website of the CGIAR Research Program on Policies, Institutions, and Markets.
Jason Donovan (CIMMYT), Dietmar Stoian (World Agroforestry), and Jon Hellin (IRRI) are co-editors of the new book “Value Chain Development and The Poor: Promise, delivery, and opportunities for impact at scale,” published with support from the CGIAR Research Programs on Maize Agri-Food Systems (MAIZE), led by CIMMYT, and Policies, Institutions and Markets (PIM), led by IFPRI.
In this interview, the editors explain why this book, why it is important and relevant now, and what lessons learned in the past we should take forward to ensure inclusive and efficient value chain development in the future.
Why this book and how did you come up with the idea of working on it?
Jason Donovan: This book looks to fill the gap in the discussions on value chains which have been ongoing for nearly two decades: the need to shed light on how value chain concepts and ideas are translated into development programming and interventions for achieving greater impact at scale. As CGIAR researchers, we felt a commitment for examining value chains from the perspectives of governments, donors, NGOs, and businesses interested in smallholder engagement in value chains.
Dietmar, Jon, and I have been engaged with Practical Action Publishing over the years and highly appreciate their dedication to better development practices, as well as the capacity to get development-oriented books into the hands of practitioners and researchers quickly. We hope that this book encourages reflection on current value chain development (VCD) approaches and on possible innovations in design, implementation, and assessment of VCD outcomes and impacts.
What is value chain development?
Dietmar Stoian: Moving a product to consumers requires multiple interactions between producers, processors, and traders. These value chain actors often engage in bilateral relationships with their business partners upstream and downstream the value chain. We speak of value chain development (VCD) when there is a concerted approach to develop a chain beyond such bilateral relationships with a view on the chain as a whole. In addition to economic gains, VCD seeks to improve the environmental and social performance of value chains. Toward this end, value chain actors often collaborate with external service providers which may include non-governmental organizations, for-profit businesses, and governmental agencies.
Our work on value chain development in CGIAR particularly seeks to improve the positioning and benefit capturing of smallholder farmers and small-scale entrepreneurs – hence the focus of our book on VCD involving the poor. Integrated approaches to VCD imply engagement with public and private sector and civil society organizations, leveraging their specific capacities and resources and creating an enabling environment for inclusive value chain development.
And what makes value chain development inclusive? What does it mean for those who are often left behind – because of their gender, age, social status, or other reasons?
Jon Hellin: These are important questions. The value chain literature often considers VCD inclusive (by default) when smallholders and other resource-poor actors are involved in VCD initiatives. What is not always accounted for are the preconditions required for smallholders and other actors to become ‘value chain ready’. This includes the development of their capacities to assume different positions in value chains and the arrangements needed for ensuring equitable sharing of benefits and risks between them and their business partners downstream the value chain. Women, youth, and other groups that may be marginalized because of social differentiation often require specific support to meet minimum asset thresholds for their successful participation in VCD. Various chapters in the book provide practical examples for this type of support and other enabling conditions for truly inclusive VCD.
Who should read the book and why? What is the best way to use learnings from this book in practice?
JD: The book focuses on themes that other books on value chains have tended to gloss over: the potential and challenges for advancing impactful VCD programming at scale. It provides relevant lessons for those who fund, implement, and research market-oriented rural development programs. For donors, it sheds light on practical options to innovate in program design and better structure engagement with NGOs, researchers, and government agencies. Across several chapters, authors urge donors to make better use of their position of influence to advance more reflective (and potentially useful) monitoring and impact assessment. For representatives of NGOs, government agencies, and others who engage in the field regularly with farmers and small businesses, the book provides practical insights on what works and what does not work in terms of programming design and implementation. The book also offers guidance for those researchers interested in rural development on how they can contribute to the boarder discussion on the effective design and implementation of VCD across different contexts.
In the context of the ongoing One CGIAR reform, how can the book inform our future research on value chains?
DS: The One CGIAR strategy envisages five impact areas. As a cross-cutting topic, value chain research will be critical in support of them. This holds particularly true for the impact area ‘poverty reduction, livelihoods and jobs’, underscoring the importance of providing evidence-based solutions for VCD benefitting smallholder farmers and other resource-poor value chain actors. Integrated approaches to value chain research and development will also allow for relevant contributions in other impact areas of One CGIAR, such as ‘nutrition, health and food security’ (nutrition-sensitive value chains), ‘gender equality, youth and social inclusion’ (gender-equitable and otherwise inclusive value chains), ‘climate adaptation and mitigation’ (climate-resilient value chain development), and ‘environmental health and biodiversity’ (sustainable value chains).
‘Value chains need not and often do not include or benefit poor people, but there are a number of collections of case studies about those that do. This book by three acknowledged experts who have many years of field experience in appraising and developing value chains goes further. It includes some important cases, from Latin America, Africa and SE Asia, but most of the book is about what has been learned, how value chains can be developed so that they do include poor people, and do not exclude them. Let us hope that the book is read, and acted upon, not only by the ‘development community’ but by the management of the businesses who actually design and manage the value chains, so that they include and benefit the poor.’
Malcolm Harper, Emeritus Professor, Cranfield School of Management
‘This collection offers unique perspectives on value chain development, exploring how VCD is implemented in the field, options for innovation in design, and the potential for VCD to achieve impact at scale.’
Shaun Ferris, Technical Director Agriculture and Livelihoods, Catholic Relief Services
‘In my many years as a researcher I have learned that analysts with different backgrounds will generate unique insights into tackling common problems and it is the collection of those insights that lead to progress. The editors of this book has pulled together not only interesting case studies on agricultural value chain development, but have drawn together an impressive caliber and diversity of authors, both researchers and practitioners. The book focuses on how to make value chains work better for the poor, especially the millions of smallholder farmers in developing countries. Readers will come away with a firm understanding of the challenges, what has been achieved so far, and what still requires attention to make value chains work for the poor.’
Frank Place, Director of the CGIAR Research Program on Policies, Institutions, and Markets
‘An insightful overview and analysis of the state of the Value Chain Development sector, past and present, from both the practitioner and researcher perspectives. Provides important thinking on challenges and shortcomings of our work while highlighting new thinking and ways forward.’
Dan Barthmaier, Senior Technical Advisor – Markets and Value Chains, Catholic Relief Services