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Are global value chains really the right answer for small farmers? New study from IIED and HIVOS

Are global value chains really the right answer for small farmers? New study from IIED and HIVOS | Inclusive Business and Impact Investing | Scoop.it

If you’re interested in livelihoods, value chains, or agriculture, you absolutely have to read a great new paper from IIED and HIVOS.
Small producer agency in the globalised market, by Bill Vorley, Ethel del Pozo-Bergnes and Anna Barnett, does for our thinking on livelihoods what the Africa Power and Politics Programme does for governance, orPortfolios of the Poor for financial systems – challenges most of the conventional wisdom and makes a whole lot of sense, crystallizing those ‘back of the head’ discomforts with orthodox thinking and getting you (or at least me) nodding in recognition at the sensible alternatives provided.

Enough rave reviewing, what does it say?

The starting point is ‘looking at where small producers are — and not where we think they should be’. As with Portfolios of the Poor, by looking intently at small producers’ current strategies, you rapidly realize that the received wisdom on how development agencies can help them is probably misconceived. In particular, an awful lot of our thinking is on helping get small farmers into global value chains (GVCs).  The problems the paper identifies with that strategy include:

-          Informal markets are growing, not shrinking (see table 3.1) – modern value chains are the exception, not the rule. In many regions, informal local and regional markets are growing as fast or faster than global ones.

-          The GVC approach largely targets the ‘top of the pyramid’ of better-off small farmers best able to meet the stringent quality and quantity requirements of GVCs.

-          Farmers often prefer informal markets because they are flexible and allow them to minimise risk by running a diverse ‘portfolio’ of strategies – some family members head for the cities, others work off-farm, others produce lots of different crops on the farm. If prices or other factors vary, they change their strategies – the right thing to do in terms of resilience, but often leading them to be branded as unreliable by formal chain buyers.

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