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By Sara Gustafson

 Photo credit: CGIAR 

Introduction

In recent years, value chain development (VCD) in the agrifood system has been hailed as a practical way to expand market access for smallholder producers, reduce poverty, enhance environmental sustainability, and improve food security and gender equity. Despite significant investments in VCD from governments, donors, and NGOs, however, evidence regarding the effectiveness of VCD interventions in addressing these important development goals remains lacking. Many existing studies have focused on the design and outputs of VCD interventions themselves rather than on their outcomes and impacts. As a result, the true reach of these programs remains unknown, particularly for poor populations.

PIM webinar

A recent webinar from the CGIAR Research Program on Policies, Institutions, and Markets (PIM) and IFPRI’s Food Security Portal examined several important findings from a new book, Value Chain Development and the Poor: Promise, delivery, and opportunities for impact at scale, that aims to fill this gap in knowledge. The book contains a collection of case studies and lessons learned from VCD interventions in Latin America, Africa, and Southeast Asia, with chapters written by researchers and development practitioners to provide an in-depth examination of VCD in both theory and in practice.

What we discussed

Erwin Bulte, Professor of Development Economics at Wageningen University, provided opening remarks and introduced the three editors who led the webinar presentations and discussion.

 

Jason Donovan, Senior Economist at the International Maize and Wheat Improvement Center (CIMMYT), provided an overview of the rationale driving the book. He highlighted that over the past two decades, VCD has become a topic of strong interest for not only governments and NGOs but also private sector industry actors. During the same period, value chain approaches have been adopted throughout other development areas as well, including food systems, health and nutrition, economic development, and gender equity. However, fundamental questions surrounding what works and what doesn’t in terms of VCD remain unexplored.

 

Donovan also summarized several key topics from the book. The first, issue-attention cycles, stems from the field of political science and is used to understand how issues gain and then lose public attention. The book finds that in the arena of VCD practice, there tend to be more issue-attention cycles than in the research arena. He points out that issue-attention cycles can be positive when innovations stem from lessons learned during implementation and when there is knowledge sharing between researchers and practitioners. However, these cycles can be negative when issues remain unaddressed from cycle to cycle, when new approaches fail to address the true complexity of VCD, and when competition among researchers and practitioners impedes knowledge sharing and innovation.

 

“It’s okay for an issue to come and go as long as we’re sort of building over time our understanding of what works and what doesn’t work and how to do things better,” Donovan explained.

 

The second topic Donovan discussed was cooperatives and the expectations the development world has held for these groups over time. These include helping smallholders access higher value markets and agricultural extension services. He drew on a case study of four emerging cocoa cooperatives in Peru, which found that these groups face several daunting challenges, including difficulty establishing relationships between buyers and members, inability to provide higher prices to their members, limited capital and lack of access to financing, and difficulty completing contracts.

 

“This has huge implications for value chain development,” Donovan pointed out, “if the key link between buyers and smallholders is the cooperative.”

 

Finally, Donovan discussed VCD implementation, drawing from a case study of four interventions in Nicaragua. The case study looked at how international NGOs are leading the design and implementation of VCD programs, particularly how they use existing tools like the VC Knowledge Portal to address the complexities of VCD. The study found that NGOs take a formulaic approach to the design and implementation of VCD interventions. They tend to use a single tool, focus on technical assistance and training rather than relationship building, limited oversight of local NGOs and cooperatives, and limited engagement with other stakeholders (researchers, additional value chain actors, etc.). These findings highlight the need for a broader approach to VCD that combines multiple tools, encourages deeper collaboration across value chains, and focuses on evidence-based reflection and learning.

 

Jon Hellin, Head of the Sustainable Impact Platform at the International Rice Research Institute (IRRI), next presented on the topic of impact bonds in the context of coffee and cocoa value chains in Peru. Impact bonds use a pay-for-success contract that replaces upfront financing by donors and allows private investors and financial markets to share in the risk of a social development program. Hellin highlighted several important lessons learned from this case study. It takes a significant amount of time to prepare the design of an impact bond and to train staff in the more substantial project monitoring needed; as a result, these bonds carry high transaction costs. Despite these challenges, however, these bonds also drove a dramatic shift in the donor-implementer relationship, with more emphasis placed on safeguarding the rate of return and thus ensuring the success of the program. Ultimately, this benefits communities in which these programs are implemented.

 

“There are clear advantages of this model over conventional development projects and grants,” Hellin concluded, “but a lot of experimentation and fine-tuning is still to be done.”

 

Hellin also presented a review of seven tools for gender-equitable VCD, which has become a prominent topic in VCD over the past few years. The review that all of the guides effectively argued for the inclusion of gender equity in the design of VCD programs. However, several important gaps remain in the coverage of the methodologies used in these guides. These include examining how women and men participate in collective enterprises like cooperatives; how societal norms impact gender relations; how to use VCD to address inequities; and how to link gender-equity tools to other VCD tools and methodologies. These gaps highlight the need for both conceptual and methodological innovations to better address issues of gender in VCD design and implementation.

Hellin concluded the presentation portion of the webinar with a review of the book’s overall messages. One of the most important of these is the call for greater cooperation among VCD actors. “There is a need for deeper collaboration among practitioners and researchers in order to learn together how to address the ‘how’ and the ‘what now’ questions,” he said.

 

After a Q&A session, Frank Place, Director of PIM, provided closing remarks. “The topic of value chain development is very, very complex,” he reiterated. “The case studies in this book all provide insights into that. . . We need to deploy many types of tools and cast them wide enough to capture that complexity.”

 

COVID-19 and impacts on global food systems and household welfare

The food system, and those who depend on it, have been strongly but unevenly affected by COVID-19. Overall, the impacts on food systems, poverty, and nutrition have been caused by a combination of a generalized economic recession and disruptions in agri-food supply chains. This paper provides an overview of the contributions to this Special Issue of Agricultural Economics.

FBS

By Diego Naziri, Arma Bertuso and Sara Gustafson

 Photo credit: CIP

 

Introduction

The Food Security Portal and the PIM Value Chains Knowledge Portal teams are pleased to announce the awardee for a grant to produce a new e-learning course. Diego Naziri of the International Potato Center (CIP) submitted a proposal for an e-learning course aimed at training facilitators in CIP’s Farmer Business School(FBS) methodology.

FBS is an experiential learning model that aims to address constraints to effective market linkages by improving farmers’ business knowledge and strengthening farmer organizations. Trained FBS facilitators work directly with farmer groups to assist them in identifying market opportunities, conducting market assessments, developing new products, and forging stronger relationships with traders and other actors along the value chain.

Farmer Business School (FBS)

The impacts of these improved business practices are numerous. Naziri says, “FBS contributes to tackling poverty, improving livelihoods, and creating job opportunities that are more attractive to women and young people by strengthening the participation of small-scale farmers in value chains and building their capacity to respond to emerging market opportunities.” The methodology can also increase farmers’ resilience to shocks by helping them diversify their livelihoods. The FBS methodology was originally developed by researchers at CIP for use in root and tuber value chains but can be applied to any commodity, particularly ones that are locally produced and consumed.

FBS e-learning course

The proposed e-learning course will streamline the training process for FBS facilitators. At the end of the course and in combination with CIP’s FBS manual and other resource materials, facilitators will be able to properly implement and oversee the FBS process in the field.

Naziri says that building the capacities of FBS facilitators through a free online course will help open doors for the methodology to reach more participants. Currently, “ . . . only a small bunch of experts is highly familiar with the approach and has the ability to train the facilitators,” Naziri explains. The e-learning course will allow a broader range of participants to effectively facilitate and oversee the FBS process. Naziri is confident that this will lead to wider uptake of this important value chain development methodology which is an innovation that has been recently selected as Golden Egg by the CGIAR Research Program on Roots, Tubers and Bananas (RTB) and also featured in the CGIAR@50 campaign.

 The FBS e-learning course will consist of three units and will include quizzes and a final exam. It will be accessible through the Food Security Portal E-learning platform at the end of 2021. The course will be complimentary and open to all as a public good. In addition, Naziri will be featured in an upcoming PIM-FSP webinar to highlight the course and the FBS methodology.

1

By Luciana Delgado and Sara Gustafson

 Photo credit: CGIAR

 

Introduction

Reducing food loss along the entire value chain can play an important role in improving global and local food security. However, accurate, standardized definitions and measurements of food loss have proven elusive. Without being able to properly understand the scope of the problem, policymakers and researchers will find it difficult to enact effective policies to address it. Two recent studies from researchers at IFPRI, KU Leuven, and UN FAO aim to improve the way food loss are studied and measured in order to provide a clearer policy roadmap.

Food loss is important

Addressing food loss is important for several reasons. First, food security policies often focus on increasing yields and production, but policies aimed at reducing food loss are often less cost- and time-intensive. Second, reducing food loss can also improve the efficiency in the use of natural resources and help cut greenhouse gas emissions. Third, reducing losses along the agricultural value chain can boost producers’ incomes by getting a price premium for better quality produce and decrease consumers’ expenses by increasing available supply, with positive implications for poor populations

Innovative methodologies

A 2021 paper published in Food Policy combines traditional methodology and three innovative methodologies to better quantify food loss and identify how and where food loss occurs for different commodities and value chain nodes. A second paper published in Applied Economics Perspectives and Policy uses econometric modeling to measure food losses along staple food value chains. The research informing both papers expands existing definitions of food loss to include pre-harvest losses and includes losses in  quantity, quality and value. The work looks at food loss among producers, middlemen, and processors in staple value chains in six countries: potato in Peru and Ecuador, maize and beans in Honduras and Guatemala, teff in Ethiopia, Maize in Mozambique and wheat in China.

 

The new methodologies measure both quantity and quality losses and consist of the category method that classifies crops into quality categories; the attribute method that evaluates crops according to inferior visual, tactile, and olfactory product characteristics; and the price method that assumes that higher (or lower) prices reflect higher (or lower) quality. These three methodologies show larger food losses than the traditional aggregate self-reported methodology, because of the disaggregation of the elements behind the losses and because they capture both quantity and quality losses.  They also allow for important distinctions to be made among producers, middlemen, and processors. These distinctions could allow for more accurately targeted policies to address food loss where it actually occurs.

Losses are consistently highest at the producer level

Losses are consistently highest at the producer level: 60-80 percent of total losses and can be mainly attributed to the pre harvest stage. Losses at the middleman level, on the other hand, account for only 7 percent. Across both studies, pests, crop diseases, unfavorable climate conditions (especially low rainfall), and lack of mechanized harvest practices and appropriate storage facilities appear to be important drivers of food loss at the producer level.

 

Beyond these immediate micro-level causes of food loss

Both papers highlight the need to look beyond these immediate micro-level causes of food loss in order to effectively address the problem. More broadly, poor road infrastructure and lack of access to credit and financing also play an important role, particularly in rural areas and for small producers. In addition, demographics also appear to have a part in determining food losses. The research found that more educated and experienced producers appear to experience significantly less loss.

Targeted policies to address food loss

The extent of all of these factors varied by commodity, however. This highlights perhaps the most important finding from both papers: Policymakers and researchers need to continue to collect evidence-based information from specific value chains and at specific nodes in order to create targeted policies to address food loss. 

 

Citations

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