410
Practitioners are now seeking to identify appropriate means to promote smallholder farmers’ participation in commodity value chains. Such means should rely
on market-based approaches to ally value chain actors, so that they concentrate on
particular activities that allow them to capture maximum benefits. This could be
achieved through identifying the distribution channels, pricing mechanisms, product attributes, selling propositions and chain configurations that yield the greatest
competitive advantage and livelihood outcomes for chain actors. It is thus crucial to
focus on actor-specific market interventions rather than generic interventions that
do not always help the poorest, because they do not usually have the capacity
(human, physical resources or social) to participate effectively in market exchange.
Poorer chain actors can potentially seize opportunities in local (farm-level) markets,
which are easier to penetrate, less competitive and less stringent in terms of volume
and quality requirements than larger markets.
A blending of interventions that are either solely private sector or solely public
sector may ensure harmonized and dedicated support in promoting the integration
of smallholder farmers in agricultural value chains locally and beyond. In cognisance of this requirement, this chapter reviews country-specific applications of the
selected forms of vertical coordination to pinpoint the salient features and effects
of such applications on farmers’ participation. The ultimate goal is to document
the key lessons learnt in order to inform future technical and policy
interventions.
2 Methods
This chapter relies on existing literature to identify products and markets for which
contract farming and collective action seem most suitable. This is achieved through
the description of selected value chains and a desk review of empirical literature to
map the applications of the models in selected commodities while justifying why
farmers need to engage in exchange processes, pinpointing current and future prospects for their inclusion and revealing policy implications.
3 Description of Commodity Value Chains
3.1 Milk Value Chain
Studies conducted in SSA have identified huge growth potential for the dairy subsector that can benefit many value chain actors. The potential for a viable dairy
industry in SSA stems from the ever-growing population in the region (currently
estimated at 2.69% vis-à-vis the world average of 1.12%), along with a growth in
consumers’ incomes (Delgado 2003; Speedy 2003) and increased investment in
small- to medium-scale milk processing plants, which both process their own milk
F. T. M. Kilima and L. R. Kurwijila
Practitioners are now seeking to identify appropriate means to promote smallholder farmers’ participation in commodity value chains. Such means should rely
on market-based approaches to ally value chain actors, so that they concentrate on
particular activities that allow them to capture maximum benefits. This could be
achieved through identifying the distribution channels, pricing mechanisms, product attributes, selling propositions and chain configurations that yield the greatest
competitive advantage and livelihood outcomes for chain actors. It is thus crucial to
focus on actor-specific market interventions rather than generic interventions that
do not always help the poorest, because they do not usually have the capacity
(human, physical resources or social) to participate effectively in market exchange.
Poorer chain actors can potentially seize opportunities in local (farm-level) markets,
which are easier to penetrate, less competitive and less stringent in terms of volume
and quality requirements than larger markets.
A blending of interventions that are either solely private sector or solely public
sector may ensure harmonized and dedicated support in promoting the integration
of smallholder farmers in agricultural value chains locally and beyond. In cognisance of this requirement, this chapter reviews country-specific applications of the
selected forms of vertical coordination to pinpoint the salient features and effects
of such applications on farmers’ participation. The ultimate goal is to document
the key lessons learnt in order to inform future technical and policy
interventions.
2 Methods
This chapter relies on existing literature to identify products and markets for which
contract farming and collective action seem most suitable. This is achieved through
the description of selected value chains and a desk review of empirical literature to
map the applications of the models in selected commodities while justifying why
farmers need to engage in exchange processes, pinpointing current and future prospects for their inclusion and revealing policy implications.
3 Description of Commodity Value Chains
3.1 Milk Value Chain
Studies conducted in SSA have identified huge growth potential for the dairy subsector that can benefit many value chain actors. The potential for a viable dairy
industry in SSA stems from the ever-growing population in the region (currently
estimated at 2.69% vis-à-vis the world average of 1.12%), along with a growth in
consumers’ incomes (Delgado 2003; Speedy 2003) and increased investment in
small- to medium-scale milk processing plants, which both process their own milk
F. T. M. Kilima and L. R. Kurwijila