Innovation For Inclusive Value Chain Development

With roughly three-quarters of the world’s poor living in rural areas, addressing global poverty requires paying attention to rural populations, especially smallholder farmers in developing countries. Millions of smallholders and others among the developing world’s poor, including a large proportion of women, participate as producers, laborers, traders, processors, retailers, or consumers in agricultural value chains. A value chain refers to the set of interlinked agents that produce, transform, and market the products that consumers are prepared to purchase (see Figure 1 for an outline of a stylized value chain). Improving the performance of agricultural value chains has the potential to benefit large numbers of low-income and poor people. Innovation for Inclusive Value-Chain Development: Successes and Challenges assesses how to improve agricultural value chains, particularly value chains that include smallholders.

Governments, nongovernmental organizations, donors, and the private sector have increasingly embraced value-chain development (VCD) for stimulating economic growth and combating rural poverty. Innovation for Inclusive Value-Chain Development: Successes and Challenges helps to fill the current gap in systematic knowledge about how well VCD has performed, related trade-offs or undesired effects, and which combinations of VCD elements are most likely to reduce poverty and deliver on overall development goals. This book uses case studies to examine a range of VCD experiences. Approaching the subject from various angles, it looks at new linkages to markets and the role of farmer organizations and contract farming in raising productivity and access to markets, the minimum assets requirement to participate in VCD, the role of multi-stakeholder platforms in VCD, and how to measure and identify successful VCD interventions. The book also explores the challenges livestock-dependent people face; how urbanization and advancing technologies affect linkages; ways to increase gender inclusion and economic growth; and the different roles various types of platforms play in VCD.

Lead firms, development organisations, donors and governments view value chains and voluntary standards as vital instruments for achieving millennium development goals through trade and market-related interventions. The precise foundations for these development strategies, which suggest positive development outcomes from integration of poor actors into value chains, are as yet underdeveloped. The interdisciplinary work in this volume shows how trade is managed and asks theory-driven questions about how value chains relate to locally-rooted development processes. Policy makers and development practitioners are increasingly using value chain analysis to frame pro-poor development interventions. This book offers multiple conceptualizations of development outcomes of inclusion of small producers, firms and workers in value chains. Processes of inclusion at different scales are unpacked in order to identify the terms of participation of small producers, firms and workers. As value chains are embedded, the book further argues that inclusion can be conceptualized as the degree of alignment between value chain logics and the institutions and capacities in the local business system. The combination of inclusive governance and endogenous development informs a grounded debate on roles of development-oriented partnerships. Chapters in this volume draw on multiple strands of economics, sociology, political science, geography and management studies; and for empirical grounding engage in comparative analysis of cases from Latin America, SubSaharan Africa and East and South East Asia. These are combined with processes taking place at a global level, such as the proliferation of standards and the growth of roundtables and multi-stakeholder partnerships. The contributions explore contrasts – between contexts, between industries or commodities/products, and between conceptual frameworks; and the context dependency of development impact necessitates cross-case investigations. This collection will be of interest to scholars in development studies, economics, business studies, as well as to development policy makers.

Inequality and innovation are both rising issues on the international development agenda. Their intersection is inclusive innovation; defined as the inclusion within some aspect of innovation of groups who are currently marginalised. This is a topic of increasing interest and activity. Large firms have been working to deliver innovative goods and services for base-of-the-pyramid consumers: the c.3 billion who live on less than US$2 per day. Within poor communities, an influx of new technology, finance and capabilities has spurred more localised innovation. A variety of different models have been identified by which this activity is organised and implemented, such as inclusive innovation clusters, grassroots innovation, frugal innovation, innovation platforms, and inclusive user-producer interactions. This book explores the operation, conceptualisation and impact of these models, and analyses the nature of inclusive innovation practice and research. It will be of interest to researchers, policy-makers, strategists and other practitioners associated with these new forms of innovation. This book was originally published as a special issue of Innovation and Development.

Most studies of doing business at the "bottom of the economic pyramid" focus on viewing the poor as consumers, as micro-entrepreneurs, or as potential employees of local companies. Almost no analysis focuses on the poor as primary producers of agricultural commodities a striking omission given that primary producers are by far the largest segment of the working-age population in developing economies. Making Markets More Inclusive bridges the management literature with original research on agricultural value chains in developing and emerging economies. This exciting work is the first to delve into the skills, capabilities, strategies and approaches needed for inclusive value chain development. McKague shows how NGOs and companies can connect poor producers in developing economies with the right markets to better create social and economic impact. He also analyzes one of the leading agricultural value chain initiatives in the world, which is being replicated by the Bill and Melinda Gates Foundation in several different value chains in Malawi, Tanzania, Ghana, India, and Mali. Want more? Check out these compelling videos, which provide a glimpse into the stories and examples used throughout the book. Video Trailer for Making Markets More Inclusive. Farmer Training. Kallani Rani increased the productivity of her cows, become a cattle feed seller in her village (Chapter 6), and opened a fresh milk canteen in her local market (Chapter 7). She now trains other women farmers and works to improve opportunities for women in her community (Chapter 5). Animal Health Care Services. Asma Husna trained to be an animal health worker with CARE to provide important animal health services and education to local farmers on a fee-for-service basis (Chapter 6). Cattle Feed Shops. Fulera Akter started a business as a cattle feed seller after demand for nutritional animal feed grew due to farmers' improved knowledge of nutrition (Chapter 6). Savings Groups. Coauthor Muhammad Siddiquee, the Coordinator of Agriculture and Value Chain Programs at CARE Bangladesh, discusses the value of farmer savings groups (Chapter 6). Milk Collection. Sarothi Rani became a milk collector to earn an improved income for her family and provide an important service to other dairy farmers in her community (Chapter 7). Digital Fat Testing. Introducing digital fat testing machines into the dairy value chain helped reward farmers for making investments in producing higher quality milk, as well as ensuring transparent and timely payments (Chapter 7). Microfranchising. Supporting agricultural input shop owners with training, relationships to suppliers, common branding, and standardized customer services improves the productivity of smallholder farmers and the profitability of shops (Chapter 12). Bangladesh Dairy Value Chain Learning. Reflections from some of the 40 CARE staff from 17 countries who came to Bangladesh to learn from the experience of the dairy value chain project (Chapter 15).

Agriculture, in Mozambique, is characterized by production systems that are based predominantly on rainfed conditions and on low use of yield enhancing agricultural inputs. The Innovation for Agribusiness (InovAgro) interventions were designed to increase incomes for poor smallholder farmers in northern Mozambique. Using a market systems development (MSD) approach, the InovAgro implemented value chain interventions (VCIs) to promote the development of inclusive and sustainable market systems such that the interventions impacts were felt long beyond the project’s lifespan. This study evaluated the impact of the InovAgro VCIs on households (considering a range of outcomes related to farmers’ use of yield-enhancing agricultural inputs, access to information on agricultural input and output markets, maize productivity, women and youth empowerment, and household welfare. The study also explored InovAgro VCIs outcome indicators to evaluate market-level effects, namely: systemic (long-term), sustainability, large-scale (spillover or multiplier), and unintended (positive or negative) effects. We conducted a modified randomized controlled trial (RCT) using a spatial identification strategy to classify beneficiary and nonbeneficiary households; this was supplemented with three waves of household-level panel data (2015, 2017 and 2019). We also complemented key informant interviews (KIIs) and focus group discussions (FGDs) with local stakeholders, including market actors and local authorities, with two rounds of geospatial data (2017 and 2019). Our findings show that InovAgro VCIs had a positive and significant impact on beneficiaries’ use of yield-boosting agricultural inputs and on access to information on agricultural input and output markets. Our analysis also reveals that the InovAgro VCIs boosted maize productivity and increased the marketable surplus of maize among beneficiaries. InovAgro VCIs were seen to have unintended negative effects on access to, and control over, land by women and youth in the short term; in the longer term; however, these adverse effects were reversed and became positive and significant. Our findings also show that simultaneous exposure to all three VCIs under the complete package had a positive impact on overall household welfare. We also find evidence in support of the InovAgro VCIs having a systemic market effect and producing more sustainable long-term usage of yield-boosting agricultural practices than non-InovAgro VCIs. Our results elucidate that InovAgro VCIs benefitted large numbers of smallholder farmers beyond the project’s direct sphere of influence and targeted beneficiaries. The key takeaway message from our findings is that a more intense VCI, that is, delivery of the complete package, appears to be necessary to achieve a long-term positive effect on overall household welfare.

This joint OECD and World Bank Group report, presented to G20 Trade Ministers in October 2015, focuses on the challenge of making GVCs more “inclusive” by overcoming participation constraints for SMEs and facilitating access for LIDCs.