An important strategy for increasing the incomes of small-scale farmers in developing countries is to help them diversify from low-value staple food commodities into higher-value commodities, such as livestock, dairy products, fish, fruits, vegetables, and spices. The demand for these products in both developed and developing countries is rising rapidly as incomes increase and consumers adopt more diverse diets. These products are typically perishable, they are increasingly sold through specialized markets, and the product price is highly sensitive to variations in quality. Because of these characteristics, the marketing channels for high-value agricultural commodities are often characterized by various forms of vertical coordination, such as cooperatives, contract farming, and vertical integration.

The specific objectives of this program are:

• To identify bottlenecks and constraints faced by small farmers and other poor households in their attempts to raise income by participating in supply chains for high-value agricultural commodities;
• To analyze alternative policies, regulations, investments (public, private or mixed), and institutional arrangements that alleviate the identified bottlenecks and constraints;
• To disseminate information on constraints and policy options to researchers and policymakers, and international organizations in developing countries; and
• To strengthen the capacity of policymakers and researchers in targeted countries to undertake policy research concerning the role of diversification and high-value agricultural commodities in raising the incomes of small farmers and other poor households.