VC4D: Value Chain for Development

International symposium discusses pro-poor changes to the way food moves from field to fork
April 28, 2013
by Xinyuan Shang

We live in a fast changing world with fast changing trends: urbanization, globalization, industrialization, and more, all of which have a profound impact on the way food moves from field to fork along the agricultural value chain. Understanding the chain, and how to make it work for smallholder farmers, is a central theme in research that seeks to find solutions to poverty and malnutrition.

A recent symposium, co-organized by IFPRI and Renmin University in China, brought policymakers, researchers, and stakeholders to Beijing to discuss that very question: how can we improve value chain performance for the poor? According to the symposium co-organizer, IFPRI Senior Research Fellow and China Program Leader Kevin Chen, most low-income countries are confronted with low agricultural productivity, weak institutions, and underdeveloped markets. “The majority of farmers in low-income countries are smallholders, and decades of underinvestment present small-scale producers with inadequate infrastructure and lack of access to technologies, skills, and services. They are highly vulnerable to energy price volatility and extreme weather,” he said.

Researchers who work in this field have boiled down the prescription for pro-poor value chains to an easy-to-remember acronym and alliteration: VC4D, or Value Chain for Development, which includes improving processes, products, productivity, and partnerships that increase farmer incomes and their ability to compete, and integrate them into higher-value markets.

What does this mean more specifically? According to Chen, nations need to:

  • focus on developing particular service sectors, such as financial and risk mitigation services;
  • increase farmers’ capacity to adopt new technology, including communications technology, and to follow market developments;
  • find ways to increase the quantity as well as the quality of food, while ensuring food safety; and
  • link farmers directly to markets to make supply chains more efficient while reducing transaction costs.

This prescription requires the development community to take an integrated, comprehensive approach to policy and offer targeted interventions, according to Tom Reardon, IFPRIvisiting research fellow and professor at Renmin University. Some interventions he mentioned: developing wholesale markets, strengthening farmer cooperatives, and offering access to value chain financing. “Strong public-private sector partnerships are key to improving value chains,” said Reardon.

PK Joshi, director of IFPRI’s South Asia office; Bart Minten, senior research fellow and director of IFPRI’s Ethiopia office; and Senior Research Fellow Xiaobo Zhang also provided perspectives on value chain development in India, Ethiopia, and China. In a panel discussion session, Kevin Chen also presented the results from a recent book, “The Quiet Revolution in Staple Food Value Chains: Enter the Dragon, the Elephant, and the Tiger”.

More than 60 participants from the Asian Development Bank, the UK Department for International Development, the United Nations Food and Agriculture Organization, the World Bank, and the International Fund for Agricultural Development—from countries as diverse as India, China, Brazil, Vietnam, Cambodia, and Bangladesh—attended the symposium.

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