Agricultural value chains in development cooperation: analyses and recommendations

Herold, Jana (2020): Agricultural value chains in development cooperation. Analyses and recommendations. Institute for Development and Peace (INEF), University of Duisburg-Essen (AVE-Study 23b/2020). 27 pages

2 April 2020. The Institute for Development and Peace (INEF) at the University of Duisburg-Essen, Germany, conducted a four-year research project entitled "Ways out of extreme poverty, vulnerability and food insecurity". The aim of the project was to develop recommendations for German official development cooperation with regard to improving target group reach and sustainable living situations for extremely poor, vulnerable and food-insecure populations groups. 

The research focused on analysing projects that mainly work within the following topics: 

1. access to land and tenure security, 
2. value chains 
3. and social security. 

Participation, socio-cultural factors and gender aspects were always taken into account as crosscutting issues. In the focus countries Benin, Burkina Faso, Cambodia, Ethiopia and Kenya, good practice projects were identified for the above-mentioned priority topics and, in a second step, their effectiveness was examined on site.

Based on fieldwork and research of the past four years, the March 2020 study demonstrates that support of agricultural value chains has become an important approach in German and international development cooperation, not only to promote the economic development of a country but also to contribute to poverty reduction and food security by integrating smallholder farmers into value chains. 

In consequence, this approach can address a number of goals of the Agenda 2030 for sustainable development. While promoting value chains has great potential to advance sustainable development, it can also have negative effects, particularly for poor and vulnerable population groups. In order for these population groups to be able to benefit from value chain support, they need targeted financial and technical support and bridging assistance. 

Therefore, the approach should primarily aim at poverty reduction, but also at improving food security, empowering women and sustainable natural resource management. 

The main challenges of the value chain approach are insufficient access to agricultural inputs, markets and agricultural credits and the lack of entrepreneurial know-how for market-oriented production. 

Overall, the INEF research on agricultural value chains shows that their promotion should always start with primary production, as this is the basis for any further added value. However, the land use rights of the population eligible for support, especially women, should be clarified before any investment is made. Another critical point that any support for value chains should take into account is a country's physical infrastructure. It is necessary to connect both primary production and processing to markets.