BOOK + WEBINAR: African Farmers, Value Chains, and Agricultural Development

9 December 2021. At first glance, African smallholder farmers might seem unproductive, as their crops yield much less than potential and are often of variable quality. A new PIM-supported book “African Farmers, Value Chains, and Agricultural Development” argues that in fact they are largely producing following rational economic decisions, and that this situation is a consequence of the economic and institutional environment in which they produce. 

The authors Alan de Brauw and Erwin Bulte discuss ways that different types of transaction costs limit their market opportunities in general, including transport costs but also costs related to different sources of risks, trust, market power, liquidity, and even storage. The presence of high transaction costs limits the ability of farmers to market their surplus, hence reducing their incentives to produce. The authors discuss several types of costs in detail, including problems related to input and output markets, certification of quality products, and issues with storage. They then critique several “solutions” that are often discussed to help lower transaction costs, before offering some of their own recommendations, noting that the application of any recommendations must take local context into account.

• Erwin Bulte – Professor of development economics at Wageningen University; co-leader of PIM Flagship 3: Inclusive and Efficient Value Chains.
• Alan de Brauw – Senior Research Fellow, Markets, Trade, and Institutions Division, International Food Policy Research Institute (IFPRI); leader of PIM Flagship 3 cluster on “Value Chains Research: Outreach and Scaling” and co-leader of “Interventions to Strengthen Value Chains” cluster.
• Hope Michelson, Associate Professor, Department of Agricultural and Consumer Economics
• University of Illinois, Urbana-Champaign.
• Moderator: Frank Place - Director, CGIAR Research Program on Policies, Institutions, and Markets.

Book content:

1. African Smallholders and Their Market Environment
2. African Agricultural Value Chains: A Brief Historical Overview
3. Economic Theory and Value Chain Governance
4. The Evolution of Agricultural Value Chains in Africa
5. Smallholders and Markets
6. Product Quality and Certification
7. Storage and Post-harvest Losses
8. Silver Bullets?
9. Structural Transformation 2.0: The Rocky Road Ahead…