Challenges and Opportunities in Agricultural Value Chains
Despite concerted efforts by various governments and international agencies, low agricultural productivity remains a persistent challenge in many developing countries. The gap in actual versus potential yield for smallholder farmers is large, especially in Sub-Saharan Africa. This brief describes findings from three case studies of value chain assessments conducted by AIR in Uganda, Mozambique, and Georgia. We provide evidence-based policy recommendations to improve programming in value chains in low- and middle-income countries.
Challenges Faced by Farmers in Sub-Saharan Africa
Farmers often do not obtain the full value of the products they produce because of rents gathered by different stakeholders across the value chain. Although the constraints facing agricultural value chains are context-specific, high transaction costs are common in many developing countries. These transaction costs are associated with challenges in transporting crops as well as liquidity constraints.
Farmers also often face challenges when it comes to acquiring inputs due to limited access to capital and lack of information on where and how to access inputs. Other challenges along the crop value chain include poor quality storage facilities, which lead to high post-harvest losses; weak market linkages; poor safety standards; and lack of consumer trust in the quality of agricultural produce. Smallholder farmers also face disadvantages due to small plots, low levels of capital investments, a lack of bargaining power, and poor connections to the international market. Other challenges include issues related to the livestock value chain and gendered behavior patterns that often constrain women to certain nodes of the value chain that require unskilled labor, thereby hampering their upward mobility.
Key Takeaways
- The gap in actual versus potential yield for smallholder farmers is large, especially in Sub-Saharan Africa.
- Using findings from case studies in Mozambique, Georgia, and Uganda, this brief provides evidence-based policy recommendations to improve programming in value chains.
- Value chain challenges have included a difficult regulatory environment, financial constraints, and gendered challenges in accessing inputs.
- Focusing on enhancing quality standards and certification, providing access to markets, and providing access to trainings that are context specific have worked well in agricultural value chains in different contexts.
