chapter  12
19 Pages

Upscaling smallholder participation in global value chains: Aad van Tilburg, Emma Kambewa, Andre de Jager and Davies Onduru


The activities implemented in the framework of the Millennium Development Goals represent a serious attempt to reduce the number of poor worldwide before 2015, comparable to the Green Revolution in Asia in the 1960 and 1970s. Inclusion of smallholder agricultural producers in global value chains is a key strategy for reducing poverty. A major development challenge is to overcome the difficulties involved in upscaling the many promising initiatives of smallholder participation in global value chains, to improve the livelihoods of the poor. Indeed, relatively little experience has been gained with upscaling small successes to obtain wider impacts. Several stakeholder groups have taken the initiative or the lead in developing pilot activities to reduce poverty. Stakeholder groups can be the poverty-stricken community members themselves, but they can also be NGOs, business partners in the value chain, facilitating institutions in the environment of the value chain and public authorities such as a local, district or national government. NGOs are typically engaged in developing pilot activities and, if these are successful, they assume that other stakeholders will take over and scale up the initiative. Yet firms – producers, exporters, traders and input suppliers – participating in bringing produce from primary producers to final consumers may be interested in upscaling successful initiatives only if they have sufficient evidence that they can recover the upfront investments made. Nonetheless, firms may be willing to invest in smallholder initiatives if they fit their long-term strategy, for example, their procurement policy or their corporate social responsibility strategy (e.g. the companies Sara Lee, Unilever and Nestlé participate in the Sustainable Agriculture Initiative). Both formal and informal institutions can play a role in facilitating smallholders’ access to markets and value chains. For example, they might provide extension services; assist in standardization of measures, procedures and contracts; and offer financial services or arbitrage in case of breach of contract (e.g. Fafchamps 2004). Governments can facilitate smallholder inclusion in local or global value chains, for example, as part of their poverty alleviation strategy or economic

growth strategy. They might do so by creating an enabling environment in terms of physical and informational infrastructure, by levelling the ‘playing field’ for all stakeholders participating in the economy, and by combating corruption. This chapter aims to generate insight about how upscaling promising initiatives of smallholder participation in global value chains can contribute to poverty reduction. To this end, the chapter begins with a micro-level analysis of successful initiatives, then moves on to a system-wide analysis of whether and how such initiatives can be scaled up. We assume that a strong sense of ownership by chain actors is required at the initial stage of the initiative to realize wider impacts. The main question is whether it is possible, and what is required, to upscale a potentially successful initiative beyond the micro-level to benefit many (thousands of) smallholders. We address this question by means of a review of the literature and an analysis of two illustrative case studies. The cases were selected to demonstrate and discuss both facilitating and limiting conditions that play a role in scaling up and to derive preliminary lessons learnt. The next section of this chapter introduces key concepts. This is followed by presentation of the conceptual framework for upscaling used in this contribution. The criteria for selecting the case studies of local and successful initiatives are then discussed and the case studies themselves are outlined. Thereafter, several features of these case studies are discussed, which forms the basis for our lessons learnt with respect to upscaling local initiatives. Finally, potential policy options for upscaling smallholder initiatives are discussed.