The adoption of modern technologies in agriculture is crucial for improving productivity of poor farmers and poverty reduction. However, the adoption of modern technology has been disappointing. The role of value chains in technology adoption has been largely ignored so far, despite the dramatic transformation and spread of modern agri-food value chains. We argue that value chain organization and innovations can have an important impact on modern technology adoption, not just by downstream companies, but also by farmers. We discuss conceptual issues and provide an empirical typology of institutional innovations through which value chains can contribute to technology transfer to agriculture in developing and emerging countries.
Value chains in the agrifood sector are undergoing a rapid process of modernization, characterized by the emergence of private standards and different systems of vertical value chain governance. In this article we investigate the technological implications of these developments at the farm-level. We explicitly modelled the conditions under which technology transfer and adoption will occur in a value chain setting and reviewed the corresponding evidence on these issues. We find that technology transfer within a value chain can occur in an environment with imperfect credit and technology markets, but depends on the surplus generated by the technology, the holdup opportunities of the supplier and the type of technology. Finally, using these findings we discuss the implications of public investment and the role of private standards as a potential catalyst for technology adoption and transfer.
The rapid transformation of agri-food value chains in Africa and other developing countries has important implications for economic growth and poverty reduction. Policy makers increasingly recognize this but there is a need for a better understanding of what value chain transformation entails and what the main policy options are. This paper provides an overview and analysis of different value chain models that have emerged in the past decades and reviews the literature on the main development implications. We discuss and categorize existing policy initiatives that aim to stimulate inclusive value chain development. Based on this review we identify lessons and implications for policy makers. In general these modern value chains have been significantly affected by changes in agricultural and food standards. Such standards are spreading rapidly and food production and trade are increasingly regulated through stringent public and private requirements on food quality and safety, and ethical and environmental aspects (Henson and Reardon 2005; Jaffee and Henson 2004). 1 Both public and private standards have become more stringent and more widespread. 2 Yet, the modernization of value chains, both domestically and internationally, has accelerated sharply during the past decades. Moreover, the growth has been strongest in where standards are most important, i.e. in the higher value productswhich includes fruits, vegetables, seafood, fish, meat and dairy products. For example, the shift towards high-value exports has been most dramatic in developing regions (Maertens and Swinnen 2015). In Asia and in Latin-America, high-value products increased from around 20% of agricultural exports in the 1980s to around 40%. The process is similar, albeit slower, in Africa. At the same time, (foreign) investment at various stages of these value chains has increased significantly. Increased investment has been triggered by several factors. The first reason is the wave of investment liberalizations in the past 20 years which have made it easier for FDI to flow in. The second reason is strong economic growth in emerging and developing countries, which has triggered increases in demand for higher quality products and, with growing urbanization as part of the economic development process, and increasing demand for retail and processed products in urban areas In combination, these developments have resulted in changes in the way agricultural value chains are organised with increasing levels of verticial coordination, upgrading of the supply base and increased dominance of large multinational food companies (McCullough, Pingali, and Stamoulis 2008; Swinnen and Maertens 2007). These processes have important implications for developing countries. Increased demand for high-value products and increasing prices in international food markets create opportunities for developing countries to realize economic growth through expanding and diversifying their agricultural exports. High-value agricultural exports entail an important potential for raising r...
Agricultural productivity and farmer welfare in developing countries is constrained by a multi tude of market imperfections. Value chain development (VCD) is receiving much attention as a market-based policy instrument that can potentially address multiple of these constraints simultaneously. This paper provides a conceptualization of VCD and discusses how VCD can be used as a policy instrument. As an illustration, the paper describes the VCD project "SAFAL", which uses an integrated approach to directly intervene in the aquaculture, horticulture, and dairy value chains in South-West Bangladesh. The strategy is to first identify a demand downstream in the value chain and then to identify and reduce the constraints experienced by value chain actors upstream to meet this demand. Using a matched difference-in-difference methodology, this paper estimates farm household participation in SAFAL increases farm income and shortens the hungry season.
The adoption of modern technologies in agriculture is crucial for improving productivity of poor farmers and poverty reduction. However, the adoption of modern technology has been disappointing. The role of value chains in technology adoption has been largely ignored so far, despite the dramatic transformation and spread of modern agri-food value chains. We argue that value chain organization and innovations can have an important impact on modern technology adoption, not just by downstream companies, but also by farmers. We provide a conceptual framework and an empirical typology of institutional innovations through which value chains can contribute to technology transfer to agriculture in developing and emerging countries.
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