Quiet Revolution by SMEs in the midstream of value chains in developing regions: wholesale markets, wholesalers, logistics, and processing

Abstract

Small and medium enterprises (SMEs) in the midstream (processors, wholesalers and wholesale markets, and logistics) segments of transforming value chains have proliferated rapidly over the past several decades in Africa, Asia, and Latin America. Their spread has been most rapid in the long transitional stage between the traditional and modern stages, when value chains grow long and developed with urbanization but are still fragmented, before consolidation. Most of Sub-Saharan Africa and South Asia, and parts of the other regions, are in that stage. The midstream SMEs in output and input value chains are important to overall food security (moving about 65% of food consumed in Africa and South Asia), and to employment, farmers, poor consumers, and the environment. The midstream of value chains is neglected in the national and international debates as the “missing middle.” We found that it is indeed not missing but rather hidden from the debate, hence “the hidden middle.” The midstream SMEs grow quickly and succeed where enabling conditions are present. Our main policy recommendations are to support the SMEs further growth through a focus on infrastructure investment, in particular on wholesale markets and roads, a reduction of policy-related constraints such as excessive red tape, and regulation for food safety and good commercial practices.

Characterizing Retail Food Environments in Peri-Urban Pakistan during the COVID-19 Pandemic

“…As in other South Asian countries, the ‘hidden middle’ of Pakistan’s agrifood system, specifically the informal food sector and MSMEs, have revolutionized the wholesale, processing, and distribution of food [ 37 , 38 ] and proved to be critical to ensuring food security during COVID-19 [ 39 ]. In the present study, corner stores were a ‘one-stop shop’ for a variety of fresh produce and staple foods and were also the primary source for many ultra-processed packaged foods.…”

How to engage informal midstream agribusiness in enhancing food system outcomes : what we know and what we need to know better

“…businesses, or are mainly focused on formal sectors (Dolislager et al, 2020;IFAD, 2021;Liverpool-Tasie et al, 2020;Reardon, 2015;Reardon et al, 2021). Therefore, the precise contribution of informal midstream agribusinesses across the world to GDP and other food system-generated assets is unclear.…”

“…However, a large informal sector continued to exist, working in parallel with public and formal private Despite the tendencies of the scaling-up described above, the majority of smallholder farmers' value chain transactions are with midstream SMEs (Reardon et al, 2021;Dolislager et al, 2019). These transactions could benefit smallholders by providing access to yield-increasing inputs and enabling sales at more distant markets, while simultaneously reducing transaction costs and risks.…”

“…in the teff and other cereal supply chains) and large aggregate investments by these SMEs in, for example, increased truck size. Examples from Chile, China and Guatemala highlight a rapid development towards highly concentrated wholesale markets, but literature demonstrates that the degree of consolidation among wholesale SMEs within wholesale markets and logistics varies between countries and products(Reardon et al, 2021). Examples from Nigeria on maize trade, for instance, indicate that urban wholesale trade is relatively concentrated in regions where maize is the main product, whereas in non-maize zones urban wholesale trade is largely in the hands of small traders, many of them operating informally(Liverpool-Tasie et al, 2017).…”

Novel pearl millet couscous process for West African markets using a low‐cost single‐screw extruder

“…It not only links local food value‐chains with markets and consumers, but also is an entrepreneurial and income‐generating activity. Mechanisation offers a way to increase production of high value locally processed products, improve consistency of quality, and to expand markets for local farmers through small‐ and medium processing enterprises (Reardon et al ., 2021).…”