By integrating smallholders and small manufacturing enterprises in value chains, donors hope to lower their marketing risks and to help them earn a higher income.
Photo: Sabine Brüntrup-Seidemann

01.12.2016

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Promoting agricultural value chains to support rural areas is high on the development agenda among many donors. However, the impacts of this support are discussed controversially. Civil society organisations in particular fear disadvantages for poorer smallholders.

Above all owing to the steady increase in global trade, but also because of changes in the demand structure in national markets through the growing purchasing power of the burgeoning middle classes there, agricultural value chains (AVC) have attained high significance in the developing countries. The quality demands of consumers have grown, and more and more domestic and foreign manufacturing enterprises, bulk traders or supermarkets are attempting to cover their demand with better organised AVC.

Since the beginning of the new millennium, promoting AVC to develop agriculture and rural regions has gained significance among bilateral and multilateral donors. AVC promotion is to help link smallholders and small manufacturing enterprises to markets so that their marketing risk is lowered and it is worthwhile for them to produce goods for the market demands. As a central element of this approach, links to the market are achieved by strengthening business relations and general improvements in the horizontal and vertical integration within the chain.

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