The “Five Rural Worlds” model introduced by the Organisation for Economic Co-operation and Development (OECD) in 2006, which is based on access to resources among different types of enterprises and households in rural areas, provides a helpful analytical frame to classify types of household in terms of the form in which they can participate in AVC. Distinctions are made between

  1. large, internationally competitive enterprises that often entertain close links to global value chains;
  2. major traditionally managed enterprises engaging both in commercial agriculture and in subsistence agriculture but only maintaining a low level of links, if any, with AVC;
  3. the risk-averse, resource-poor agricultural subsistence enterprises, fishers, pastoralists and micro-enterprises that are on the threshold to marketability. They represent the lion’s share of the population in rural regions and are a key target group for AVC support. However, their integration as producers in AVC requires large investments in consultancy, financing, the establishment of business relations, structuring, etc.;
  4. landless households and micro-enterprises, often headed by women, who earn their income as wage labourers; and
  5. chronically poor households lacking any resources, unable to pursue productive labour and relying on so-cial welfare benefits.

The economic development of Rural Worlds 1 and 2 has considerable influence on the employment and income prospects of Rural Worlds 3 and 4.

Creating a poverty impact in value chains

The entry barriers described above show that chronically poor households cannot be directly integrated in AVC or benefit from them.