Moving smallholders up rice value chain: a system dynamics approach

Abstract

PurposePaddy farmers form the backbone of food security. However, poverty plagues them despite having linked them to the rice value chain. To overcome this, the concept of involving smallholders in post-farm value chain stages is promoted. The purpose of this paper is to explore the potential of upgrading smallholder involvement in rice value chains through the adoption of a sustainability standard.Design/methodology/approachThe authors built a system dynamic model to capture both conventional and certified sub-value chains. The latter deviates from the conventional one and capitalizes on compliance to a sustainability standard.FindingsWhen compared to conventional farm gate sales methods, the simulations revealed obvious profitability of direct marketing with respect to certified sustainable rice. Although coupled with productivity growth, the simulations indicated the shift to standard adoption would likely to be both limited and slow.Originality/valueThe findings suggest that the profitability of a certified rice value chain will remain fettered. In order to enhance both farmer livelihood and food security, given the limited prospect of moving smallholders up that chain, the authors conclude that national policy should be rationalized and concentrated on the possibility of diversifying the end-use of rice through research, development and subsequent commercialization.