How Public Procurement Mechanisms Can Be Used as a Tool for Developing Pro-Poor Food Value Chains: From Entry Points to Interventions

Abstract

Smallholder farmers from developing countries are among the most vulnerable populations facing high food insecurity. Participation in agri-food value chains can offer a valuable pathway out of poverty for millions of poor households in these regions due to their trans-sectorial ability to create empowerment, inclusion, and economic value. Current urbanization rates and the advent of a growing middle class in developing countries make local value chains linked to regional and domestic markets increasingly valuable for smallholder farmers. Under this context, governments and institutions are key actors in influencing pro-poor value chains upgrading trajectories, and public procurement is a way by which these actors can direct participants. This study addresses an important knowledge gap in the possible practical approaches to designing and implementing such schemes. Informed by a literature review, a contextual appraisal of the major advantages and disadvantages of public procurement for the pro-poor development of value chains was conducted. A framework of analysis and intervention is then proposed and discussed. Based on the critical and contextualized analysis of the evidence, we address strategies for public food procurement, challenges, mitigation measures, supporting interventions, and considerations for planning. Overall, our analysis suggests that several existing initiatives still lack tangible results, partly due to gaps in the implementation of laws and regulations. We also highlight that, if implemented as a stand-alone intervention, it is likely that public procurement will not be effective. Additionally, we make an argument on the importance of engaging with the private sector in the process of devising an exit strategy as part that supports long-term sustainability.