A scoping review of market links between value chain actors and small-scale producers in developing regions

Abstract

AbstractSustainable Development Goal 2 aims to end hunger, achieve food and nutrition security and promote sustainable agriculture by 2030. This requires that small-scale producers be included in, and benefit from, the rapid growth and transformation under way in food systems. Small-scale producers interact with various actors when they link with markets, including product traders, logistics firms, processors and retailers. The literature has explored primarily how large firms interact with farmers through formal contracts and resource provision arrangements. Although important, contracts constitute a very small share of smallholder market interactions. There has been little exploration of whether non-contract interactions between small farmers and both small- and large-scale value chain actors have affected small farmers’ livelihoods. This scoping review covers 202 studies on that topic. We find that non-contract interactions, de facto mostly with small and medium enterprises, benefit small-scale producers via similar mechanisms that the literature has previously credited to large firms. Small and medium enterprises, not just large enterprises, address idiosyncratic market failures and asset shortfalls of small-scale producers by providing them, through informal arrangements, with complementary services such as input provision, credit, information and logistics. Providing these services directly supports Sustainable Development Goal 2 by improving farmer welfare through technology adoption and greater productivity.