Feed the Future
This project is part of the U.S. Government's global hunger and food security initiative.

4.3.9. Emerging Good Practices for Integrating Food Security and the Value Chain Approach

Although the interest in integrating food security and the value chain approach is recent, a number of good practices have already emerged from the experience of implementing agencies, donors and other development partners.  These are presented here in accordance with the stage in the value chain project cycle when they are most relevant.  A separate category has been added for emerging good practices that apply prior to value chain selection.  Many of the emerging good practices that are summarized here are described in more detail in the pages on food availability, food access, and food utilization.

Prior to Value Chain Selection  

  1. Start by understanding food insecurity.  It is important to identify the predominant food security concerns in the targeted area or population as well as the underlying causes of food insecurity. The results of the analysis should drive value chain selection and strategy development.  Problems of availability, access or utilization will all require different strategies, as will knowing who is most affected, when, and the types of food commodities that they are dependent upon.  It is necessary to identify the root causes of food insecurity in order to address these issues in the value chain selection and analysis stages.
  2. Determine food security-related project goals.  Food security objectives should be decided prior to value chain selection, based on the information gathered on the root causes of food insecurity.1  Value chain selection is then based on a better understanding of the specific project goals. 
  3. Incorporate a gender perspective throughout. Given the critical role that gender plays in shaping food security, a gendered perspective needs to be incorporated in all aspects of the value chain project cycle.  Ignoring these linkages can sabotage project objectives. For instance, economic activities that reduce women’s capacity to provide child care and food preparation may actually worsen household food security, even if such activities increase household income.
  4. Assess vulnerability. Households that are food insecure – particularly chronically food insecure – tend to be more vulnerable to shocks. Such vulnerability has a strong influence on the capacity of vulnerable households to engage in value chain programming.  When addressing food insecurity requires working directly with vulnerable households, good practices in working with such groups will likely apply. 

Value Chain Selection 

  1. Consider the economic context.  The specific context has a significant impact upon the capacity of agricultural value chains to address food insecurity.  Agricultural value chain activities will create a greater food security impact in areas where nutritional outcomes are worse, agriculture is responsible for a greater portion of the economy and many of the food insecure are farmers.  Where these conditions are not present, non-agricultural value chains may have greater potential to address food insecurity.  Further, raising incomes may be the most viable option for improving food access when there is limited ability to improve household food production.  It is critical to remember that increasing incomes alone is not sufficient to increase food security.
  2. Evaluate the enabling environment. Many of the value chains with the greatest potential impacts on food security – staple foods – often feature greater control, regulation, intervention and sudden policy changes by government.3 Government interference in these value chains often greatly increases risks for the private sector, lowers their margins, and causes disruptions in supply. It is important to carefully consider whether pursuing changes in the enabling environment would be necessary, and whether the greater risks of intervening in such subsectors outweighs their benefits.
  3. Identify the implications of introducing new cash crops or commercializing existing food crops.
    Be cautious in promoting new cash crops in areas where there is no surplus land or labor, the new crop would be grown at the same time as traditional food crops, or where there is pronounced variation in the supply or price of staple foods.4  Similarly, programs that encourage smallholders to begin selling staple foods that have been traditionally consumed at home should assess whether selling will provide a greater benefit than consuming it, as this could have a negative impact on household nutrition. 
  4. Promote diversification.  Diversification of livelihood strategies reduces risk for food insecure populations.  On-farm diversification generally assists household dietary diversity, particularly in contexts where rural markets cannot guarantee that demand can be satisfied through the purchase of food. Diversification also gives households more regular distribution of income that allows households easier ongoing access to food.  Value chain projects should consider how they can support or at least not reduce household diversification of income sources through the value chain selection process. 

Value Chain Analysis

  1. Determine the appropriate geographic scope.  Food security is shaped not only by what is happening within a given country or sub-national area, but also be regional and global forces. Understanding and addressing food security challenges through value chain analysis will in some cases therefore require an expanded geographic focus.  
  2. Assess potential demand. In many cases consumers, traders and farmers are unaware of more nutritious food products or biofortified varieties and so there is low demand for these products.5  Market assessments should consider potential demand as well as existing demand for these foods and varieties before determine their commercial potential. 
  3. Understand the impacts of changes in food prices.  It is a common misconception that all farmers who produce a given product will benefit from an increase in its price. In fact, although higher output prices for staple foods will increase returns for farmers with a net surplus, they will tend to hurt those who are net purchasers of food if they result in higher retail prices.  This latter group often includes smaller-scale farmers, who purchase more than they produce.6  Therefore, at times the objective of development programing should be to reduce the price of staple foods by increasing efficiency. An example of the distributional consequences of a rise in food prices is illustrated in the figure below from Malawi. 

7

Competitiveness Strategy

  1. Be aware of shared objectives.  When working with staple foods, the goals of increasing competitiveness of the industry and improving food security will often overlap.  Increased productivity and improved value chain efficiency both lead to industry growth, but they also lead to improved availability, higher incomes and often to improved access. The flip side is to be aware that increasing availability and access alone may not be sufficient to improve food nutritional outcomes if they do not address the root causes of nutritional deficiencies.
  2. Conceive of nutritional value as a competitive tool.  Adding nutritional value to food products through the cultivation of improved varieties, fortification, better storage or other techniques, can be a key source of competitive advantage, enabling a higher selling price and better returns.  Where lucrative markets exist or can be developed, more nutritious products represent a win-win solution for both producers and consumers.
  3. Improve competitiveness in staple foods by lowering per unit costs.  Value chain programming often seeks to improve returns for microenterprises by encouraging upgrading behaviour that increases the per unit sale price. In contrast, value chain programming in staple foods should generally attempt to reduce per unit costs in order to improve food affordability for consumers. Enhancing the competitiveness of staple food producers is therefore accomplished by increasing their productivity adequately that the increased volumes of production compensate for reductions in the sale price. 
  4. Recognize and support transition.  Improving the competitiveness of food value chains may ultimately reduce the viability of cultivation for some farmers, and particularly for those with small land sizes in marginal areas, even as it may lower food prices for consumers. Increased application of technology, for instance, may raise the barriers to participation and thus push out the least competitive within the value chain.  Working to avoid creating harmful impacts for such producers may include simultaneously supporting other economic opportunities that they are better suited to engage in.  

Design and Implementation

  1. Don't abandon facilitation.  While the many constraints faced by food insecure populations may initially require that practitioners initially provide greater support in linking to value chains, the importance of facilitating relationships among value chain actors to creating sustainable outcomes remains critical.  Value chain linkages have collapsed in cases where projects convinced private firms to purchase from food insecure suppliers. 
  2. Recognize and mitigate risks.  Some value chain strategies may inadvertently worsen food security, particularly when their food security and nutrition implications have not been assessed. The design of project interventions should be sensitive to increasing food prices when vulnerable households are net buyers or reducing them when vulnerable households are net sellers, increasing unemployment or underemployment, and encouraging shifts to cash crops that reduce the utilization or local labor.8 
  3. Consider the implications of utilization on spatial focus.  Value chain programs that are oriented to improving food security will generally focus on rural areas, where most agriculture occurs. Yet as urbanization continues an increasing proportion of consumers will be located in urban areas. To address the food utilization issues that play a major role in food security, value chain programs will need to consider how this can be addressed, such as through forging partnerships or adopting a dual urban-rural focus. 
  4. Incorporate additional skill sets.  Value chain projects need additional technical capacity in food security in order to effectively incorporate and address food security objectives during design and implementation.  Food security assessment, monitoring and nutritional expertise are all common gaps among value chain practitioners.  When important information gathering tasks are outsourced - such as the value chain selection and value chain analysis stages - it is critical that a food security perspective be also integrated at these stages.  If service providers do not have a strong understanding of food security issues, their work should be integrated with specialists who do.  Otherwise, experience suggests that these considerations will be inadequately addressed. Value chain selection and analysis will thus be conducted with inadequate reference to addressing food security challenges, and may be based on the tenuous assumption that increased income will by itself by adequate to address food security challenges.
  5. Promote linkages to other programming.  Value chain programming is often not sufficient on its own to resolve food insecurity, particularly among very vulnerable populations. Other challenges contributing to food security may include poor health and sanitation, or a lack of safety nets. Constraints that cannot be addressed by the value chain approach alone should be recognized and solutions identified based on the context.  In many cases, it is advisable that value chain projects link to other service providers rather than assuming these roles themselves.
  6. Do not forget business viability.  It is important to consider business profitability even when encouraging households to produce nutritious staple foods that are oriented for own consumption.  If households cannot generate sufficient revenue to cover the costs of production or maintenance (in the case of livestock), they may opt to liquidate the asset.  
  7. Link cash for work to value chain constraints.  If using cash for work programs to support extremely food insecurity individuals, consider how work projects can address value chain constraints such as inadequate market infrastructure.  Addressing these constraints should contribute to longer-term sources of income for cash for work participants. 

Monitoring and Evaluation  

  1. Incorporate explicit food security indicators and tools.  While there are a range of food security measurement tools, many value chain projects have not rigorously assessed changes in food security among project participants even when food security is a stated project objective.  Selecting and using them is critical to understanding whether project interventions are really effective. 
  2. Consider measuring impacts on consumption.  Many value chain projects have not sought to measure increases in household food consumption, in spite of their positive impacts on food security.  This may often portray project results in an overly negative light, as sales of project clients appear lower.
  3. Monitor indirect benefits.  While value chain projects typically focus on measuring the direct benefits generated for target firms, their greatest impact on food security is often generated for non-target firms and households through lower food prices, increased employment or improved safety standards. Projects should identify and seek to measure these indirect benefits within their results measurement systems.  

Footnotes

  1. Corinna Hawkes and Marie T. Ruel, Value Chains for Nutrition, 42. 
  2. Ecker et al, Growth is good, but not enough to improve nutrition, 2
  3. Jayne and Tshirley, Food Price Spikes and Strategic Interactions between the Public and Private Sectors: Market Failures or Governance Failures?, 2010
  4. Patricia Bonnard, Improving the Nutrition Impacts of Agriculture Interventions: Strategy and Policy Brief, March 2001, 5
  5. Corinna Hawkes and Marie T. Ruel, Value Chains for Nutrition, 44.
  6. Infant and Young Child Nutrition project, Achieving Nutritional Impact and Food Security through Agriculture, 2
  7. Action Against Hunger, Seasons of Hunger:  How planning for seasonal cycles can fight malnutrition and accelerate progress towards the Millennium Development Goals, 2008, 6
  8. Tom Schaetzel, Maximizing Nutritional Benefits of Agricultural Projects:  Do good, but first do no harm, undated