FIELD Report No. 18: Smallholders and Inclusive Growth in Agricultural Value Chains

This FIELD Report investigates inclusive growth in agricultural value chains, with a focus on smallholder participation, upgrading behavior, and outcomes related to agricultural productivity, agricultural profits, and smallholder incomes. The purpose of the paper is to advance understanding of inclusive growth by reviewing empirical evidence from twelve agricultural value chains that have engaged and benefited smallholders.

With inclusive market development, the goal is to promote economic growth with poverty reduction by facilitating the integration of large numbers of micro- and small enterprises into competitive value chains. The recent development experiences reviewed in this paper indicate that smallholders can play a significant role in competitive value chains, so long as they have the requisite capabilities, profitable opportunities, and the information they need to accurately assess their alternatives. In addition, there are significant steps that governments, development practitioners, and for-profit firms can take to promote inclusion, by building smallholder capabilities, facilitating improved market opportunities, and improving the quality of information available to smallholders when they make their decisions. Finally, it is important to keep in mind that decisions about market participation and upgrading are made by smallholders themselves, based on their understanding of their own best interests.