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Developing Smallholder Inclusive Food Value Chain Models for Local and Global Markets

Project Background

In many economies, market forces have resulted in the development of food value chains that directly connect food producers with modern retail outlets such as supermarkets, hypermarkets and food processors. These chains also operate across international borders. Their origins lie in the changing demands of consumers, the growth of new forms of modern food retailing and processing and the emergence of specialist providers of services relevant to these chains. They can provide safe and secure delivery of food consistent with trade patterns according to comparative advantage.

The dilemma is that previous research has shown that these new business models often exclude smallholders due to potentially high transaction costs of dealing with a large number of heterogeneous sellers, smallholders’ inabilities to meet new market requirements as a result of lacking the necessary skills, technology, financing, and/or inadequate infrastructure due to chronic underinvestment. Yet, farmers who are able to participate are found to have significantly higher incomes by a factor of 3 to 4 times.

Project Aims

The project aims to develop food value chain business models consistent with international market conditions that are gender-inclusive, practical, efficient, and enhance the inclusiveness of smallholders in local as well as global modern food value chains in partnership with other public and private stakeholders. The project studies the dairy, meat, fish and horticulture sectors and draw on the experience of farmers in six economies.

The project facilitates knowledge exchange between participating economies, build the capacity of relevant bodies in participating economies and identify the implications of findings for the APEC programs.

The project team comprises of Associate Professor Wendy Umberger (project leader), Professor Christopher Findlay and Dr Risti Permani and is funded by the Australian Government Department of Agriculture as part of the Australian Government’s Economic Diplomacy Fund.

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