Global value chains and agrifood standards: Challenges and possibilities for smallholders in developing countries

TLDR

The rise of private food standards has sparked debate over whether they act as barriers for smallholders and impede poverty reduction in developing countries. The study applies a global value‑chain framework to explain how value‑chain structure relates to agrifood safety and quality standards, and to discuss challenges and opportunities for upgrading smallholders. The authors map four value‑chain scenarios based on market concentration of suppliers and buyers, and analyze how lead firms and intermediaries affect smallholders in each scenario. The scenarios are illustrated with case examples, and the paper highlights theoretical and policy implications while proposing future research on industry structure, private governance, and sustainable value chains.

Abstract

The rise of private food standards has brought forth an ongoing debate about whether they work as a barrier for smallholders and hinder poverty reduction in developing countries. This paper uses a global value chain approach to explain the relationship between value chain structure and agrifood safety and quality standards and to discuss the challenges and possibilities this entails for the upgrading of smallholders. It maps four potential value chain scenarios depending on the degree of concentration in the markets for agrifood supply (farmers and manufacturers) and demand (supermarkets and other food retailers) and discusses the impact of lead firms and key intermediaries on smallholders in different chain situations. Each scenario is illustrated with case examples. Theoretical and policy issues are discussed, along with proposals for future research in terms of industry structure, private governance, and sustainable value chains.