Multi-stakeholder platforms for linking small farmers to value chains: evidence from the Andes

TLDR

Value chains linked to urban markets and agro‑industry offer opportunities to add value and raise rural incomes, yet small farmers face entry barriers and high transaction costs due to limited trust among actors. This paper explores how multi‑stakeholder platforms have been used to address these problems in potato‑based value chains in Bolivia, Peru and Ecuador. Using the Institutional Analysis and Development framework, the study identifies two platform types: one that convenes traders, processors, supermarkets, farmer associations and R&D to spur commercial, institutional and technological innovation, and another that organizes geographically bounded supply areas to align farmers and service providers on governance, quality, volume and timeliness. The analysis shows that differing value‑chain characteristics produce two distinct platform types, and evidence indicates that such platforms generate new products, processes, norms and behaviours that benefit poor farmers in ways unattainable without them.

Abstract

Value chains linked to urban markets and agro-industry present new opportunities for adding value and raising rural incomes. Small farmers, who produce small volumes, struggle to enter these markets. A lack of trust among value chain actors increases transaction costs and short-circuits innovation. This paper explores how multi-stakeholder platforms have been used to address these problems in potato-based value chains in Bolivia, Peru and Ecuador. It uses the Institutional Analysis and Development (IAD) framework to understand how platforms work. Differences in characteristics of the value chains, the participating actors and institutional arrangements have led to the emergence of two types of platforms. The first type brings traders, processors, supermarkets and others together with farmer associations and research and development (R&D) organizations to foster the development of new market opportunities through commercial, institutional and technological innovation. The second type is structured around geographically delimited supply areas, meshing farmers and service providers to address market governance issues in assuring volumes, meeting quality and timeliness constraints and empowering farmers. Evidence from these cases indicates that platforms that bring stakeholders together around value chains can result in new products, processes, norms and behaviours that benefit poor farmers, which could not have been achieved otherwise.