Senegalese woman smiles while holding up a jar of oysters and clams

Markets and value chains 

64 million
people benefitted from greater market access (2019-2021)
20%
higher prices obtained through better market access (2019-2021)
11 650 km
of roads constructed or rehabilitated (2019-2021)
© IFAD/Ibrahima Kebe Diallo
Reliable access to markets and strong value chains boost productivity, increase incomes and strengthen food security

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Context

An agricultural value chain is all the steps involved in bringing food from the farm to the plate: from growing and rearing food, to storing and processing it, to transporting and selling it.

Agricultural value chains are complex, involving producers, agro-dealers, suppliers, food processors, transporters, traders, retailers, exporters and others.

Many smallholder farmers only produce enough food for their own consumption. Some may sell a small surplus in local markets. This makes it hard for them to thrive, with limited income to improve the quality of life or to grow their businesses. Moreover, they could struggle to recover from a single bad harvest.

There are many reasons why small-scale farmers do not or cannot participate in more lucrative value chains. They may be far from a market and transport costs may be high. Some may have limited business skills or are not part of an organization to pool their resources. Often, small producers simply don’t have bargaining power and can end up earning significantly less than their larger competitors.

Agricultural markets have changed significantly in recent decades. Modern value chains that serve national and global markets now complement traditional local markets.

Meanwhile, demand for high-value products, like organic cacao or llama jerky, is growing. This means there are more opportunities for poor small-scale producers to earn, but it also increases international competition. Small-scale farmers may struggle to produce the right products to the right standards. 

Opportunities

Strong value chains and better access to markets allow small producers to reliably sell more quality produce at higher prices. By moving away from subsistence farming, small-scale farmers can generate more income.

When farmers get a good price for their produce, they are encouraged to invest in their businesses and increase the quantity, quality and diversity of their produce. This helps them earn more, ensuring their families’ food security and building their economic resilience to withstand setbacks.

Value chain development creates opportunities for rural people to establish businesses that meet local needs and produce diverse nutritious food. By participating in rural value chains, young people can look forward to better livelihoods for themselves and their communities.

What IFAD does

  • Over a quarter of IFAD project finance is dedicated towards enhancing market access for small-scale rural producers. 

  • We support projects that improve physical access to markets, like building roads and bridges. These projects also provide improved cold storage to maintain food quality and making roads and markets climate-proof. 

  • While we strengthen the entire value chain, we focus on the stages related to producing, processing and marketing food. By intervening at different points, we enable rural producers to create added value. 

Related pages 

Food loss reduction

Reducing food loss between farm and market could vastly improve global food security while reducing pressure on the environment 

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Experts

Lorna Grace

Lead Regional Technical Specialist, Rural Finance, Markets and Value Chains

[email protected]
Nadhem Mtimet

Senior Regional Technical Specialist, Rural Finance, Markets and Value Chains

[email protected]
Sauli Hurri

Lead Global Technical Specialist (East and Southern Africa), Rural Institutions

[email protected]

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