Changes in global value chains of fresh fruit and vegetables: opportunities and challenges for producers in Sub-Saharan Africa

Authors: Temu,A.E.; Marwa,N.W.

Produced by: South Centre (2007)

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The governance of the global value chain in fresh fruit and vegetables no longer consists of an arm's-length relationship between African (in the context of this document) smallholder producers and retailers with the links along the chain including agents and wholesalers. Difficulties in ensuring product quality and a low profit margin across the chain has lead towards an explicitly co-ordinated approach, with the number of players reduced to two: producers and large retailers. Although bypassing wholesalers has meant increased profit margins, smallholder farmers who fail to meet standards through lack of capital and technology can become excluded from the value chain. In the case of Africa, this amounts to the majority of the population.

The authors recommend addressing or mitigating this exclusion through farmer cooperatives which can develop capacity in capital, technology and technical know-how. In addition to this:

  • Governments in Sub-Saharan A frica should focus on export promotion and address issues of infrastructure development, business skills and strengthening links
  • Policy-makers and technical administrators in developing countries should provide the necessary infrastructure for compliance and promoting research, development and technical assistance as well as effective policies in broader areas such as credit availability, land ownership and risk management
  • The private sector in developing countries should incorporate current and expected requirements into business plans, whereas the private sector (especially supermarkets) in industrialised countries should harmonise overlapping and competing private protocols and diversify their base of supplier countries
  • Academic and research institutions should highlight the impact of current global value chains on developing countries and the implications on poverty reduction in their advice to policy-makers
  • Bilateral and multilateral development agencies should support research into sustainability and equitable distribution in global value chains
  • African producers should also seek to exploit other opportunities such as domestic and regional African markets, other markets with less stringent requirements and markets for organic produce