©2011 C.Stowers/Panos


ALIGNING THE INCENTIVES Value chains are no panacea for the prob- lems of small farmers. Worldwide there are about 500 million small farms, which are home to about 2 billion people. Only a small fraction of them are involved in modern value chains. CIAT’s Lundy points out that to be suited for value chains, farmers must be able to grow commercial crops, and CTA’s Shepherd is doubtful whether the poorest people have what it takes to participate. “Te very poorest people have no assets or financ- ing and limited education. Tey are not an attractive proposition for companies to work with,” he says.


Nonetheless, ILRI’s Derek Baker points


out that small farmers have an impor- tant competitive resource at their dis- posal: their own labor and that of their families. “Tere are conditions under which smallholders can be competitive,” he says. “It comes down to, ‘Can cheap labor be used well?’”


Tere is still much to learn about how to engage poor farmers and rural people in value chains, and it can be difficult to translate lessons learned from one value chain to another. Products and local conditions vary widely, so it often seems as though each value chain must reinvent the wheel. To help find broad lessons for developing value chains, IFPRI research- ers and their partners across the CGIAR


will look at the big picture, bringing to bear their experience in studying specific commodities and in conducting large- scale surveys at different points along the value chain and across different types of producers. “Tis will give us a quantita- tive assessment that is representative of what is happening in different value chains on farms of different sizes in a certain country,” says Maximo Torero. Te findings should help set priorities in promoting value chains, especially those targeting small farmers.


“Te most important thing any project can do,” says Montealegre, “is to align the incentives of the various actors: the farm- ers, the supermarkets, the processors.”


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