Country-Driven Innovations and Agrifood Value Chains for Poverty and Hunger Reduction

While progress has been made in reducing global poverty over the last two decades, about one billion people still live in poverty, according to the latest World Bank estimate. In addition, according to FAO, over 800 million people suffer from hunger, while more than two billion people suffer from macronutrient deficiencies, or “hidden hunger”. IFPRI’s 2016 Global Hunger Index reports that 50 countries continue to have “serious” or “alarming” hunger levels, with the most affected areas in Africa south of the Sahara and South Asia.

In a recent book chapter published in Global Food Security and Wellness , IFPRI Director General Shenggen Fan discusses how to speed this progress in hunger reduction. Fan suggests that in order to more effectively address hunger, more innovative, better focused, and more cost-effective measures are needed, and developing countries themselves must drive these innovations. He cites large successes in agricultural development and food and nutrition security in China and Vietnam and in the Green Revolution in Asia, all of which have been country-driven.

The success of country-led processes hinges on a combination of good policies, increased agricultural investments, technological innovation, strong institutions, and good governance. Fan focuses specifically on country-led and -owned innovations, agri-food value chains, and reductions in postharvest losses and food waste, as well as related capacities that are needed in developing countries.

In many developing countries, the agricultural sector accounts for a large portion of national income and employment. Therefore, increasing agricultural investments to spur growth in this sector is essential to broad-based growth as well as poverty and hunger reduction. Such investments could include: improved crop storage, processing, and marketing facilities; water conservation; improved land-management practices and integrated farming to optimize crop productivity while limiting greenhouse gas emissions; breeding of drought- and pest-resistant crop varieties; rural road improvements; improved telecommunications; and improved nutrition and health practices. However, how these investments should be prioritized will depend on each country’s specific needs, capacities, and resources. Developing countries themselves need to take a leading role in determining their priorities, earmarking investments, and driving innovation in the agricultural sector. Fan emphasizes that change should stem from local populations acting as a driving force in the development process in order for true success to be seen.

In recent years, a value chain approach to development has been used to promote market-oriented growth in order to reduce rural poverty in developing countries. At the same time, agri-food chains in developing countries are changing rapidly as populations grow, get richer, and become more urban. This expands the demand for supermarkets and processors, which changes the traditional marketing channels that smallholders participate in as both farmers and consumers. Government policies that strengthen the position of smallholders thus need to support their integration into the agri-food value chains; according to Fan, collective action by producers, public-private partnerships, and market deregulation seem to be the most promising measures to accomplish this goal.

However, there have only been a limited number of impact assessments completed to analyze poverty alleviation through value chain interventions, and it remains unclear whether these interventions have been responsible for the improvements observed, whether they truly benefitted the poor, and whether they were more cost-effective than alternative approaches. More analysis and assessment at the individual program level need to be conducted to develop a stronger evidence base and to explore the long-term effects of smallholder participation in value chains. To understand the relationships, policymakers need to allow impartial monitoring of value chain activities and adjust their policies based upon the interventions that are most successful for smallholders.

One big concern with current agri-food supply chains is the amount of food that is lost between harvest and consumption. According to the FAO, food loss accounts for roughly one-third of total global food production. In industrialized countries, like the United States, food waste (largely at the consumption stage) is the main problem. However, in developing countries, the main issue is food loss, which occurs at the production, harvest, postharvest, and processing stages of the value chains; these losses are caused by poor infrastructure, lack of technology, pests, and low investment in food production systems at all levels. As an example, the author notes that in Africa south of the Sahara, the value of postharvest grain losses amounted to US$4 billion a year in 2011 — enough food to feed 48 million people. There are several developing technologies, such as nanotechnology, which can reduce post-harvest losses; those should be monitored in the coming years to determine their effectiveness, suggests Fan.

Losses before crops are harvest also pose a significant problem in Africa south of the Sahara. Crop diversification, as well as the development of more stress-resistant crops and improved planting and growing practices could help reduce losses from disease, pests, and drought before harvest.

However, the best channel through which to avoid losses at all levels in developing countries is investment from both the private and the public sectors in rural infrastructure, transportation, and food and packaging industries. These investments would help create more stable and sufficient supply of quality produce, allowing food-processing factories to operate more reliably and profitably. This in turn would reduce the dependence of low-income countries on imported food products and thereby improve their foreign exchange reserves, while providing employment and development opportunities in poor rural areas.

In conclusion, more and continued country-driven efforts that include global, national, and local actors are needed to reduce hunger and poverty at the global level. A framework for evaluating pilot projects and experiments in developing countries is needed, as is the political and legal space to transform the lessons learned into large-scale initiatives, and an open mindset from policymakers. Given the right incentives and enabling environment, private-sector companies can also provide effective and sustainable investment and innovation to upgrade local agri-food supply chains.

By: Jenn Campus