Value chain approaches to development

Abstract

Purpose – The purpose of this paper is to look at the ever-popular, “value-chain approach” for linking smallholder farmers to high value export markets. Conventional wisdom says that value chains undertaken for development purposes redistribute risk and provide benefits and services to participants that are otherwise difficult or impossible to obtain. The authors take a farmer-centric approach and ask farmers participating in these higher value chains if they perceive greater, or different risks and compare results to their conventional counterparts. The authors also ask what benefits they associate with participation and if they believe they believe those benefits are exclusive to value chain participation. Design/methodology/approach – The authors collect data from growers in three different cocoa value chains in Ashanti, Ghana. These chains include one focussed on certified production practices (Rainforest Alliance), one that focussed on high-value product characteristics (Fine Flavor) and a conventional chain, which serves as counterfactual. Findings – The paper finds differences in perceptions of participation risks and benefits – particularly among price risks – that appear to filter based on value chain membership. However, for many risks, value chain participation seems to do little to redistribute potential production shocks. With some exceptions, growers report that many of the benefits they enjoy as a result of participation could feasibly be accessed by other sources. Research limitations/implications – The limitations of this paper are related to sample size. This was managed from a statistical perspective. Social implications – The authors explore how these results might impact the sustainability of the value chain approach and encourage donors and development agencies to be thoughtful and critical about measuring how farmers perceive new market opportunities. Originality/value – The authors believe that this is the first paper prepared to critically investigate the perceived benefits of value chains.

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