Dear colleagues, I found many valuable reflections on the guiding questionы, and would like to share my view on the question: How can smallholder farmers benefit from the GVCs.
Recent years the growing awareness of the contribution of smallholders through the value chain to income, employment and exports is observed.
The economic factors of the development of Global Value Chains (GVC)s in developing countries, such as access to and use of natural resources, such as oil, mining and agriculture products is tremendous (UNCTAD, 2010). It allows smallholder farmers to participate in global economy through resource supply, production, processing, marketing, distribution and consumption. Also, they benefit from participation in GVCs, as it unpacks the opportunity to attain financial stability, increase productivity and expand their markets.
However, because of smallholders' plot size and small production output, their role in the GVCs is often underestimated. Besides, the participation of smallholders in global value chain is challenging because it requires more managerial and financial resources to meet international standards. And, they are most vulnerable for economic, financial and food crises, as the decrease in demand, volatility of prices, or changing consumers preferences can negatively affect their positions in GVCs.
Lead and advanced agricultural, agro-processing companies can support farmers in pre-chain to meet required standards. For example, Nestle has helped local suppliers in developing countries to meet better standards in agricultural produce, offering training and technical assistance in field care, post-harvest practices, storage and transportation. The same assistance can be provided by Rural Advisory Services, and, under the public support programs/interventions, in the countries with high share of population depending on agriculture and food system.
Small-scale production and resources, e.g. labor, agricultural product, like livestock and crops, provided by households and family farms is at the downstream of GVCs. Outsourcing these activities implies considerable advantages for downstream partners, mainly because they can rapidly cover demand of wholesalers and buyers while minimizing risks and investment in collecting channels. With such mechanism, the networks of smallholders are organized and it creates a channel for flowing returns and small-scale innovations back against providing inputs by smallholders. It also creates opportunities for small-scale suppliers, i.e. smallholder farmers to develop their competencies and skills to move to a new value chain.
However, this requires more attention of big and key actors of the GVC to downstream actors, e.g. smallholders and small-scale producers; creating incentive mechanisms for that, and increase of awareness that agricultural and rural population are most vulnerable, sensitive and responsive to the changes, either those changes are positive or negative, either exogenous or endogenous.
Dr. Botir Dosov