2011-2013
Subtheme 2.2: Participation in High-Value Agricultural Markets (GRP 27)
Centers/ProgramsIFPRI
Target RegionsAsia, CWANA, LAC, SSA
Countries of Planned Research Potential Beneficiary Countries
 
Ghana, Indonesia, India, Morocco, Mozambique, Peru, Tanzania, Vietnam
 
Ghana, Indonesia, India, Morocco, Mozambique, Peru, Tanzania, Vietnam
CGIAR Priorities
3A - Increasing income from fruit and vegetables
3B - Income increases from livestock
3C - Enhancing income through increased productivity of fisheries and aquaculture
5B - Making international and domestic markets work for the poor
5C - Rural institutions and their governance
Development Activities - Development Activities
Stand-alone Training - Stand-alone Training
Financing Sources
Members: ADB, Australia, European Commission, FAO, Finland, Japan, Switzerland, United States, World Bank

Non Members: Agence Francaise de Development (AFD), Bill and Melinda Gates Foundation, Center for International Research and Economic Modelling, Coffey International Development, HarvestPlus/CP, Hewlett Foundation, Indian Center for Agricultural Research (ICAR), Institut Nationale de la Recherche Agronomique, Institute for Financial Management and Research (IFMR), Landbouw-Economish Instituut, Michigan State University, Others, Overseas Development Institute (ODI), S.E.VEN Fund Inc., University of Illinois, Unres+Other Sources, Weidemann Associates, World Food Program (WFP)
Project Overview and Rationale

Overview

The research agenda under Participation in High-Value Agricultural Markets project (Sub-Theme 2.2) focuses on diversification into higher-value agricultural products (HVAP).* The opportunities for diversification into HVAPs are expanding as a result of various trends:

  • rising incomes are allowing consumers to shift from staples to higher-value foods,
  • trade liberalization is increasing the opportunities to export to high-income markets,
  • urbanization is creating growing markets of relatively high-income consumers, and
  • improved information and communication technology is allowing improved coordination of demand in high-income countries and supply in low-income countries.

Small farmers often have some cost advantages in producing these commodities relative to large-scale producers due to the lower opportunity cost and better motivation of family labor compared with hired labor. However, small farmers are constrained from participating in high-value sectors because of:

  • lack of information on production methods and marketing;
  • difficulty in bearing the risks associated with growing and selling HVAPs;
  • liquidity constraints that prevent even profitable investments; and
  • the high transaction costs of assembling goods from many small farmers.

Increasing consumer preferences for quality and specific attributes, tightening food safety regulations, and the restructuring of the retail food sector (including the growth of supermarket chains) are imposing new requirements on suppliers which often give an advantage to large farmers, including those in developed countries. The challenge is to craft policies and regulations that establish a level playing field for different types of growers and to promote marketing institutions that facilitate vertical coordination—meaning the transfer of information, credit, inputs, and commitments—between small farmers and buyers.

Project Goals and Objectives

Participation in High-Value Agricultural Markets seeks to promote the participation of poor households and low-income countries in the production and export of high-value agricultural products to raise rural incomes and reduce poverty. High-value agricultural products are defined as products that generate relatively high returns per unit of labor or land, mainly meat, dairy, eggs, fish, fruits, and vegetables of which most of the livestock projects described are carried out by the joint IFPRI-ILRI program. The specific objectives of this project are:

  1. To identify bottlenecks and constraints faced by small farmers and other poor households in their attempts to raise income by participating in supply chains for high-value agricultural commodities;
  2. To analyze alternative policies, regulations, investments (public, private or mixed), and institutional arrangements that alleviate the identified bottlenecks and constraints;
  3. To disseminate information on constraints and policy options to researchers and policymakers, and international organizations in developing countries; and
  4. To strengthen the capacity of policymakers and researchers in targeted countries to undertake policy research concerning the role of diversification and high-value agricultural commodities in raising the incomes of small farmers and other poor households.

___________
*This research program involves joint activities with the International Livestock Research Institute (ILRI).  In September 2003, IFPRI and ILRI agreed to form a Joint Program for Livestock Marketing Opportunities.  The Joint Program coordinators are Steve Staal for ILRI and Clare Narrod for IFPRI.  Dr. Narrod is a research fellow in the Markets, Trade, and Institutions Division of IFPRI.



Project Outputs
Output Title
1: Improved understanding of long-term patterns, trends, and emerging issues in high-value agriculture, focusing either on one sector globally or all sectors in one country (three years)
Output Description
This output focuses on documenting and explaining current trends in the production and marketing of high-value agricultural commodities. There are no changes from the previous MTP.
CGIAR Priorities
3A, 3B, 3C, 3D, 5A, 5B, 5C, 5D
Countries of Planned Research
Ghana, Morocco, Mozambique, Vietnam
Intended Users
Researchers, development planners, and policymakers.
Outcome
Researchers use results to guide future work. Policymakers and development agencies pay greater attention to a growing sector and make use of insights to promote the participation of poor households.
Impact
Increased research and policy focus on high-value agriculture. Improved policies and research capacity, leading to higher incomes for small farmers and other poor households."

Output Target
Year Target Type Target Description
2010
Other kinds of knowledge
Evaluation of patterns and trends in diversification toward high-value agriculture in Morocco, Ghana, Mozambique, and Vietnam.
2011
Policy strategies
Contribution of diversification to growth in value of agricultural production in selected countries
2011
Policy strategies
Research on trends in high-value agriculture in Bhutan completed.
2011
Policy strategies
Review of policies and institutions for promoting high-value agriculture

Output Title
2: Improved understanding of the competitiveness of small farmers in high-value agriculture, including the degree of participation of small farmers, its contribution to income and employment, and the constraints to participation (three years)
Output Description
This output concentrates on the current and potential role of smallholders in high-value agriculture, the impact of HVAP on farm income, and factors that limit the involvement of smallholders.
CGIAR Priorities
3A, 3B, 3C, 3D, 5B
Countries of Planned Research
Indonesia, India, Peru, Tanzania, Vietnam
Intended Users
Researchers, international organizations, and policymakers in developing countries.
Outcome
Policymakers and development agencies recognize potential of smallholders in certain High Value Agriculture sectors. Researchers adopt methods to undertake policy research on smallholder’s competitiveness.
Impact
More appropriate policies and investments to facilitate small-farmer participation in High Value Agriculture, giving the sector a more pro-poor impact. Improved methods and research capacity."

Output Target
Year Target Type Target Description
2010
Other kinds of knowledge
Assessment of competitiveness of small-farmer in horticulture and other high-value agriculture in Bhutan.
2011
Policy strategies
Patterns in varietal diversification in India and Nigeria analyzed
2011
Policy strategies
Study of impact of modern retail sector on small farmers in Indonesia completed

Output Title
3: Implications of agribusiness development and retail transformation on smallholders and other poor households, and identification of best practices in to maximize the pro-poor impact of these changes (three years) 
Output Description
This output focuses on understanding the effects of the growth of agricultural processing, retail chains, and high-value agriculture, and how policies and public investments can promote the participation of smallholders and other poor households. This output consolidates Outputs 3 and 4 from the previous MTP. This change responds to the call to define outputs more broadly. In addition, there was some overlap between the old Output 3 (Best practices in marketing high-value commodities) and Output 4 (Implications of market transformation on smallholders in Asia).
CGIAR Priorities
3A, 3B, 3C, 3D, 5A, 5B, 5C, 5D
Countries of Planned Research
Indonesia, India, Peru, Vietnam
Intended Users
Policymakers, researchers, and practitioners in developing countries.
Outcome
Development practitioners and policymakers use insights to facilitate appropriate marketing arrangements. Researchers adopt methods to undertake further policy research on best practices in marketing arrangements for HVA commodities.
Impact
More appropriate marketing institutions allow smallholders and the poor to participate in high-value agriculture, raising rural incomes and reducing poverty. Improved methods and better research capacity."

Output Target
Year Target Type Target Description
2010
Practices
Development of a model to simulate impact of changing retail sector and consumer demand on small pig farmers in Vietnam.
2011
Policy strategies
Evaluation of importance of modern retail sector in Indonesia
2011
Policy strategies
Research on effect of certification on consumer demand for high-value food analyzed and completed

Note: Financial Tables, Target Regions, CGIAR Priorities and Financing Sources show aggregated data for more than one MTP project and in particular for: - Subtheme 2.1: Globalization and Markets (GRP 2) - Subtheme 2.2: Participation in High-Value Agricultural Markets (GRP 27) - Subtheme 2.3: Institutions and Infrastructure for Market Development (GRP 23)


Allocation of Member, Non-Member Grants and other sources to projects, 2009-2011
in $millions

Project Member Actual
2009
Estimated
2010
Proposal
2011
Project Total
4.879
5.773
5.657
Theme 2: Globalization, Trade and MarketsMemberADB
0.380
0.385
0.000
Australia
0.210
0.136
1.138
European Commission
0.596
0.000
0.000
FAO
0.000
0.025
0.000
Finland
0.000
0.000
0.282
Japan
0.045
0.000
0.000
Switzerland
0.047
0.140
0.000
United States
0.187
0.733
0.822
World Bank
0.127
0.273
0.009
Non MemberAgence Francaise de Development (AFD)
0.000
0.111
0.000
Bill and Melinda Gates Foundation
0.040
0.633
0.000
Center for International Research and Economic Modelling
0.018
0.079
0.000
Coffey International Development
0.010
0.020
0.000
HarvestPlus/CP
0.000
0.118
0.268
Hewlett Foundation
0.494
0.273
0.000
Indian Center for Agricultural Research (ICAR)
0.012
0.128
0.000
Institut Nationale de la Recherche Agronomique
0.120
0.060
0.371
Institute for Financial Management and Research (IFMR)
0.000
0.080
0.104
Landbouw-Economish Instituut
0.055
0.209
0.341
Michigan State University
0.073
0.162
0.124
Others
0.036
0.219
0.224
Overseas Development Institute (ODI)
0.008
0.000
0.000
S.E.VEN Fund Inc.
0.045
0.011
0.000
University of Illinois
0.018
0.000
0.000
Weidemann Associates
0.063
0.000
0.000
World Food Program (WFP)
0.006
0.000
0.000
Unres+Other SourcesUnres+Other Sources
2.289
1.978
1.974


Allocation of Project Costs to CGIAR Priorities, 2009-2013
in $millions

Project Actual
2009
Estimated
2010
Proposal
2011
Plan 1
2012
Plan 2
2013
Priorities
Theme 2: Globalization, Trade and Markets
Project Total
4.879
5.773
5.657
5.883
6.119
3A
0.917
1.085
1.064
1.106
1.150
3B
0.917
1.085
1.063
1.106
1.150
3C
0.459
0.543
0.532
0.553
0.575
5B
1.769
2.094
2.050
2.133
2.219
5C
0.622
0.735
0.721
0.750
0.780
Development Activities
0.049
0.058
0.057
0.059
0.061
Stand-alone Training
0.146
0.173
0.170
0.176
0.184


Project investment by developing Region, 2009-2013
in $millions

Project Target Regions Actual
2009
Estimated
2010
Proposal
2011
Plan 1
2012
Plan 2
2013
Project Total
4.879
5.773
5.657
5.883
6.119
Theme 2: Globalization, Trade and MarketsAsia
2.428
2.948
3.130
3.255
3.386
CWANA
0.479
0.495
0.253
0.264
0.274
LAC
0.528
0.619
0.587
0.610
0.635
SSA
1.444
1.711
1.687
1.754
1.824