Global value chains in the agrifood sector

This paper is about agriculture and poverty reduction in the context of globalization. Agricultural growth is central to poverty reduction in rural areas, and one opportunity for such growth lies in increasing exports of agricultural products from poor countries to global markets.

Global agricultural markets have become increasingly complex because of concentration at all points in the value chain and the increasing scope and complexity of food standards, particularly those relating to food safety. Therefore, realizing the potential benefits of agricultural export growth for poverty reduction requires careful analysis of trends in global markets and the policies that will unlock the potential for growth and poverty reduction.

Trends in global agribusiness and their consequences for strategies to eradicate poverty through increasing export growth are analysed in this paper using the GVC perspective. This perspective analyses inter-firm linkages in global agribusiness, placing agricultural production and processing in developing countries in the context of the dynamics of the broader global agribusiness and agrifood systems.

The value chain perspective has highlighted issues of codification of knowledge in value chains, supplier competence, strategies to reduce the costs of governance, power asymmetries, and concentration. These issues are decisively affected by the two major trends in agribusiness value chains, the increasing importance of standards and increasing concentration, subjects of this paper.

The paper is structured around the following six heading:

  1. Agribusiness and poverty
  2. GVC analysis applied to agribusiness
  3. Standards
  4. Concentration in agribusiness value chains
  5. Strategies for decreasing powerlessness in global markets
  6. Making a difference: policy options for agribusiness and poverty reduction

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