Feed the Future
This project is part of the U.S. Government's global hunger and food security initiative.

4.3.7. Challenges and Solutions in Integrating Food Security and the Value Chain Approach

Although there is a lot of congruence between the value chain approach and food security objectives, there are also some challenges that may emerge in their integration. Several of the most common challenges follow, together with solutions that may help to address them.  Many of the challenges and solutions that are summarized here are described in more detail in the pages on food availability, food access, and food utilization 

Value chain selection.  The standard criteria for value chain selection are not always adequate to achieve food security objectives. Value chain programs often select value chains with the highest potential to increase incomes, but while income increases households’ access to food through purchases, the nutritional impacts vary based on the governance and structure of the value chain and the volatility of the market.While increased incomes allow households to purchase foods, a diverse range of nutritious foods must be available in the marketplace. Moreover, many households may choose to spend increased earnings on other priorities than food, causing no change or even deterioration in food security.2 Intra-household dynamics and gender issues influence how increased income affects a household's food security status.  The points below describe two areas that require particular attention:

  • Staple foods vs. cash crops: There is often a strong cultural norm for smallholder farmers to produce their own staple foods even in areas where these foods are not commercially viable, because these risk-averse farmers do not trust that there will be year-round availability of food in the market to purchase. As a result, programs focused on food security may opt to promote production for household consumption to have immediate impact on food security. However, production for consumption is not always cost effective in scenarios where farmers can obtain more quantities of diverse food by producing a cash crop and then using that income to purchase food. It also must be noted that the line between staple foods and cash crops is not black and white. Staple foods can be considered cash crops when the surplus is marketed. The main distinction is whether the crop is grown with the primary purpose of consumption or marketing.
  • Agricultural vs. non-agricultural value chains:  Nearly all food security research and programs to date have focused on agricultural value chains, typically seeking to increase the productivity and incomes of farmers, while benefitting urban dwellers through lower food prices and food-related employment (e.g., processing). However, this focus ignores the potential of income gains from non-agricultural value chains to positively affect household food access. In contrast, the value chain approach can be applied to any type of value chain.  An agricultural orientation is generally more important to addressing food security when countries are poorer and nutritional issues are more severe, while if agriculture is a less important sector in the economy and does not engage the poor, such as in Yemen, focusing on industry and services is likely to have a greater impact upon nutrition.3 

Potential solutions include: 

  • Evidence-based design.  Identify food security gaps and needs first by using food security assessment tools, then incorporate this information by using a food security lens to inform value chain selection and analysis. This entails not only understanding whether the food insecurity is being driven by poor availability, access or utilization, but understanding the root causes and incorporating appropriate food security criteria into the value chain selection process. When food insecurity is causing malnutrition, understanding the key contributing factors (e.g., inadequate calories, lack of protein or micronutrients, poor quality food) is equally important. For example, an assessment may identify the lack of key micronutrients as a critical contribution to food insecurity, which could lead the program to focus on staple foods that include these micronutrients.  Also understand the relative importance of the agricultural sector on the poor, and the relative merits of investing in agriculture versus other sectors. 
  • Reduce the risk of commercializing. Enabling farmers to focus more on producing cash crops in the long term requires improved availability of food crops in the market so farmers start to see reduced risk in relying on purchasing food. Programs would need to work on both food crops and cash crops to see through this transition, or in related areas such as trade policy and transportation infrastructure.
  • Incorporate food security criteria into value chain selection. Weighing both food security and other criteria can assist in selecting those value chains with the greatest potential to support both food security and economic objectives.

High potential versus high need areas. Though not true of all areas,4 in many countries the geographic areas with high potential for increasing incomes and food production do not overlap with the areas with highest food insecurity.  These areas frequently differ in terms of agro-ecological conditions, distance to roads and markets, vibrancy of the private sector, and access to supporting markets. As such, to have the greatest impact on productivity and incomes, value chain initiatives generally target areas that are less food insecure, with the anticipation that the food insecure will benefit as increased production flows to food deficit areas, increasing availability and reducing the cost of food.  Food security programs tend to target more food-insecure areas with households that are less competitive and require more support. Potential solutions include: 

  • Understand the distribution of food insecurity.  In some contexts the food insecure are widely disbursed, living even in areas with high agricultural potential and productivity. In these areas value chain approaches can focus on areas of higher potential while designing their programming to incorporate and benefit the food insecure.  Thus it is important to properly understand the context and avoid assuming that the food insecure only reside in more marginal or remote locations. 
  • Compromise in the geographic targeting. Projects can identify areas with high potential that have pockets of high food insecurity close to the target area, or areas of high potential that have market linkages to deficit areas, or identify areas that have high levels of food insecurity but still have the potential to achieve gains in productivity and income.
  • Improve market efficiency. Select staple food value chains that are consumed by the food insecure, and identify opportunities to increase the volume and quality of food available by improving productivity and domestic market efficiency. The result should be decreased market price for these food products.

Self-selection versus targeting.  Value chain activities typically encourage self-selection of participants and anticipate that success will lead to spill-over and increased participation by other value chain actors. The participants that elect to engage are generally the less vulnerable who are able to assume risks and undertake upgrading. In contrast, food security activities generally target interventions to the most food insecure individuals or households. These individuals and households are often selected on the basis of criteria established by communities or NGOs.  Such populations face greater constraints to participating in value chain programming, and thus are often not included. Potential solutions include:

  • Address sources of vulnerability. It is important to understand the constraints of food insecure populations and determine whether they can engage in upgrading activities and what resources they would require to do so. Preparatory interventions may be required for very vulnerable populations that increase their assets and capacity.  This may include linking households to other initiatives that meet households' immediate needs while they start to engage in upgrading activities. As households' vulnerability declines, assistance can be provided to support engaging in value chain programming. A range of potential strategies exist for tailoring the value chain approach for vulnerable populations. 
  • Ensure adequate human resources. Programs aiming to improve food security using a value chain approach will require a diverse set of technical skills.  In addition, working with such households can require additional time and resources to enable them to upgrade. These considerations should be reflected in programs’ budgets and timeframes.
  • Focus the benefit on the food insecure.  Improving food security does not always require working directly with food insecure households on production and marketing. If value chain projects are unable or unwilling to work directly with the extremely food insecure, they can still create positive impacts by reducing the prices of foods that are consumed by these groups. Doing so requires a careful understanding of whether increased production will actually reach these target groups and be consumed by them. 

Direct versus indirect approaches. Value chain projects may not work directly with the populations that they seek to benefit with their programming. This may be done in order to achieve greater leverage and cost-effectiveness, to address binding constraints that exist elsewhere in the value chain, or to improve the sustainability and strength of relationships between value chain actors.  For instance, interventions that improve the capacity of exporters may have a strong indirect benefit on farmers who are subsequently able to access new markets.  However, such indirect approaches may not be sufficient to address all aspects of food security.  In particular, effective food utilization is significantly influenced by relationships among household members. Without nutritional messaging or other approaches that directly reach food insecure households, it may not be possible to improve food security. A potential solution is:

  • Partner for linkages. Value chain programs that aim to increase food security may need to develop activities targeted to different levels of the value chain, even when those actors are not targeted for core activities. Partnerships may allow projects to address and improve food security without directly engaging with target populations.  [Practical example sought that illustrates this point]. 

Prioritizing income maximization versus risk minimization. Many value chain initiatives promote types of upgrading that involve intensifying profitable activities. While these strategies will often maximize household profitability, they may not be the best option for increasing food security in households that are vulnerable to sudden shocks, for whom the smoothing of income can have more beneficial impacts. Projects that focus on a single value chain may not address the diverse food needs of food insecure households,5 particularly where markets do not function effectively. A potential solution is:

  • Promote diversification. Research in Eastern and Central Africa suggests that focusing on single commodities alone will produce worse outcomes for poverty reduction than taking a more broad-based approach.6  Facilitating multiple value chains supports increased incomes and improved food security.  Another solution is to increase income and provide training on the importance of a diversified diet for good nutrition, if there is a sufficient variety of staple foods available in the market. 

Reaching the food insecure as consumers.  Upgrading strategies that encourage farmers to shift their food production to cash crops or engage in high-value-added processing may result in increased food prices for consumers and negative impacts on the most food insecure.7 Poor consumers often lack the purchasing power to afford more expensive products and thus are rarely selected as viable end markets for safer and more nutritious food products if they are more expensive, in spite of their strong need for these products.A potential solution is:

  • Encourage self-production. Evaluate how value chain activities will affect food prices and their impact on the food insecure. Consider encouraging the production of nutritious food by those households without the financial capacity or market stability to reliably purchase it.

Competitiveness versus national food security policies.  There is often a contradiction between national food security objectives that promote local food production to improve stability and reduce the risk of supply disruptions, and the lack of competitiveness of producing those staple foods vis-à-vis purchasing food grown elsewhere. While farmers may earn a greater return by growing higher-value cash crops and purchasing those that they eat, such a strategy depends upon markets functioning adequately to ensure that food is available over the lean season.  A potential solution is:

  • Advocate a portfolio approach. Programs must strike a balance between these competing objectives. While competitiveness is important and should be taken into account in value chain selection, it is not the only criterion. There may be upgrading strategies that can improve the competitiveness of local staple foods. Often it is advisable to promote both food and cash crops, particularly when these crops are complementary (e.g., rotation of horticulture and maize crops). 

Footnotes

  1. Strasberg et al, Effects Of Agricultural Commercialization On Food Crop Input Use And Productivity In Kenya, 1999, vi
  2. Jaleta et al, Smallholder Commercialization:  Processes, Determinants and Impacxts, 2009
  3. Ecker et al, Growth is Good, but is not Enough to Improve Nutrition, 2
  4. Gamba and Mghenyi, Rural Poverty Dynamics, Agricultural Productivity and Access to Resources, 2004
  5. Corinna Hawkes and Marie T. Ruel, Value Chains for Nutrition, 21.
  6. Omamo et al, Strategic Priorities for Agricultural Development in Eastern and Central Africa, 2006.
  7. Corinna Hawkes and Marie T. Ruel, Value Chains for Nutrition, 20-43.  
  8. Corinna Hawkes and Marie T. Ruel, Value Chains for Nutrition, 20
Targeting:&nbsp; </strong>Households struggling to access food face a range of challenges that make them less likely to self-select into value chain programming, typically including limited assets and high risk aversion.&nbsp; While reducing food prices does not require working directly with food insecure households, many other strategies to improving food access require a more intensive effort directed at these households. Programs need to determine whether to target such households directly with their programming, and if so, how to identify these households.&nbsp; <br /><strong></strong></p><p><strong>Subsidies:&nbsp; </strong>Addressing the root constraints faced by households with the poorest access to food typically requires greater use of subsidies and a longer time frame relative to households that are more food secure. Such constraints often include both tangible issues (e.g., lack of productive assets) and intangible (e.g., poor self-esteem) that must be addressed in stages. Projects will need to understand what additional investments are required to address the constraints faced by households with inadequate ability to acquire food, and consider what corresponding strategies are required.