Opportunities for Smallholders from Developing Countries in Global Value Chains

Abstract

The current policy debate on opportunities for African smallholders in agricultural markets focuses on the need for proper institutions at the market level or governance in the global value chain (GVC). Both discussions neglect insights from strategic management. We argue that successful inclusion of smallholders in GVCs requires the deployment of strategic resources and capabilities in the farming systems. The consequence of this argument is that the ‘inclusion’ of smallholders in GVCs only makes sense if they have the opportunity to create strategic resources.

Keywords:

• global value chains
• smallholders
• strategic resources
• Sub-Saharan Africa

Notes

Hayes (2006) uses competitive equilibrium theory to show that fair trade improves welfare. Several NGOs stress the importance of fair trade as an instrument to replace competitive forces and to provide better opportunities for producers in developing countries. This is a worthwhile initiative; however, this specific market niche constitutes a minor market share in nearly all product markets.