There are a number of characteristics of the value chain approach that make it suitable to addressing food security objectives and that add value to other approaches:
It draws attention to incentives. The value chain approach works to ensure that incentives are in place to promote desired behavior, which is an efficient way to sustainably achieve desired results. The value chain approach helps to:
- Identify disincentives for the private sector to respond to food supply gaps and invest in food production and processing, such as government-instituted export bans and price controls that lower potential returns and increase risk.
- Identify disincentives for producers to increase their productivity and switch to more lucrative livelihoods, such as inadequate market infrastructure and large fluctuations in the prices of basic staple foods.
- Identify incentives and disincentives for the production and sale of nutritious food, including consumer demand and production costs vis-a-vis less nutritious options.
It is market-driven. The value chain approach focuses on linking households to growing markets, so that households can earn income to purchase additional food. This may diversify their diet and reduce the risk of relying solely on their own production for their food security.
It is a systems approach. By looking at the value chain system, this approach assists in understanding the systemic impacts of project interventions. This helps identify high-impact interventions that might otherwise be overlooked such as:
- Striking the right balance between improving productivity in areas with high agro-ecological potential while ensuring market functionality to improve availability in food deficit regions, supported by the emphasis on understanding product flows and transaction costs.
- Targeting a diverse array of value chains instead of production of a single staple food. This can include non-agricultural value chains to improve food access, when this is identified as a critical factor to food security.
- Strengthening the enabling environment to ensure the right incentives are in place for value chain actors that support food security. Incentives are shaped through social safety nets, government services, and interventions in food markets, among other areas.
- Improving supporting markets for the products and services that are important to value chain actors. Critical supporting markets for food security include agricultural extension services, appropriate technology such as small-scale irrigation, transportation, storage, access to finance, leasing of farm equipment and many more.
It seeks sustainable solutions. In the past, the term “food security” in the development context was often used interchangeably with “humanitarian assistance” or “food aid”. These interventions often focused on alleviating short-term needs, and less on creating systems and relationships to sustainably address the underlying constraints. The value chain approach identifies the underlying causes and works towards sustainable local solutions by leveraging market forces, which leads to longer-term change.
It emphasizes leverage. By facilitating the actions of market actors rather than providing services directly to beneficiaries, the value chain approach is suited to reaching greater scale. Opportunities to leverage the investments and relationships of private sector actors can greatly
The Relevance of is Food Security to Value Chain programing
Food insecurity has a significant impact upon the effectiveness of value chain programming in many contexts. In many countries receiving development assistance, the majority of the population is food insecure. This includes both rural households that have periods of food insufficiency, and urban households that spend up to 80 percent of their incomes on food and so are greatly affected by fluctuations in food prices. Thus many of the participants and would-be participants in value chain programs are food insecure. Food insecurity shapes the behavior of households and therefore the success of value chain initiatives. Food insecure households are often less likely to take risks to make investments in upgrading. Individuals that are malnourished have a diminished capacity to engage in value chain programming, due to deteriorated cognitive capacity and greater susceptibility to illnesses. Those food insecure households that do engage in value chain initiatives may divert resources away from productive investments to bolstering household food security if these initiatives do not directly address food security. Addressing food security is therefore critical in many contexts to improving the outreach and effectiveness of value chain initiatives.
Conversely, value chain programming can and often does impact food security. Although it is frequently assumed that raising the incomes of the poor will automatically improve food security, this is not always the case. Research indicates that value chain activities can actually have an inadvertent but negative impact on food security. For example, encouraging the cultivation of cash crops can reduce household food production, while the processing and storage of food can greatly reduce its nutritional value for consumers. Income opportunities that remove women from child care and food preparation responsibilities may worsen nutritional outcomes. A food security lens helps value chain practitioners to identify the potential impact of activities on food security and develop mitigation strategies for any possible negative impacts. Moreover, it can help to guide value chain programs in understanding what strategies can create positive food security outcomes.
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