Sustainable Agribusiness and Food Value Chains

Small-scale producers provide over 70% of the world’s food needs while agribusinesses are important generators of employment and income worldwide. Improving the sustainability of food value chains can benefit millions of poor households in developing countries as well as ensuring access to nutritious food for all.

Integrating smallholders into food value chains and improving food systems.

Governments should support farmers, agribusinesses and civil society to promote inclusive and efficient food systems that better integrate smallholder farmers and small and medium agribusinesses into value chains. This will improve their access to markets, generate decent employment, and make nutritious food available.

FAO has developed approaches and tools to support the integration of smallholders and small and medium agribusinesses into value chains. FAO also provides capacity building support to strengthen public-private collaboration on sustainable food value chains development, public food procurement, public-private partnerships, responsible contract farming, and improve market access for local products through Geographical Indications.

Key policy messages

· Creating an effective enabling environment for sustainable agribusinesses and food value chains requires well-established legal and institutional frameworks as well as inter-institutional coordination and collaboration on policy development, legislation, and policy implementation — from ministry to district levels. FAO promotes transparent and evidence-based governance practices that lead to inclusive and sustainable agribusiness and food value chains in support of healthy diets for all.

· Adding value to agricultural production in rural areas (e.g., through processing industries) offers tremendous potential to boost rural employment, generate income, reduce poverty and improve nutrition. Policies, incentives and frameworks promoting agro-industries, and in particular small and medium enterprises (SMEs), have proven to be an effective pathway to lift rural populations out of poverty in many countries.

· Policies promoting sustainable agribusiness and food value chains play a crucial role in meeting the 2030 Sustainable Development Goals, and particularly Goal 2 - Achieving zero hunger and Goal 12 - Responsible consumption and production.

· Nutrition-sensitive value chains (NSVCs) contribute to improving the nutritional value of food, as well as to increase supply and demand for safe and diverse food. A nutrition-sensitive value chain approach is a useful way to analyse and navigate the complexity of food systems to improve food security and nutrition. Such an approach can help identify entry points for policy interventions, investment decisions and capacity development.

· Large-scale crises such as Covid-19 may weaken even well-established food value chains, resulting in income reduction and loss of employment, thereby leaving people vulnerable to food insecurity and malnutrition. While at the business level, some agrifood businesses may benefit from particular shocks (e.g., those with solid e-commerce channels having to cope with Covid-19 lockdowns), others will be negatively affected. Given the risks posed by large-scale crises, resilience to shocks should always be taken into account especially when working on policies that promote sustainable agribusiness and food value chains.