Rethinking Food Markets and Value Chains for Inclusion and Sustainability


In recent decades, agricultural productivity has steadily grown and technological and institutional innovations have proliferated within agrifood markets and value chains, helping to reduce poverty and food insecurity around the world. But despite these critical contributions, the ways in which food markets are structured and operate have negative impacts. Much of the rural population employed within the agrifood sector remains poor and food- and nutrition-insecure, and evidence suggests that at least 3 billion people globally cannot afford nutritious diets. These populations have been unable to benefit from expanding food markets.

In addition, the sector’s overuse and misuse of natural resources has also degraded the environment and exacerbated the climate crisis and biodiversity loss. Many of these failures are rooted in markets hindered by multiple deficiencies in infrastructure, equipment and standards; incentives that do not foster sustainability, nutrition or inclusiveness; concentrated market power; and weak value-chain integration.


This Initiative aims to provide evidence on what types of bundled innovations, incentive structures, and policies are most effective for creating more equitable sharing of income and employment opportunities in growing food markets, while reducing the food sector’s environmental footprint.


This objective will be accomplished through:

  • Making globally integrated value chains inclusive, efficient, and environmentally sustainable.
  • Innovation for inclusive and sustainable growth of domestic food value chains.
  • Innovations and policy design for development of cross-value chain services to leverage new employment and income opportunities.
  • Knowledge tools for policy coherence and market reform for inclusive and sustainable food market transformation.


Proposed 3-year outcomes include:

  1. Pilot bundled innovations on inclusive business models for (a) vertical value chain coordination and (b) product quality certification for global export markets are being used by 4,000 farms and agrifood small- and medium-sized enterprises, directly benefiting at least 20,000 people in households of self-employed, owners and workers of those farms and agrifood businesses in Bangladesh, Ethiopia, Uzbekistan, and two countries in Central America.
  2. Pilot bundled innovations on inclusive business models for a) storage and transport logistics, b) value chain contracting, and c) product quality certification for domestic markets, especially for high-value and nutrient rich foods, are being used by 4,000 farmers and agrifood small- and medium-sized enterprises and directly benefiting at least 20,000 people in households of self-employed, owners and workers of those farms and agrifood businesses.
  3. Pilot innovations on digital technologies for a) logistics and b) finance are benefitting at least 6,000 agrifood small- and medium-sized enterprise workers.
  4. National policymakers and private food market actors use the Initiative’s innovative tools for food market diagnostics and policy analysis with governments of at least six countries having changed policies to enabling scaling of the piloted innovations, and with at least 14,000 smallholder farms and agrifood small- and medium-sized enterprises adopting the innovations.


Projected impacts and benefits include:


Income improvements for the poor from integrated and inclusive value chains generate commensurate improvements in food security, assisting 3.5 million people to meet their minimum dietary energy requirements. Socio-technical innovations in value chains for nutrition-rich foods also improve the availability and affordability of healthy diets for all.


Market access for smallholders and small- and medium-sized agrifood enterprises is improved, raising income and increasing employment opportunities, especially for the many poor people whose livelihoods depend on small-scale agrifood activities, assisting 3.5 million people to exit poverty.


Inclusive value-chain integration increases the prospect of a decent living for 1.6 million women and 0.7 million youth by creating new, off-farm job and income opportunities. Promoting skills development, entrepreneurship, and access to sustainable and digital technologies, and addressing structural and normative barriers to participation through gender transformative approaches bundled with innovations, helps close existing gaps in opportunities and empowers women and youth.


Testing and scaling of cost-effective and productivity-enhancing innovations contributes to climate adaptation and reduction of greenhouse gas emissions, including an averted 150 kilotonnes of CO2 equivalent emissions, along value chains and provides evidence on how food market incentives can be reset to promote the diffusion of such investments and innovations along value chains.


A deeper understanding of the trade-offs between market efficiencies, income generation and environmental outcomes for environmentally sustainable land, water and energy use and production practices furthers understanding of the evidence and tools needed to support public and private sector agents to redirect policies and investments in support of conservation of biodiversity and environmental health.


For more details, view the Initiative proposal


Header photo: Traders displaying bunches of banana for sale in a market. Photo by IITA.