Markets for the Poor and Value Chains

Poorer rural households depend on market systems for much of their livelihoods. Altering market systems to improve their fairness for all participants will create opportunities for poorer households to improve their livelihoods and reduce poverty.  These more accessible, efficient and inclusive markets will enable greater choices and opportunities for poorer households.  At the same time, markets can also marginalise people further, especially the more vulnerable, including women, who have less access to productive resources, capital, extension services and capacity development.

This research area will focus on understanding how market systems operate in the project using a value chain analysis (VCA) approach, across a select number of commodity chains in the case study areas in order to identify strategies for encouraging participation of vulnerable households in a manner that provides sustainable benefits from agricultural intensification across actors in the chain.

In order to achieve this, the VCA will consider barriers, constraints and risks of participation, while realising that participation in agricultural value chains may not be the only option for increasing livelihood resilience for vulnerable households. This includes both the dimensions of social exclusion, as well as adverse incorporation. Our premise is that the strategies developed from this project will be sustainable in the longer term. As such, the activities designed to achieve this objective not only focus on chains within communities; they also include organisations that can provide continued support to these communities once the project concludes.

One of the key sectors of support for the development of value chains and pro-poor markets is finance. The VCA will generate opportunities for piloting and scaling of value chain interventions that make it attractive for the private sector and financial institutions to engage directly with marginalised households, allowing for the demonstration of improved self help group (SHG)-based access to finance and insurance products, in turn positioning SHGs to become village level service providers and opening up new livelihood opportunities for marginalised households.