Identifying value chain trade-offs from fruit and vegetable aggregation services in Bangladesh using a system dynamics approach

Abstract

Significant progress has been made in cereal production in Bangladesh due to an agricultural policy environment that prioritizes the productivity of staple crops over fruit and vegetables (F&V). However, many smallholder farmers remain poorly connected to markets, which may lead to a limited supply response of F&V that can reduce opportunities for sufficient intake in neglected, consumer-facing, smaller retail markets. To address this issue, aggregation schemes have been conceived that collect and transport F&Vs on behalf of multiple farmers. Given the volume of horticultural produce produced and the reliance on developed transport infrastructure, aggregation schemes tend to supply wholesale and urban markets rather than underdeveloped rural and isolated markets. To this end, we investigated how a particular aggregation intervention ('Loop') could potentially improve the distribution of F&V to smaller markets whilst improving farmer benefits. We used an innovative system dynamics modeling approach based on Loop's aggregation services in Jashore, Bangladesh, and to identify the potential trade-offs between consumer outcomes in retail markets and farmer benefits. We find that combining aggregation with a quota at the smaller market, transport subsidy, and current price growth does not result in trade-offs between consumer purchases and farmers'- benefits. However, combining aggregation with current price growth can increase demand without losing farmers'benefits. The findings emphasize that standalone and multiple market-oriented interventions generate broader win-win benefits to promote inclusive food systems.