Improving the performance of FVCs for economic development, food and nutritional security

Abstract

Improving the performance of agri-food value chains for economic development and food and nutrition security is vital amid emerging local and global challenges. Literature confers severe underinvestment throughout fruit value chains in emerging economies, resulting in high post-harvest losses, leading to a persistent shortfall in the availability of affordable fruit, and eroding actors' margins. The primary aim of this study was to identify the causes of the poor performance of the avocado value chain in Ethiopia and simulate the impacts of a select set of coherent interventions. System dynamics modelling was adopted for its system-wide view, ability to handle complexity, dynamics and multiple objectives and measure quantitative ex-ante impacts. The research aim was achieved through an extensive literature review, direct observation of all chain activities, in-depth semi-structured interviews, and participatory model-building workshops to collect data, build qualitative and quantitative models, select interventions and validate outputs. Secondary data from various sources complemented primary data from participants. Qualitative modelling identified several feedback loops representing a vicious cycle in which underinvestments lead to remarkably high post-harvest losses, reducing fruit availability and affordability, impacting demand and discouraging investment. The high post-harvest loss reduces incomes, leading to low economic development and discouraging investment. The quantitative model simulation confirmed the continuing poor performance where producers cultivate a handful of less productive trees under a low-input production system, diminishing growth in availability. While significantly reducing availability, salient costs of the high post-harvest loss continue to erode margins in distant urban centres, even after continually pushing consumer prices up, reducing affordability. Scenario analysis suggests current trajectory would lead to a worsening of performance even in a plausible best case, while interventions bring about robust positive ex-ante impacts on the availability, incomes and overall affordability from improved investment. Modernised and organised retailers can assume chain leadership and deploy bestowed customer value and market information to incentivise and sanction other transformed actors to invest, access and fulfil supply contracts, enforcing implemented quality and fruit handling standards and facilitating the flourishment of agribusiness credit services and efficient payment systems. The research identified institution changes essential to enhance the implementation and effectiveness of interventions. The research results contribute to designing interventions and augmenting the literature on upgrading, measuring performance and ex-ante impacts.