Abstract
PurposeSmallholder value chains are dynamic, changing over time in sudden, unpredictable ways as they adapt to shocks. Understanding these dynamics and adaptation is essential for these chains to remain competitive in turbulent markets. Many guides to value chain development, though they focus welcome attention on snapshots of current structure and performance, pay limited attention to the dynamic forces affecting these chains or to adaptation. The paper aims to discuss these issues.Design/methodology/approachThis paper develops an expanded conceptual framework to understand value chain performance based on the theory of complex adaptive systems. The framework combines seven common properties of complex systems: time, uncertainty, sensitivity to initial conditions, endogenous shocks, sudden change, interacting agents and adaptation.FindingsThe authors outline how the framework can be used to ask new research questions and analyze case studies in order to improve our understanding of the development of smallholder value chains and their capacity for adaptation.Research limitations/implicationsThe framework highlights the need for greater attention to value chain dynamics.Originality/valueThe framework offers a new perspective on the dynamics of smallholder value chains.
Highlights
Value chain development (VCD), which facilitates the participation of smallholders and small and medium rural enterprises in higher value markets for agricultural and forest products, has become a key component in the strategies of many development agencies, donors and governments (Humphrey and Navas-Alemán, 2010; Staritz, 2012)
The focus, is on the common properties of complex adaptive systems and their relation to experience with smallholder value chains. We suggest that this perspective is relevant for smallholder value chains because of their greater exposure to uncertainty, shocks, and sudden changes, and that this perspective is helpful by focusing attention on the contextual factors that help determine performance as well as the need for VCD to build capacity for adaptation
Designing interventions to link smallholders with value chains will benefit from greater attention to the contextual factors that shape value chain performance over time
Summary
Value chain development (VCD), which facilitates the participation of smallholders and small and medium rural enterprises in higher value markets for agricultural and forest products, has become a key component in the strategies of many development agencies, donors and governments (Humphrey and Navas-Alemán, 2010; Staritz, 2012). This paper presents a conceptual framework based on an analogy between value chains involving smallholders and complex adaptive systems. We have applied the theory of complex adaptive systems to VCD involving smallholders to provide researchers with an expanded conceptual framework to understand value chain performance over time. We identify and describe seven common properties of complex adaptive systems that we believe to be most relevant for understanding value chains in which smallholders are important participants. A complex systems perspective implies that we should not see shocks as only external to the value chain, and as generated from within, by uncertainty, by technological change, and by “interacting agents,” whose individual behavior can have unpredictable results for the system as a whole. Competition between buyers and processors can lead to price-wars between rival firms (a “race to the bottom”) or to cooperation and price-fixing by cartels
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