Support for Agriculture Value Chain Development

Date: October 2012
Type: Evaluation Reports
Subject:
ADB administration and governance; Agriculture and natural resources; Evaluation
Series: Evaluation Knowledge Studies

Description

The nature of agricultural development and the way food is produced, processed and sold is changing rapidly. Consumers increasingly want safe, higher value, and varied agricultural products. This is creating opportunities for farmers and agribusiness entrepreneurs along agricultural value chains to transform commodities into higher value products—a process that can play an important role in poverty reduction.

Rural poverty in Asia and the Pacific remains high despite considerable progress made in poverty alleviation. The rural poor, who often depend on agriculture for their livelihoods, can benefit from changes in agriculture, provided they are part of the emerging value chain.

This evaluation study reviews the relevance and effectiveness of the Asian Development Bank’s (ADB) assistance to projects supporting agricultural value chains, and draws lessons for ADB’s future engagement in this area, and particularly how the rural poor can participate in the value chain.

The study reviews the project designs of 53 agriculture and natural resources loans totaling $2.6 billion and 50 technical assistance operations with commercial agriculture components during 2001–2009. The loans represent 62% of the agriculture and natural resources loans approved in the review period.

The study also includes evaluations for case study countries: Bangladesh, the People’s Republic of China, Lao People’s Democratic Republic, and Nepal.

It finds that external support for agricultural value chains is an important option for agricultural development, because higher financial returns can be realized through value-enhancing inputs. Improvements in the effectiveness and efficiency of agricultural value chains can also enhance benefits to all participants in the value chain, and contribute to food security and poverty reduction.

Andrew Brubaker, evaluation specialist at the Independent Evaluation Department of the Asian Development Bank, talks about how rising demand for high-value crops and processed agricultural products is expanding opportunities as never before for farmers and agribusinesses through agricultural value chains. This has significant implications for reducing rural poverty if small farmers and agribusinesses can participate in agricultural value chains, an area of growing interest in the development community.

 

“While the changing context and the emergence of value chains have benefited large national and multinational agribusiness firms, small farmers and agribusinesses can also benefit,” says the study.

It finds that ADB’s support for commercial agricultural has demonstrated the potential of agriculture value chains, and it recommends scaling up this assistance.

The study says that countries need to adopt a comprehensive approach to policy, regulatory and institutional reform to remove constraints to the development of agriculture value chains; and that countries and projects need to identify the infrastructure requirements for the development of value chains and develop models for including the poor and marginalized groups in them.

Contents

  • Executive Summary
  • Chapter 1: Introduction
  • Chapter 2: Evaluation Methodology
  • Chapter 3: Agriculture in Developing Member Countries and ADB Support for Commercial Agriculture
  • Chapter 4: Relevance and Effectiveness of ADB Support for Commercial Agriculture
  • Chapter 5: Inclusion and Benefits to Key Stakeholders in the Value Chain

Support for Agricultural Value Chain Development by Independent Evaluation at Asian Development Bank