Regional Markets

1 Introduction
in this publication the triple bottom line of sustainable development (social, environmental
and economic impact) (Slaper and Hall 2011). 2 We will also touch upon the
concept of power: what role does power have both in and outside the value chain?
Limitations of export value chains
Even when local small-scale farmers, traders and processors do profit from accessing an
export market, those actors most vulnerable at the base of the chain are usually left out.
Inclusion can have positive indirect effects on income through the local labour market
(Neven et al. 2008); however, the direct effects on incomes of the poorest sections
of society remain limited (Béné et al. 2010). Usually the rich farmers are those most
often involved in value chains, cash cropping and exporting (see Neven et al. 2008; Rao
and Qaim 2010). Poor farmers do secure some benefits, although without sustainable
impact on improved landownership, income increases and price stability (Minten et al.
2009). The average, poor farmers usually do not dare to experiment with new methods
or new crops because of the risks involved. A bad harvest could mean the end of
their family business and the main source of their sustenance. Usually the very poor
do not even have the resources to farm commercially, lacking access to land, inputs,
additional technologies, wage labourers and other elements. They do not have strong
networks that can assist them in transforming their livelihood along commercial lines,
and sometimes lack access to knowledge to select the strategy for the prevailing market
conditions. Even when rich and very rich farmers engage in value chains and export
projects, they may face enormous challenges. The number of farmers and smallholders
with averaged-sized farms participating in export often drops over time, especially
when prices are low. Large-scale farmers, who reap the benefits of economies of scale,
tend to take over much of the innovation rent in the market (see Vorley et al. 2007;
Swinnen and Maertens 2007). In some cases, smallholders are forced to sell their land
to larger estates and become labourers on these holdings.
As internationally operating actors aim to increase their control over the value chains
for sustained profit, crop producers in developing countries are often marginalised.
International competition greatly increases the risks faced by local producers in the
South, both for domestic and export markets. An example is the pastoral small stock
export chain to Saudi Arabia, in which East African small-scale producers were pushed
out of the market by large-scale producers from New Zealand in the mid-1990s and
again in the mid-2000s (Zaal 1998; El Dirani et al. 2009).
2 This concept is also known as the triple P model (people, planet and profit) and was first coined by John
Elkington. For more information please visit the website of SustAinability, a think tank and strategic advisory firm cofounded
by John Elkington, which works to catalyse business leadership on sustainability (http://www.sustainability.com).
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