Inclusive business in agrifood markets: evidence and action

This report brings together issues discussed at an international conference on &ldquo;Inclusive Business in Agrifood Markets: Evidence to Action in 2008.<br /><br />The conference sought to answer the following questions:<br /> can the new food giants, including supermarkets and food companies be partners in the economic growth of rural areas? can small-scale farmers meet the high expectations for food quantity, quality and safety? can policy help to make successful market linkages between business and small-scale farming?The report notes that market modernisation offers increased economic opportunities for small scale producers and SMEs, consumers, and other actors in the food chain. New buyers in the countryside are competing for farmers&rsquo; produce. But there are also risks of domestic businesses being bypassed and of costly market entry requirements, which favour the better resourced. <br /><br />Small-scale producers often have trouble exploiting the new opportunities because of an absence of economies of scale, limited access to critical assets, high transaction costs, and limited negotiating power. It should therefore come as no surprise that the modernization of the agrifood sector has been accompanied by intense policy debate, especially in India, where local traders &ndash; but also farmers &ndash; feel a threat to their livelihoods from the growth of modern organized retail.<br /><br />In this context, the food industry is assessing its &ldquo;realm of responsibility&rdquo; in the supply chain; producer organizations are debating appropriate responses and strategies; governments are devising new forms of market governance to promote private sector investments while ensuring social inclusion; public and private sector organizations are joining forces in novel alliances; and donors are revisiting their support to agriculture in the context of the Millennium Development Goals (MDGs). <br /><br />The report also notes that disproportionate attention has been paid to export markets, despite the far greater importance of the domestic market for the majority of small-scale farmers. Plenty of attention has also been applied to public policy, even though the levers wielded by the state in food and agriculture markets have been steadily weakening. Not enough consideration has been given to the role of the private sector, the food processors and retailers as partners in inclusive rural development.<br /><br />.<br /><br />