Value Adding, Agroenterprise, and Poverty Reduction: A territorial approach, CIAT, Colombia, Lundy, et al, 2002

    In spite of improvements in agricultural production, rural poverty is growing and it is becoming apparent that, in a context of globalization, declining commodity prices, public sector reform and increasing natural resource degradation, increased agricultural productivity is not sufficient to improve rural livelihoods. A focus on post-harvest activities, value-added products, and links with niche markets may be a good strategy for smallholders.

    CIAT's approach to achieving both added value and poverty reduction is to strengthen the rural enterprise sector. Working with local partners, its Rural Agribusiness Development Project links smallholders with growth markets, strengthens local capacity for rural business development, and facilitates adoption of conservation practices. With the intended outcome of improving farmer livelihoods and the adoption of resource conservation practices, the project promotes an entrepreneurial, market-oriented focus and participatory decision-making by strengthening existing local skills and building new ones; developing consensus; and ensuring equal access to opportunities.

    CIAT chose to use a territorial rather than subsector approach in an effort to build a local skills base that can generate positive returns for a specific subsector or farm-to-market chain, while also contributing to a diverse and dynamic local economy. By not limiting the focus to a specific product, a territorial approach allows flexibility and adaptative learning more appropriate to complex and dynamic market-driven systems. Finally, the creation of human capital and the improvement in both bonding and bridging social capital among organizations are embedded in this approach. This last point is important to achieving sustainable gains against poverty in a region.

    The paper presents an overview of the approach, developed by CIAT and implemented in three Latin American sites, that focuses on strengthening or developing local capacity to make the transition to a product differentiation and value-added strategy.

    Summary of results
    At this stage, the debate is no longer about whether or not value-adding is important but rather how to achieve it in practice. While initial results are positive, much work remains to be done to adapt and test these tools in diverse contexts, cultures, and products.

    Associated Activities and Documents
    Programme Design
    »Improving Local Support Services for Agroenterprises, NZAID Honduras & Colombia, 2002
    »Pilot Testing the Territorial Marketing Methodology in Madagascar, Ferris & Dabat, CRS, 2003
    Synthesis Documents
    »Identifying and Assessing Market Opportunities for Small Rural Producers - A Manual, Ostertag, CIAT, 2004
    »Strategies to Increase the Competitiveness of Smallholder Chains: CIAT Field Manual - Lundy, Gottret, Cifuentes, Ostertag & Best, 2004