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This paper examines available evidence on the impact of investing in value chain development as a means of reducing poverty and chronic malnutrition.
- Small, low-risk investments to increase quality and yields are the most effective path for generating behaviours that promote value chain competitiveness among the poor. Switching from private plots to providing labour on larger farms can increase incomes.
- Interventions most likely to attract private sector investment in agriculture include infrastructure development, policy reform and support for agricultural research and extension. In general, bank lending to agriculture constitutes less than 10 per cent of total loan portfolio: between 1999 and 2011, the Development Credit Authority made more than 300 partial credit guarantees to mobilize $2.3 billion of private capital for more than 100,000 entrepreneurs in 67 countries.
- USAID has collected more in fees from banks ($10 million) than it has paid in claims (the default rate is 1.75 per cent); and currently more than one-third of the portfolio is in agriculture.
Promotion of inclusive agriculture sector growth and improved nutrition. This multipronged approach includes the empowerment of women in agriculture, improving and diversifying the diets of local communities, improving post-harvest infrastructure, ensuring better-quality and improved access for farmers to financial investment opportunities.
- Comprehensive assessment of existing evidence and gaps in knowledge for each of six themes covered by the Feed the Future Learning Agenda.
- Success was measured according to three key considerations: whether markets had expanded, whether value chains were observed to be more efficient and whether investments had increased.
Anyone interested in value chain development and specifically USAID's Feed the Future Programme, including researchers, policy makers, investors and potential partners involved in similar projects.