Review of Policy-Constrained Value Chain Initiatives

The report aims to assist the Policy Division of the Bureau for Food Security/Agricultural Research and Policy (BFS/ARP) in strengthening the framework for understanding and addressing policy issues as part of comprehensive competitiveness strategies for targeted value chains in FTF countries. The report establishes a conceptual framework for analyzing and optimizing the impact of policy reforms on agricultural productivity and competitiveness. It reviews project documents to assess whether they implemented activities designed to change laws, regulations, and government involvement in given value chains. The report identifies policy constraints that value chain initiatives might theoretically address, including selling agricultural goods and markets, obtaining seed and livestock inputs, accessing rural land, accessing finance, starting and operating a farm, enabling contract farming, transport and infrastructure, and management and information. The report highlights the importance of a better business environment for agriculture, which can be achieved by improving policies and regulations. It notes that weaknesses in the business environment affect productivity and competitiveness in two major ways: unnecessary regulations or burdensome administrative procedures, and excessive zeal or poor administration that can deter investment and lead to illegal and corrupt practices. The report concludes that improved policies will minimize unnecessary costs to businesses, allow for greater value chain investment, and ultimately lead to poverty reduction via enterprise growth. It suggests that the degree to which elements of the business environment hamper or help rapid productivity gains is critical to raising net incomes and boosting competitiveness. The report provides summary tables documenting key FTF initiatives that have explicitly addressed policy-related constraints and summarizes initial lessons learned from this review. It concludes with suggestions for future research, including a selection of projects from which to identify in-depth case studies.