Participation in global horticulture value chains:Implications for poverty alleviation in the Sub-Saharan Africa (SSA) region

Access to files

•   FULL-TEXT.PDF (pdf)

Abstract

There are approximately one billion people predominantly in Asia and sub-Saharan Africa (SSA) who live in extreme poverty because they are adversely linked to the process of globalization and not optimally integrated in global value chains. In the SSA region, agriculture is the main occupation where most of the rural population are employed and earn incomes. The horticulture sector a subset of agriculture is one of the value creating sectors where opportunities exist for the rural population to link and connect to the global economy through participation in global value chains (GVCs). The global value chain perspective has been used in a number of studies analyze how global buyers organize and control operations with local suppliers. Kenya is a leading exporter of horticulture produce, where the large and medium suppliers are considerably linked to GVCs but not the small suppliers. Ghana is developing its horticulture sector where local suppliers are considerably small in size and adversely connected to GVCs. Effective participation and connection to GVCs is considered as a perquisite and under certain conditions opportunities for local supplier upgrading, leading to income generation and poverty alleviation. Local suppliers, especially small ones in both economies are challenged due to limited market access, stringent standards and quality requirements (conditions of participation) imposed by global buyers, and an inefficient operating environment. High exclusion levels due to non-compliance with high standard and quality requirements imposed by global buyer’s increases vulnerability and risks which tends to prolong the duration of poverty. Competitiveness remains a key issue due to the lack of investment in upgrading resulting in low performance and exclusion of a number of suppliers from participation in global horticulture value chains. High exclusion rates have a negative impact on incomes which further exacerbates the incidence of poverty. On the other hand opportunities for the acquisition of skills, learning and upgrading that would reduce exclusion depends on conditions of participation – governance in GVCs imposed by global buyers In addition, transaction costs in both countries are high due to inefficient infrastructure and support institutions. There is evidence in the literature that participation in global horticulture valve chains does contribute to increased incomes but it is unclear if this has contributed or not to reducing poverty levels in Kenya and Ghana. Kenya is selected as a case study because the horticulture sector is mature has extensive experience in participating in global horticulture value chains but poverty levels remain very high. It currently ranks 145th out of 186 countries on the 2013 Human Development Index. Ghana is selected to complement the analysis because its horticulture sector is at an infant stage where the government is seeking to use the process as a diversification strategy to reduce poverty. On the same index it ranks 135th out of 186 countries. Data and information was collated from 25 global horticulture value chain participants and 6 informants complemented with secondary data were used for the analysis. This research argues that the GVC perspective in its current form is not capable of delivering the expected poverty alleviation outcomes because its emphasis on conditions of participation, the operational environment and ways in which these elements could adversely or not affect the effective participation of local suppliers leading to poverty alleviation is missing. The empirical evidence from the horticulture sectors in Kenya and Ghana supports the view that participation in global horticulture value chains does contribute to poverty alleviation but has been constrained due to a lack of focus on number of issues including the enabling operational environment. Strategies and policies that could inform a more inclusive model of GVCs that could improve the conditions of participation of local suppliers are proposed for consideration.

Bibliographic metadata

Institutional metadata

Record metadata