Value Chains for Nutrition

2020 CONFERENCE BRIEF 4 · FEBRUARY 2011 VALUE CHAINS FOR NUTRITION Corinna Hawkes and Marie T. Ruel urrently, close to 1 billion people suffer from hunger and Limited availability, economic constraints, lack of food insecurity, defined as not having enough calories to knowledge and information, and related lack of demand Clive a healthy life. While this number is staggering, the for nutritious foods are critical factors that limit poor number of people with poor access to nutritious foods rich in people’s access to such foods. In theory, the agriculture essential micronutrients—such as fruits and vegetables, meat, sector could help address this problem by helping at-risk fish, dairy products, and biofortified staple foods—is even more groups generate more income and by making nutritious daunting. Deficiencies in micronutrients such as vitamin A, iron, foods more available, affordable, acceptable, and of higher and zinc affect the survival, health, development, and well- quality. Agriculture-based development programs that aim being of billions of people; low fruit and vegetable consumption to improve nutrition have tended to focus on agricultural is also associated with increased risk of chronic diseases. production and consumption by producer households. Increasing poor people’s consumption of nutritious foods is Yet the links among what is produced on the farm, the therefore essential to solving malnutrition in all its forms. consumer, and the income received by the producer do not stop at the farm gate. Far from it: Figure 1— A simplified representation of a food supply chain food is stored, distributed, processed, retailed, prepared, and consumed in a Activities Actors range of ways that affect the availability, Crop breeders; extension services; seed, affordability, acceptability, and nutritional Inputs into production agrochemical, and farm machinery companies quality of foods for the consumer. If, then, the agriculture sector is to play a more Farmers, agricultural laborers, Food production important role in improving nutrition, commodity producers there needs to be a greater focus on what happens between production and Primary food storage and processing Packers, millers, crushers, reﬁners consumption. One way of addressing this issue is to adopt “value-chain” Processed foods manufacturers, Secondary food processing concepts, analysis, and approaches. artisan to global Value-chain approaches are already used as development strategies to enhance the Importers, exporters Food distribution, transport, and trade brokers, wholesalers livelihoods of food producers, but they have, to date, rarely been used explicitly Informal retailers, supermarket chains, as a tool to achieve nutritional goals, and Food retailing and catering restaurants, fast food companies they have not been sensitive to nutritional concerns. This brief seeks to identify if, Advertising and Food promotion and labeling why, and how value-chain concepts could communications agencies and should be applied to enhance the ability of agriculture to improve nutrition. Food Food Food Food quality What Are Value Chains, Value- availability aﬀordability acceptability Chain Analysis, and Value-Chain Approaches? A value chain starts with a supply chain: Food consumption and diet quality the processes and actors that take a Source: Adapted from C. Hawkes, “Identifying Innovative Interventions to Promote Healthy Eating product from its conception to its end Using Consumption-Oriented Food Supply Chain Analysis,” Journal of Hunger and Environmental use or disposal (see Figure 1). Although a Nutrition 4, nos. 3 and 4 (2009): 336–356. value chain is a form of supply chain, the “value” component imbues it with greater meaning: value is added to the product Box 1 — Value Chains for Nutrition: Examples in Action through “value-adding” activities as it passes through the Value-chain approaches have not to date been applied in the field of chain. These activities create value for the value-chain actors. nutrition in a consistent or comprehensive way, but there have been 1 A value chain can thus be described by what and where value some attempts to apply value-chain approaches in a nutrition context. is added in the supply chain for and by these activities and Projects with explicit nutrition goals and related activities: actors. The “value” involved may refer to the value of the • Enhancing the bean value chain in Uganda: A project to improve product in economic terms, to the value added to the product bean production, marketing, and consumption as a means of as it passes through the chain, or to the economic value that enhancing sustainable livelihoods. In a value-chain framework, actions included research into increasing yields, improving nutrient is created and captured by the actors in the chain—or to all quality after harvest, understanding consumers’ preferences and of these forms of value. “Adding value” may also refer to demand, and increasing their awareness of the nutritional and health enhancing the benefit offered by the product relative to its benefits of beans. price, as perceived by consumers. • Strengthening the value chain for orange-fleshed sweet potato (OFSP) in Mozambique and Uganda: With the ultimate objective Value-chain analysis involves identifying (1) the actors of improving vitamin A status, this project implemented actions at involved in the chain and the relationship between them; (2) three levels of the value chain—farmers, traders, and consumers. the activities performed by each actor and his or her location; Among many other things, actions included distributing OFSP vines and (3) some form of attribution of value corresponding to producers, disseminating results of willingness-to-pay studies to the activities and actors in the chain. There are many to traders, and using mass media and promotional events to raise consumer awareness of the nutritional benefits of OFSP. different ways to conduct value-chain analysis, but all • Developing nutrition programs in Sierra Leone: REACH (the are distinct from other forms of supply-chain analysis by Renewed Efforts Against Child Hunger partnership) is currently assuming that the value through the chain is affected by the developing a value-chain framework for programs involving food interactions among the different actors and activities, not purchases from local farmers. The aim is to increase the demand for nutritious foods while augmenting the incomes of small farmers. just the isolated behavior of individual actors in that chain. • Building food systems and access to nutritious foods in the Value-chain analysis has been used in practice in several United States: This project, in northeast Iowa, aims to increase areas. For example, private companies use it to enhance the availability and affordability of health-promoting foods while competitive strategy, and researchers have used it to examine expanding the market opportunities for existing and new local the processes, causes, and consequences of global industrial producers. The project included activities to enhance the distribution of locally produced fruits and vegetables into schools with high integration (globalization). proportions of low-income children. Value-chain approaches to development have been Projects that incorporate nutrition or health concerns but do not have adopted by several development agencies to encourage specific nutrition goals: greater participation by poor people in modern value chains, • Developing a dairy value chain for smallholders in Zambia: Land including food value chains. These include agricultural O’Lakes International Development used a market-based, value- value-chain development projects, which tend to focus on chain approach in its work with small famers in Zambia. The some form of “upgrading” as a means of increasing returns objective was to reduce household food insecurity through increased to farmers (that is, changing their products, improving their incomes from the sale of milk and other dairy products and increase the demand for dairy products among producers and consumers. processes, increasing the volume produced, changing their • Analyzing the high-value food chain in Indonesia: The objective of functions, or improving coordination to capture more value). this value-chain analysis is to provide insights into how changes in the demand for high-value foods by supermarkets and their Can Adoption of Value-Chain Concepts Help customers are affecting the farmers back along the value chain. A Achieve Nutrition Goals? second component of the study is a consumer survey of determinants of changing food demand and the associated health outcomes, which Adopting value-chain concepts has enormous potential will be used to analyze changing trends in obesity and related chronic to help increase both the supply of nutritious foods to the diseases. poor and their demand for those foods (see Box 1). First, • Transforming the supply chain of local foods in the United States: value-chain analysis can be used to assess why foods are or Sysco Corporation and the National Good Food Network (NGFN) jointly implemented a project that aims to improve Sysco’s are not available in specific communities, why foods cost competitiveness by providing nutritious, locally grown foods to what they do, and how the nutrient quality of foods changes its food-service customers. Actions were taken to enhance the through the chain. Once problems are identified, value- value created for all the actors in the chain, including reorganizing chain

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