Paper short abstract:

Kenyan smallholders increasingly supply domestic supermarkets in regional value chains, but face rising national standards. This paper examines whether smallholders (independent and organised) experience ‘adverse inclusion’, or potential for economic and social upgrading; and policy implications.

Paper long abstract:

African smallholders face significant challenges accessing global value chains (GVCs), due to supermarket requirements and quality standards. The expansion of domestic and international supermarkets within Africa provides smallholders with new opportunities of participating in domestic and regional value chains (RVCs), although standards also increasingly apply. This raises the questions: Do smallholders engaged in RVCs experience ‘adverse incorporation’ which perpetuates poverty and exploitation for disadvantaged groups, including smallholder farmers and women workers? Or are smallholders supplying RVCs able to experience ‘economic and social upgrading’? This paper draws on qualitative empirical research with Kenyan smallholder avocado and green bean farmers in 2019.

The paper finds differences between two groups selling into RVCs. First, independent smallholders whose produce is sold through arms-length intermediaries who are not required to apply standards, even where their produce is ultimately sold to leading supermarkets based in Kenya. These farmers face significant challenges including market and price volatility and poor returns. Second, smallholder farmers organized into cooperatives and self-help groups (SHGs) increasingly supply domestic and regional retailers through modular value chains. Coops and SHGs, long been encouraged by the Kenyan government, negotiate price and could support farmers in implementing the national standard KS1758 (similar to GlobalGAP) being rolled out by the Kenyan government. Hence the integration of smallholders within RVCs is mixed. Many independent smallholders face adverse incorporation, but more organised smallholders (including women) experience better bargaining power and potential for economic and social upgrading. This has implications for public policy and further government support for smallholder organisation.