Understanding the role of value chains in enhancing diets in low-income settings

Diagnostics to support the identification, design and evaluation of interventions

Aulo Gelli and, IFPRI and Jason Donovan, ICRAF.

Based on ongoing work with Noora Aberman, Amy Margolies, Marco Santacroce.

Improving Food Security, Diets and Nutrition through Multi-sectoral Action, Lilongwe, May 2017.

Value chains and nutrition

• How to leverage market-based interventions to improve diets of low-income populations?

• Value chain (VC) framework can provide a useful lens to examine role of markets in food systems and potential to improve diets (Hawkes & Ruel, 2011, Gelli et al. 2015)

• Recognizes need to examine all stages of food chain from production to consumption

Value chains and nutrition

• However…‐ A VC is by nature commodity specific

‐ Focus in VCs to date has been on efficiency and economic returns, with little explicit focus on consumers and “nutrition”

‐ Understanding links between VCs, overall business environment, and “nutrition” is complex, very little rigorous evidence exists on these links

How can VC interventions improve nutrition?

• 3 generalised pathways through which VC interventions can influence nutrition outcomes, based on leveraging (i) demand, and (ii) supply of nutritious foods, and (iii) enhancing value chain performance

‐ Recognise that food-related nutritional impacts derive from changes in quality of overall diet, not just nutrient content of an individual food

‐ Provide a basis on which to theorize impact pathways of specific interventions in specific contexts and to collect evidence of impact

‐ Also used as a basis of a typology of value chain interventions appropriate for different contexts of supply and demand

Supply and Demand Typology

Quadrant BHigh demand & inadequate supply

Quadrant AHigh demand & adequate supply

Quadrant DLow demand & inadequate supply

Quadrant CLow demand & adequate supply

Demand(Consumption levels in target

population)

Supply(Year-round availability in

markets)

Improving the sustainability of WFP operations• WFP is seeking strategic and operational linkages between smallholder

agricultural production, private sector processors, social protection and nutrition across its programme portfolio

• In Malawi, WFP transfers targets beneficiaries across lifecycle (“demand side”): - PLW, infants and young children: Stunting prevention project (RUTFs, BCC, strengthened

health services), targeted supplementary feeding

- School age children: School meals and take-home rations

- Households: General food distribution, cash/vouchers, food for assets

• In addition, WFP provides “supply side” programming through P4P- Technical skills and inputs to selected FOs to improve farming practices and increase

production output, through supply side partners

• Programmes like HGSF link supply and demand side of WFP operations- Can these linkages be strengthened to improve the sustainability of WFP activities?

Diagnostics

• Aim: Link a set of nutrition problems of target populations to possible constraints in the supply and demand of specific foods, that can then be addressed by interventions

• 5 key objectives/steps: (building on (Timmer & Falcon., 1983) and more recently (WHO, 2013)

1. Understanding the nutrition problem2. Examining macro-level food systems context (& enabling environment )3. Characterizing diet patterns and relative contribution of different

crops/missing foods, contaminated foods, etc.4. Identify value chain constraints and opportunities related to nutrition and

food security5. Prioritising intervention options

Study setting

• Data was collected from 60 communities randomly selected among a set of food-insecure villages in Zomba district in southern Malawi

• Ongoing RCT (NEEP-IE)

Seasonality and prices

Source: WFP.

Source: FEWSNET

Baseline Follow-up

Methods

• Mixed-methods descriptive study based on two rounds of data collection

- Panel of 1200 households, including 7-day recall food consumption module

- In-depth individual interviews: 56 in-depth interviews and 27 structured direct household observations

- Market surveys in 5 main markets in Zomba district

• In-depth market study: - Structured interviews with 47 traders located in the 5 main markets, semi-

structured interviews with government agencies, businesses and traders

- Lean season only

Findings: Household nutrient availability

• Data from 7-day recall of household consumption and expenditure suggests that low-income households face important deficits in nutrient intake

Estimated nutrient availability of household food consumption (AE) / EAR, across 2 seasons, all households and for households in the lowest expenditure quintile in Malawi

Source: NEEP baseline & Immana follow-up surveys, Zomba, Malawi. (n=1,156).

0.00

0.50

1.00

1.50

2.00

2.50

Iron Zinc Vitamin A

Poorest quintile, post-harvest

All HH, post-harvest

Poorest quintile, lean season

All HH, lean season

• Food intake dominated by maize

• Food consumption per adult equivalent (AE) ~ 1 kg of food/day and to only 40% of that amount in households from the lowest expenditure quintile

Findings: Food consumption patterns across seasons

Source: NEEP baseline & Immana follow-up surveys, Zomba, Malawi. (n=1,156).

“Food is maize, but others require money”• Preferences for diverse foods: pulses, veg,

animal protein

• However, “maize first” preferences, budgetary limitations, limited and seasonal availability, hamper diverse diet

- Meat usually eaten at harvest time, and pulses are sold if cash is required

“It is in our culture...food is maize, but others require money” - Male respondent, Dual-head household, Village 6, Zomba.

Coping with the lean season• People eat less, and less preferred foods (sometimes

nutrient dense)

• Non-maize meals are not considered “food”, often used to soothe children

• Buy-as-you-go approach to filling maize needs

“It helps when you have sugar, you can make tea and kids have that with avocado...if there is cassava, you can cook for the kids and they can take it with water and cool down. If they were crying of hunger, they stop crying.” - Female respondent, Dual-headed household, Village 5, Zomba.

Contributions of foods to nutrient intake and sourcing patterns across seasons

• Although food consumption is dominated by maize, a range of more nutritious foods are being consumed, including leafy greens, fruits (avocado, mango), chicken, dried fish, dried beans and peas, and groundnuts

• Role of markets varies considerably by food and by season

Source: NEEP baseline & Immana follow-up surveys, Zomba, Malawi. (n=1,156).

Market analysis• Aim: identify the potential of markets to supply

year-round access to a selected basket of foods - Actors involved: who, products and services

provided

- Prices and availability

- Bottlenecks for increased sales and safety

• Selection of 6 chains based on analysis of food consumption patterns

• Semi-structured interviews with traders in the 5 markets in ZombaDistrict

Availability and affordability: Leafy greensAvailable during most of year, but with marked fluctuations in price

- Demand low during early months, as consumers have leafy greens growing in their garden

- Demand picks up mid-year as income improves following maize harvest and own stocks dwindle

- Demand is highest towards end of the year, with price 25-50% price increases

- Grown mainly be local farmers; those without irrigation w/ short period for for sales (Jan-April)

- Sold under full sun; limited access to fresh water for hydrating greens; no storage options

0=no sales; 1=low volume sales; 2=high volume sales; 3=lowest prices during year; 4=highest prices during year

Availability and affordability: Avocado Short window of availability, with very strong price fluctuations

- Avocados begin to appear just before the major maize harvest, when rural household would have limited resources to purchase

- Sales peak in April-May, and then collapse. Small amounts of avocado may appear after May sold by traders with access to fruits from other regions

- Prices vary from 100%-300% during the short production season

- Most sellers source from own production and from nearby farmers – highly localized

- Sellers with high transport costs; intensive competition during season; no options for storage

Availability and affordability: Live chicken

Consumption limited during most year

- Available throughout the year

- Consumers purchase more chicken following the maize harvest, from April to July

- Demand peaks in December, as households purchase chicken for end-of-year festivities

- Price roughly 75-100% greater during peak season compared to off-season

- Farmers rush to sell chickens during dry season

- Sellers constrained to increase volumes: limited supply (farmers only sale 1-2 chickens/month), high transport costs, no credit

Availability and affordability: Dried fish

Year round available, considerable price fluctuation, but low quality puts nutritional benefits at risk

- Most fish purchased from intermediaries or directly from fisherman

- Demand is lowest Feb-March, reflecting abundant fish stocks and lack of income by households.

- Following maize harvest (April) demand picks up, June - July being the peak selling period

- Prices vary markedly by season, fish type, size, availability, other factors, with prices fluctuating between 25% to 200% during the year

- High transport costs (by bike from Lake Chilwsa); traditional preservation methods (rancidity, microbial attacks); improper storage and transportation

Availability and affordability: Groundnut

Available year round, but relatively expensive, and safety concerns

- Demand grows during final quarter, as rural households have consumed most of own production and seek to purchase seed for the next year’s production

- Price varies considerably between peak and off-season (roughly 300%)

- Aflatoxin in peanuts sold in local markets and consumed by farmers (from their own production)

- Lack of knowledge and controls for addressing aflatoxin in groundnuts sold directly to consumers or consumed as own production by farmers

Biggest marketing challenge as reported by sellers (n=47)

ChallengeSellers reporting as

biggest challenge (n)

Low demand/excess supply 20

Lack of regular customers 11

Irregular demand (majority of sales at end of month)*

3

Lack of capital / limited stock 7

Low quality product (e.g. discoloured leaves due to lack of fertilizer & sale in full sun, small fish size)

3

Lack of transportation 2

Some opportunities to improve rural-urban links in food systems

• Build basic market infrastructure (H2O, shade)

• Learning platforms to enhance sale of nutritious & safe locally produced foods

• Long-term challenge of building more informed demand by consumers

• Support services for local farmers to increase production, increase safety, and extend growing season

• Support services for traders to address high costs, low volumes, and limited storage

• Implies major rethink of how agriculture interventions are designed and assessed

B) High demand and inadequate supply A) High demand and adequate supply

D) Low demand and inadequate supply C) Low demand and adequate supply

-

Demand(Consumption levels by targetPopulation)

Supply(Year-round availability in markets)

+

- +

Bean and legumes: Consumed in low volumes, increased consumption will improve diet quality.

Constraints: Production bottlenecks limit availability during periods of the year; limited incentives for traders to engage in supplying local markets

Intervention options:• Innovation in production

technologies to expand availability

• Improved coordination and other measures (e.g. storage) with traders to reduce costs

Groundnuts: Consumed throughout the year but high levels of aflatoxin contamination is a major health risk.

Constraints: Gaps in regulatory environment and quality assurance; limited capacity & weak incentives for smallholder to invest in improved production

Intervention options:• Developing & testing third-

party quality assurance• Strengthening capacity of

processors to minimize food safety concerns

Animal source foods (esp. dried fish) & leafy green vegetables : Available but consumption is low; increased consumption will improve diet quality.

Constraints: Producers and sellers with limited opportunities to expand or add value to production due to limited effective demand

Interventions options:• Subsidies/transfers for

consumption (lean season)• Support to chain actors to

reduce costs to production and trading

• Information campaigns to stimulate demand

Nutritious tree fruits: not consumed in significant amounts due to limitations on supply and demand; increased consumption will improve diet quality.

Constraints: Lack of storage and transport for perishable products, limited demand increases risk for production developments and other investments; few processors and distributors engaged in sector

Intervention options:• Information campaigns to

increase acceptability;

• Support to chain actors to

process/store to extend shelf

life

• Investments in marketing

infrastructure

• Subsidies/social transfers to

facilitate consumption when

in season (school meals)

Implications from Malawi Case Study

• Results indicate a need for a layered approach to improving diets- Food stores and spending power are highly limited in Malawi in the lean

season, so improving diets during this time should largely focus on subsidies and social transfers (for large, immediate, short term improvements)

- In harvest season, emphasis on nutrition education while in planting season, production support

- Information to optimize decision-making related to food and nutrition (short-and medium-term improvements in diets)

• Longer term interventions like improving capacity for product differentiation, processing and storage, and market infrastructure can simultaneously be addressed.

Key Take-Aways

• This diagnostic tools supports a strategic view- Find interventions that can simultaneously address various

challenges, and complementary interventions that can address different challenges depending on season, target group, etc.

• Multi-faceted descriptive work is key for determining synergies and trade-offs

• However, food systems and preferences may be highly localized, may need to repeat descriptive work in multiple areas of a particular country

Acknowledgements

• Research by the International Food Policy Research Institute (IFPRI), WFP, Save the Children, Chancellor College at the U. of Malawi and Wadonda:

• Programs implemented by WFP and Save the Children with local partner NGOs

• Research funded by:- NEEP, IMMANA

- USAID

- Gender, Agriculture and Assets Project (GAAP)

- CGIAR Research Program on Agriculture for Nutrition and Health (A4NH) led by IFPRI.

• Program and research participants

Thank you!

Dietary Change Demand & Supply

Characteristics

Consumer-related Issues Main Constraints Implications for Intervention Design

Groundnuts are consumed

throughout the year but high

levels of aflatoxin contamination is

a major health risk

(Quadrant A)

Consumers willing and able to

purchase, & high availability in

markets during all or part of

the year

Sorting and grading likely to

result in low-income

consumers exposed to foods

w/ higher levels of aflatoxin

Gaps in regulatory

environment and quality

assurance; limited capacity &

weak incentives for

smallholder to invest in

improved production

Developing & testing third-party

quality assurance; strengthening

capacity of processors to minimize

food safety concerns

Beans & legumes are consumed in

low volumes, increased

consumption will improve diet

quality

(Quadrant B)

Consumers willing to prioritize

the purchase of food when

funds are available, but

limited availability some parts

of the year

Willingness to purchase and

prioritize over other food

(except maize), consumers

with limited purchasing

capacity during peak demand

periods

Production bottlenecks limit

availability during periods of

the year; limited incentives for

traders to engage in supplying

local markets

Innovation in production

technologies to expand availability;

improved coordination and other

measures (e.g. storage) with traders

to reduce costs

Animal source foods (esp. dried

fish) / Leafy greens: Available but

consumption is low; increased

consumption will improve diet

quality

(Quadrant C)

Low consumption, despite

generally high degree of

availability in local markets

Preferred foods but low

willingness to pay due to

insufficient budget /

nutritious wild foods, seen as

coping foods, not preferred

Producers and sellers with

limited opportunities to

expand or add value to

production due to limited

effective demand

Subsidies/social transfers to

facilitate consumption in critical

periods (e.g. lean season); support

to chain actors to reduce costs to

production and trading; Information

campaigns to increase acceptability

Nutritious fruits (e.g. mangoes and

avocados) are not consumed in

significant amounts throughout

the year due to limitations on both

supply and demand side; increased

consumption will improve diet

quality

(Quadrant D)

Low consumption; not

typically purchased due to

budget constraints and not

preferred; highly seasonal

availability

Low willingness to pay for

fruits, with preferences

towards consumption of

staples, fruits relatively

expensive during off-peak

seasons, adding further

deterrence to year round

consumption

Lack of storage and transport

facilities for highly perishable

products, limited demand

increases risk for production

developments and other

investments; few processors

and distributors engaged in

sector

Information campaigns to increase

acceptability; support to chain

actors to process or store to extend

shelf life; investments in local

marketing infrastructure;

Subsidies/social transfers to

facilitate consumption when in

season (school meals)