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How can sector governance models drive sustainability performance in smallholder-dominated agricultural sectors?

Governance of agricultural sectors and commodity markets can have significant influence on their performance, and good governance is key to achieving ‘sector quality’. High quality sectors are resilient in the face of market volatility and climate change; have a net positive impact on natural capital and quality of life in rural communities; and have a good product reputation on world markets. High quality sectors support progress towards ‘farm quality’ – whereby farmers (and their workers) earn a decent living; are adaptive, resilient and innovative; produce at optimum productivity and product quality levels; and that farming has a positive social and environmental impact.

In a liberalised world economy there has been a general shift away from intervention in and governance of markets, as a reaction against the failed models that existed before liberalisation, many of which were associated with rent seeking, patronage and government mismanagement. Instead, sector management has been left to individual value chain participants. This has created ‘islands of success’ – limiting the scope to a smaller number of producers and a smaller proportion of the production base, and limiting the longevity of interventions. This has led to a net loss in the sector of resilience, natural capital, and quality of life in rural communities.

This paper explores the drivers and potential benefits of sector governance models in enabling the transition of smallholder-dominated agricultural sectors towards sustainability; the different forms of sector governance models and market governance mechanisms that exist; their strengths and weaknesses in relation to promoting sector quality; and key success factors that should be borne in mind when designing and implementing sector governance models in current economic and market realities.

Publication information

  • IIED code: 16583IIED
  • Published: Apr 2015 - Aidenvironment, NewForesight, IIED
  • Theme: Sustainable markets
  • ISBN: 978-1-78431-159-9
  • Language: English

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Blackmore, E., Vorley, B., Molenaar, J.W., Gorter, J., Heilbron, L., Simons, L., Dallinger, J. 2015. Sector governance models for sustainability: How can these models drive sustainability performance in smallholder-dominated agricultural sectors? White Paper 2. Commissioned by IFC.

Project information

There is an increasing number of voluntary sustainability standards (VSS) in the market. The International Finance Corporation (IFC) tasked IIED, NewForesight and Aidenvironment to explore how VSS could be scaled up to improve agricultural sustainability in developing countries. The research produced a model for sector transformation.

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Scaling up sustainability in smallholder-dominated agricultural sectors