Information for G03368
Branding Agricultural Commodities: The development case for adding value through branding - briefing paper
Agricultural commodities matter to development. Commodity products such as sugar, coffee or beef contribute to more than a quarter of GDP in developing countries, where over 1 billion farmers derive at least part of their income from them. As most of these farmers are smallholders, raising the value of commodities can do much to reduce poverty.
Unfortunately, the trend has been the opposite. Modern food chains place increasing importance on branding, distribution and services — activities ‘downstream’ of farmers’ traditional role in supplying produce to markets. As a result, primary producers of agricultural commodities have been capturing less and less of the total value of their products. At the same time, power has become concentrated in the hands of a small number of buyers — the giant supermarket chains and manufacturers who dominate the global food market.
By branding commodities, producer countries and organizations can reverse this growing imbalance. Branding creates consumer demand, giving producers leverage in negotiations with major buyers.
A longer paper is also available. Please see "additional information" for details.
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Millions of farmers in Africa depend on export markets for their livelihoods. But recent market trends have led to declining small farmer participation. Yet, these farmers have the skill and soil to provide the high-quality products the food industry seeks. This collaborative initiative engaged with research, civil society and private sector partners to develop new business models across a variety of sectors that enable smallholders to participate in sustainable trading relationships with international businesses and thereby improve their livelihoods.
More at www.iied.org:
New business models for sustainable trade