Global value chains – the production, processing and marketing of products ‘from farm to fork’ – now link together producers, traders, processors, manufacturers, retailers and consumers. Due to changing market conditions and consumer demands, entrepreneurs in developing countries are increasingly becoming integrated into the world trading system.

Alamy / John Eccles

Value chain development is a key concept in strategies to reduce rural poverty in developing countries. For entrepreneurs, such chains promise a way to access new markets as well as to add value to their products. But value chains often exclude the most vulnerable farmers. And those who are included often benefit only marginally due to the unequal distribution of power, as well as failures of markets and governments.

So what opportunities are available to small entrepreneurs to participate in a global value chains, and what are the bottlenecks? One strategy involves improving knowledge and information flows to enable them to ‘upgrade’ their businesses. But real empowerment requires much more: rural entrepreneurs need to become involved in the management of value chains. Becoming organized into cooperatives is one way they can achieve this, although this presents its own challenges. Interventions to promote value chain development will have a positive impact on rural livelihoods only if local power relations (including gender relations) relations are taken into account, and if the poor themselves take the lead in defining what is good for them.

In this special report, Anna Laven discusses what rural entrepreneurs can do to upgrade their operations and strengthen their economic power within global value chains. Linda Mayoux offers a gender perspective of value chain development, and Malcolm Harper describes how small farmers in India have succeeded in becoming part of modern, integrated value chains. Roldan Muradian and Ellen Mangnus discuss entrepreneurship in cooperatives, and David Jean Laniel examines the implications of shifts in international trade for developing countries.