An important strategy for increasing the incomes of small-scale farmers in developing countries is to help them diversify from low-value staple food commodities into higher-value commodities, such as livestock, dairy products, fish, fruits, vegetables, and spices. The demand for these products in both developed and developing countries is rising rapidly as incomes increase and consumers adopt more diverse diets. These products are typically perishable, they are increasingly sold through specialized markets, and the product price is highly sensitive to variations in quality. Because of these characteristics, the marketing channels for high-value agricultural commodities are often characterized by various forms of vertical coordination, such as cooperatives, contract farming, and vertical integration.

Research under this multi-country program focuses on three interrelated areas:

• identifying trends and emerging policy issues in global and local markets for high-value agricultural commodities;
• assessing opportunities and threats to the participation in high-value agricultural commodity supply chains by small farmers and the poor in general, including those related to rising demand for food safety, consolidation in the processing and retailing sectors, and the challenge of meeting quality standards; and
• analyzing policy and investment options for reducing the barriers to increased participation of smallholders, the rural poor, and women in high-value agricultural sectors.

The objective of the program is to help policymakers be better informed of the barriers that prevent small-scale farmers in developing countries from greater participation in sales of high-value commodities and the policy options to reduce these barriers. Policy changes are expected to accelerate growth in production of high-value commodities, to contribute towards poverty alleviation, and to increase sustainability.