Jo Swinnen

Growth in high-value agriculture in Asia and the emergence of vertical links with farmers.

1. Director, Markets, Trade, and Institutions Division, International Food Policy Research Institute. 2. Research Fellow, Markets, Trade, and Institutions Division, International Food Policy Research Institute. 3. Director, ILRI-IFPRI Joint Program on Livestock Market Opportunities and Senior Research Fellow, Markets, Trade, and Institutions Division, International Food Policy Research Institute. 4. Senior Research Assistant, Markets, Trade, and Institutions Division, International Food Policy Research Institute.

Research Principles for Developing Country Food Value Chains

From farm to table, multidisciplinary research is needed to improve the economic benefit of food production in the developing world. Food value chains (FVCs) comprise all activities required to bring farm products to consumers, including agricultural production, processing, storage, marketing, distribution, and consumption. FVCs are changing rapidly in developing countries (DCs), because of population and income growth; urbanization; and the expansion, globally and domestically, of modern food retailing, distribution, and wholesaling firms (1, 2). One such change is that consumers and regulators increasingly demand product-specific characteristics beyond price—including nutrient content; food safety certification; and indicators of impacts on natural resources, greenhouse gas emissions, and farmworkers. To accommodate these multidimensional demands, regulators and firms are developing new multiattribute product labeling and production standards. We outline below ways in which scientists must integrate existing disciplinary evidence into rigorous models and must develop measures and methods to evaluate the multidimensional performance of FVCs.

Checking into China’s cow hotels: Have policies following the milk scandal changed the structure of the dairy sector?

Chinas milk scandal is well known for causing the nations largest food safety crisis and for its effect on thousands of children. Less, however, is known about the effect on the other victim: Chinas small dairy farmers. Although small backyard producers were not the ones that added melamine to the milk supply, the incomes of dairy farmers fell sharply after the crisis. In response, one of the actions taken by the government was to encourage small dairy producers to check into production complexes that were supposed to supply services, new technologies, and provide for easy/bulk procurement of the milk produced by the cows of the farmers. Because both farmers and their cows were living (and working) away from home, in the rest of the paper we call these complexes cow hotels. In this paper we examine the dynamics of Chinas dairy production structure before and after the milk scandal. In particular, we seek to gain a better understanding about how Chinas policies have been successful in encouraging farmers to move from the backyard into cow hotels. We also seek to find if larger or smaller farmers respond differently to these policy measures. Using data from a sample of farmers from dairy-producing villages in Greater Beijing, our empirical analysis finds that 1 yr after the milk scandal, the dairy production structure changed substantially. Approximately one quarter (26%) of the sample checked into cow hotels after the milk scandal, increasing from 2% before the crisis. Our results also demonstrate that the increase in cow hotel production can largely be attributed to Chinas dairy policies. Finally, our results suggest that the effects of government policy differ across farm sizes; Chinas dairy policies are more likely to persuade larger farms to join cow hotels. Apparently, larger farms benefit more when they join cow hotels. Overall, these results suggest that during the first year after the crisis, the government policies were effective in moving some of the backyard farmers into cow hotels (although 60% farmers remained backyard producing).