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David versus Goliath: Consequences of mainstream agricultural export commodities and niche products

2022-09-02

Initiative für Nachhaltige Agrarlieferketten (INA)

A study published by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) examines the differences between globally traded agricultural commodities and domestic niche products in terms of economic, environmental and social impact on the region of origin. The results provide new evidence to make supply chains more sustainable.

Niche products versus globally traded agricultural commodities. There is no good or bad. © Initiative for Sustainable Agricultural Supply Chains, 2022

By Initiative für Nachhaltige Agrarlieferketten (INA)

The Initiative für Nachhaltige Agrarlieferketten (INA) is an alliance of stakeholders from the private sector, civil society and politics and part of the Nachhaltige Lieferketten und Standards (Sustainable Supply Chains and Standards) program of the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ). Its goal is to achieve greater sustainability in global agricultural supply chains and to improve the living conditions of smallholder farmers. To achieve this, INA works independently of individual commodities, instead focusing on the development of sustainable regions in which a cross-commodity approach is applied.

All contributions

What impact do globally traded agricultural commodities have on local sustainability compared to the niche products of the region of origin? This question is addressed in the newly published study "David versus Goliath: Niche products and mainstream agricultural export commodities - to what extent do they promote sustainable development?" by the Initiative for Sustainable Agricultural Supply Chains (INA).

Ten development projects of Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) and the Swiss development organisation Helvetas in Asia, Africa and Latin America were analysed. Economic, ecological and social consequences were focused. The analysis was based on interviews with key actors from the project teams and the private sector as well as a literature review. The results provide new information on how to make supply chains more sustainable and offer a solid basis for future projects. Mainstream agricultural export commodities, due to the size of the industry and their relatively high contribution to gross domestic product, have a much higher importance at the macroeconomic level than niche products, whose contribution to gross domestic product and foreign trade is smaller and often not recorded. However, this perspective neglects marginalised rural communities for which niche products often represent important sources of income.

In the cases analysed, niche products contribute significantly to biodiversity conservation. In contrast, mainstream agricultural export commodities have often been found to be drivers of deforestation. Contrary to expectations, it has not been confirmed that the promotion of major mainstream agricultural export commodities automatically leads to a higher number of beneficiaries compared to niche products. Such projects may even reach fewer beneficiaries than projects supporting smaller supply chains. However, this assessment does not take into account the scaling potential of so-called mainstream products.

Overall, the study shows that there is no "good" or"bad" in mainstream agricultural export commodities or niche products.

Both can be seen as complementary elements within a sustainable landscape approach. The INA study thus provides important food for thought for the discussion of future project approaches. According to the study, however, the following must be taken into account when promoting niche products: As it is difficult to identify and analyse all circumstances and market options in advance during the planning phase, projects promoting niche products should be able to act flexibly. Biodiversity-based niche products are often produced or collected per se in compliance with sustainability criteria. Certification, on the other hand, incurs high costs.

Care should therefore be taken to ensure that the effort required for a certification process is not too high, as otherwise the incentive for smallholder farmers is too low and this can even impair sustainable use.

Find the results of the study here under ‘For Experts’ on the INA website.

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David versus Goliath: Consequences of mainstream agricultural export commodities and niche products

By Initiative für Nachhaltige Agrarlieferketten (INA)

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A Contribution of the 'Initiative for Sustainable Agricultural Supply Chains' (INA)

New insights on trade and value addition in the rice sector in West Africa

A Report

Discussion about the potential supply chain law

A contribution by Isabel Knößlsdorfer

A contribution by James Wanzala

A contribution by Jan Rübel

A Contribution by Niladri Sekhar Bagchi

A contribution by gebana

By Pedro Morazán

By Marcellin Boguy