The paper examines the current state of value chain development in India, the policies that are in place and the institutional framework that supports the value chains in agriculture. The facilitating processes adopted in India for strengthening agricultural value chains have been analyzed and their efficacy has been critiqued.
The experience from India is used to examine the implications for countries in Africa and how the lessons can be put to work to the benefit of African vulnerable farmers. The analysis shows that small farms are having similar problems the world over. While public policy can bring in institutions to facilitate flow of ideas, technology, products and the like, gaining viable markets is a continuing issue. Bank financing of value chains is easier only in cases where market access is stable.
Even evolved value chains do not lead to equitable income distribution to the small producer. Intermediary institutions that mobilize farmers and work in their interest are necessary to ensure 'inclusive growth' and income enhancement in the hands of the small farmers.
These farmer collectives have a significant role to play in productivity enhancement, access to finance and improving income realization through taking up value addition activities. Such institutions of farmers require State support in the initial years so that they access finance from mainstream banks after they get through the gestation period. Establishing a larger network presence of banks in the rural areas and designing customized products for small farmers are identified as essential for successful value chain financing in Africa.