How to design inclusive value chains to improve livelihoods of smallholder farmers

(Credit: Unsplash)

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Tanner Methvin, Director, Impact Amplifier, Annika Surmeier, Senior Lecturer, Graduate School of Business of the University of Cape Town, Addisu A Lashitew, Assistant Professor, McMaster University, Non-Resident Fellow, Brookings Institution


  • Smallholder farming is the source of livelihood for more than two billion people worldwide, with 65% of workers in Africa living on agriculture.
  • Many agribusinesses have sought to create inclusive value chains to improve lives, but many have been critiqued for providing superficial solutions.
  • But key lessons can be learned from Nando’s PERi-Farms project on how to successfully integrate smallholder farmers into companies’ value chains.

Smallholder farming is a source of livelihood for more than two billion people globally, the vast majority of whom live in poverty. In Africa alone, 65% of the labour force lives on agriculture and a staggering 80% of farmers produce on plots of less than 2 hectares.

In recent years, agribusinesses have increased efforts to integrate smallholder farmers profitably into the modern economy by creating inclusive value chains. Yet, many of these efforts have been critiqued for providing superficial solutions that do not substantially improve the productivity or purchasing power of farmers

    .

In contrast, our research into the chilli value chain initiative of Nando’s, based on extensive fieldwork over five years, reveals a different narrative. Nando’s is a multinational casual dining chain from South Africa that operates hundreds of restaurants around the world.

In 2012, the company launched a programme aimed at sourcing African bird’s eye (ABE) chilli from smallholder farmers in Sub-Saharan Africa. The goal was to take a hands-on approach to sourcing the ABE chilli, a critical ingredient deeply embedded in its brand, while also empowering farmers.

For 10 years now, the initiative has improved the living standards of more than 2,000 farmers in Zimbabwe, Malawi, and Mozambique and supplied 100% of Nando’s global ABE chilli demand.

Lessons for firms seeking to create inclusive value chains

Some of the key lessons from the Nando’s PERi-Farms project are transferable to other companies seeking to integrate smallholders into their value chains. Here are five practical insights identified in our research:

1. Align inclusive value chain initiatives with broader corporate objectives

Building inclusive value chains can be time-consuming, often involving multiple learning loops. Value chain initiatives are more likely to enjoy sustained, corporate-wide backing when they are aligned to strategic objectives and not seen as solely philanthropic endeavours.

Nando’s Peri-Farms initiative has been successful in part because it focused on ensuring a reliable supply of ABE chilli – a raw material that is deeply intertwined with the company’s history and brand identity.

By sourcing ABE from African farmers, Nando’s was able to build connections between its global brand, diverse workforce, and African roots. This has enabled the initiative to garner sustained support from the procurement, marketing and human resources teams of Nando’s, even in the face of complex challenges.

2. Partner with organizations with distinct expertise and contextual knowledge

Nando’s collaborated with different partner organizations, which were carefully selected for their specialized expertise, context-relevant knowledge, and value alignment. For example, it collaborated closely with Impact Amplifier, a social innovation consultancy firm, to ensure that the initiative created sustainable livelihoods for participating farmers.

Nando’s also worked with implementing partners in Malawi, Mozambique and Zimbabwe. These organizations provided agronomic training to participating farmers, but also played a vital role in aggregating chilli harvests and coordinating post-harvest processes.

3. Marry supply sourcing practices with the needs of smallholder farmers

Smallholder farmers are often considered ill-suited for industrial-scale procurement because they generally lack robust quality control processes. Due to production and distributional inefficiencies, they also tend to be more expensive than commercial farmers.

To address these issues, Nando’s introduced a multi-pronged intervention that enabled smallholder farmers to compete with commercial growers and produce at an economically viable scale. This model included a guaranteed purchase of ABE chilli at a premium price, agricultural inputs on credit, technical support from agronomy experts to maximise farm yields, centralized post-harvest handling and traceability controls.

This combination of support made ABE chili a popular cash crop for smallholder farmers while meeting the quality control standards of Nando’s.

4. Beyond measuring income changes, assess social impact

Many organizations that seek to create impact stop at measuring changes in income, in part because of the difficulty to quantify social impact. However, it is crucial to understand how farmers spend their extra income, and how this affects their basic needs, like education and healthcare.

In addition, identifying the income threshold required to generate specific impact domains, such as enhanced education or energy consumption, is essential. Impact Amplifier created tools to measure impact that to helped identify when “infrastructural ceilings” limit further progress.

This revealed that beyond a specific income level, improving livelihoods required changing local conditions or significantly increasing income. For example, while higher income enabled families to send their children to school, it did not change the quality of education. This underscores the importance of addressing broader community development issues to sustain positive impact in the long term.

5. Recognize that creating inclusive value chains is a journey

While single interventions can be valuable, they generally do not suffice to provide a ladder out of poverty for smallholder farmers. The Peri-Farms initiative of Nando’s has provided its farmers with a new source of income which earns them 200% more than any other crop, fundamentally improving their basic human needs.

Yet, most of them are still considered poor, highlighting the difficulty of achieving a quick fix to poverty. The most significant achievement is that participating farmers now afford to send all their children to school; some even afford private school and university education. These new educational opportunities offer the capacity to break the cycle of poverty even if it takes a generation to realise it.

Inclusive value chains can improve livelihoods

The experience of Nando’s demonstrates that inclusive value chains, while not a panacea, can go a long way toward improving the living standards of smallholder farmers.

DISCOVER

What is the World Economic Forum doing to help ensure global food security?

Show more

This requires changing corporate systems, which takes significant commitment, time, and experience. It also requires sustained partnerships to develop new capabilities, secure local support, and build trust.

To create inclusive value chains that truly benefit smallholder farmers, companies need the willingness to focus on long-term impact goals, develop new capabilities, and re-evaluate how they define value.


Discover more from The European Sting - Critical News & Insights on European Politics, Economy, Foreign Affairs, Business & Technology - europeansting.com

Subscribe to get the latest posts sent to your email.

Interesting reads

This article is published in association with United Nations.l student with a strong interest in research and global health.

COP31: Energy transition takes centre stage as countries map path beyond fossil fuels

This article is published in association with United Nations. The global energy transition took centre stage on the second day of COP31, as countries explored how to move away from fossil fuels, accelerate clean energy and overcome financial and infrastructure barriers standing in the way. Today at COP31 Energy and Transport Day at COP31 got […]
UN News Two children stand in a rain-soaked tent in Deir al-Balah, Gaza.

Children among the dead as heavy rains flood tents and shelters in Gaza

This article is published in association with United Nations. An infant reportedly drowned and five Gazans were killed – including three children – when a sand dune collapsed on their tents as the first heavy rains swept across the enclave at the weekend, according to the UN aid coordination office (OCHA). Thousands of families lost […]
© EducAid “Before [this], the difference was huge – I used to carry Anas, and he had to crawl on his hands,” said Anas’s mother.

‘For the first time I have my own chair’: Gaza siblings find new freedom

This article is published in association with United Nations. In Gaza, 10-year-old Anas is one of three siblings born without legs and with only two fingers on each of their hands. They struggle to move around and perform daily activities like eating and writing independently. With funding from the UN’s aid coordination office (OCHA), and […]
© UNICEF A child looks out from a makeshift shelter in Rafah, in the south of the Gaza Strip.

Gunfire damages tents at Rafah displacement site in Gaza, as aid teams prepare for winter storms

This article is published in association with United Nations. Gunfire hit and damaged multiple tents at a displacement site in Gaza’s northern Rafah region on Tuesday, reportedly causing injuries and forcing a humanitarian partner to leave the area, the UN aid coordination office (OCHA) has said. The NGO had been working on flood control ahead […]
© UNIFIL UNIFIL remains a critical stabilising factor in south Lebanon..

UN peacekeeping chief warns of ‘security vacuum’ as Blue Helmets leave Lebanon and Western Sahara

© UNIFIL UNIFIL remains a critical stabilising factor in south Lebanon.. This article is published in association with United Nations. The UN’s peacekeeping chief warned on Wednesday that the withdrawal of “Blue Helmets” from Lebanon and Western Sahara risks leaving a dangerous security vacuum, while the Security Council remains divided over what, if anything, should […]
© IOM/Haithm Abdulbaqi Young people in Yemen play football on a sandy pitch.

15 years of ‘almost no progress’ in getting young people moving: WHO

This article is published in association with United Nations. One in four adolescents worldwide reported not getting at least 60 minutes of physical activity on any day in the previous week, according to new global estimates released by the World Health Organization (WHO) on Wednesday. That amounts to some 240 million young people aged 11 […]
© UNICEF/Sultan Mahmu A mother and daughter wade through floodwaters in Feni, southeastern Bangladesh.

COP31 explained: What’s at stake at this year’s UN climate summit?

This article is published in association with United Nations. The world has more tools than ever to tackle climate change, yet millions remain unable to benefit from them. As clean energy technologies advance faster than ever, the challenge facing countries at COP31 is no longer just finding solutions – but making sure everyone can afford […]
© UNICEF/Christina Pashkina A school in Chuhuiv, Ukraine, lies in ruins after being hit by a missile.

Air raid alerts and attacks on schools: the devastating face of education in Ukraine

This article is published in association with United Nations. Ukraine has sustained almost 2,000 attacks on education since the full-scale Russian invasion in 2022, with some 270 this year alone, the UN Children’s Fund (UNICEF) said on Tuesday, a day after a strike at a school being used to distribute aid. Tweet URL Since the […]
© UNICEF/Oleksii Filippov People walk past a war-damaged building in Ukraine.

Ukraine: WFP provides hot meals to Oleshky evacuees as UN pushes to restore power before winter

This article is published in association with United Nations. The UN World Food Programme (WFP) is providing emergency food assistance to more than 400 people who were able to leave the Russian-occupied city of Oleshky, in Ukraine’s Kherson region, during a brief local ceasefire. Many arrived in worrying condition at medical facilities in Kyiv on […]

COP17: Nations chart ‘Yerevan Pathway’ to speed up action for nature

This article is published in association with United Nations. At the halfway mark to 2030, countries meeting in Armenia have agreed a roadmap to accelerate action for nature, after a global review found the world off track to meet its biodiversity targets. Agreement was formalised through the Yerevan Pathway as the UN Biodiversity Conference (COP17) […]
This article is published in association with United Nations.

AI is changing the way we think. The question is whether we’ll notice in time

This article is published in association with United Nations. Artificial intelligence promises to make life easier. With a few keystrokes, it can write emails, summarize reports, generate ideas and answer complex questions in seconds. For many people, it feels like a technological leap on par with the arrival of the internet itself. But according to […]
© NYCDDC Flood defences are built on the east side of Manhattan Island by the East River in New York City.

Higher Ground: How New York is raising a park to hold back the sea

This article is published in association with United Nations. On 29 October 2012, Hurricane Sandy slammed into New York City, unleashing a devastating storm surge that flooded homes, subways and tunnels, knocked out power and sparked deadly fires. In just 48 hours, 44 people were killed, nearly two million New Yorkers lost power, and 6,500 […]
This article is brought to you in association with the European Commission.

World News in Brief: ‘No safe place in Ukraine’, IAEA calls for Iran nuclear inspections, Kenya hosts thousands of Ethiopians fleeing clashes

This article is published in association with United Nations. The UN refugee agency (UNHCR) on Tuesday urged continued international support for Ukraine’s population as Russian airstrikes intensify and humanitarian needs grow in advance of another bitterly cold winter. The “relentless” attacks are targeting critical energy infrastructure, leaving millions without heat and electricity, and limited access to […]
This article is published in association with United Nations.

Four in five domestic workers lack formal job protections, UN finds

This article is published in association with United Nations. An estimated 66.5 million domestic workers – representing more than four out of five domestic workers worldwide – were informally employed in 2025, a new report by the UN’s labour organisation has found. This makes them more than twice as likely as other employees to lack […]
© WFP/Mohamed Hinnawi An elderly woman in Al Saraya, Gaza, looks after young children after losing three sons, her husband, and home during the war.

Gaza: Families brace for fourth winter in tents as aid operations remain stymied

This article is published in association with United Nations. Families in Gaza are bracing for a fourth winter in tents and makeshift shelters as UN aid operations face mounting obstacles, with transport suspended on Tuesday due to Israel’s closure of the key Kerem Shalom crossing for election day. The UN project services agency in the […]

West Bank: Hebron crackdown displaces thousands, Türk warns of ethnic cleansing

This article is published in association with United Nations. Israel’s “aggressive operation” in the West Bank city of Hebron raises serious concerns of ethnic cleansing, UN human rights chief Volker Türk warned on Monday, as the number of Palestinians forced from their homes passed 3,000 on the eve of Israeli elections. The UN aid coordination […]
© UNICEF/Rawan Eleyan A mother and her children go through their belongings after a room in their home was burned in a settler attack in southern Hebron, West Bank. (July 2025)

West Bank: Guterres alarmed as Israel imposes sweeping closures after deadly Hebron attack

This article is published in association with United Nations. The UN said on Friday it was “extremely alarmed” by intensifying violence in the occupied West Bank, as Israel moved to seal off the territory following a deadly attack on its soldiers in Hebron. Two Israeli soldiers were killed and at least five injured when gunmen […]
This article is published in association with United Nations.

‘Connect the dots’ between street protests and global turmoil, urges Guterres

This article is published in association with United Nations. The international community must combat inequality and stop wars from expanding to ensure a safer world for all, the UN Secretary-General said on Thursday. Speaking to reporters in New York ahead of a visit to Egypt, António Guterres addressed growing public discontent in Europe and beyond, […]
© SOS Méditerranée/Anthony Jean Up to $500 million was paid in migrant smuggling fees on sea routes to Europe in 2025, according to new UN estimates.

Migrants paid up to $500 million in smuggling fees on European sea routes

This article is published in association with United Nations. The price tag for smuggling on European sea routes reached up to half a billion dollars last year, the UN Office on Drugs and Crime (UNODC) and the UN migration office, IOM, reported on Wednesday. Key points Almost half of migrants trying to get smuggled into […]

Why don't you drop your comment here?

Go back up

Discover more from The European Sting - Critical News & Insights on European Politics, Economy, Foreign Affairs, Business & Technology - europeansting.com

Subscribe now to keep reading and get access to the full archive.

Continue reading

The European Sting – Critical News & Insights on European Politics, Economy, Foreign Affairs, Business & Technology – europeansting.com