Agricultural value chains and social and environmental impacts: trends, challenges, and policy options

With the global population approaching 8 billion, the role of agricultural value chains (VCs) is increasingly important in ensuring sustainable and equitable food production. However, in developing countries, market failures can prevent small farmers from fully participating in domestic and global value chains, and issues related to climate change create further challenges.
Moreover, greening policies and actions, as well as concerns regarding nutritional outcomes, add complexity to providing nutritious high-quality food to feed a growing population. In this context, it is critical to examine how markets can be shaped to be pro-poor and to reduce negative social and environmental externalities.
The current paper examines policies, institutional arrangements, and initiatives that target and affect different agricultural supply chain actors to improve environmental and social outcomes. Specifically, it reviews the non-economic consequences associated with the current operation and structure of global and domestic food value chains and identifies successful private and public strategies to shape food markets that foster
non-economic benefits (social and environmental).
The paper provides key lessons and discusses policy implications on how markets can generate balanced economic objectives that also achieve desired nutritional, social, and environmental outcomes. It also highlights areas of future research to further understand the linkages between market forces shaping food value chains (FVCs) and non-economic outcomes.