IFAD Research Series 77: The role of trade and policies in improving food security

Developing competitive and inclusive food value chains requires domestic macroeconomic policies to improve the agricultural sector’s business environment and create outside opportunities, and sector-specific targeted measures to promote smallholder participation in competitive value chains by reducing market access costs. Key elements of an agricultural development strategy are: infrastructure investment to reduce transaction costs; improving smallholder access to markets; and promoting their participation in food value chains through empowering and increasing their capacity to comply with food quality and safety requirements. Encouraging innovation and adoption of technologies in all segments of the value chain is crucial for upgrading and diversifying agricultural output. This in turn leads to greater income generation, jobs outside of agriculture, and increased export opportunities. Export diversification strengthens countries’ resilience to trade shocks and reduces vulnerability to the rising costs of food imports.