Procedural Justice in Value Chains Through Public-private Partnerships

This paper is about making agricultural value chains work for smallholder farmers, and the way that governments can achieve this aim through public-private partnerships (PPPs). Applied to agricultural value chains, PPPs seek to catalyze new investments, support chain upgrading, or improve the performance of poorly functioning chains through joint activities that capitalize on the complementary resources and competencies of public and private partners. Smallholder farmers are frequently the intended beneficiaries. However, there is little understanding of how the terms of value chain participation affect farmer perceptions of and behavior within chains, or the role of the public sector in influencing these arrangements. This paper analyzes in-depth case studies from Ghana, Indonesia, Rwanda, and Uganda to better understand a surprising empirical finding: that farmers that experience strong PPP results in terms of productivity and incomes may nevertheless remain dissatisfied, while those experiencing much more modest gains can view the PPP favorably. At the heart is an analytical framework based on five attributes of “procedural justice”. It finds that public sector actors, through PPPs, are able to shape governance within value chains, influencing the relative skills, knowledge, and resources which different actors possess, the way that farmers are organized to engage in the value chain, and the attributes of procedural justice reflected in chain arrangements. Where procedural justice is weak, farmers are more likely to exit or neglect the arrangements, leaving the value chain underperforming with sub-optimal outcomes for all: for farmers, for lead firms, and for government agencies. Government involvement in value chains should be premised on facilitating relationships that are more procedurally just than those which would be expected to arise through the market alone.