August 21, 2024 | Food Policy|
Collaboration among Michigan State University (MSU), the International Food Policy Research Institute (IFPRI), and several global institutions examined the rise of outsourced agricultural service enterprises. Originally developed in high-income countries a century ago, these services have become increasingly common in developing regions over the past few decades. The study uses a Product Cycle framework to explain how such services evolve through three phases: (1) commoditization, illustrated by rice combine harvesting in China and Myanmar; (2) early product differentiation, exemplified by horticultural services in Ethiopia and Indonesia; and (3) advanced product differentiation, where services help French farmers grow eco-labeled vegetables.
These outsourced services help address farmers' limitations in information, labor, equipment, and expertise. They are typically supplied by larger farmers, wholesalers, agribusinesses, and input companies seeking to reduce risks and costs while improving productivity. The study also highlights new partnerships, such as those between outsource firms and companies like Bayer or robotics/drone companies in France.
The findings suggest that governments can play a crucial role in supporting the growth of these services through infrastructure investments, import liberalization, and policies that encourage coadaptation between service providers and farmers, particularly in developing regions. These services have the potential to integrate farmers more effectively into both domestic and international agrifood value chains.