Level 2 · Part 2
Who does what, and who earns what
Each actor does work and carries risk. Understanding this prevents wrong conclusions.
Every actor in the chain does something the next one needs: growing, collecting, storing, moving, processing, selling. Each also carries risk, such as spoilage, theft, late payment or price falls.
| Actor | Work done | Typical risks |
|---|---|---|
| Input supplier | Provides seed, fertiliser, tools | Customers cannot pay, product quality questioned |
| Farmer | Grows and harvests | Weather, pests, price falls, losses after harvest |
| Aggregator or local trader | Collects small amounts, grades, arranges transport | Spoilage, theft, price changes, unpaid credit |
| Transporter | Moves goods between places | Bad roads, delays, breakdowns, damage |
| Processor | Changes the product (drying, milling, packing) | Unreliable supply, equipment cost, safety rules |
| Wholesaler and retailer | Store, sell and offer choice to customers | Unsold stock, spoilage, changing demand |
Do not assume someone is cheating
It is common to think that 'middlemen take everything'. Sometimes there are unfair practices. Often, though, the trader is paying for transport, storage, credit and risk that the farmer would otherwise carry. Look at what each actor really does and carries before deciding where a better arrangement is possible.
Who earns more, and why? In general, an actor earns more where the work is harder to replace, where it takes more skill or capital, or where they carry more risk. Actors with more information and more choice of buyers usually have more bargaining power.
Exercise 2.2 · Roles and rewards
- For each actor in your chain, write one thing they do and one risk they carry.
- Write which actor you think has the most bargaining power and why.
- Write one question you would like to ask an actor you have not talked to before.
Background reading for this part:
- Developing Sustainable Food Value Chains: Guiding Principles — Food and Agriculture Organization of the United Nations (FAO), 2014