Identifying ‘win-win-win’ futures from inequitable value chain trade-offs: A system dynamics approach

Context

There is growing recognition that food systems must adapt to become more sustainable and equitable. Consequently, in developing country contexts, there is increasing momentum away from traditional producer-facing value chain upgrades towards efforts to increase both the availability and affordability of nutritious foods at the consumer level. However, such goals must navigate the inherent complexities of agricultural value chains, which involve multiple interactions, feedbacks and unintended consequences, including important but often surprising trade-offs between producers and consumers.

Objective and methods

Based around the 'Loop' horticultural aggregation scheme of Digital Green in Bihar, India, we develop a system dynamics modelling framework to survey the value chain trade-offs emerging from upgrades that aim to improve the availability of fruits and vegetables in small retail-oriented markets. We model the processes of horticultural production, aggregation, marketing, and retailing – searching for futures that are ‘win-win-win’ for: (i) the availability of fruits and vegetables in small retail markets, (ii) the profits of farmers participating in aggregation, and (iii) the sustainability of the initial scheme for Digital Green as an organisation. We simulate two internal upgrades to aggregation and two upgrades to the wider enabling environment through a series of 5000 Monte Carlo trajectories – designed to explore the plausible future dynamics of the three outcome dimensions relative to the baseline.

Results

We find that ‘win-win-win’ futures cannot be achieved by internal changes to the aggregation scheme alone, emerging under a narrow range of scenarios that boost supplies to the small retail market whilst simultaneously supporting the financial takeaways of farmers. In contrast, undesirable producer versus consumer trade-offs emerge as unintended consequences of scaling-up aggregation and the introduction of market-based cold storage.

Significance

This approach furthers ongoing efforts to capture complex value chain processes, outcomes and upgrades within system dynamics modelling frameworks, before scanning the horizon of plausible external scenarios, internal dynamics and unintended trade-offs to identify ‘win-win-win’ futures for all.