Abstract:

Rapid urbanization and changing diets in Africa and South Asia are increasing demand for horticultural products, creating opportunities for agri-food transformation. This report synthesizes evidence from the INCATA (Linked Farms and Enterprises for Inclusive Agricultural Transformation in Africa and Asia) project. The study finds that small-scale producers are highly commercial and are often embedded in mutually beneficial relationships with micro, small and medium-sized enterprises (MSMEs) in the “hidden middle” of input supply, trade, logistics and related services. Drawing on case studies of the tomato value chain in Kenya and vegetable value chains in Odisha, as well as analyses of six African countries, we identify common dynamics. Many small-scale producers sell crops, buy modern inputs, and often operate or work in MSMEs. The “hidden middle” has expanded rapidly and is critical to value chain performance. We document the emergence of agricultural and MSME clusters, longer supply chains, intensification of technology and inputs, and the creation of employment both inside and outside production units. Wholesale markets act as hubs that mobilize growing volumes, coordinate exchanges and sustain the livelihoods of traders and service providers. However, markets often face deficits in basic infrastructure and services, especially water, sanitation and electricity, limiting efficiency and increasing food safety risks. Inclusion outcomes are mixed and depend on the context. The wholesale and retail tomato segments in Kenya show high and increasing participation of women. In contrast, the vegetable wholesale trade in Odisha remains male-dominated, with very low participation of women and scheduled castes, even though the retail trade is more inclusive. These changes create “growing pains” as rapid expansion intensifies competition, raises pressures on quality and safety, and exposes governance gaps. INCATA demonstrates that inclusion is possible, but not always automatic. Public policy priorities include investing in wholesale market infrastructure and connectivity logistics; strengthening inclusive market institutions and targeted programs that reduce barriers to entry; and supporting applied research and practical technologies that improve water and chemical use, while preserving MSME-led innovation.

Keywords: Small-scale producers, horticulture value chains, hidden middle MSMEs, wholesale markets, clusters, commercialization, gender inclusion, logistics, public investments.