Symbiosis Between Commercial Small-Scale Producers and Micro, Small and Medium Enterprises in the “Hidden Middle”: Evidence from the Horticulture Value Chains in Africa and Asia

Rapid urbanization and changing diets in Africa and South Asia are raising demand for horticultural products, creating opportunities for agrifood transformation. This report synthesizes evidence from the INCATA project (Linked Farms and Enterprises for Inclusive Agricultural Transformation in Africa and Asia). It finds that small-scale producers are highly commercial and often embedded in mutually beneficial relationships with micro, small, and medium enterprises (MSMEs) in the “hidden middle” of input supply, trading, logistics, and related services.

Towards inclusive and sustainable vegetable value chains in Odisha

The Hidden Middle—the segment of agrifood systems that connects farmers to consumers through aggregation,
storage, logistics, and processing—has long been overlooked in both research and policy. Yet this is where most
value addition, employment, and efficiency gains actually occur. When midstream actors function well, food
systems are more resilient, markets are more stable, and small producers gain predictable access to buyers and
inputs. When they do not, costs rise, losses increase, and opportunities for inclusive growth dissipate.

Evidence Review: Investments and Policies in Agrifood Chain Linkages

Agrifood systems are increasingly shaped by activities beyond the farm gate, yet the midstream and
downstream segments—known as the hidden middle—remain severely under-researched. This paper
presents a review of 276 impact evaluations and systematic reviews to assess what is currently known
about effective policies and programs targeting the hidden middle in low- and middle-income
countries. While 52% of the studies focus on smallholder-oriented interventions and 21% on public
goods, only 27% address the hidden middle, and nearly half of these concern contract farming—a
mechanism designed to bypass intermediaries rather than strengthen them. Most intervention
categories in the midstream and downstream are supported by fewer than four rigorous studies.
Moreover, services like storage, training, and market information are evaluated almost exclusively in
the context of producers, ignoring the micro, small, and medium enterprises (MSMEs) that dominate
the hidden middle. The paper concludes that addressing this evidence gap is essential to designing
inclusive, resilient agrifood systems and calls for a shift in research and policy focus toward the actors
and services that connect farms to markets and consumers.