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.

Farm Transformation of the Tomato Value Chain in Kenya

The Kenyan tomato value chain represents a hallmark of agricultural transformation, characterized by a massive twelve-fold expansion in production volume between 1980 and 2022 to meet a five-fold increase in domestic consumption.

Transformation of the Aquaculture Value Chain in Kenya

The Kenyan aquaculture sector has undergone a profound structural transformation over the last decade, evolving from a subsistence-based activity into a sophisticated commercial ecosystem. This growth is most evident in the cage-based segment of Lake Victoria, which saw an explosive 1,300-fold increase in production volume between 2014 and 2024.

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.