Abstract:

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. Drawing on case studies of Kenya’s tomato value chain and Odisha’s vegetable value chains, plus analyses from six African countries, we identify common dynamics. Many small-scale producers sell crops, buy modern inputs, and frequently operate or work in MSMEs. The hidden middle has expanded quickly and is central to value chain performance. We document the emergence of farm and MSME clusters, longer supply chains, technology and input intensification, and job creation on and off farm. Wholesale markets act as hubs that move growing volumes, coordinate exchanges, and support livelihoods for traders and service providers. However, markets often face deficits in basic infrastructure and services, especially water, sanitation, and electricity, which constrain efficiency and heighten food safety risks. Inclusion outcomes are mixed and context-specific. Kenya’s tomato wholesale and retail segments show high and rising participation by women. In contrast, Odisha’s vegetable wholesale remains male-dominated, with very low participation by women and marginalized castes, even as retail is more inclusive. These shifts generate “growing pains” as rapid expansion intensifies competition, raises quality and safety pressures, and exposes governance gaps. INCATA shows inclusiveness is possible, but not always automatic. Policy priorities include investing in wholesale market infrastructure and connective logistics; strengthening inclusive market institutions and targeted programs that lower entry barriers; and supporting applied research and practical technologies that improve water and chemical use while preserving MSME-led innovation.

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