The Hidden Middle: The Quiet Revolution in the Midstream of Agrifood Value Chains in Developing Countries

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The food security debate has focused largely on the farm sector and on trade. Relatively neglected or "hidden" from mainstream
debate are the middle segments (processing, logistics, wholesale) of agrifood value chains in developing countries - and yet this "midstream" forms 30-40% of the value added and costs in food value chains. The productivity of the midstream is as important as farm yields for food security in poor countries. The article shows that over the past several decades the middle segments have transformed quickly and surprisingly - with a huge volume expansion, a proliferation of small and medium enterprises (SMEs), but also concentrating and multinationalizing (in some places and products), with technology change characterized by capital-led intensification, and with the incipient emergence of branding and labeling and packaging, of new organizational arrangements in procurement and marketing interfaces with farmers and retailers, and of private standards and contracts. Economic policies of market and foreign direct investment liberalization, commercial and business climate regulations, hard and soft infrastructure investment, and food safety laws, have paved the path to the expansion and shaped the transformation of the important midstream segment of food value