Conflict-sensitive Palm Date Value Chain Development in Yemen

Conflict-sensitive Palm Date Value Chain
Development in Yemen
by
Nikolaos Koufos
March 2016

Acknowledgements
I would like to thank my internship supervisor at SPARK Marc de Klerk, as through his guidance I
acquired knowledge of private sector development in conflict-affected countries.
I would also like to thank my colleague at SPARK Nina Aqlan, as through our collaboration I gained
insights into Yemen’s context.

Summary
Yemen is currently facing a critical situation due to the ongoing conflict that plagues the country. Food
insecurity, decreased income and employment opportunities, as well as conflicts over the access to
scarce natural resources are some of the negative effects of the conflict, which deteriorate livelihood
conditions within the country. This study aims at identifying solutions that can provide food, income
and employment, as well as fair and sustainable natural resource management for Yemenis, by
recommending options for developing the country’s palm date value chain. These solutions aim at
addressing the limitations that characterise the existing value chain and in doing so, enhance its
performance and role in economic, social and environmental terms.
The study identifies that the ever deteriorating function of institutions in Yemen, the country’s poor
business enabling environment, the scarcity of vital natural resources and the lack of appropriate
infrastructure hinder the existing date’s value chain performance and role. Moreover, the chain’s
existing structure and cooperative levels, as well as the inefficiencies in the activities that take place
within it also obscure its performance and role within the country. In addition, the ongoing conflict in
Yemen affects negatively the existing date value chain, by deteriorating further the socio-economic
environment that the chain is embedded in by disrupting agricultural activities and the functioning of
domestic agri-markets.
For addressing these limitations and enhancing the palm date value chain’s performance and role, this
study adopts the framework for value chain upgrading in developing countries as proposed by
Trienekens (2011) and modifies it for the context of date production/distribution and of Yemen. By
employing this framework, the study provides recommendations for the date value chain’s upgrading.
These recommendations refer to options relevant to the upgrading of the chain’s product, the upgrading
of the processes that take place within the chain, the upgrading of the chain’s network structure and the
upgrading of the chain’s governance form.
For achieving upgrading in these levels, the study suggests that the main solution is to provide support
for the formulation of a well-functioning date farmers’ cooperative. In this cooperative, the study
identifies that it can be beneficial to channel capacity building, inputs, technology and market
intelligence to the farmers. Additionally, the study suggests that specifically important for the well-
functioning of the cooperative is the employment of a proper governance form for the coordination of
its members’ activities. The study also identifies that it can be beneficial to facilitate a partnership
between the cooperative and a sectoral lead firm, as well as to employ a proper governance form for the
coordination of the relevant transactions.

Contents
1. Introduction..........................................................................................................................................1
2. Limitations of the existing date VC .....................................................................................................5
2.1 Institutions ....................................................................................................................................5
2.2 Natural resources and physical infrastructure ..............................................................................7
2.3 Structure of the date VC...............................................................................................................8
2.4 Production, post-harvest and marketing activities of the date VC ...............................................9
3. Impact of the conflict on the date VC................................................................................................10
3.1 Impact on the economy...............................................................................................................10
3.2 The conflict and natural resources nexus ...................................................................................11
3.3 Impact on markets and transactions............................................................................................11
3.4 Impact on date production and post-harvest...............................................................................11
4. Date VC development........................................................................................................................13
4.1 Framework for date VC development .......................................................................................13
4.2 Product upgrading.......................................................................................................................15
4.3 Process upgrading.......................................................................................................................16
4.4 Network structure upgrading......................................................................................................19
4.5 Governance form upgrading.......................................................................................................22
5. Conclusions .......................................................................................................................................30
References ...............................................................................................................................................33

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1. Introduction
Since 2011 Yemen faces political and social instability, initiated by mass protests that erupted through
the country. The protests were influenced by the uprising that characterised many Arab countries that
period, namely the ‘Arab Spring’, while they were fueled by Yemen people’s need for improvement of
their country’s economic and socio-political conditions. In 2015 this instability was transformed into a
civil war.
The ongoing conflict in Yemen's deteriorates further the country's socio-economic conditions. As
FAO (2015) reports, the conflict exacerbates food insecurity, since around 50% of Yemen's population
faces serious shortages in food supplies. Historically, Yemen is among the most food insecure countries
on a global scale. Domestic staple food production covers 10% of the population's demand, which
constitutes Yemen's economy heavily reliant on imports and its citizens extremely vulnerable to global
price shocks. Yemen is also confronted with serious water shortages, since almost 80% of its population
lacks access to clean water (OCHA, 2016). These water shortages historically cause the eruption of
violent conflicts within the country (Glass, 2010). Moreover, Yemen's economy and its citizens are also
severely affected by a fuel crisis, as fuel prices have increased almost by 90% since the eruption of
conflicts (OCHA, 2016). As Yemen’s oil reserves are depleting at a high rate (Al-Weshali et al., 2015),
the country is forced in a transformation towards a non-oil-dependent economy. With Yemen’s
institutions and economy growing less after the eruption of conflicts, this transformation is affected
negatively. Yemen has also an unprecedentedly high rate of population growth, as the country has
witnessed an increase in its population by almost 450% in the past 50 years (ILO, 2014). This
population pressure in combination with Yemen’s shortages in vital resources and the consequences of
the ongoing conflict depict a humanitarian and economic crisis situation.
Deeply affected by the consequences of the ongoing conflict, government institutions in Yemen
cannot address this crisis, while aid is provided by international agencies and the donor aid community.
With peacebuilding being the immediate goal, various programmes are being implemented by the
international community to this end. Private sector development is one approach that can be a key
driver towards this end (Peschka et al., 2011). In fact, international organisations are progressively
advocating for the critical role that the private sector holds in restoring peace in conflict-affected
environments (Hoffmann, 2014). Despite the common belief, during wartime production does not seize
to exist entirely and markets continue to operate (Hille et al., 2014). As businesses continue their
operations, the promotion of the private sector’s development can contribute to the rebuilding of
infrastructure, as well as can provide income, employment and products/services to citizens affected by
the conflict. Additionally, by promoting corporate social responsibility among existing business
practices allows to contribute to the establishment of values of democracy and human rights. All these
give the potential to create the foundations for addressing consequences of conflict, as well as for
restoring and for promoting further a long-term culture of peace (Hoffmann, 2014). As existing
literature suggests, one of the most efficient approaches for private sector development and
peacebuilding, is the development of specific value chains (Parker, 2008, Curtis et al., 2010, Hille et
al., 2014). A Value Chain (VC) is the set of activities needed in order to bring a product from its
producer to the consumer. These activities are performed by different actors in a sequence, with each
actor adding value to the product (Hille et al., 2014).

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Programmes that work towards the development of VCs in conflict-affected settings aim at
strengthening the performance of a chain in economic, social and environmental terms. In economic
terms, VC development interventions aim at promoting income and a more equitable economic growth
for communities, by boosting the production of small-holders and by increasing their market share and
margins they can achieve for their products (Hiller et al., 2014). Furthermore, VC development
interventions target the operational efficiency and competitiveness of the whole chain, by addressing
opportunities and limitations that determine their levels (Parker, 2008). In social terms, VC
development is a useful tool for increasing food security/safety and addressing poverty, as well as for
contributing to human capital development. In doing, so VC development contributes to improving
livelihoods within communities and regions (ESCWA, 2013). Specifically for conflict-affected settings,
VC development is also a tool for promoting peace and stability by providing employment (Hiller et
al., 2014), as well as by promoting trust and synergies among conflict-affected groups and individuals
(Parker, 2008). In addition, by its self the process of analysing a VC in order to plan development
interventions and studying power relationships and dynamics within it offers insights into the nature of
conflict, its dynamics and its impact on a region/country (Gündüz and Klein, 2008). Such knowledge
can be valuable for conflict-resolution and peace-building interventions. In environmental terms, VC
development interventions aim at promoting a sustainable use of natural resources within a chain
(ESCWA, 2013). In cases of conflicts over the access to scarce resources, the promotion of sustainable
and fair usage of resources can mitigate disputes and tensions and thereby, contribute to social stability.
Overall, in conflict-affected settings VC development shall be designed and implemented with the so-
called ‘conflict-sensitivity’ (Gündüz and Klein, 2008), in order not to fuel further conflicts rather
contribute to their mitigation.
Considering these, in order to intervene in a manner that addresses Yemen's aforementioned
humanitarian and economic crisis, it is critical to choose a VC that its development can contribute to
these ends. In short, a chain has to be chosen in terms of its capacity to contribute to food security, to
income and employment for marginilised groups/individuals and to sustainable/fair resource
management within the country. Given these, the importance of agriculture in general and the
characteristics/potentials of the palm date production in particular in Yemen, indicate that the palm date
VC can be considered as a chain that its development is in line with the mentioned above criteria.
The agricultural sector in Yemen holds significant importance for the country’s economy and
society. More specifically, the sector contributes by 12.6% to Yemen’s GDP and by almost 50% to its
employment levels (Republic of Yemen, 2013). The sector also has a key role in addressing food
security and reducing rural poverty, as well as in stabilizing Yemen’s population and in shaping natural
resources management (Republic of Yemen, 2012). Additionally, in contrast to global patterns,
economic dependence on agriculture in Yemen is increasing since 2000, due to decreasing
opportunities in the industrial and service sectors (Republic of Yemen, 2013). The fruit sub-sector of
Yemen’s agriculture offers potentials for growth and exports, while it is considered that relative small
investments in this sub-sector can yield substantial benefits for large to small producers (Republic of
Yemen, 2012). The palm date is a key commodity of Yemen’s fruit sub-sector. The date fruit has
significant nutritional value, which in combination with its position in Yemen’s culture and diet can
contribute significantly to food security in the country (Mahmoudi et al. 2008, Nasser et al., 2011, Al-
Khayri et al. 2015). Finally, the Yemen palm date is considered to be of excellent quality, thus bearing

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significant marketing potentials that could lead to the growth of the sub-sector (Al-Khayri et al. 2015).
Therefore, given the characteristics and prospects of the palm date sub-sector, the development of the
date VC has potentials to benefit parts of Yemen’s conflict-affected society.
However, the date VC in Yemen faces chronic limitations and operational inefficiencies, which
are exacerbated further by the ongoing conflict. More particularly, the existing date VC is characterised
by traditional agricultural production and insufficient farm management practices (Nasser et al., 2011),
as well as by low competitive status of the end product (Mahmoudi et al. 2008, Al-Khayri et al. 2015).
In addition, the existing chain is charactirised by limited cooperative status and access to credit (Al-
Khayri et al. 2015). All these limitations result in low prices for small-scale date producers, which in
turn yield limited or even no profits (Nasser et al., 2011), impacting negatively their income and
economic sustainability. Moreover, the benefits of producing and selling a high quality product are not
realised and thereby, there is room for improvement that can impact positively income and employment
in rural areas. In addition, these limitations in production in combination with the low coordination
levels within the chain hinder the chain's potentials in contributing to food security, as well as to
sustainable/fair resource management. Currently, this already problematic situation deteriorates further,
as the ongoing conflict has affected negatively the national economy and disrupted agricultural
production, transportation and marketing activities within the country (FAO, 2015).
Considering the importance and potentials of the date VC in Yemen, as well as the capacity of the
VC development tool in benefiting conflict-affected societies and economies, this study aims at
identifying solutions that can promote the development of Yemen’s date VC. These solutions refer to
interventions that can strengthen the operational efficiency of the actors involved in the chain, as well
as the competitive status of the date product. Additionally, these interventions have to be in line with
the aforementioned conflict-sensitive approach, given Yemen’s current situation. Altogether, these
solutions will aim at contributing to food security, income and employment in Yemen’s rural areas, as
well as to sustainable/fair natural resource management.
Research objective
The purpose of this study is to provide recommendations for developing the date VC in Yemen under a
conflict-sensitive perspective, by identifying solutions that can impact positively the efficiency and the
competitiveness of the chain.
Research questions
1. What are the limitations that characterise the existing date VC in Yemen?
2. How the on-going conflict intercepts with the date VC?
3. How can these limitations and conflict’s impact be addressed, under a conflict-sensitive approach?
Methodology
Research question 1 will be answered through a literature review on the environment that the existing
date VC in Yemen is embedded in and on the resources that the chain utilizes, as well as on key

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features of the chain. For answering research question 2, a literature review on the conflict’s impact on
the chain’s environment, available resources and operations will be conducted. Research question 3
will be answered by a literature review on VC development, with a focus on conflict-affected settings.
Contents
After the introduction, chapter 2 presents the limitations that characterise the existing date VC in
Yemen and upon these, identifies the generic orientation of the chain’s development. Chapter 3
discusses the impact of the conflict on the date VC and upon this, identifies the generic orientation of
the chain’s conflict-sensitive development. Based on this generic orientation, chapter 4 identifies
specific solutions that can address these limitations and impact of conflict. Finally, chapter 5 presents
the study’s conclusions, as well as a general discussion and recommendations.

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2. Limitations of the existing date VC
The purpose of this chapter is to portrait the limitations that characterise the existing date VC in
Yemen. Based on these limitations, the chapter also identifies the generic orientation of the chain’s
development. Thus, chapter 2 is organised as following: Section 2.1 discusses how Yemen’s institutions
affect negatively agricultural activities and their role in economic, social and environmental terms.
Section 2.2 presents the limitations imposed to agricultural activities in Yemen by the country’s
endowment of natural resources and physical infrastructure. Following, section 2.3 analyses how the
date VC’s structure impacts negatively its organisational efficiency. Finally, section 2.4 examines
features of the activities that take place within the chain, in terms of their impact in its operational
performance.
2.1 Institutions
Institutions in Yemen do not provide sufficient support for agricultural activities within the country.
The government’s role, the overall business climate, as well as the functioning of markets are the major
institutional factors that limit the performance and role of agricultural activities in Yemen.
The government’s role in supporting and regulating agricultural activities in Yemen is limited and
at a constant decline (Republic of Yemen, 2012). Without an adequate policy framework, the
agricultural sector lacks of central planning that can promote its modernisation and sustainability, as
well as its potentials in contributing to the country's economy and society. Focusing on the date VC's
development, such institutional void implies that any initiative that can promote its
modernisation/efficiency has to rely less on government's support. Thus, any initiative can be planned
and implemented by being supported by the international donor community, by domestic and
international non-governmental organisations and by domestic, diaspora and international private
sector actors. Further in the state's role, law enforcement is a major issue in Yemen, affecting
commercial activities and reinforcing disputes (U.S. Department of State, 2014). Labour laws in Yemen
are also poorly enforced and hence, labour markets operate to an extend in an un-regulated and non-
transparent manner. All these law-enforcement implications induce deficiencies and high costs for the
transactions that take place within the agricultural sector, as well as favor an unequal application of the
law and thereby, increase income and labour related inequalities. Such limitations in law-enforcement
in combination with the fact that corruption plagues Yemen (Transparency International, 2014) raise the
need for establishing a governance structure within the date VC, which can allow efficient, fair and
transparent transactions within it. Moreover, women participation in agricultural activities in Yemen is
also not effectively supported by the government (Republic of Yemen, 2012). As a result, gender
inequalities preserve within the sector, which exacerbate the marginalization of women in terms of
opportunities for income and of their participation in decision-making processes. Therefore, it can be
beneficial for the date VC’s gender equality levels to promote through the chain’s development an
inclusive participation of female actors in decision-making and income-generating activities. Another
limitation of the government’s role is that environmental protection regulations and practices are also
ill-implemented within the country (ESCWA, 2013). As a consequence, the agricultural sector lacks of
central planning and implementation of policies and practices that could ensure an efficient and

6
sustainable use of natural resources. This impacts negatively agricultural production and its
sustainability in the long-term, as well as does not mitigate conflicts over the access to natural
resources. All these imply that for the case of the date VC's development, it is critical to plan and
implement strategies, procedures and technologies within the chain that promote a sustainable
management of natural resources, which at the same time ensure a fair for all stakeholders access to
these resources. Regarding the government’s role in ensuring food safety and in establishing relevant
grades and standards systems within the country, it is also problematic (Republic of Yemen, 2012). In
the absence of adequate services that could promote food and health standards relevant to agricultural
production, the sector’s potentials in ensuring a safe provision of food for Yemenis and in meeting the
imperatives of international competition are constrained. Therefore, Yemen’s agri-entrepreneurs
progressively lose their domestic and international market share, as they are replaced by international
competitors who succeed in offering more competitive products. Focusing on the date VC's
development, the aforementioned limitations raise the need for establishing strategies, procedures and
technologies in the chain, which can constitute the date product compatible with the imperatives of
food safety and markets. The governmental and non-governmental institutions in Yemen also do not
provide sufficient extension services to farmers (Ba-Angood, 2015). Specifically for date producers,
they do not have access to research and development services in order to modernise their production
and address the opportunities/limitations they face (Mahmoudi et al., 2008). Such an absence of
knowledge and technology transfers to farmers results in low yields for agricultural production and
yield gaps (Republic of Yemen, 2013). In addition, there is a lack of extension services that could offer
market intelligence to farmers and advice/training on the marketing of their products (Republic of
Yemen, 2012). This limits farmers’ bargaining power, by rendering them depended on the market
intelligence and prices that middlemen offer. Besides market intelligence, extension services in Yemen
fail also to offer sufficient training to farmers, such as the provision of capacity building relevant to
farm management practices (Republic of Yemen, 2012). All these leave Yemeni farmers without the
knowledge and skills to competitively organise the production and supply of their products. Focusing
on the date VC, this lack of extension services imply that it is crucial for any development intervention
to identify domestic and international actors that can provide these supporting services and facilitate
their connection with the chain's actors.
As far as the country's business enabling environment is concerned, doing business in Yemen is
challenging according to the World Bank's Doing Business annual report. In fact, the country is ranked
in the 170th position out of 189 countries, in terms of ease of doing business (World Bank, 2016).
Focusing on agriculture, this implies that business activities that take place within the sector are risky
and entail high transaction costs. This poor ecosystem raises implications for the development of the
date VC, as any initiative has to provide the chain with coordination structures and linkages that
mitigate such risks and reduce transaction costs. Examining specific aspects of Yemen's enabling
environment, World Bank ranks Yemen as the fifth lowest country among a list of 189, in terms of its
institutions’ capacity in providing credit to entrepreneurial activities. Specifically for the date
businesses, Yemen’s small-scale farmers and agri-entrepreneurs have limited access to loans
(AARINENA, 2008), implying that they face obstacles in funding their production activities and
processes, as well as in investing and thereby enhancing their prospects in adapting to the imperatives
of international competition. For the case of the date VC's development, such poor access to credit

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raises the need to identify financial institutions and private sector actors that can invest in chain's
entrepreneurs and their activities and to facilitate the connection with them.
Regarding agricultural markets in Yemen, they operate within the aforementioned institutional
void, under a non-competitive (WFP, 2010) and mainly informal (BTI, 2014) framework. Thus,
business practices that might restrict modernisation and cause an unequal distribution of income,
employment and bargaining power are not properly addressed. In addition, food safety regulations and
the compliance with established grades and standards systems are not adequately enforced and
monitored. The latter restrict agriculture’s role in promoting food safety, as well as limit Yemen’s agri-
products competitive status. For the case of the VC's development, this informality and non-
competitiveness of agricultural markets can be addressed by increasing the bargaining power of the
actors of the chain and promoting their market access. In doing so, the chain's actors can be
strengthened against potential oligopolistic or monopolistic phenomena caused by the aforementioned
non-competitive function of markets. Additionally, market informalities can be addressed by promoting
the establishment of agreements between the chain's actors and external transacting parties. Thereby,
transactions will be embedded in mutually accepted and beneficial for all parties norms of conduct,
which can compensate for the absence of formal market regulations.
2.2 Natural resources and physical infrastructure
Yemen is one of the most water-scarce countries on a global scale. In fact Sana’a, the country’s capital
might be the first capital city in the world to deplete entirely its water resources in the next decade
(Glass, 2010). Additionally, water use patterns within the country follow an unequal distribution
between regions, as well as between farms within the same region (World Bank, 2010). Such unequal
distribution limits the production capacities of marginalised smallholders. Overall, as literature (Al-
Hebshi, 2011, Republic of Yemen, 2012, Republic of Yemen 2013) suggests, this water scarcity is the
most significant constraint in agriculture’s production in Yemen. Considering the water stress that the
country is facing and given the mentioned above institutional and production limitations in supporting a
sustainable management of natural resources, agriculture's production and sustainability is at a high
risk. Moreover, conflicts over the access to water continue and the sector's role in contributing to food
security is also at risk. All these imply that the development of the date VC has to provide the chain's
actors with sustainable water management knowledge and technologies, as well as to establish
coordination mechanisms and strategies within the chain that ensure a fair for all actors access to water.
Further, as already discussed above oil reserves in Yemen are decreasing and oil prices are
increasing at a high rate. This raises implications for the production, post-harvest and
transportation/marketing activities that take place within the date VC. More specifically, the operational
costs of the activities that rely on fossil fuel as input are significantly high. Therefore, the incomes
generated from these activities are decreased, which impacts negatively the economic sustainability of
the concerned actors. Moreover, these high operational costs caused by high fuel prices might have also
put a halt to many of the aforementioned activities. In this case, the chain’s operational performance,
competitiveness and role in contributing to food security are affected negatively. Hence, it is critical to
establish processes, technologies and strategies within the date VC, which can constitute it less reliant
to fossil fuel.

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As far as Yemen’s agriculture physical infrastructure is concerned, there is an overall lack of
facilities for pre and post-harvest processes. The whole sector and the date production in particularly
are constrained by a lack of storage, packaging and marketing facilities (Ba-Angood, 2015). Such lack
of infrastructure limits the VC’ overall contribution to food safety within the country and its
competitiveness levels, as Yemen’s dates are not handled, processed and stored according to the
imperatives of food safety and the standards of markets. In order to address these limitations, the
development of the date VC has to identify and connect the chain with actors and sources of funding
that can invest in it, by establishing such facilities.
2.3 Structure of the date VC
The date VC in Yemen is characterised by small and scattered actors, as well as by their limited
cooperative status. As a result, asymmetric power relationships, uncoordinated activities and initiatives,
as well as non-transparent transactions are prevailing within the chain.
The distribution of agri-products in Yemen relies heavily on the actions of numerous middlemen,
which implies that only a small percentage of the products’ value added is for the benefits of the
farmers. In many cases, the prices that are offered to the farmers do not fully compensate for their
production costs, which impacts negatively their income and economic sustainability (ESCWA, 2013).
Additionally, farmers are in many cases indebted and dependent, in terms of their production decisions
and input usage, on middlemen. This implies that in many cases farmers adjust their production
according to the aims of the middlemen and not theirs (Al-Hebshi, 2011). Moreover, due to the
presence of many scattered actors, market and competition information is not effectively available for
all the actors of a VC. As a result the chain's operational efficiency, competitiveness and flexibility in
adapting to changing standards are limited. For the case of the date VC’s development, all these raise
the need for implementing interventions that can increase their access to markets, inputs, knowledge,
technology and market intelligence. In doing so, date farmers can be less depended on middlemen and
increase their adaptability to changing standards. Further, there is insufficient monitoring of agricultural
activities in Yemen and enforcing of rules/standards, which could promote transparency and
competitiveness in agricultural VCs (ESCWA, 2013). This implies that it can be beneficial for the date
VC's development to implement interventions that support the establishment of adequate monitoring
and enforcement mechanisms within the chain. Regarding the cooperative status of the existing date
VC, there is a lack of associations and alliances, between the actors of the chain (Ba-Angood, 2015).
This implies that there is no synergy between actors and no common organisation and agreement upon
mutual production and marketing strategies. As a result the date VC’s actors engage in individual and
isolated activities, which offer limited potentials for realising economies of scales and for increasing
their bargaining power. Despite the fact that cooperative organisations exist, their manifestation is
rather enforced to the farmers by the government and not due to their needs (ESCWA, 2013). This
implies that existing cooperatives are reluctant and slow to adapt to developments and have members
with low cooperative mindset and motivation for common organisation. Therefore, it is crucial for
interventions that aim at developing the date VC to provide incentives for common organisation to the
chain's actors and to establish procedures, strategies and coordination mechanisms that can allow an
effective functioning of theses associations and alliances.

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2.4 Production, post-harvest and marketing activities of the date VC
Narrowing down to the specific activities that take place within the date VC, inefficiencies and
limitations are identified in production, post-harvest and marketing processes. These inefficiencies and
limitations hinder the chain's performance and role in contributing to income, employment and food
security.
Regarding production, date cultivation is traditional, with low productivity and unable to address
properly pest and disease outbreaks (Ba-Angood, 2015). In addition, date trees are randomly cultivated,
while agricultural pre-harvest practices such as fertilisation and the usage of agro-chemicals are either
poorly (Republic of Yemen, 2013), or excessively (ESCWA, 2013) implemented. Moreover, with a lack
of knowledge, technology and inputs that could promote yields in terms of quantity and quality
(Republic of Yemen, 2013), date production in Yemen fails to realise in full its marketing potentials.
Additionally, date farmers are constrained in their production and income prospects by insufficient
farm management practices (Mahmoudi et al., 2008) and by the absence of high yielding, resistant and
sustainable varieties (Republic of Yemen, 2012). All these limitations depict an inefficient, non-
competitive and non-sustainable date cultivation. Thus, the development of the date VC is critical to
promote the production capacities of the date farmers, according to the market requirements and these
limitations that they face in their production.
As far as the post-harvest activities that take place within the chain are concerned, they are
characterised by inefficiencies in terms of the relevant actors’ knowledge and established processes.
More specifically, inadequate packaging, sorting/grading, storage and transportation practices are
prevailing (Mahmoudi et al., 2008). Despite the fact that Yemen dates intrinsically bear high quality
and taste characteristics, the aforementioned inefficiencies result in low prices and a poor marketing
image for the product. Furthermore, these inefficiencies in handling and storing of dates also result in
high post-harvest losses (Republic of Yemen, 2012). Overall the post-harvest activities that take place
within the chain impact negatively the actors' income and the competitiveness of the product.
Additionally, high post-harvest losses limit the chain’s role in providing food to Yemen’s population.
All these imply that the development of the date VC has to incorporate interventions that support the
adoption of proper packaging, sorting/grading, storage and transportation practices within the chain, by
providing the chain’s actors with relevant knowledge, technology and processes.
Finally, marketing is also an area for improvement for the actors of the date VC. More
particularly, there is a lack of adequate marketing knowledge, channels and systems for the chain's
actors and specifically for the farmers (Ba-Angood, 2015). As a result, market opportunities remain
untapped, as decisions on date production/handling are taken in isolation with market requirements.
Therefore, the date VC's development has to facilitate the chain's actors connection with markets, with
a focus on small-scale farmers, by promoting their capacity to incorporate market intelligent in their
activities.

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3. Impact of the conflict on the date VC
This chapter analyses how the ongoing conflict exacerbates further date production and distribution. In
doing so, the chapter discusses the date VC's generic development orientation in mitigating the
conflict’s impact. Thus, chapter 3 is organised as following: Section 3.1 examines aspects of Yemen's
economy that are further negatively affected by the conflict and how they impact the date VC. Section
3.2 analyses how the conflict and the availability/usage of natural resources in Yemen are intertwined
and explains how this affects the date VC. Further, section 3.3 presents the impact of the conflict on the
VC’s markets, as well as on the transactions that take place within it. Finally, section 3.4 analyses how
the conflict deteriorates further the production, post-harvest handling and marketing of the product.
3.1 Impact on the economy
The ongoing conflict in Yemen has severely impacted the already problematic national economy,
causing several negative effects for date VC's performance and competitiveness. More specifically, the
conflict has caused high inflation rates and the depreciation of Yemen's national currency, the Rial. In
doing so, the conflict has caused a reduction in Yemeni consumers’ purchasing power and a reduction
in the demand for domestic and imported agricultural products, as prices have increased (FAO, 2015).
This decrease in demand affects negatively the date VC, as it causes a decrease in market sales and thus
revenues and income for all the actors involved in it. The latter implies that before implementing any
intervention, it is critical to perform a thorough analysis of the date market in Yemen, in order to plan
the VC's development according to the market’s demand. In fact, as literature (Parker, 2008, Hiller et
al., 2014, Sewando, 2014) suggests the market is the key driver of any development intervention,
dictating the price, the demanded quantity and quality, as well as the delivery-time of the product. This
implies that thorough knowledge of these characteristics of the market is required when planning the
date VC's development. Moreover, the depreciation of Rial constitutes the imports of inputs such as
fertilizers, pesticides, etc. more expensive. Thereby, production costs increase for the date farmers,
which also contributes to the reduction of their income. This implies that it can be beneficial for the
development of the date VC to identify alternative and/or locally produced agri-inputs and facilitate
their adoption in the chain’s activities. Further, a positive effect bearing beneficial potentials is that the
depreciation of Rial increases the competitiveness of the date products in international markets, which
opens new windows of income and modernisation opportunities for the chain. However, in conflict-
affected settings it is more feasible to develop VCs by focusing on domestic markets, leaving the
exploration of opportunities on an international level for the long-term (Hiller et al., 2014). Another
economic effect of the conflict in Yemen is that it has severely decreased employment opportunities,
specifically for young people. Such a lack of employment opportunities in Yemen fuels further
conflicts and creates social tensions within the country (UNDP, 2013). This impacts negatively the
stability of the country and hence, the socio-economic environment that the chain is embedded in.
Given that according to literature (Cramer, 2010) youth unemployment is strongly correlated with the
eruption of conflicts, it is critical to target youth employment through the date VC’s development.
However, targeting should be carried out with precaution, since it can cause stigmatization and
exacerbate further disputes and tensions between individuals/groups (Felton, 2009).

11
3.2 The conflict and natural resources nexus
Water, fuel and electricity in Yemen are scarce, a situation that has deteriorated further after the
eruption of violent conflicts (FAO, 2015). This implies that activities that take place within the date
VC, which rely on the usage of such resources, are negatively affected, impacting thus negatively the
whole function and performance of the chain. Furthermore, the control over these resources has been
the subject of conflicts and tension between different groups within the country (UNDP, 2013, BTI,
2014). Hence, the activities that take place within the date VC, along with the conflicts between
different groups over the control over these resources compose a complex nexus. The power dynamics
within this nexus are assumed to determine the access to resources for the date VC. This implies that
the chain’s function and performance rely on fragile balances. Therefore, planning and implementing
any processes or strategy that determine the access to these resources within the date VC has to be
carried in a manner that is mutually acceptable from all stakeholders and does not disturb community
level balances.
3.3 Impact on markets and transactions
Markets and transportation of products such as dates are negatively affected by the ongoing conflict in
Yemen. More specifically, the conflict has caused physical damages to shops and reduced the
movement of goods between different regions to a minimum (FAO, 2015). As a result, products lack of
sufficient access to markets. Specifically for a perishable commodity such as the date, this raises
serious implications; this lack of access to markets implies that the date products that could not be
transported and sold in proper time pile up and rot. This limits incomes for all actors of the chain and
their economic sustainability, as well as the VC’s contribution to food security. Therefore, it is critical
to strengthen the date VC and its actors with knowledge, processes and technologies/facilities that
allow a proper handling of the product, in cases it has to be stored for longer than usual periods.
Moreover, existing literature provides some useful insights into the functioning of markets in conflict-
affected settings. As literature suggests (Peschka et al., 2011), conflict reinforces the degree of
informality of the transactions that take place within a conflict-affected private sector. For the case of
Yemen's date VC this implies that transactions during the conflict are assumed to be carried out more
through informal networks and depending on the trust levels between the various actors. As a result the
enforcement of contracts, as well as the monitoring of compliance with established grades and
standards systems relies on trust and power relationships between the various actors of the chain. In
addition, kinship and identity is a major determinant of the nature and outcomes of economic
relationships within a conflict-affected private sector. Hence, actors of the date VC that belong to
different social groups are likely to establish less and more fragile economic linkages. All these imply
that it is critical to develop the date VC, under the orientation of promoting agreements / transactional
channels between actors, which have the potentials to ensure effectiveness and transparency in
transactions.
3.4 Impact on date production and post-harvest

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The joint effects of the ongoing conflict and the shortage of fuel and water have severely affected
production, handling, storage and transportation of agricultural products such as dates in Yemen. More
specifically, as FAO (2015) reports violent conflicts have disrupted agricultural activities such as land
preparation, irrigation and weeding. This in combination with the fact that the conflict has in general
decreased field activities allow the assumption that date's production has been reduced, impacting
negatively income within the chain, as well as the chain's contribution to the provision of food within
the country. Moreover, the availability and distribution of farm inputs has been decreased due to the
conflict, impacting also negatively agricultural activities. All these imply that it is essential to develop
the date VC, with an eye on ensuring that the aforementioned activities take place effectively within the
chain, as well as that the farmers have sufficient access to farm inputs. Furthermore, power outages and
the shortage of fuel have impacted the post-harvest handling, transportation and storage of agricultural
products (FAO, 2015). For a perishable product as the date, these affect negatively its marketing
potentials as due to inadequate handling the product faces a loss in its quality characteristics, as well as
in its shelf life. Hence, the date VC’s development has to provide the chain’s actors with access to
knowledge, technologies and facilities that can allow a less reliant on fossil fuel and electricity post-
harvest handling of the product. Additionally, it can also be beneficial to strengthen the date actors’
access to proximate markets, in order to avoid high transportation costs.

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4. Date VC development
Given the presented generic orientation in addressing the date VC’s limitations and the conflict’s
impact, this chapter presents a synthesis of findings from existing literature relevant to options for
increasing the chain’s performance and role. Thus, chapter 4 is organised as following: Section 4.1
presents some key concepts in VC development and formulates a framework upon which potential date
VC development interventions can be planned and implemented. Based on this framework, section 4.2
presents product upgrading options for the date VC. Section 4.3 discusses options for upgrading the
processes that take place within the date VC. Section 4.4 analyses upgrading options for the network
structure of the date VC. Finally, section 4.5 identifies upgrading options for the governance form of
the date VC.
4.1 Framework for date VC development
Existing literature provides some key concepts relevant to agricultural VC development. Staring from
the actors and the activities that take place within a chain, an agricultural VC according to KIT & IIRR
(2010), modified for date production/handling/marketing, can be mapped as depicted in figure 4.1.

14
Figure 4.1 Agricultural VC
Farmers
Date fruits Cash Information/services
Traders
Date fruits Payment Information
Processors
Processed dates Payment Information/services
Retailers
Processed dates Cash Information
Consumers
Source: KIT & IIRR, 2010 and own modifications
As figure 4.1 depicts, the date farmers engage in transactions with traders. Before engaging in these
transactions, the farmers produce the date fruits by using land, variable inputs, and technology, as well
as labour deriving usually from their families and hired workers. In some cases, the farmers store
and/or post-harvest handle the date fruits before selling them to traders. In doing so, they add value to
the date fruits. Generically, value added refers to the enhancement of the quality of the product, its
delivery time and flexibility, its innovativeness, its handling and packaging, etc. When selling the date
fruits to traders, there is an exchange of date fruits for cash. Farmers and traders exchange also
information relevant to the characteristics of date fruits in terms of demanded/supplied quantity and
quality, as well as bargain prices and determine delivery times. In many cases, farmers are dependent
on traders for accessing information on market requirements and/or training, technology and inputs for
employing in their production. After acquiring the date fruits, the traders store and transport the date
fruits to processing facilities. Thus, traders and processors engage in transactions for exchanging date
fruits for payment. In these transactions, the traders and processors also exchange information relevant

15
to the characteristics of the date fruits in terms of demanded/supplied quantity and quality, as well as
bargain prices and determine delivery times. The processors employ post-harvest handling in the date
fruits, such as sorting, grading and packaging. In doing so, they add value to the product, enabling it to
take its end-market form. They then sell the end product to retailers and they receive payment for this
transaction. The processors and retailers exchange also information relevant to the characteristics of the
date fruits in terms of demanded/supplied quantity and quality, as well as bargain prices and determine
delivery times. Being closer to the end-market, retailers in some cases provide training and technology
to processors, which they can employ in their post-harvest handling activities. Finally, retailers sell the
end product to consumers. Through this transaction they receive cash for exchange, as well as
information relevant to the consumers' demand characteristics. The latter highlights the retailers' pivotal
role in transmitting consumer demand information through the chain, as they are the actor being closest
to the market.
Given these, a framework can be formulated upon which potential date VC development
interventions can be planned and implemented. As literature (Trienekens, 2011) suggests, VC
development interventions can target the upgrading of the product(s) produced within the chain, the
upgrading of the processes that take place within the chain, the upgrading of the network structure of
the chain and finally, the upgrading of the governance form of the chain. Following, table 4.1 provides
an overview of this framework, modified for the case of the date VC, upon which specific upgrading
options will be discussed.
Table 4.1 Date VC development framework
Upgrading level Upgrading options
Product Introduction of new and innovative date products / by-products and product
differentiation. Enhancement of the intrinsic characteristics of the existing date
product, in terms of its quality, composition, packaging, etc.
Processes Optimisation of date production and distribution activities; introduction of new
technologies/processes/facilities for production, post-harvest handling,
transportation and marketing of the date product.
Network structure Enhancement/building of linkages between the date VC’s actors.
Governance form Optimisation of the coordination of the activities/processes and linkages within
the date VC.
Source: Trienekens, 2011 and own modifications
4.2 Product upgrading

16
Existing literature provides various product upgrading options for the date VC. These options refer to
increasing the quality of the dates and enhancing their extrinsic characteristics, as well as to product
differentiation. All these options are of significant importance for the competitiveness levels of the VC,
given the limited competitive status of the existing date product.
As far as the upgrading options for the quality of the dates are concerned, they refer to increasing
the access of farmers to improved cultivars, which are adapted to local climate’s conditions, as well as
to enhancing through the provision of capacity building the production skills of the farmers, along with
their promoting their dedication in their production (Mahmoudi et al., 2008). In doing so, the date
farmers will face less risks in their production and increase the competitiveness of their product.
Regarding the upgrading of the extrinsic characteristics of the dates, they refer to introducing
product certification by adopting organic cultivation, by adjusting the production according to
established safety standards, as well as by establishing fair trade or other socially/environmentally
sustainable production schemes. All these increase the value of the product, allowing it to enter niche
markets and achieve higher prices (Trienekens, 2011). In fact the demand for such sustainable-
produced (Hiller et al., 2014) and certified agri-products (Bijman et al., 2011) is increasing globally,
something which is particularly evident for the case of organically produced dates (Mahmoudi et al.,
2008). These imply that there are market opportunities for date farmers and processors to tap, by
adjusting their activities according to the imperatives of organic cultivation, fair trade schemes, etc.
However, certification comes with a warning as it bears high costs in its implementation (Trienekens,
2011), which can hinder the establishment and threaten the sustainability of such schemes. This implies
that before implementing the aforementioned production schemes within the date VC, it is critical to
conduct a feasibility study of introducing them. Such feasibility study has to incorporate an assessment
of the capacity of governmental and non-governmental institutions in Yemen to certify agri-products,
given their weakened role due to the on-going conflict.
In reference to product differentiation, literature (Mahmoudi et al., 2008) identifies that dates can
be marketed as soft or dry fruits, while there are a plethora of date by-products such as cakes and
cookies, cereals, breads and puddings, as well as ice cream. In addition, dates can be processed into
syrup and juice, as well as paste, cubes, spread, powder and jam, or vinegar and alcohol. Furthermore,
dates can be processed into animal feed, as well as chocolate (Ashraf and Hamidi-Esfahani, 2011). In
domestic markets where there is an existing and growing demand for such products and by-products,
the date VC’s actors can leverage simultaneously these multiple market opportunities by introducing
relevant product differentiation within the chain.
4.3 Process upgrading
The second pillar for the date VC’s development is the upgrading of the processes relevant to date
production, post-harvest handling and marketing. Overall, interventions that target the optimisation of
processes are significant, given the current inefficiencies in producing and post-harvest handling the
date product, as well as its low competitive status.
As presented in the section above, product certification bears significant marketing opportunities
for the date VC’s actors in agri-markets. What is more, establishing production processes that comply
with the imperatives of certification schemes is also expected to boost productivity, by improving input

17
use (Seville et al., 2011). Further, as literature (ESCWA, 2013) suggests, proper certification processes
can be implemented by contemplating an integrated strategy for enhancing product differentiation and
value addition within the chain. Additionally, it is critical to identify and evaluate market risks and
opportunities, which could orient the production of premium products and access strategies to enter
niche markets. Moreover, it is important to plan and implement proper coordination policies and
processes, which could ensure quality control and consistency in supply. It can also be useful to
complement the VC’s processes with the appropriate supporting services, sourced from the private
and/or public sector. Finally, as Seville et al. (2011) argue, before implementing any of these
interventions, it is essential to provide first relevant training to farmers, to ensure their market access
and to provide them with an understanding of the short-term limitations and the long-term benefits of
certification.
A set of processes, which their adoption can benefit the performance and competitiveness of the
chain, are the Monitoring and Evaluation (M&E) processes (ESCWA, 2013). This M&E processes can
specifically be beneficial when adopting certification schemes. Overall, M&E processes allow tracking
and evaluating the progress and performance of a chain and thereby, benefit strategic planning and
implementation of investments and interventions. In addition, M&E processes track the compliance of
the chain’s activities with standards and regulations. Useful steps for implementing rigorous M&E
processes within a chain are the identification of appropriate indicators for measuring performance and
bottlenecks, the promotion of a mindset between the chain’s actors that encourage them to keep
appropriate records, the frequent conduction of analysis of the indicators and reporting on the findings
and finally, the timely addressing of any identified deficiency. Management Information Systems (MIS)
and other software and applications can benefit the implementation of M&E processes, as they provide
a useful platform for analysing and reporting data relevant to the monitoring of activities within the
chain (Miller and Jones, 2010).
Moving to specific upgrading options for date production, as literature suggests (ESCWA, 2013)
the adoption of Good Agricultural Practices (GAP) for date production can improve the quality of the
product, promote food safety, reduce the environmental impact of production and benefit labour
conditions for hired workers. These GAP entail the efficient use of natural resources and inputs and
thereby boost productivity and promote environmental protection.
Considering these process upgrading options and the mentioned above generic orientation of the
date VC’s development, it can be beneficial to provide capacity building to date farmers relevant to
production processes that can boost quantity/quality and productivity, as well as support them in
addressing pest and disease outbreaks. Additionally, it can also be beneficial to focus on production
practices for proper fertilisation and usage of agro-chemicals. Furthermore, given conflict’s impact in
date production, this capacity building in GAP has to ensure that land preparation, irrigation and
weeding activities take place sufficiently in date production. Moreover, specific production
management practices, which are in line with GAP are the utilization of sustainable water-management
and water-saving technologies, which could allow the re-usage and recycling of water, as well as
support water-harvesting. However, specifically for water-usage, it has to be considered that the already
existing community water management practices in Yemen serve as a mean for reducing conflicts (Al-
Weshali et al., 2015). Hence, introducing any water management practices through the adaption of
these GAP within the date VC has to be in line or complement these community practices, in order not

18
to fuel further conflicts. Finally, relevant for Yemen’s environment, GAP promote the usage of solar
and wind energy, which can reduced reliance on fossil fuels and electricity, enable a sustainable
production and reduce conflicts over the usage of scarce natural resources. Thus, it can be beneficial to
introduce these GAP to the date VC by providing relevant capacity building to farmers and introducing
relevant production technologies.
A critical factor for ensuring the successful impact of the implementation of the aforementioned
production processes is the level of farmers’ involvement in the management of date production. As
literature (Faida, 2006) suggests, promoting the awareness farmers have of their production’s and the
whole chain’s performance, as well as of the characteristics of the markets are critical for increasing the
returns of any investment in the production level. This can be achieved by promoting among farmers
the implementation of record-keeping processes over production and input use, as well as over market
prices and trends. In addition, the implementation of proper grading processes within the VC and the
establishment of critical quality-control points, can also be beneficial. Furthermore, it can be beneficial
to support farmers in participating in decision-making processes regarding the modernisation of their
production; their context-related knowledge of their production and environment can be a useful input
in contemplating production-innovations, as these innovations will be adapted to the specific context of
the date farmers, rather than imposed externally.
As far as the specific upgrading options for the date’s post-harvest handling are concerned, the
adoption of Good Manufacturing Practices (GMP) according to literature (ESCWA, 2013) can benefit
the performance, competitiveness and sustainability of the VC. More specifically, GMP entail an
efficient management of natural resources and inputs in post-harvest handling the product, as well as
promote fair labour conditions in the relevant activities. In addition, they promote the nutritional value
and hygiene characteristics of the product, impacting thus positively food security and safety.
Moreover, they eliminate post-harvest losses and in doing so promote a chain’s role in contributing to
food security and improve incomes within the chain. Furthermore, their adoption reduces waste and
emission and facilitates recycling of used goods. Thereby, the adoption of GMP limits environmental
degradation caused by the chain’s activities. These GMP can be introduced by providing relevant
technical education and capacity building to date processors. Given conflict’s impact on the post-
harvest processes of the date product, capacity building in GMP can focus on handling processes that
allow the product to be stored for longer periods.
Regarding the infrastructure for post-harvest handling of dates, as mentioned above investing in
new facilities for proper sorting and grading, packaging and storage of the product can benefit the
chain. Furthermore, facilities and practices which rely on handling the product by utilizing solar and
wind energy can also benefit the chain, by consisting it less reliable on the scarce fuel and electricity
resources, as well as increase its sustainability and mitigate conflicts over scarce natural resources.
Moreover, given that optimal temperature for the date’s storage is 0o
C (Ashraf and Hamidi-Esfahani,
2011), the establishment of a cold chain for the handling/distribution of the product can boost its
quality, shelf-life and competitiveness. However, establishing such technologies is rather challenging
under Yemen's current situation, given the prevailing high fuel prices and power shortages. Therefore,
in case such cold chain is not feasible to rely on solar or wind energy, its establishment can be a long-
term goal, which might be achieved in parallel with the VC’s long-term exporting potentials.

19
Finally, in reference to the upgrading options for the date’s marketing, the adoption of a MIS can
facilitate the flow of market information within the chain and thereby, increase its performance and
competitiveness. Additionally, providing access to internet and promoting the usage of mobile phones
for the chain’s actors can provide them with invaluable market intelligence, which can increase
farmers’ bargaining power (Miller and Jones, 2010). This in combination with the provision of training
on marketing for the chain’s actors can boost the performance and competitiveness of the whole VC
and thereby, benefit significantly the market access and share of the date product. However, given the
ongoing conflict, implementing such technologies can be challenging in Yemen due to limited access to
internet. Thus, in case their adoption is not feasible, they can also remain a long-term development
target for the date VC.
4.4 Network structure upgrading
The upgrading of a VC’s network structure refers to enhancing and or building linkages within the
chain. Existing literature (Parker, 2008) suggests that intervening for these linkages relies on building
new relationships between individuals and/or firms. In conflict-affected settings, literature (Curtis et al.,
2010) suggests that network structure upgrading involves as well the restoration of systems, processes
and relationships that the conflict has disrupted. This can be achieved by opting for building linkages
with already existing institutions and actors (Hiller et al., 2014), as well as by sourcing any supporting
service and input locally if possible (Parker, 2008). Overall, intervening for building/enhancing these
relationships is a priority activity in VC development. The critical factor for succeeding in
enhancing/building effective and sustainable relationships is the trust levels between the concerned
individuals/firms. Hence, any intervention essentially focuses on promoting trust between the
concerned individuals/firms, by facilitating transparency, communication and early joint-success
(Curtis et al., 2010). Additionally, any intervention has to ensure a fair distribution of gains and risks
among the chain, in order to promote its cohesion and more specifically, to support small-holder
interests. In conflict-affected settings, these interventions that target the rebuilding of relationships and
trust between individuals and firms, as well as the distribution of gains/costs can serve also as a mean
for establishing a culture of synergy in contrast with a culture of rivalry as imposed by conflict. In
doing so, these interventions can contribute to the elimination of disputes and tensions between
individuals and communities.
Linkages within a VC are classified in vertical and horizontal. Regarding the vertical linkages
within a VC, they can be considered as linkages between individuals and firms at different levels of the
chain. Through the interdependent activities of these individuals/firms the product moves from
production to its end-market. The more efficient the transactions between these individuals/firms, the
more competitive the VC is (Sewando, 2014). The efficiency of these transactions and the effectiveness
of the VC’s vertical relationships as a whole rely heavily on information sharing between the chain’s
actors. This information is relevant to the supply and demand of the product, as well as the market
characteristics and the consumer preferences. In addition, they rely on the logistic efficiency of the
production, post-harvest handling, storage, transportation and marketing activities that take place
within the chain. This efficiency is determined by the coordination of these activities, in terms of the
strategy and the quality control systems that govern them (Bijman et al., 2011). Upgrading these

20
vertical relationships for the case of Yemen's date VC refers to improving the information sharing and
logistic efficiency that characterise them, by introducing schemes such as contract farming,
partnerships with sectoral lead firms and increased vertical integration.
As far as contract farming is concerned, it refers to the agreements different actors establish, in
order to regulate the transactions embedded in moving the product from one level of the VC to the
other. These agreements range from formal, which explicitly cover every aspect of the agreement, to
informal, which are based on interpersonal relationships/trust and do not cover explicitly every aspect
of the agreement, but are subjects of (re)negotiations (Trienekens, 2011). Typically, a contract is
established between farmers and a processing firm or a retailer/wholesaler, which creates a mutual
commitment for the farmers and the other contracting party to supply/purchase the product
respectively. The contract frequently entails the explicit terms of the planned transaction, in reference
to the quantity and quality of the product, as well as to the timing of the delivery. Additionally, the
contract in many cases entails the advancing of inputs, technical support and funding to farmers by the
other contracting party, in order to secure an effective supply of the product (Miller and Jones, 2010).
Overall, introducing contract farming is a way of building effective vertical linkages within a VC,
which offers various benefits for its actors; it provides farmers access to secure markets and prices, as
well as a connection with the market characteristics. In doing so, it supports the commercialisation of
small-scale farmers and contributes to improved livelihoods (Seville et al., 2011). In addition, it
provides a level of comfort for processors/retailers/wholesalers and promotes the establishment of long-
term relationships for the actors of the VC, based on trust. Moreover, it can facilitate the chain’s
compliance with quality standards such as certification and thereby, improves its performance and
competitiveness. Contract farming is implemented successfully when there are mutual benefits for all
parties involved in the contract, which derive from trust, synergy and reciprocal dependency. In
addition, it is successful when all parties involved are extensively aware of the risks that the production
and marketing of the product entail, as well as are informed about the quality standards that have to be
followed. Finally, the appropriate selection of partners for the contract, along with finding the right
supporting services for the VC and enabling transparency for all transactions also promote the
successful implementation of contract farming (Miller and Jones, 2010). All these are key
considerations for planning and implementing contract farming within the date VC.
Further, regarding the upgrading option of establishing partnerships with sectoral lead firms, it
can be considered a special case of contract farming. A lead firm is a powerful actor within a VC,
which due to its dominant and influential role has the capacity to pioneer change for the VC, by
promoting the chain’s production capacities and quality levels, as well as its connection with the market
(ADB, 2012). Lead firms are end buyer companies, or processors, or even lead farmers who can
demonstrate and transfer knowledge and technology to other actors of the chain. In conflict-affected
settings, the lead firm approach can contribute significantly to the development of a VC, as it can
provide leadership for innovation for managing risks imposed by conflict and for promoting the image
and credibility of the chain (Parker, 2008). Establishing partnerships for a VC’s actors with a lead firm
can be a win-win situation, since the small actors of the chain benefit from increased access to inputs,
technical assistance, funding and markets, provided by the lead firm, while the lead firm consolidates
its presence in untapped markets (ESCWA, 2013). However, introducing this lead firm approach can
yield sustainable partnerships, only when the buying practices of the lead firm are in line with

21
development objectives, such as a ensuring a fair pricing system and a consistent technical assistance to
small-scale farmers (Seville et al., 2011). For the case of the date VC’s development, these are key
aspects for consideration when screening for potential for partnerships with lead firms.
In reference to the upgrading option for enhancing a VC’s vertical integration, it regards
interventions that aim at increasing the different activities that the chain’s actors, such as the farmers,
undertake. More specifically, such interventions aim at shortening the chain, namely eliminating traders
and other middlemen, by supporting farmers to undertake post-harvest handling and marketing
activities (ESCWA, 2013). In doing so, the chain's operations are carried out in less complex setting
and therefore are more efficient and less costly. Additionally, small-scale farmers become able to
capture more value added rents and hence, increase their income. However, interventions that aim at
eliminating traders and middlemen have to be carried with precaution, since in many cases they provide
critical services to farmers that cannot be overlooked (Seville et al., 2011). Furthermore, in conflict-
affected settings such eliminations can fuel further conflicts and tensions between groups and
individuals; under the fragility that characterise such settings, any intervention that threatens the
established status quo and/or affects livelihoods and employment can be a source of conflict. In order
to cope with this, interventions that target the shortening of a VC can provide alternative employment
opportunities for these affected traders/middlemen. Overall, a successful increase of vertical integration
within a VC lies on the identification of opportunities for expanding activities and on identifying
opportunities for partnership between individuals and firms (ESCWA, 2013). Moreover, it lies on the
identification and introduction of proper technologies and value-adding activities, on accessing funds,
on providing capacity building to the concerned actors and on ensuring an appropriate organisation of
their activities (Faida, 2006).
Regarding the horizontal linkages within a VC, they are those established between the actors who
perform the same activities within the chain. Their upgrading refers to interventions that aim at
promoting cooperation between them, in contrast to considering each other as competitors (Parker,
2008). The main option for upgrading horizontal relationships within a VC is to support the formation
of farmer organisations, such as cooperatives (Parker, 2008). A farmer cooperative is an organisation
under which farmers collectively process and market their products, as well as purchase farm inputs.
The establishment and support of cooperatives offers significant benefits to farmers and to the whole
VC. A well-functioning cooperative facilitates information-sharing between its members and within the
VC. Furthermore, it improves the bargaining power of its members, by allowing them to jointly sell
their products and buy their inputs. The latter feature implies increased and more stable prices for the
cooperative’s members. This feature also implies reduced production costs, deriving from the joint
purchasing of inputs. All these translate into increased and more stable incomes for farmers. In
addition, being members of a cooperative allows its members to jointly invest in new technologies and
thereby, upgrade their production and grasp the benefits of achieving economies of scale. Moreover,
being members of a cooperative enables farmers to increase their access to technical knowledge, build
their skills and in doing so, increase the efficiency of their activities and their competitiveness
(Sewando, 2014). A very important dividend that well-functioning cooperatives also offer is that it
promotes an aggregate stable supply in terms of quantity and quality (Hiller et al., 2014). With such
feature in their supply, small-scale farmers organised in a cooperative improve their access to markets
and increase their potentials in establishing contracting agreements with lead firms, which require such

22
stability in supply (Hiller et al., 2014). Additionally, a cooperative offers its members increased access
to funding and promotes their efforts in exploring different market opportunities (ADB, 2012). Another
opportunity that cooperatives offer to their member is that they can facilitate increased vertical
integration, by enabling farmers to undertake and other activities besides producing, such as processing
and/or marketing the product (Trienekens, 2011). Further, cooperatives can safeguard their members
against the negative aspects of monopsonies, as they increase their bargaining power (Bijman et al.,
2011). They also can promote the farmers’ compliance with certification standards, as they enable
economies of scale and low transaction costs in information management (Seville et al., 2011).
Moreover, cooperatives can substitute for inadequate or missing institutional support for the VC’s
activities (Trienekens, 2011). Finally, a distinct characteristic of a cooperative is its two-fold nature; it
is a firm and at the same time a community of members (Bijman et al., 2011). Due its two-fold nature,
the cooperative has to operate in a manner that is competitive according to the imperatives of the
market, as well as in manner that is acceptable according to established social norms and traditions.
The latter implies that in order to organise date farmers into a cooperative it is critical to identify and
engage farmers that are capable or motivated to modernise their production according to the
imperatives of the market. It is also critical for the cooperative's cohesion to identify and engage
farmers that abide to the same social norms and traditions.
4.5 Governance form upgrading
Governance is defined in VC terms as the chain's coordination and the determination of power
dynamics within the chain (ADB, 2012). According to the form of governance, human, material and
financial resources move and flow within the VC and value added rents are distributed among its actors
(Trienekens, 2011). For the case of the date VC’s development, all these imply that it can be beneficial
for the chain’s performance to employ governance forms that eliminate asymmetries in information and
bargaining power, as well as minimise transaction costs and coordinate the logistics of the chain
effectively. Additionally, in case the date farmers are organised in a cooperative organisation, it is
essential to establish the proper governance form for their coordination. Before proceeding in the
examination of specific governance upgrading options for the date VC, following there are some
generic aspects for consideration relevant to employing an adequate governance form.
A VC’s governance form influences the access to finance the VC's actors have, where forms that
facilitate long-term and closely-dependent relationships between the various actors, increase such
access (Miller and Jones, 2010). Therefore, the date VC’s governance form can be beneficial to
promote agreements and incentives that target not only the short-term economic profitability of the
chain’s activities, but also long-term goals for their up-scaling and modernisation. Further, governance
also shapes the VC's production levels and in fact, governance forms that are characterised by fairness
and transparency promote the consistency and quality of production (Seville et al., 2011). Hence,
beneficial governance forms for the date VC are those that align interests, provide sanctioning of
undesired practices and eliminate opportunistic behaviors. Moreover, the governance form of a VC
influence its actors' and their activities' compliance with the imperatives of food safety and markets, as
one of its main function is to monitor and coordinate activities, as well as to enforce compliance with
regulations and standards (ADB, 2012). These imply that for the case of the date VC’s development it

23
can be useful to establish governance forms that incorporate mechanisms for monitoring/coordinating
the chain’s activities according to food safety and production standards, as well as to market
intelligence. Governance additionally determines a VC's cohesion, as another pivotal function is to
reduce disputes and tensions that take place within a chain (Rota et al., 2014). In fact, as existing
literature (Bijman et al., 2011) suggests, governance forms that provide a framework for coordinating
transactions under an existing social context allow decreased opportunistic behaviors and increased
information exchange by the parties being involved in the transactions. Therefore, it can be useful to
identify ex-ante the existing social context that the date VC is embedded in, in order to contemplate a
governance form that is based upon and complements the existing social norms and traditions. Further,
a VC’s governance form determines the chain social role, where, context-specific, innovation-driven
and inclusive in participation governance forms allow a VC to contribute to poverty reduction (ADB,
2012). These imply that it can be beneficial to employ a governance form for the date VC that is the
product of inclusive and community-level participation processes. Additionally, a governance form that
incorporates the participation of women in leadership roles within the VC offers potentials in
enhancing the chain’s development impact, in terms of contributing to gender equality, as well as to
household nutrition and education (Seville et al., 2011). Hence, it can be beneficial to promote the role
of women entrepreneurs into the governance of the date VC. Finally, a VC’s, governance dictates the
natural resource use practices that take place within the chain, by offering opportunities for establishing
an efficient and coherent management of resources (Seville et al., 2011). For the date VC’s
development, the latter implies that it is critical to employ a governance form that ensures fair and
acceptable by all stakeholders resource use patterns. Such use patterns can be contemplated by
facilitating relevant dialogue among local stakeholders and by promoting their participation in
decision-making processes.
Following, the section examines governance upgrading options, specifically for coordinating the
vertical/horizontal linkages within the date VC. As far as the upgrading governance options for the date
VC's vertical linkages are concerned, existing literature (Gereffi et al., 2005) on global value chain
theory provides a typology of different governance forms, including the factors that determine the
typology. Table 4.3 provides an overview of this typology.

24
Table 4.2 Governance options for coordinating vertical linkages within a VC
Governance
form
Complexity of
transactions
Capacity in codifying
transactions
Capacities of
supply base
Level of
coordination
Market
Low High High
Low
Modular VC
High High High
Relational VC
High Low High
Captive VC
High High Low
Hierarchy
High Low Low high
Source: Gereffi et al., 2005
As illustrated in table 4.2, the market and the hierarchy types of governance are in the opposite sides in
terms of coordination levels. According to Gereffi et al. (2005), three context-related factors determine
which governance form is appropriate to establish within a VC, namely the complexity of the
transactions, the extent to which these transactions can be codified and the capacities of the suppliers.
The first factor refers to the degree of complexity in transmitting information on product and process
specification within a transaction. The second factor refers to the extent to which such complexity can
be addressed through codification. The third factor refers to the capacities of the suppliers in meeting
the transactions’ requirements.
Examining each governance option individually, in markets, the instrument that governs
transactions is the price. Market governance arises when the transactions that take place are not
complex, as product and process specifications are simple. As a result, the transacting parties can
codify this information on product and process specification easily, without implementing transaction-
specific investments. Moreover, suppliers can deliver the product by receiving limited input from the
buyers. These imply that when product and process specification are complex, such as the case of
exchanging products that are certified and/or products that have high value added characteristics,
market governance does not provide the proper framework for codifying and communicating the
relevant information adequately along the VC. Furthermore, the simplicity in transactions along with
the low need to uptake transaction-specific investments and supply with limited input from the
contracting partners imply that under market governance, the costs of switching to a new transacting
partner are low. Therefore, when a VC opts for long-term and closely-depended linkages, which could
increase trust levels and transparency in the transactions that take place within it, market governance
does not provide a sufficient relevant framework. Overall, market governance requires low levels of
coordination and thus, offers as a framework limited potentials and incentives for the alignment of
interests for a VC's actors, as well as for implementing coherent policies and schemes within a chain
that can contribute to economic, social and environmental development goals.
In a modular VC, the transactions that take place within it are more complex that in the case of
market governance. More specifically, these transactions require more complex information-exchange,

25
in terms of product and process specifications. As a rule, suppliers in a modular VC have the capacity
to codify easily and internally this information, as well as to supply to the buyers with limited input.
The latter implies that in a modular VC, smallholder actors might face significant challenges in
adapting to these requirements. Furthermore, all these imply that no substantial coordination is needed,
which as discussed previously, does not favor the implementation of inclusive and development-
oriented policies and processes within a VC. In addition, the fact that supplier can codify information
and supply to a great extent independently, constitute the costs of switching to a new partner once again
low. Hence, a modular VC also does not favors the establishment of long-term linkages within the
chain.
In a relational VC, the transactions that take place are complex, entailing difficult to codify and
communicate information relevant to product and process requirements. In a relational VC, transactions
are frequent and explicitly coordinated in order to meet these requirements. Furthermore, suppliers
have a high capacity to supply to buyers with limited input. The transactions that take place in a
relational VC are usually embedded in a social, ethnic and family context, which is characterised by the
spatial proximity of the actors and regulated through reputation. All these imply that relational linkages
within a VC take time to be established and entail high costs of switching to a new partner. Overall, a
relational VC offers an adequate framework for the exchange of certified and high-value-added
products, for building long-term relationships within a VC and for implementing inclusive and
development-oriented policies/processes in the chain through explicit coordination. On the contrary, a
relational VC requires highly competent suppliers, something that rules our smallholders such as small-
scale farmers and micro and small enterprises.
In a captive VC, the transactions are complex and the suppliers have low competencies.
Although, through the leadership role of large buyers, such as lead firms, transactions are codified and
suppliers offer products according to the imperatives of the markets. These imply that the suppliers are
“captive”, being fully depended on large buyers in order to access information and implement the
proper technologies and processes. In captive VCs, transactions are closely monitored and controlled
by larger buyers and therefore, there is a high degree of coordination. As a result, the costs of switching
to a new partner are high. Overall, a captive VC offers an appropriate framework for small-holders to
supply high value added products, for building long-term relationships within a VC and for
implementing inclusive and development-oriented policies/processes in the chain through explicit
coordination. However, a decisive factor for realising such outcomes is the ethical leadership role of the
large buyers and more specifically, the extend that their policies and practices promote a fair treatment
for small-holders and ensure a fair price for them (Gereffi and Fernandez-Stark, 2011).
In the hierarchy governance form there is a full vertical integration within a VC. In hierarchy,
transactions are complex and difficult to codify and suppliers with high competencies are difficult to be
found. In this case a large buyer such a lead firm decides to in-source production and distribution of the
product. In doing so, the lead firm controls explicitly all actors of the VC, by managing inputs and
outputs, by facilitating knowledge/information exchange and by channeling strategic decisions from
managers to subordinates. All these features of the hierarchy governance form consist it adequate for a
VC that produces and distributes high value added products. Additionally, hierarchy is appropriate for
ensuring the efficiency of the activities/processes that take place within a chain, as well as for ensuring
a market access for all the actors of the chain. On the contrary, in a hierarchically integrated VC the

26
lead firm establishes its agenda. This might raise implications when trying to address development-
oriented goals through the development of a VC, since in some cases the lead firm's agenda might not
be in alignment with these goals.
Considering all these, a partnership with a lead firm can be beneficial for the date small-scale
farmers, while a beneficial governance form for such vertical link can be the captive VC or the
hierarchy, or a hybrid developed upon a combination of these two types of coordination. Through such
a governance form, the small-scale producers are not excluded but rather can acquire inputs,
knowledge, skills, finance and market access that will enable them to increase their economic
performance and sustainability. In addition, through such a governance form, long-term and closely
depended relationships can be built. This will increase the efficiency of the chain, as well as promote
synergy among the involving actors. By increasing synergy and trust between the chain's actors the
employment of such governance form can contribute to the mitigation of tensions and disputes and
therefore, promote stability in communities and regions. Furthermore, such a governance form offers
potentials in increasing the VC's contribution also and to other economic, social and environmental
goals. More particularly, the explicit coordination that characterise such form enables to design and
implement policies, activities and procedures that can promote income and employment for
marginalised and conflict affect actors and communities. Additionally, the VC's role in contributing to
food security can be increased, since explicit coordination along with the lead firm's leadership can
result in increased and without significant post-harvest losses distribution of food. Moreover, the VC's
contribution to food safety can be achieved through the increased coordination and the lead firm's
leadership role in ensuring compliance with food safety standards. The VC's contribution to
environmental goals can also increase through the close coordination and monitoring/control of input
usage that this governance form offers. However, it is significant to highlight the importance of the lead
firm's leadership role in such a framework; in order for the date VC to increase its economic, social and
environmental role, the lead firm's agenda and business culture has to be in line with such economic,
social and environmental pursuits.
Finally, the section closes by discussing upgrading options for coordinating the horizontal
linkages within the date VC, namely the date farmer’s cooperative. Existing literature (Bijman et al.,
2011) provides a typology of different governance forms for a VC's horizontal linkages and factors that
determine the typology. These types of governance are the market, the community, the democracy and
the hierarchy. Following, table 4.3 provides an overview of this typology.

27
Table 4.3 Governance options for coordinating horizontal linkages within a VC
Governance
form
Coordination instruments Operational and
administrative
costs
Flexibility Capacity to solve
coordination
problems
Market Reciprocity and prices
Low High Low
Community
Goal alignment, social norms
and informal information
sharing
Low Intermediate Intermediate
Democracy
Join decision making, voice
and representativeness
Intermediate Low Intermediate
Hierarchy Control, command and rules High Intermediate High
Source: Bijman et al., 2011
The market and the hierarchy types are once again the two opposites in coordination levels. According
to Bijman et al. (2011), the number of actors, their homogeneity, as well as the complexity of
transactions determine which of the aforementioned types can be employed as the proper governance
form for horizontal integration.
Regarding the specifics of each governance type, market governance utilizes prices as the main
instrument for coordination, while individual actors’ decisions, in reference to their activities and
investments, are taken independently. The transactions that take place under market governance regard
exchanges that require easily transmittable and non-complex information sharing. All these imply that
the market governance cannot coordinate a full horizontal integration, since it does not favor joint
decision-making and action, as well as does not offer an adequate framework for complex information-
sharing.
The second type for coordinating horizontal integration, namely the community governance
utilizes existing traditions and social norms in order to coordinate decisions/actions, promote internal
trust and align the interests of the concerned actors. Due to the actors’ embeddedness in such a social
context, information exchange is favored and opportunistic behavior is minimised. Moreover, by
aligning interests between actors that share the same identity, community governance facilitates joint
learning among its members. All these features allow community governance to coordinate complex
horizontal integration, in case such integration refers to small in size and homogenous groups that do
not require a more complex coordination.

28
The third type for coordinating horizontal integration, namely the democracy governance, utilizes
models of inclusive participation, representativeness and voice-giving in order to coordinate
decisions/actions. By promoting a culture of joint ownership among the concerned actors, democracy
governance supports the alignment of their interests and facilitates information-exchange. However,
democracy governance has limitations in promoting innovation and in its adaptability levels, as well as
in its capacity to provide coordination for large in size groups. More specifically, in democracy
governance the majority rules, which in most of cases is rather conservative in terms of opting for
innovation and adapting to changes. This limitation can be addressed by employing more formal
decision making processes within democracy governance, namely by employing a mutual-adjustment
lens. Mutual-adjustment calls for closer interaction and coordination between concerned actors, as well
as for adequate exchange of ideas and views. By employing this mutual-adjustment lens, the
coordination of horizontal relationships incorporates structures that promote innovation and flexibility
in adapting to changes. Overall, democracy and mutual-adjustment governance are capable of
coordinating horizontal integration, which its complexity is at an intermediate level. On the contrary,
democracy and mutual-adjustment governance have limited capacities in coordinating large is size
groups, where conflicts of interests imposed by heterogeneity are frequent.
The fourth type for coordinating horizontal integration, namely the hierarchy governance utilizes
central decision-making and authority-legitimacy in order to coordinate decisions/actions. Under the
hierarchy governance, formal structures are employed that explicitly regulate how labour and resources
are allocated. In addition, rules, plans and control instruments are also explicitly formalized and
employed. All these enable an efficient exchange and processing of information, as well as provide a
framework for addressing conflicts of interests. Therefore, hierarchy governance is capable for
coordinating complex horizontal integration. Additionally, when higher vertical integration is needed
within a VC, hierarchy governance is more appropriate, in relevance to the other forms, since it enables
the efficient information exchange and processing, as well as the overall control and regulation that are
required for such integration. However, strengthening hierarchy within a group might contradict
existing traditions and social norms embedded in it. In doing so, increased hierarchical authority might
reduce the commitment of actors involved in the group and hence, jeopardize the group’s sustainability.
The latter implies that there is a trade-off between the benefits and limitations of employing hierarchy
and community/democracy based governance within a VC.
Considering all these, the appropriate governance form for the date farmers’ cooperative as well
as the cooperative itself can be subjects of constant development. More specifically, it can be beneficial
to start with a small in size and homogeneous group of date farmers and aim at organising them in
cooperative action. Community level participation in the planning of such cooperative can enable the
identification of farmers that have the potentials and determination to engage in cooperative action.
Through such planning processes it is critical to assess also the homogeneity of potential cooperative
members and engage those that share to a sufficient extent the same social norms and traditions.
Community or democracy or a combination of these types of governance can be employed for the
coordination of the cooperative. These forms can enable the alignment of farmers’ interests, actions and
investment plans, as well as increase their bargaining power and their access to markets. In addition, by
capitalizing on the trust and connectedness among the farmers, as well as on the traditions and social
norms embedded in it, the cooperative as a whole will face low costs in the transactions that take place

29
under it and therefore, increase its overall performance and competitiveness. As the cooperative moves
to a trajectory of innovation and up-scaling, enabled by the benefits of implementing joint and
strategically planned actions/functions, as well as of achieving organisational efficiency, it can increase
its size in order to leverage the benefits that economies of scale offer. With increased size and therefore
complexity relevant to the coordination of the transactions that take place under it, a hierarchical model
can provide then the appropriate form for the cooperative’s governance. The employment of hierarchy
governance in the cooperative can offer also potentials for more vertical integration within the date VC,
constituting it thus more connected to markets. Overall, the planning and implementation of any
governance form in the cooperative has to be carried with precaution; any governance form has to be
employed by not disturbing existing social norms and traditions. On the contrary, the governance of the
cooperative has to complement these existing norms and therefore, enrich its power in aligning
interests and mitigating conflicts. Finally, the potential process of moving into a hierarchical
governance form has to be carried with consideration of the existing power dynamics among the
members of the cooperative, in order to implement an authority structure that is acceptable by all
stakeholders.

30
5. Conclusions
The political, social and security situation in Yemen is constantly deteriorating, due to the escalation of
the conflict. Food insecurity, decreasing income and employment opportunities, as well as tensions and
disputes over the access to scarce natural resources are some of the negative effects of the conflict
within the country. Thus, Yemen is in great need for interventions that can provide food, income and
employment to conflict-affected communities, as well as for technologies and strategies that can
support a sustainable and fair management of natural resources. In order to do so, this study identifies
solutions for developing Yemen’s date VC, under a conflict-sensitive scope.
Based on the analysis of this study, the date bears significant nutritional value and holds an
important role in Yemeni diet. Hence, the support for the date production and distribution can
contribute to food security within the country. In addition, Yemen’s date is considered to be of high
quality, which constitutes it an agri-product with high marketing potentials. The promotion of the date’s
marketing potentials can boost income and employment for the date farmers and agri-entrepreneurs and
thereby, improve the livelihoods of their families and communities. Furthermore, the promotion of fair
and environmental friendly natural resource use patterns within the date VC can reduce tensions and
disputes over the access to these resources, as well as promote the chain’s sustainability. In order to
allow the realisation of these aims, this study identifies the limitations that characterise the chain and
provide options based on findings from existing literature for addressing them.
This study identifies the restrictions imposed to the VC by Yemen’s institutions, business
enabling climate, functioning of agri-markets, endowment of natural resources and infrastructure, as
well as the conflict’s impact as limitations for the chain. Additional limitations identified are the
structure of the VC, the cooperative levels of its actors and the operational inefficiencies in the chain’s
production, post-harvest and marketing activities. All these hinder the VC’s performance and its
economic, social and environmental role. Through the analysis of this study, options for addressing
these limitations and promoting the date VC’s performance and role are the upgrading of the chain’s
product, the upgrading of the processes that take place within the chain, the upgrading of the network
structure of the chain and the upgrading of the chain’s governance form. These upgrading options are
critical to focus on supporting small-holder actors such as the small-scale date farmers, as well as on
youth and women.
Given Yemen’s current critical situation and the overall limitations that characterise the date VC,
interventions for implementing these options can be useful to be prioritised and have a long-term scope.
The first step before planning and implementing any intervention is essential to be the conduction of a
thorough market analysis of the domestic date market in Yemen. The findings from this market analysis
will dictate the specific opportunities that the upgrading interventions will aim at addressing and the
specific approach that needs to be taken. After identifying the market opportunities and the approach
than needs to be followed, the second step can be the upgrading of the VC’s horizontal linkages and
more specifically, the support for the formation of a farmer’s cooperative. This cooperative
organisation can be the structure through which capacity building, access to inputs, technology and
market intelligence will be channeled to individual farmers. Moreover, within the cooperative vertical
integration can be achieved, by supporting farmers to perform value added activities such as sorting,
grading, packaging, etc. and thereby, capture value added rents. In addition, a cooperative can be the

31
channel through product and process upgrading interventions can be implemented in producing, post-
harvest handling and marketing of the date product. Through these product and process upgrading
interventions, a fair and sustainable natural resource usage can also be addressed. A critical aspect for
consideration is that it can be useful before implementing any product and process upgrading
intervention, to conduct relevant feasibility studies for ensuring their appropriateness and beneficial
implementation. Overall, the formation of a well-functioning cooperative can promote income and
employment for conflict-affected date farmers and entrepreneurs. These provided employment
opportunities can be beneficial to be focused on youth and women. Furthermore, a well-functioning
cooperative can enable the achievement of economies of scale for the date farmers and entrepreneurs,
promote the competitiveness of the date product, as well as facilitate an aggregate stable supply in
terms of quantity, quality and delivery time. A pivotal factor for ensuring such beneficial function of the
cooperative is its governance form. Hence, after intervening for supporting the formation of the
farmers’ cooperative, the next step is to contemplate and employ a proper governance form for the
coordination of its actors and their activities. The study identifies that in the initial stages,
community/democracy governance can be the appropriate type of governance for the cooperative. The
study also identifies that it can be beneficial to promote the role of women in the governance of the
cooperative. Further, by ensuring the beneficial function and performance of the cooperative, then more
targeted network structure upgrading interventions can be implemented. More specifically, the study
identifies that it can be beneficial to facilitate a partnership with a lead firm such as a large processing
company or a large retailer. The well-functioning and performance of the cooperative can advocate for
such partnership, by focusing on the established competitiveness and stable supply of the product.
However, it is essential to promote a partnership with a lead firm that its corporate agenda is in line
with the development goals that the date VC’s development will aim at pursuing. When a partnership
with a lead firm is established, it can then be beneficial to employ a hierarchical type of governance for
the cooperative, in order to coordinate adequately the more complex transactions within it, as imposed
by the higher standards that the lead firm might establish. Regarding the coordination for the
transactions between the cooperative and the lead firm, the study identifies that it can be beneficial to
employ a captive VC or a hierarchical governance form, or a hybrid between these two.
All these interventions have to be supported by the international donor community, as well as by
domestic and international private sector actors, given the impact of the ongoing conflict on the
capacities of Yemen’s institutions and state. However, the domestic institutions’ and state’s role in
supporting private sector entrepreneurial initiatives remains pivotal. Therefore, it can be useful to
leverage every opportunity for synergy and collaboration with relevant domestic stakeholders, despite
their current limited capacities to provide support. Furthermore, specifically critical for such an absence
of domestic support, the lead firm’s role in promoting the date VC’s development can be beneficial; by
providing leadership and access to resources the lead firm can mitigate the negative effects of such
institutional void.
However, given the ongoing conflict all these interventions have to incorporate solutions for
addressing security issues and unexpected breaks in their implementation. In fact, this is one of the
limitations of this study since it does not provide options for addressing security issues such as
restrictions in the movement of goods and people, as well as sudden seizures in the functioning of
markets. Thus, before implementing the recommended interventions it can be beneficial to contemplate

32
alternative options, for addressing potential implications. This planning is critical to involve the
participation of local stakeholders, since they can provide input that is context-related. In any case, the
planning and implementation of any intervention can be useful to incorporate community-level
participation, in order to ensure its feasibility and appropriateness for Yemen’s and conflict’s specific
context.
Another limitation of this study is that it does not provide specific and context-related options for
the date’s pre-harvest, post-harvest, storing, transporting and marketing activities. This implies that
before planning and implementing relevant capacity building, practices and processes within the date
VC, it is essential to be consulted by experts and domestic stakeholders that have specific and context-
related knowledge and experience in these areas. Moreover, a limitation of this study is also that it does
not provide options for specific and context-related technologies and infrastructure relevant to the
date’s pre-harvest, post-harvest, storing, transporting and marketing activities. Once again, the planning
and implementation of relevant interventions is essential to be based on the knowledge and experience
of experts and domestic stakeholders.
Finally, as discussed in this study Yemen’s date has high quality, which can constitute it
competitive in international markets. As also discussed, the demand in international markets for
certified and socially/environmentally sustainable agri-products is increasing. Therefore, there are
exporting opportunities for Yemen’s date farmers and agri-entrepreneurs, which they can tap by
supplying internationally date products with such characteristics. This study identifies the exporting
potentials of Yemen’s date VC as an area for further research.

33
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