Research on World Agricultural Economy

Enhancing Agribusiness Performance and Livelihood Outcomes in Fragile Contexts: A Case Study of Somalia’s Agricultural Value Chains

Ali Yassin Sheikh Ali

Faculty of Economics, SIMAD University, Mogadishu P.O. Box 630, Somalia

Mohamed Adan Ali Farow

Skillful Academy, Mogadishu BN00000, Somalia

Zeinab Abdirahman Mohamud

Faculty of Management Sciences, SIMAD University, Mogadishu P.O. Box 630, Somalia

DOI: https://doi.org/10.36956/rwae.v6i3.1853

Received: 13 March 2025 | Revised: 9 April 2025 | Accepted: 22 April 2025 | Published Online: 16 July 2025

---

Abstract

This study investigates the relationship between agribusiness performance and livelihood outcomes in fragile contexts, with a particular focus on the agricultural value chains of Somalia. By adopting a holistic framework that combines Porter’s Value Chain with the Sustainable Livelihoods Framework (SLF), this research highlights the importance of different livelihood assets—human, social, natural, physical, and financial capital—in mediating this relationship. Applying structural equation modeling to data from 400 respondents in the agribusiness value chain, the results indicate that improved agribusiness performance significantly raises incomes, food security, and resilience. The findings indicate that agricultural performance exerts a direct and substantial beneficial influence on livelihood outcomes (β = 0.396, p < 0.001), especially in enhancing income, food security, and resilience. It markedly improves livelihood assets (β = 0.714, p < 0.001), including human, social, natural, physical, and financial capital. These assets significantly affect livelihood outcomes (β = 0.495, p < 0.001) and partially mediate the association between agribusiness success and enhanced livelihoods (indirect impact β = 0.353, p < 0.001). The model demonstrates substantial explanatory power (R² = 0.682 for outcomes), hence supporting the employed frameworks. Based on these findings,, policymakers should focus enhancing agriculture performance and livelihood assets. Targeted initiatives encompass the expansion of Sharia-compliant microfinance, investment in rural infrastructure and irrigation, enhancement of extension services, and fortification of market connections. The advancement of social capital via inclusive involvement in value chains, particularly for women and youth, is crucial. Climate-resilient techniques, like soil conservation and drought-resistant crops, must be integrated into mainstream approaches. These measures are essential for attaining inclusive and sustained rural development in Somalia.

Keywords: Agribusiness Performance; Livelihood Outcomes; Agricultural Value Chains; Livelihood Assets; Food Security

---

References

[1] Nassirou Ba, M., 2016. Strategic agricultural commodity value chains in Africa for increased food: The regional approach for food security. Agricultural Sciences. 07(09), 549–585.

[2] Santana De Figueiredo, H., Meuwissen, M.P.M., Filho, J.d.A., et al., 2016. Evaluating strategies for honey value chains in brazil using a value chain structure-conduct-performance (SCP) framework. International Food and Agribusiness Management Review. 19(3), 225–250.

[3] Bailey, K., Francis, M., 2008. Managing information flows for improved value chain performance. International Journal of Production Economics. 111(1), 2–12.

[4] Staritz C. 2012. Value Chains for Development? potentials and limitations of Global Value Chain approaches in Donor interventions. ÖFSE Working Paper, No. 31, April 2012. Available from: https://hdl.handle.net/10419/98802

[5] Abdul-Rahaman, A., Abdulai, A., 2020. Farmer groups, collective marketing and smallholder farm performance in rural Ghana. Journal of Agribusiness in Developing and Emerging Economies. 10(5), 511–527.

[6] Adeyanju, D., Mburu, J., Gituro, W., et al., 2023. Impact of agribusiness empowerment interventions on youth livelihoods: Insight from Africa. Heliyon. 9(11), e21291.

[7] Adediran, O., Osabuohien, E., Silberberger, M., et al., 2024. Agricultural value chain and households’ livelihood in Africa: The case of Nigeria. Heliyon. 10(7), e28655.

[8] Choudhury, A., Ph, A., Lakiang, I., 2022. iTEAMS—an agri-business model for enhancing farmers’ income in Meghalaya. Indian Journal of Agricultural Economics. 77(3), 480–490. .

[9] Bergquist, L.F., Dinerstein, M., 2020. Competition and entry in agricultural markets: Experimental evidence from Kenya. American Economic Review. 110(12), 3705–3747.

[10] Ali, I., Arslan, A., Chowdhury, M., et al., 2022. Reimagining global food value chains through effective resilience to COVID-19 shocks and similar future events: A dynamic capability perspective. Journal of Business Research. 141, 1–12.

[11] Mishra, V., Ishdorj, A., Tabares Villarreal, E., et al., 2024. Collaboration in agricultural value chains: A scoping review of the evidence from developing countries. Journal of Agribusiness in Developing and Emerging Economies. DOI: https://doi.org/10.1108/JADEE-12-2023-0311

[12] Keshelashvili, G., 2018. Value chain management in agribusiness. International Journal of Business and Management. VI(2), 59–77.

[13] D’Hôtel, E.M., Bosc, P.M., 2011. Neither state nor market: The influence of farmers’ organizations on agricultural policies in Costa Rica. Oxford Development Studies. 39(4), 469–485.

[14] Teklu, A., Simane, B., Bezabih, M., 2023. Effect of climate smart agriculture innovations on climate resilience among smallholder farmers: Empirical evidence from the choke mountain watershed of the Blue Nile Highlands of Ethiopia. Sustainability. 15(5), 4331.

[15] Ogutu, S.O., Qaim, M., 2019. Commercialization of the small farm sector and multidimensional poverty. World Development. 114, 281–293.

[16] Kelly, L., 2020. Evidence on resilience approaches in fragile and conflict-affected states and protracted contexts. K4D Helpdesk Report 824, 6 September 2024.

[17] Otundo Richard, M., 2024. Navigating Climate Change and Environmental Degradation in Conflict-Affected Regions of Africa: Implications for Sustainable Development and Peacebuilding. 1-21. DOI: https://dx.doi.org/10.2139/ssrn.4933475

[18] Ndhlovu, E., 2025. War and conflict: Effect on african agriculture and agribusiness and prospects for industrialization. Agriculture, Autonomous Development, and Prospects for Industrialization in Africa Springer Nature: Cham, Switzerland. pp. 173–194.

[19] Cain, A., Clover, J., Cornwell, R., et al., 2004. Supporting sustainable livelihoods: A critical review of assistance in post-conflict situations. Institute for Security Studies Monographs. 2004(102), 105.

[20] Quaye, W., Dowuona, S., Okai, M., et al., 2016. Gender dimensions of decision-making on production assets and challenges facing women. Development in Practice. 26(1), 77–90.

[21] Maeder, M., Thomas, E., Villar, G., et al., 2024. Tackling gender inequality in community-based organizations. International Journal of the Commons. 18(1), 112–130

[22] Okpara, U.T., Stringer, L.C., Akhtar‐Schuster, M., 2019. Gender and land degradation neutrality: A cross‐country analysis to support more equitable practices. Land Degradation & Development. 30(11), 1368–1378

[23] Dono, G., Buttinelli, R., Cortignani, R., 2022. Financial performance of connected Agribusiness activities in Italian agriculture. Bio-based and Applied Economics. 11(2), 147–169.

[24] Hidayati, D.R., Garnevska, E., Childerhouse, P., 2023. Enabling sustainable agrifood value chain transformation in developing countries. Journal of Cleaner Production. 395, 136300.

[25] Sargani, G.R., Jiang, Y., Chandio, A.A., et al., 2023. Impacts of livelihood assets on adaptation strategies in response to climate change: Evidence from Pakistan. Environ Dev Sustain. 25(7), 6117–6140.

[26] Kumar, D., Pv, R., 2016. Value Chain: A Conceptual Framework. International Journal of Engineering and Management Sciences. 7(1), 74–77. Available from: https://www.researchgate.net/publication/325110680

[27] Thakur, N., Thakur, N., Verma, H., & Klate, A. (2023). Value Chain Analysis and Optimization in Agribusiness. In Agribusiness Management (pp. 68-84). Routledge.Available from: https://www.researchgate.net/publication/372746779

[28] Kariuki, A.N., 2018. Upgrading strategies and food security implications on smallholder farmers in Sub-Saharan Africa: A value chain review. Journal of Food Security. 6(4), 141–154. Available from: http://pubs.sciepub.com/jfs/6/4/

[29] Khadjavi, M., Sipangule, K., Thiele, R., 2021. Social capital and large-scale agricultural investments: An experimental investigation. Economic Journal. 131(633), 420–449.

[30] Lee, D.R., 2005. Agricultural sustainability and technology adoption: Issues and policies for developing countries. American Journal of Agricultural Economics. 87(5). 1325–1334.

[31] Thiele, G., Devaux, A., Reinoso, I., et al., 2011. Multi-stakeholder platforms for linking small farmers to value chains: Evidence from the Andes. International Journal of Agricultural Sustainability. 9(3), 423–433.

[32] ​Arbeláez, M. A., Higuera, S., Steiner, R., & Zuluaga, S. (2018). Protecting “sensitive” agricultural products in Colombia: A political economy approach. Coyuntura Económica, 48(1–2), 153–205 avialable at: http://hdl.handle.net/11445/3846

[33] Mishra, P.K., Dey, K., 2018. Governance of agricultural value chains: Coordination, control and safeguarding. Journal of Rural Studies. 64, 135–147.