Supply chain inefficiencies undermining smallholder farmer sustainability: Insights from a developing economy

Smallholder farming is crucial for food security and rural livelihoods in developing economies; however, productivity and income remain bound by persistent inefficiencies along agri-food supply chains. This research explores how such inefficiencies impact crop yield, quality, and farmer livelihoods, using the Sri Lankan tea smallholder supply chain as the main case. Through the use of an abductive reasoning approach, we carried out a four-step analysis that consisted of a case study evaluation, development of a causal loop diagram, an analytic hierarchy process model construction, and insights synthesis. Our findings indicate that farm input supply (33.03%) and regulation (28.2%) are the most impactful value chain functions on smallholder performance. Inadequate investment, fragmented policies, limited digitisation and scalability of extension services, shortages of labour, and restricted access to finances, among other high-priority inefficiencies, emerge as structural barriers that hold down yields and incomes and increase vulnerability to livelihoods. These results illustrate how systemic inefficiencies self-reinforce to pose long-term risks for food security and rural development. Such challenges will need targeted investment in support of regulation and digital and financial inclusion strategies in strengthening the resilience of smallholders. This study hence provides a combined empirical framework through which to analyse inefficiencies of supply chains and their various impacts on sustainability within small-scale farming systems.