Sustainable Development Goal 2 (SDG 2) aims to end hunger and promote sustainable agriculture by 2030. Achieving this requires the inclusion and benefit of small-scale producers in the rapidly transforming food systems. Smallholders interact with a diverse range of market actors, including traders, processors, and retailers. While prior research has focused heavily on formal contracts between large firms and farmers, these represent a small fraction of total interactions. This scoping review addresses the gap in understanding how non-contractual interactions, predominantly with SMEs, impact smallholder livelihoods. The rapid growth and urbanization in developing regions have created substantial markets and employment opportunities within food supply chains, often involving a 'hidden middle' of SMEs that constitute a significant portion of the chain but are frequently overlooked in policy discussions. These SMEs are crucial as they act as the primary interface between smallholders and markets, providing essential services and influencing the adoption of sustainable practices. This scoping review, therefore, aims to comprehensively investigate whether non-contract interactions with value chain actors improve small-scale producers' welfare in developing regions.

Existing literature extensively explores the formal contractual relationships between large firms (processors, supermarkets) and farmers, often focusing on resource provision within these arrangements. However, a significant portion of smallholder market interactions occur outside formal contracts. There's limited research examining whether non-contractual relationships, particularly with SMEs, provide resources and services to farmers and affect their livelihoods. This review seeks to address this gap by analyzing studies focusing on SMEs that do not typically engage in formal contracts with smallholder farmers.

This scoping review followed a pre-registered protocol, employing a comprehensive search strategy across multiple databases and grey literature sources. A total of 12,320 search results were screened in three phases (title, abstract, and full-text), employing a machine-learning model to accelerate initial screening. 202 studies met the inclusion criteria, primarily focusing on non-contractual transactions between small-scale producers and value chain actors (input suppliers, output market channels, and logistics providers) in low- and middle-income countries. Data extraction involved assessing study quality, focusing on methodological descriptions and justifications. Thematic analysis was employed to identify patterns and trends in the data, allowing for policy recommendations.

The review revealed that SMEs frequently provide complementary resource provision similar to that observed in formal contract schemes with large firms. SMEs, including traders, processors, and logistics companies, commonly offer services beyond their core functions. Credit provision, extension services, and input provision were common, particularly among processors and cooperatives. Supermarkets were less likely to offer credit and inputs but often provided transport arrangements. The majority (83%) of interactions between small-scale producers and value chain actors resulted in positive outcomes for farmers, including improvements in income, food security, technology adoption, and yields. Positive outcomes were more frequent in interactions involving complementary services such as transport, credit, inputs, and extension services. The provision of such services filled critical gaps for smallholders, addressing market failures and facilitating welfare improvements. Geographical variations existed, with a lower percentage of positive outcomes observed in Latin America compared to Africa and Asia. Livestock-related interactions tended to have a higher percentage of positive outcomes than those focused on crops. Facilitating conditions for positive outcomes included complementary services (capacity building, credit, market information), access to infrastructure, and a supportive policy environment. Conversely, negative outcomes were associated with capacity constraints, lack of trust, high transaction costs, non-inclusiveness, financial constraints, and market power imbalances. The review highlighted a significant gap in literature addressing gender and environmental sustainability aspects, underscoring the need for further research in these areas.

The findings challenge the conventional narrative that focuses primarily on large firms and formal contracts as drivers of smallholder welfare. This review demonstrates the significant contribution of SMEs in facilitating inclusive growth within transforming food systems. SMEs' provision of complementary services addresses critical market failures and empowers small-scale producers. The high percentage of positive outcomes in non-contractual interactions suggests that policies should consider SMEs as allies, not competitors, of governments in rural service provision. Direct government intervention might be less efficient than supporting and enabling the flourishing of these SMEs. The prevalence of positive outcomes when complemented with services highlights the importance of holistic approaches that address infrastructure gaps, capacity building, and access to credit and information. The underrepresentation of gender and environmental aspects in the literature demands further research to ensure that sustainability and inclusivity are central to food system development.

This scoping review provides robust evidence supporting the crucial role of SMEs in improving smallholder welfare through non-contractual interactions. Policies should recognize SMEs as key partners in achieving SDG 2. Future research should prioritize gender and environmental dimensions, investigate the effectiveness of emerging one-stop-shop platforms, and explore the optimal balance between public and private sector roles in supporting small-scale producers.

The review's scope was limited to English-language studies published since 2000, potentially excluding relevant research. The quality assessment of studies was general, not a full quality assessment, and the review's focus on non-contractual interactions might have inadvertently excluded some formal arrangements with smaller enterprises. The relatively limited number of studies addressing gender and environmental sustainability represents a major constraint in drawing comprehensive conclusions in these areas.