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It is often claimed that small and intermediate urban centres are growing faster than large cities. While it is true that the average annual population growth rates of small towns and secondary cities are higher than those of large cities, many of them stagnate or even lose population. These large variations masked by aggregate statistics are directly linked to the huge diversity of small towns, and to the importance of local factors in driving urban change in different countries and regions (Satterthwaite and Tacoli, 2003). The settlements described in the chapters in this section rely primarily on agricultural production, as is often the case for small towns and large villages in low-and middle-income countries where agriculture is an important component of GDP. A key difference between dynamic growing settlements and settlements that appear to be declining in both economic and demographic terms is the relative diversity of the economic base. This, in turn, is closely linked to the nature of the crops produced in the settlement’s surrounding area and the opportunities these provide to generate added value through local processing. Thus the nature of agricultural production, the value chains dynamics it creates, and the local ability to capture some of this value and generate non-farm employment all contribute to the settlements’ trajectories.

This chapter explores these issues through the discussion of a number of interlinking themes. We start with an overview of the organisation of the flow of agricultural products, with special attention to how the nature of the crops and the operation of the value chains impact on the economic dynamics of the settlements …