This chapter focuses on the issue of inclusiveness in agro-industries. The 'business model' is defined as the way by which a business creates and captures value within a market network of producers, suppliers and consumers. The chapter describes a range of business models that improve the inclusiveness, fairness, durability and financial sustainability of trading relationships between small farmers and downstream agribusiness. It is argued that the chief challenge for modern agrifood businesses in working with small-scale farmers is the difficulty of organizing supply chains so as to ensure that the benefits of logistics, economies of scale, traceability and compliance with private sector standards are achieved. Despite the difficulties faced, there are sound business reasons for agro-processors, retailers, exporters and other buyers to include small farmers in the farm-to-consumer value chain. A typology of organizational models, covering models organized by the producers themselves, by the end-customer companies or by an intermediary such as a trader, wholesaler or exporter, is introduced. It is argued that evidence on benefits and impacts of the different models is still weak, and that no single modality is inherently superior for smallholders. It is argued that despite the recent trends towards increased inclusiveness, the participation of smallholders and SMEs in modern markets is still more of an exception than the rule. They identify three priorities for enhancing competitiveness and inclusiveness of smaller-scale sup pliers. The first is skills development to prepare farmers to be reliable partners and suppliers. The provision of key infrastructure services, public investments in services such as agricultural research, education and extension, and policies to maintain competitive markets, is emphasized. The third is for private sector actors to ensure that their procurement practices work to the benefit, rather than the detriment, of small-scale producers and suppliers.
Policies to shape agricultural investments and markets in favour of small-scale farmers Rasmalar and her family are part of a rice growing co-operative in Sri Lanka (2011).
Summary Motivation Around 80% of milk in Kenya is marketed informally, providing livelihoods and contributing to the food security and nutrition of low‐income consumers. Government policy, however, is focused on formalization—primarily through licensing and pasteurization—with enforcement via fines, confiscation of milk, or closing the premises of informal actors. Purpose This article seeks to better understand if, and why, Kenya’s informal milk sector and regulatory system are disconnected from one another and how the policy–reality gap might be better bridged. Methods and approach To understand the nature and performance of Kenya’s informal milk markets and their governance, we used a mix of research methods and data sources, including surveys with informal market players, and key informant interviews with key sector stakeholders. Fieldwork was carried out in Nairobi in late 2018. Findings Milk safety and quality matters to all actors in informal milk value chains. The trust‐based system used is effective in moderating behaviours and assessing and prioritizing quality and safety. Government policy is not accomplishing the stated goal of formalization: licensing levels remain low among informal actors. Pasteurization is not rewarded in the market. There is some evidence of suboptimal pasteurization processes being undertaken to satisfy regulators. There is a gap between the reality of Kenya’s informal milk sector and its regulatory system. Policy implications The regulation–reality gap manifests itself as adversarial relationships between regulators and informal actors, and unnecessary transaction costs, missing opportunities for enhancing livelihoods, food safety, and food security. New approaches should build on and consider existing approaches taken by actors in informal food markets to ensure food safety and quality. Policy‐makers should seek to communicate more effectively with informal actors and engage in more constructive dialogue on inclusive ways forward.
The article considers how policy can address the local–global within a wider commitment to food sustainability and draws on research conducted for the EU-funded GLAMUR project (Global and local food assessment: a multidimensional performance-based approach). Case study data identifies four key policy challenges for policymakers. Addressing these challenges in order to make links between current (and future) more sustainable food policy involves three phases. The first identifies processes of engagement in three spheres (public policy, the market and civil society); the second identifies points of engagement offered by existing policy initiatives at global, EU, national and sub-national policy levels; and the third builds scenarios as possible “food futures”, used to illustrate how the project’s findings could impact on the “bigger policy picture” along the local–global continuum. Connections are made between the policy frameworks, as processes and points of engagement for food policy, and the food “futures”. It is suggested that the findings can help support policymakers as they consider the effects and value of using multi-criteria interventions.
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