Business models that are inclusive of small farmers.

Abstract

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.

A Design Research Business Model: A Framework Built with Brazilian Farmers

“…In their research on business model and performance indicators, Saunders, Kaye-Blake, Hayes, and Shadbolt (2007) tested several management tools in order to identify which one best fits the reality of agriculture. Vorley, Lundy and MacGregor (2009) studied the business models considered as inclusive for small producers. Poláková, Koláčková and Tichá (2015) tested three business models proposed in the Czech literature for agriculture.…”

Factors Influencing Smallholder Farmers in Supplying Organic Fruits and Vegetables to Supermarket Supply Chains in Karnataka, India

“…In farming, unfavourable weather conditions may prevent farmers from fulfiling supply contracts. This kind of situation is more common in the case of smallholder farmers because they do not have the capital, skills and knowledge to manage the adverse changes in farming (Vorley et al 2009). In the case of OF, farmers may also face uncertainty in finding an appropriate buyer.…”

“…In the case of smallholder farmers transacting small quantities, compliance, aggregate transaction and marketing costs can easily exceed the value of their transaction. Poor infrastructure and support services in developing countries tend to trigger this problem, and there is increasing evidence that smallholders are increasingly excluded from agribusiness supply chains by rising transaction and compliance costs associated with demands for a continuous supply of safe, value-added food products (Vorley et al 2009). Therefore, we might fairly consider these three dimensions to be important determinants of the market relations in which smallholder farmers engage and we can use this framework to understand the propensity of smallholder organic farmers to engage in the SMSC versus SM.…”

Which Choice of Delivery Model(s) Works Best to Deliver Fortified Foods?

“…An important but little understood driver of success and failure for food fortification and biofortification has been the range of business models (The terms business models and delivery models are used interchangeably throughout the manuscript.) (from public to private-led) and approaches adopted to promote uptake [14,15,16]. The term “business model” has been widely debated [17] but in principle has been defined as: “A specific combination of resources which through transactions generate value for customers and the organization” ([17] p 382).…”