409
The fourth pessimistic view is linked to the joint effect of policy-related
interventions and the existing (inadequate) infrastructure, which together distort
markets and discourage long-term investment in crop and market development
(Barrett 2008; Smale et al. 2012; Van Donge et al. 2012). Some scholars acknowledge that such policy distortions could have a greater negative impact on crop
production and market development than the problems associated with the development of new technologies (Smale et al. 2012).
In contrast, optimistic views on enhancing smallholder farmers’ participation
in commodity value chains revolve around ongoing efforts to promote chain
development in SSA. These efforts have primarily focused on identifying and
piloting business models to overcome specific challenges while at the same time
ensuring traceability and reducing exposure to risks such as inconsistent volume
and quality of produce. Broadly speaking, these initiatives have attempted to
address problems such as the high dispersion of producers, diseconomies of scale
among producers and poor access to information, technology and finance. Actions
that appear promising in overcoming these problems include tapping into the support of the public sector to improve market linkages among smallholder farmers
and knowledge management through local and global innovation systems (Fischer
and Qaim 2011; Kirsten and Sartorius 2002; Mojo et al. 2017; Pietrobelli and
Rabellotti 2011; Riisgaard et al. 2008; World Bank 2006).
While varied forms of business models have been piloted, the participation of
smallholder farmers in commodity value chain has persistently been low with the
exception of isolated commodities such as high-value crops for export. This low
participation is a result of the greater focus on subsidies or grants, rather than
focus on the farmers themselves, or resources from other local actors to finance
market and social development. This creates overdependence on external support
and makes the initiatives unsustainable (Humphrey 2008). Moreover, literature
citing the successful integration of smallholder farmers, such as Abdulai and
Birachi (2009) and Nhodo and Changa (2013), does not fully account for variations in commodity markets, particularly regarding the structure of the value
chain in relation to others. Consequently, factors such as the composition of
actors and their behaviour, the level of chain development, the intensity of competition and the nature of the commodity have rarely been compared. In general,
little is known about the efficacy of different business models in delivering benefits to smallholders and other actors along different value chains, implying that
drivers of success or failure are not adequately understood to generalize the
results. This chapter reviews relevant business models that have been deployed
for similar purposes in SSA, so as to draw lessons from smallholder milk and
vegetable farmers in selected countries in SSA and to guide future endeavours.
The chapter seeks to:
(i) Map the application of different models in selected commodity value chains
(ii) Assess the performance of these models as applied to commodity value chains
(iii) Make recommendations to promote the integration of smallholder farmers to
specific value chains
Integrating Smallholder Farmers to Commodity Value Chains in Sub-Saharan Africa…
The fourth pessimistic view is linked to the joint effect of policy-related
interventions and the existing (inadequate) infrastructure, which together distort
markets and discourage long-term investment in crop and market development
(Barrett 2008; Smale et al. 2012; Van Donge et al. 2012). Some scholars acknowledge that such policy distortions could have a greater negative impact on crop
production and market development than the problems associated with the development of new technologies (Smale et al. 2012).
In contrast, optimistic views on enhancing smallholder farmers’ participation
in commodity value chains revolve around ongoing efforts to promote chain
development in SSA. These efforts have primarily focused on identifying and
piloting business models to overcome specific challenges while at the same time
ensuring traceability and reducing exposure to risks such as inconsistent volume
and quality of produce. Broadly speaking, these initiatives have attempted to
address problems such as the high dispersion of producers, diseconomies of scale
among producers and poor access to information, technology and finance. Actions
that appear promising in overcoming these problems include tapping into the support of the public sector to improve market linkages among smallholder farmers
and knowledge management through local and global innovation systems (Fischer
and Qaim 2011; Kirsten and Sartorius 2002; Mojo et al. 2017; Pietrobelli and
Rabellotti 2011; Riisgaard et al. 2008; World Bank 2006).
While varied forms of business models have been piloted, the participation of
smallholder farmers in commodity value chain has persistently been low with the
exception of isolated commodities such as high-value crops for export. This low
participation is a result of the greater focus on subsidies or grants, rather than
focus on the farmers themselves, or resources from other local actors to finance
market and social development. This creates overdependence on external support
and makes the initiatives unsustainable (Humphrey 2008). Moreover, literature
citing the successful integration of smallholder farmers, such as Abdulai and
Birachi (2009) and Nhodo and Changa (2013), does not fully account for variations in commodity markets, particularly regarding the structure of the value
chain in relation to others. Consequently, factors such as the composition of
actors and their behaviour, the level of chain development, the intensity of competition and the nature of the commodity have rarely been compared. In general,
little is known about the efficacy of different business models in delivering benefits to smallholders and other actors along different value chains, implying that
drivers of success or failure are not adequately understood to generalize the
results. This chapter reviews relevant business models that have been deployed
for similar purposes in SSA, so as to draw lessons from smallholder milk and
vegetable farmers in selected countries in SSA and to guide future endeavours.
The chapter seeks to:
(i) Map the application of different models in selected commodity value chains
(ii) Assess the performance of these models as applied to commodity value chains
(iii) Make recommendations to promote the integration of smallholder farmers to
specific value chains
Integrating Smallholder Farmers to Commodity Value Chains in Sub-Saharan Africa…