The relevance of certifications and business practices in linking smallholders and large agro-businesses in Sub-Sahara Africa

Smallholders often have to certify according to international standards and produce under contract for large agro-businesses to access the export market. While mostly positive effects for the farmers have been found for contracts and certifications, little is known about the role of individual firm behavior and certifications in shaping farmer-agro-business relationships and contract success. This is what this article does. Data of 386 smallholders in the pineapple export sector in Ghana is analyzed quantitatively and enriched by a detailed case study of a large-scale agro-business in Ghana called Blues Skies. The results show that certification is an agent of change in farmer-agro-business relations. Building trust and aligning expectations of farmers and firms is important for success. Additionally, individual firm behavior matters more than taken into account in previous research. Our case study shows that three 'R', reliability, reputation and respect, constitute the basis for contract relationships that benefit all

Designing better donor strategies for inclusive business

Inclusive business has been rising on the donor agenda for about ten years. Following Prahalad's (2004) book on 'Fortune at the Bottom of the Pyramid', there has been a shift within the donor community towards promoting business as a means of achieving development objectives. Donors see a chance of leveraging additional funding for development with the prospects of creating financially self-sustainable initiatives that scale up autonomously. A growing number of firms are interested in investing into low-income markets, and in collaborating with donors for their inclusive business activities. Several donors and development banks are active in this field and collaborate via platforms such as the Inclusive Business Practitioner Hub. This policy brief argues that a careful analysis of this web of business activities is needed, before and during any donor intervention in order to find a suitable intervention strategy, that highlights risks and - lacking evidence on impacts - asks where donors can be useful in supporting inclusive business. There are several working definitions of inclusive business that differentiate this concept from related ones

Organic pineapple farming in Ghana: A good choice for smallholders?

As consumer demand for organic food grows, organic certification is increasingly promoted in many developing countries. Organic products earn a premium price on the market compared to conventional varieties. Hence, organic production is often seen as a valuable alternative for developing countries with many smallholders. Using value chain analysis for the case of the pineapple sector in Ghana and extensive data from the European market, this paper tries to shed light on the feasibility and profitability of organic small-scale production. Even though smallholders tend to have quality problems with their fruit and large farms benefit from economies of scale, production for the export market is a realistic option for both organic and conventional smallholders. The results indicate that organic production is more profitable for smallholders than conventional production and farmers collect a fair share of the price premium on the retail level. Even more, from a theoretical perspective, organic farmers should also be more likely to get into contractual relations with exporters. The results are set into perspective with relation to the debates on small versus large farms, environmental impact, and the selection effect of standards

Sustainable agriculture and food security in Africa: An overview

The development of the agricultural sector and the improvement of the food security situation are seen as essential components to sustainable development in Africa. However, continuing population growth, impacts of climate change and environmental degradation add to an unprecedented combination of pressures that threaten existing efforts and solutions. This article discusses the challenges of meeting the food security needs in a sustainable way. Due to its involvement of all three dimensions of sustainable development, economic, social and ecological, we argue that organic farming could be one possible approach to create a more sustainable agricultural system

Rural welfare implications of large-scale land acquisitions in Africa: A theoretical framework

Large-scale agricultural land acquisitions might entail substantial welfare implications for the affected rural population. Whether the impacts are indeed as devastating as the popular notion of land grabs would suggest depends on a number of factors, including the size of compensation payments, productivity spillovers on smallholders, employment opportunities for displaced farmers, and changes in food prices. We study the local welfare effects of land acquisitions in Sub-Saharan Africa using a theoretical model that captures the major channels through which land deals might affect rural African populations. We distinguish two basic scenarios. In the first scenario, the investor plants capital intensive staple food crops. Displaced farmers compete for a very limited number of jobs on the investment farm and spillovers to the remaining local farmers are rare. In the second scenario, where the investor is assumed to plant cash crops, potential spillovers through contract farming are larger and production is more labor intensive and hence provides better employment prospects. In both scenarios the crop produced on the investment farm is exported. The net welfare outcome varies with the relative strengths of the contradicting effects of spillovers, wages and food prices. We determine the minimum size of compensation payments for displaced farmers that would leave them as well off as staying on their plot

Unhappily non-cooperative: Do development research and practice ignore each other?

Successful cooperation between development researchers and development policy makers and practitioners translates into better development policies, projects and programmes. Research is relevant if it can provide meaningful input for the practitioners. At the same time, practitioners have to be willing and able to use these findings to improve their work. Through continuous communication, evaluation and feedback cycles both parties should be able to gain additional insights and improve future outcomes. But how close is reality to this ideal state of collaboration between theory and practice? Development researchers are often said to be working in ivory towers - doing research for the sake of publications with results that are hardly relevant or applicable in practice. But is this necessarily so and is it the only reason for the lack of cooperation between research and practice? What role do personal communication, time horizons and the researchers' fear of losing their academic reputation play? To answer this question, we developed two surveys, one among development researchers and one among development practitioners in Germany, asking them about the intensity and quality of cooperation and feedback linkages between research and practice. We also asked about the main obstacles and the expectations about the future of cooperation between the two groups. The questionnaires were published on the PEGNet website and contained 27 questions. The researcher questionnaire was sent to about 2000 development researchers in Germany and abroad in early 2014. Within three weeks 145 researchers answered the questionnaire. The practitioner questionnaire was distributed in 2013 (Kleemann and Böhme 2013). Although the results are not representative for the development research sector as a whole they provide some interesting insights into existing problems and what can be done about them. The results show that both researchers and practitioners are interested in cooperating more. Researchers in particular believe that better collaboration would be mutually beneficial, resulting in additional insights for their research and better development outcomes. From their point of view the current state of cooperation is unsatisfactory because of four main reasons: different interests, different time frames, poor communication and mistrust. The practitioners' and researchers' opinion on the main obstacles for cooperation coincide to a large extent, and in particular on the question of timing. Practitioners complain about the slowness of research wherefore they have to make decisions before the researchers can provide them with their findings (Bell and Squire 2014). Moreover, practitioners claim that researchers are mainly aiming at publishing their results and are therefore neglecting the applicability of their research. Hence, in order to improve the cooperation environment researchers and practitioners have to learn how to trust and respect each other, to communicate better and to find ways to handle differences in timing

Price transmission in the pineapple market: What role for organic fruit?

As consumers' demand for organic products and especially organic food grows, organic certification for tropical fruit is increasingly promoted in many developing countries. Certified organic pineapple exports only started taking off after 2005 and are rapidly increasing. The organic and conventional fresh pineapple value chains are dominated by certification standards and large multinational companies respectively. The two markets, however, still differ greatly in size. We analyze if this influences the price structure in these markets. Specifically, the paper attempts to single out the existence and direction of causality between the conventional and organic pineapple price using the European pineapple market as an example. We study spatial price transmission, i.e. the difference in prices between the markets for organic and conventional pineapple. The results indicate the dependence of organic market price movements on conventional ones. On the contrary, the conventional market is not affected by this niche market

Organic certification, agro-ecological practices and return on investment: Farm level evidence from Ghana

The recent empirical literature on economic sustainability of certified export crops shows that certification standards that enhance yields are important for improving farm revenues and farmer welfare. However, limited evidence exists on the impact of organic certification on the adoption of agro-ecological practices. In this study, we use unique farm-level data from Ghana to examine the impact of organic certification on the use of agro-ecological practices to improve environmental conditions, as well as how using these measures affect farm outcomes such as return on investment. In the former, we utilize an endogenous switching regression approach to account for selection bias due to unobservable factors. Our empirical results reveal that organic certification increases agro-ecological practice use, although from a very low starting point. Using a generalized propensity score approach, we show that there is a nonlinear relationship between the intensity of agro-ecological practice use and return on investment

Social business: A new private sector contribution to development? Reflections on opportunities, limitations, and risks

Since Nobel Peace Laureate Muhammad Yunus first began launching joint ventures with multinational corporations (MNCs) in Bangladesh, his social business concept has received international attention. What's the meaning of social business? What can it contribute to poverty reduction, and how does it foster human development? With reference to empirical findings, we illustrate how social business enterprises can create new sources of income, raise productivity and provide low-income consumers with access to products for their basic needs. Yet the findings are not suggestive of a panacea. Social purpose business rather represents a complementary approach to traditional poverty reduction strategies with its own set of opportunities, limitations, and risks. Some of the limitations could be mitigated by means of cross-sector partnerships and development partners creating an enabling environment. The mitigation of risks, however, will require a deliberate regulatory framework and rigorous monitoring and evaluation of impact

The future of funding for social enterprises

The funding of social enterprises has undergone significant transformation over the last 20 years shifting from direct grants provided by government and philanthropic foundation sources, to earned revenues from a broader range of sources. In addition, the global economic crisis in 2008 has created new challenges and opportunities for the social enterprise sector. Fiscal tightening by traditional social funding sources was exacerbated by investor wariness of investments without clear reporting transparency and impact accountability. However, the high volatility of conventional markets has led investors to consider diversification strategies and counter-cyclical investments, benefiting many types of social enterprise. This paper describes the challenges and opportunities for funding faced by the social enterprise sector post-economic crisis. It also proposes recommendations for social enterprise managers and policy makers that are intended to increase the pool of funding available to the social enterprise sector