Strange bedfellows? : big business meets small farmer

Population growth and urbanization cause an increased demand for food distributed through modern food supply chains, dominated by a handful of large international agri-businesses. Primary production, quite contrarily, is dominated by hundreds of millions of small-scale farmers in developing countries. Although big business and small-scale farmers might seem to be strange bedfellows, there are numerous situations in which they already form economic relationships. In the doctoral thesis, the focus lies on a peculiar subset of relationships, so-called inclusive business models, which consists of for-profit buying relationships with small-scale farmers in which the firm states to care about the well-being of the farmer. The thesis contains four papers. Two papers analyse the organisational structure of the economic relationship between firms and small-scale farmers. One paper takes a critical look at an often used way to measure the well-being of small-scale farmers: a food security indicator. The final paper is on coffee certification, a well-known example of an inclusive business model, and looks at its impact on the set of activities farmers rely on to make a living

Gum arabic collection in northern Kenya : unexploited resources, underdeveloped markets

Gum arabic is a resin collected from several types of Acacia tree growing most densely in arid and semi-arid lands in East Africa and the Sahel. Kenya is particularly well endowed with gum-yielding trees but exports only small amounts of gum. Methodology: A combination of descriptive livelihood and value chain analysis was used to gain insight into the socio-economic characteristics of collectors and the role of gum arabic in their livelihood. Results: The degree of poverty encountered is considerable with most collectors barely able to maintain a subsistence level. Marketed quantities of gum arabic are low, collection practices are rudimentary, and the market is severely underdeveloped. Conclusion: Thin markets, evidenced by a lack of specialised traders and the infrequency of their visits, removes incentives for increasing the quantity and quality of marketed gum arabic. Only when this situation changes will collectors be motivated to improve their current collecting and marketing practices, for which there is ample scope

Is inclusive business for you? Managing and upscaling an inclusive company: Lessons from the field

Presented in an attractive and accessible way, this publication provides readers with a valuable understanding of how agri-food markets can contribute to food security and rural poverty reduction, while still building profitable commercial relations. It aims to distil original research on incentives and mechanisms for inclusiveness, success factors and obstacles, and opportunities for scaling up successful models. Bringing together ten case studies across a wide range of commodities in East Africa, the book features numerous photos, tables and diagrams, and includes a useful ‘Lessons learnt’ chapter at the end

Is inclusive business for you? Managing and upscaling an inclusive company: Lessons from the field

Presented in an attractive and accessible way, this publication provides readers with a valuable understanding of how agri-food markets can contribute to food security and rural poverty reduction, while still building profitable commercial relations. It aims to distil original research on incentives and mechanisms for inclusiveness, success factors and obstacles, and opportunities for scaling up successful models. Bringing together ten case studies across a wide range of commodities in East Africa, the book features numerous photos, tables and diagrams, and includes a useful ‘Lessons learnt’ chapter at the end

Explaining hybrid 'personalities' in smallholder sugar cane sourcing

Purpose - The purpose of this paper is to analyse the extent to which transaction cost theory on hybrid governance structures can explain hybrid personalities observed in the South African sugar industry. Design/methodology/approach - Three governance structures used simultaneously by the same company to purchase sugar cane from small-scale growers are described in detail. One of these structures is close to a market arrangement, the other two are hybrids. The discriminating alignment hypothesis and more recent work on hybrid models are used to explain the factors driving the choice for a hybrid arrangement and determining their specific form. Factors not covered by theory are identified. Findings - At least two areas would need to be included to explain the specific form taken by the studied governance structures: production characteristics and financial constraints of the transacting parties. Furthermore, the importance of national and local regulations in affecting organizational form by determining what is and is not possible is demonstrated. Research limitations/implications - This case study highlights limitations of current theory in fully explaining the "personality" of governance structures. Future work should not shun the finer details of governance structures and their interaction with the institutional environment. Social implications - Inclusive business models are promoted as tools for poverty alleviation and economic development. Public involvement plays an important role, however, more research is required to understand its reach and leverage its full potential. Originality/value - This paper is the first to rigorously apply transaction cost theory to inclusive business models in agricultural sourcing, an area which is rapidly gaining prominence on the development agenda. It shows that a complete understanding requires going beyond curren

Inclusive Business Models in Agri-food Value Chains: What Safeguards for Whom?

International audienceInclusive business models are promoted as unique opportunities to combine profitability for firms needing reliable supply from small-scale farmers with market inclusion for those farmers. In environments with weak public institutions, such agreements may be conducive to sustainable income, yet costly or even impossible to enforce. They rely on firms willing to provide investment while being exposed to high appropriability hazards. This paper explores the relationship between investments, appropriability hazards, and safeguards based on ten African case studies. Results suggest that in environments in which commitments are hard to secure, the business model chosen is largely determined by safeguarding against side-selling

Verifying validity of the household dietary diversity score: an application of rasch modelling

The Household Dietary Diversity Score (HDDS) was developed to measure household food access, one of the levels of food security. Previous research has shown dietary diversity is related to food security. However, the specific way in which the HDDS measures food security has never been validated. Based on the results of a Rasch model on datasets from Colombia and Ecuador we conclude this indicator in its current form is not internally valid, has limited external validity only in our Colombian data, and is not comparable across cultural settings. More research is warranted into the food groups that make up the indicator as well as the recall period on which it is based

A validity assessment of the Progress out of Poverty Index (PPI) for Rwanda

Development organisations need easy-to-use and quick-to-implement indicators to quantify poverty when requested to measure program impact. In this paper we assess the validity of the Progress out of Poverty Index (PPI)TM, a country-specific indicator based on ten closed questions on directly observable household characteristics, by its compliance to the SMART criteria. Each response receives a pre-determined score, such that the sum of these scores can be converted into the likelihood the household is living below the poverty line. We focus on the PPI scorecard for Rwanda, which was validated using two national household surveys conducted in 2005/06 and 2010/11. The PPI is Specific, Measurable, Available cost effectively, and Timely available. Yet, its Relevance depends on the way it is used. Although it accurately distinguishes poor from non-poor households, making it a useful reporting tool, its limited sensitivity to changes in poverty status restricts its usefulness for evaluating the impact of development projects

Verifying validity of the household dietary diversity score: An application of rasch modeling

Background: The Household Dietary Diversity Score (HDDS) was developed to measure household food access, one of the levels of food security. Previous research has shown dietary diversity is related to food security. However, the validity of the HDDS in the form developed by the Food and Nutrition Technical Assistance (FANTA) project-12 food groups, 24-hour recall-and most frequently used by development organizations and nongovernmental organizations has never been verified. Objective: To verify the construct validity of the HDDS. Methods: A Rasch model was used to test the extent to which the HDDS meets the criteria required for interval scale measurement, using data from 1015 households in Colombia and Ecuador. Results: Different dietary patterns between Colombia and Ecuador and 2 cultural groups within Ecuador required data to be split into 3 subgroups. For each subgroup, the food groups meeting the criteria and their difficulty ranking were different. Refined indices, containing only those food groups meeting the criteria, contained 7 items in Colombia, 10 for Kichwa households in Ecuador, and 9 for migrant households. Conclusion: The indicator in its current form does not meet all criteria. Even when analyzing culturally homogenous subgroups within a small region, the components of the indicator do not form a reliable way of measuring household-level food access