Income growth in many countries is fuelling expansion of the ethical consumer segment and creating an unprecedented opportunity for small African farmers. The challenge is how to organize these farmers to seize the opportunities being offered by the emerging market. We argue in this paper that the development of entrepreneurial perspectives on small farmers’ realities could help alleviate the current economic challenges confronting them. We suggest increased engagement between researchers and academics with producers in entrepreneurial ventures to seize these opportunities. This is new model of economic development focuses on microeconomic solutions through entrepreneurial initiatives. We believe the agricultural economics profession’s ability to engage producers in this manner will not only increase its relevance but provide needed financial resources to grow education and research programs.Ethical Foods, Farmers, African, Markets, Agricultural and Food Policy, Community/Rural/Urban Development, Consumer/Household Economics, Environmental Economics and Policy, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, International Relations/Trade, Marketing, Productivity Analysis, Research and Development/Tech Change/Emerging Technologies,

Amanor-Boadu, Vincent

English

Research Papers in Economics

AAAE Conference Proceedings (2007) 601-605 
 
Opportunities for African Small Farmers in Ethical Foods Markets: An Entrepreneurial 
Perspective 
Vincent Amanor-Boadu 
306 Waters Hall, Department of Agricultural Economics 
Kansas State University, Manhattan, KS 66506 
Abstract 
Income growth in many countries is fuelling expansion of the ethical consumer segment and creating an 
unprecedented opportunity for small African farmers. The challenge is how to organize these farmers to seize the 
opportunities being offered by the emerging market. We argue in this paper that the development of 
entrepreneurial perspectives on small farmers’ realities could help alleviate the current economic challenges 
confronting them. We suggest increased engagement between researchers and academics with producers in 
entrepreneurial ventures to seize these opportunities. This is new model of economic development focuses on 
microeconomic solutions through entrepreneurial initiatives. We believe the agricultural economics profession’s 
ability to engage producers in this manner will not only increase its relevance but provide needed financial 
resources to grow education and research programs 
Keywords: Ethical Foods, Farmers,African, Markets,  
 
Introduction 
Ethical consumption is becoming an important 
movement around the world as people become 
increasing conscious about how their consumption 
decisions and patterns affect other parts of their lives 
and society.  These changes are opening trade 
opportunities as new market segments focusing on 
ethical consumption are developed and serviced.  For 
example, the environmental movement has 
successfully nurtured and supported the transformation 
of the organic foods segment into a major and a fast 
growing industry in the US and Europe.  Similarly, the 
animal welfare groups are helping shape a new farm 
animal production system that is changing the way 
meat and other animal products are produced and 
marketed.  As these shifts in consumption occur, a 
small proportion of producers are becoming critical to 
the associated supply chains.  Niman Ranch of 
California, a producer of organic lamb, beef and pork 
products, has grown to $100 million in sales over a 
decade or so because of the the ethical consumer 
segment.  Similarly, the retailing group, Whole Foods 
Market of Texas, has been experienced consistent 
growth over the past decade based on both stock price 
and profitability.  A similar trend is occurring in 
Europe with companies such as Waitrose and 
Sainsbury expanding their natural, organic and fair 
trade product lines. The thrust of this paper is that 
African small farmers have a natural opportunity to 
participate aggressively in the growing ethical markets 
because most of their activities fit the ethical 
sensibilities of the ethical consumer.  We investigate 
the reasons why despite their proximity to some of the 
rapidly growing ethical markets, African small farmers 
are still not significant players when compared to 
South American or Chinese farmers.  The paper argues 
that leveraging the entrepreneurial orientation of 
African small farmers and working with them to 
identify and seize opportunities is fundamental to their 
capacity to participate fully in these markets.  The 
paper begins with a definition of the ethical consumer 
markets and review of the performance trends in the 
segment.  It then carves the challenges of economic 
development and participation in emerging markets 
within the context of entrepreneurship.  The paper 
ends with a proposition for the academy to develop a 
strategic initiative that engages producers in an active 
research framework to achieve outcomes that are 
beneficial to both the academy and the producers 
while contributing to a new model for economic 
development 
Ethical Consumption 
Lang and Hines (1993) identify three waves of 
consumerism: consumer choice; corporate 
accountability; and ethical consumption.  Consumer 
choice focused on the definition of product value in 
terms of its cost, seeking to maximize the quantity and 
quality of the product while minimizing the cost of Opportunities for African Small Farmers in Ethical Foods Markets: 
602  AAAE Ghana Conference 2007 
acquisition.  This continues to pervade most of the 
commodity market, with the majority of consumers 
maintaining control over their choice purely on 
tangible economic benefits and costs.  Corporate 
accountability emerged as a result of concerns about 
corporate malfeasance regarding product safety and 
similar charges.  Some consumers avoided products 
manufactured or supplied by companies they deemed 
to be crooked.  This accountability extended to 
avoiding products that violated environmental, animal 
welfare and other ethical issues.  The focus for 
choosing a product was thus not only on the tangible 
economic benefits and costs but the real and perceived 
externalities that are associated with the product. 
The ethical consumption wave incorporates merges the 
different dimensions of the corporate accountability 
wave, bringing together environmentalism, human 
rights, animal welfare, social responsibility and fair 
trade into a complex matrix for making consumption 
decisions (Tallontire et al. 2001).  For the ethical 
consumer, there is an active belief and an expectation 
that consumers can influence the production of 
products and services through their consumption 
choices.  The desired outcomes for such consumption 
choices, unlike consumer choice and corporate 
accountability waves, may not have direct (in space 
and time) effects on the consumer.  For example, by 
choosing to consume fair trade products, ethical 
consumers are affecting production decisions and 
increasing fair treatment of distant producers with 
whom they have no direct connection except through 
the human web.  Their expectation is that such a 
decision will contribute to making the world is a better 
place.  
Sustainable consumption is emerging as a more 
rigorous dimension of ethical consumption, presenting 
itself as understanding and managing demand in ways 
that achieve social, economic and environmental goals 
(Robins and Roberts, 1998). Thus, sustainable 
consumption brings into focus not only the ethical 
consumer’s desire to make the world a better place, 
but a conscious effort to ensure that both economic 
and social accounting along the supply chain of all 
products are computed accurately so that they are 
reflected in the prices consumers pay. The argument is 
that when prices reflect all costs, including accounting 
for all externalities, consumers and producers will 
make consumption and production decisions that 
create a sustainable economic and social system 
(Robins and Roberts, 1998).   
The consumption waves may be attributed to a number 
of factors including education, income and increasing 
realization of the important role of human action on 
the survival of the planet.  We know there is a 
relationship between education and income but the 
relationship between income and ethical consumption 
has been at best anecdotal (Cooperative Bank, 1992).  
However, European survey results show that there is a 
positive relationship between education level and the 
proportion of consumers who act on their awareness 
about ethical issues and purchase fair-trade products.   
This is reflected in the 37 percent increase in total 
sales of fair trade labelled products in 18 developed 
countries €831.5 million in 2004 to €1,141.6 million in 
2005.  The highest changes (sales volume) were seen 
in fresh fruits and wine.  In 2004, fair trade labels sold 
about 5,157 tons of fresh fruits and increased that by 
83 percent to 8,289 tons in 2005.  To put this growth 
in context, total fresh fruit sales under fair trade labels 
in 2003 amounted to 1,291 tons.  There were 569 fair 
trade certified producers and producer organizations 
(in excess of one million farmers and workers) in 50 
countries in 2006, more than double the number of 
organizations in 2001 (FLO International, 2007).  An 
analysis of certification data of Fairtrade Labelling 
Organization (FLO) in as of October 2006 shows that 
Africa is lagging South America in terms of number of 
producers and producer organizations as well as 
average producers/producer organizations per 
participating country and lagging Asia in terms of 
producer organizations per participating country 
(Table 1).  
The activity of FLO is only a small part of the changes 
that are occurring in consumption and related 
decisions.  Harrison (2007) reports that there has been 
a sea change in corporate behaviour in the last decade 
or so (Table 2).  At the consumer level, there is 
movement away from price-focused purchases to 
ethical consumption that addresses issues such as 
organic, environmental protection through eco-labels 
animal welfare and organic food.  Firms are also 
shifting from merely maximizing profits to becoming 
more socially responsible by focusing on people, 
planet and profits (Elkington, 1997).  Investors are 
carefully choosing to place their resources in 
corporations and activities that support community 
development and in companies that exhibit excellence 
in corporate governance. More importantly, 
shareholder activism has increased significantly in 
recent years, almost in tandem with the increases in  Amanor-Boadu, V. 
Africa’s Food and Nutrition Challenges  603 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ethical consumption.  Finally, there is a strong 
movement to move from traditional metrics of national 
well-being such as gross domestic product to Human 
Development Index, promoted by the UNDP and even 
Gross Happiness Index, which is Bhutan’s metric of 
national well-being.   
Entrepreneurial Perspective on the African Small 
Farmers’ Situation 
The agriculture and agribusiness industries of sub-
Sahara Africa present significant comparative 
advantage in the emerging global marketplace (Wood, 
2002).  Unfortunately, the region has been relatively 
incapable of transforming its comparative advantage 
into competitive advantage to exploit inherent value.  
As a result, farmers in sub-Sahara Africa remain 
among the poorest of many working people around the 
globe.  Sanchez (2001) argues that pessimism about 
the prospects for agricultural productivity in Africa are 
unjustified because soil and climate conditions in 
many of its areas are no worse, and in some cases are 
better, than the conditions encountered in other 
tropical and sub-tropical regions of the developing 
world, where productivity is much higher and poverty 
alleviation has been sustained.  Many authors attribute 
the poor performance of sub-Saharan Africa to 
external factors such as access to technology and poor 
infrastructure (CEPA, 2002).   
While we do not disagree with the perspective that 
increased access to technological improvements 
(seeds, fertilizers, tractors, etc.) would be helpful in 
increasing productivity, we argue that where they have 
been supplied, performance has not been sustained.   
The Green Revolution efforts in the mid-1960s are 
illustrative of these attempts to address the technology 
divide problem.   
If we cast the problem with the perspective of 
entrepreneurship, then we may argue that success in 
attaining sustained productivity and income growth 
may be due to an inability to see opportunities, 
evaluate them and seize them in order to profit from 
them.  This perspective internalizes the problem and 
challenges policy makers to revisit the tools of 
economic development by altering the alertness of 
producers to opportunities in the marketplace.  The 
argument we are making is that unleashing the 
entrepreneurial spirit will reduce the hurdles of the 
Table 2: Fairtrade certified producer organizations by region (October 2006) 
Region  No. of Countries  No. of Producer Organizations Producer  Organizations/Country 
Africa 25  167  7 
South America  18  293  17 
Asia 9  89  10 
Pacific 2  6  3 
Caribbean 3  21  7 
Total 57  576  11 
Source: FLO International (http://www.fairtrade.net/by_location.html).  
Table 3: Emerging metrics of performance at different levels of the economy 
Level Metric  New  Metric  Measurement  Tools 
Consumer Price  Ethical  Consumption  Fair trade, Organic Food, Eco-labelling 
Firm  Profits  Social Responsibility  Triple Bottom Line 
Investor Capital  Socially  Responsible 
Investment 
Community Development Finance, Corporate Governance 
National  GDP  Quality of Life  Human Development Index Opportunities for African Small Farmers in Ethical Foods Markets: 
604  AAAE Ghana Conference 2007 
identified technological and infrastructural challenges 
and create new perspectives on how to leverage 
resources to sustained these farmers’ ability to 
transform their natural comparative advantage into a 
competitive advantage. After nearly two centuries of 
research and conversations about entrepreneurship, 
there still is no universally accepted definition of the 
concept.  Some look at it a self-employment while 
others look at as launching new ventures.  We believe 
entrepreneurship is broader than either of these; that it 
is a way of thinking as well as an approach to 
purposeful action (Mises, 1964).  We see 
entrepreneurship as the alertness to seeing and 
evaluating opportunities and a propensity to seizing 
the best opportunities to create desired outcomes.  We 
see it as the skilfulness in marshalling resources to 
achieve desired goals.  As a result of bearing all the 
uncertainties of their venture, entrepreneurs seek to 
earn higher than market returns by being innovative in 
the recombination of resources that create superior 
efficiencies or customer value.  Thus, the opportunities 
and their implementation are a means to an end 
defined by the entrepreneur.  The necessary and 
sufficient conditions for entrepreneurship, then, are 
innovation, uncertainty in the outcome from the 
innovation and purposeful action (Amanor-Boadu, 
2006).  Within the context of this paper, the desired 
outcome of the purposeful action dimension of 
entrepreneurship is increased wealth and wealth 
creation capacity among African small farmers.   
A Strategic Initiative 
How do we unleash the entrepreneurial spirit in the 
African small farmer economy?  The traditional 
approach is to teach producers how to increase their 
alertness to opportunity scoping (Kirzner, 1997), 
assessment capabilities (Fiet, 2004), selection and 
implementation (Schumpeter, 1954) (Figure 1).   
We have argued that as consumers become 
increasingly aware of the impacts of their consumption 
on their environment and society, they may make 
some changes in their consumption decisions.  The 
likelihood of these changes occurring is a function of 
the consumer’s education and income.  We have 
argued that the production practices of African small 
farmers place them at an advantage in meeting the 
sensibilities of ethical consumers with lower price 
elasticities.  While the well-being of the participating 
farmers in fair trade initiatives has increased in relative 
terms, are there organisational structures that may be 
implemented to enhance their wealth and wealth-
creating capacities? 
Without impugning any ill-intent, it is important to 
note that the downstream supply chains formed to 
meet the needs of ethical consumers are essentially not 
very different from the structures they purport to 
replace except returning a higher proportion of profits 
in relation to the previous situation to producers.  As 
long as producers are not responsible for optimizing 
the share of downstream operations they perform or 
control, they will not be maximizing their share of 
value created.  Therefore, there is a need to evaluate 
all embedded opportunities in the supply chain to 
extract the ones that increase producer 
competitiveness.   
The African agricultural economics academy has a 
clear role to play as a partner, a mentor and a guide in 
enhancing the alertness, assessment, selection and 
implementation capabilities of the Africa small farmer 
when it comes to emerging opportunities for which 
there is a natural comparative advantage.  The 
academy can help transform this comparative 
advantage into a sustained competitive advantage by 
perceiving these relationships as collaborative 
entrepreneurial ventures to achieve congruent goals.   
By conducting the necessary market research and 
creating the operational strategies, by organizing the 
producers and negotiating the terms of engagement 
with potential customers, the academy can initiate 
excellent new research agenda within the active 
research framework while helping the producers learn 
to be more entrepreneurial in their decisions and 
actions.  They help the producers take ownership of 
their supply chains and share the results with their 
academic partners through structured or unstructured 
arrangements.  Most importantly, the academy 
achieves insights into how to achieve development 
objectives from a microeconomic perspective and 
provide a living laboratory for training future academy 
members. 
Conclusions 
The emerging ethical consumer market presents a 
natural comparative advantage for African small 
farmers.  We know some producers have already been 
participants through the Fairtrade Labelling 
Organization and its affiliates. But we need to find 
new models of engagement that allow the agricultural 
economics academy to connect with its producer 
constituents in ways that orchestrate these efforts and Amanor-Boadu, V. 
Africa’s Food and Nutrition Challenges  605 
support wealth creation.  By exploring an 
entrepreneurial perspective of the potential 
relationship that may be forged between the academy 
and producers, we can develop excellent research and 
teaching forums while solving a persistent problem 
that has faced the academy – how to enhance the 
economic well-being of the African small farmer.   
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Amanor-Boadu, V. "Putting Entrepreneurship into 
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Cooperative Bank. Summary of Market Research. 
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Fiet, J.O. The Systematic Search for Entrepreneurial 
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FLO International. Fairtrade International: Figures. 
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Harrison, R. "Rise and Rise of Ethical Consumerism." 
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Figure 1: The entrepreneurship process 
 
 
 
 
 
 
 
 
 

Belief Formation in Ethical Consumer Groups: An Exploratory Study.&quot;

Could Africa be Like America?&quot;

Entrepreneurial Discovery and the Competitive Market Process: An Austrian Approach.&quot;

Ethical Consumers and Ethical Trade: A Review of Current Literature.

Fairtrade International: Figures.

Putting Entrepreneurship into Agricultural Economics: Research and Teaching Perspectives – Discussion.&quot;

Rise and Rise of Ethical Consumerism.&quot; Ethical Consumer.

The Systematic Search for Entrepreneurial Discoveries.

Unlocking Trade: Opportunities. Changing Consumption and Production Patterns.

Opportunities for African Small Farmers in Ethical Foods Markets: An Entrepreneurial Perspective

Opportunities for African Small Farmers in Ethical Foods Markets: An Entrepreneurial Perspective

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