Epsilon Archive for Student Projects

Abstract

With smallholder farmers identified as the core of several recent development programs, coupled with the very important role agriculture can play in the eradication of extreme poverty, hunger and food insecurity in the world. The aim of this paper is to identify conditions necessary for smallholder farmers to capitalise on new business opportunities emerging from the reorganization of supply chains around the world. A comparative case study approach provides views on the most favourable conditions. The research makes use of an extensive literature review on patterns and constraints to agricultural marketing in Sub- Saharan Africa to identify potential areas for intervention by different stakeholders. The main focus is on the role NGOs are playing in market-oriented smallholder agricultural development in this part of the world. Selected theories, business model frameworks, concepts and principles like stakeholder theory, transaction cost theory, the concept of collective market and Oxfams five principles of linking smallholders to formal markets are used to analyse the ability of NGO proposed business models in meeting smallholder agricultural development challenges. Empirical data for analysis was gathered from four (4) agricultural projects in three (3) different SSA countries (Kenya, Uganda and Zambia), pioneered by three different international NGOs; Swedish Cooperative Centre and FARM-Africa. Collective action was identified as the model NGOs are applying as a best option for smallholders to overcome barriers to entry into high value markets, with group characteristics, type of product and market, institutional arrangements, the role of facilitators and the external environment emerging as determinants of success for any collective action initiative. NGOs acting as facilitators are expected to have very clear exit strategy, as this is crucial for project sustainability. NGOs should concentrate more on building the capacity of smallholder farmer groups such that they are able to conduct business on their own and be able to stay in the market even if NGO support ceases.