A survey of business models that provide opportunities for smallholders

Making the most of agricultural investment: A survey of business models that provide opportunities for smallholders

By Sonja Vermeulen and Lorenzo Cotula 
Published by IIED and FAO 
Website: www.iied.org/pubs 
2010, 106pp, ISBN 978 1 84369 774 9(Pb), free to download

Renewed interest in agricultural investment has led to a rise in large-scale acquisition of farmland and subsequently to heated debates over 'land-grabbing'. But little attention has been paid to alternative, and more inclusive, business models, such as contract farming schemes, joint ventures, management contracts, and new supply chain relationships. To address this gap, Making the most of agricultural investments examines a variety of business models and considers their opportunities and constraints, and options for scaling up.

According to the authors, none of the business models reviewed emerged as the best option in all circumstances for smallholder farmers, but the extent to which an investment shared value with local smallholders was usually more important. "Depending on its specific terms, contract farming may be a vehicle for providing support and improving market access for smallholders - or an exploitative relationship where smallholders are effectively providers of cheap labour, and expected to carry production risks," the authors explain.