The evaluation of inclusive business models for smallholder market access : two South African case studies

Abstract

Statistics South Africa has estimated the South African population at more than 55 million people. The World Wildlife Fund has estimated that, with a population growth of nearly 2% per year, the population could reach nearly 80 million by the year 2035. South Africa, with its growing population, is seeing a changing agro-food landscape in accordance with global changes. It is important to note that the South African agricultural sector takes on a form that is dualistic in nature, spread between large-scale commercial farmers and small-scale, emerging farmers. These small-scale farmers often face numerous constraints, which curb their market access. Without small-scale farmers entering the value chain, there is limited participation of smaller agro-processing organizations in the downstream value-chain. Following a description of these critical constraints faced by small-scale farmers in a country like South Africa, this dissertation focuses on a method to capture the true responses from respondents in two case studies. In the first part of the objective, the analysis focuses on value-related questions applied to different respondents in each case study. These value-related questions relate to the following: The main advantages _ The main disadvantages _ The major lessons learned _ The major challenges experienced After the value-related analysis, further analysis of the specific objectives captures the true impacts of the model and evaluates how the current constraints are eliminated. The impacts and constraints are: Impacts of participating in the agro-processing model: _ “Access to resources and knowledge _ Economic and social gains _ Environmental and health impacts” Addressing the constraints faced by the small-scale farmers: _ “Weakness of support services _ Prevailing farming structure _ Access to finance and risk management _ Producer knowledge” After studying previous literature and the current analyses, it became increasingly clear that it is important for big business to engage in transactions with small-scale farmers. Critical impacts for small-scale farmers as specified above and examined in more detail in Chapter 4 through inclusive business models will be beneficial to small and rural communities. They will improve food security on small and commercial scales, and ultimately lead to the development of agricultural land that was previously not utilized or underdeveloped. In conclusion, it can be said the proposition can be supported that a small- and medium-scale agro-processing model could be accepted as an alternative inclusion mechanism that would effectively address the constraints faced by small-scale farmers when entering high-value food markets. However, further research is recommended in this area.