CID Research Fellow and Graduate Student Working Paper No. 53

October 2011
Sustainable Agriculture Enterprise: Framing Strategies to Support Smallholder Inclusive Value Chains for Rural Poverty Alleviation
Daniele Guidi
This research explores the determinants of sustainable agriculture value chains in the context of international development cooperation. It focuses on the hypothesis that smallholder participation in agricultural value chains can provide a meaningful approach to poverty reduction and rural development. In such a context of agri-business chains,, smallholders can contribute by implementing sustainable farming practices and, through organized collective action, also take part in the post-harvest agri-business activities downstream. In particular, the research analyzes the institutional conditions, business models and governance mechanisms with which small scale farmers can be facilitated in performing as agents in a system that fully recognizes the multi-functional role of agriculture: by adopting sustainable agricultural practices, smallholders join in an agriculture enterprise that responds simultaneously to poverty reduction, agri-food market and ecosystem services agendas. After briefly framing the principles of a sustainable agriculture paradigm and contextualizing it within the emerging field of sustainability science (section 2), a brief literature review focuses on some of the main issues and challenges faced in agricultural development that is bothinclusive of smallholders and attentive to natural resource management (section 3). An analysis of value chain business models and governance mechanisms from case study reviews follows as a core part of the paper (section 4). A conceptual framework inspired by a post-positivist science paradigm, grounded in a multi-dimensional analytical approach is introduced and leads to a classification of the chain governance arrangements that emerges from empirical evidence. A synthesis is proposed highlighting the salient features of the business models and associated governance arrangements, as well as the risk dynamics and constraints of market linkages for small farmers and their organizations. The conclusions (section 5) point to the opportunities to mediate among contrasting objectives for a growth cum equity outcome and to the policy strategies that the engaged stakeholders (donors, national governments, private sector) could use in order to reconcile the multiple dimensions of sustainable agriculture.
Keywords: sustainable agriculture, agricultural policy, smallholder farming, agri-business value chains, social entrepreneurship
JEL subject codes: Q01, Q10, Q13, Q18, Q56, Q57

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