Enterprise development
Stockists selling leaf meal prepared from Leucaena leucocephala, a fodder shrub in Tanga, Tanzania. Photo: Steven Franzel
Overview
The development of cooperatives, producer associations, and other types of smallholder enterprises is often a critical element for linking the poor to higher-value markets for products derived from agroforestry. For many, the appeal of smallholder enterprises lies in their perceived ability to combine economic objectives with environmental and social objectives, such as sustainable resource management, improved local safety nets, and increased influence over political processes.
In many parts of Africa, Southern Asia, and Latin America, recent changes in the political, legal and market environments offer possibilities for smallholder enterprise development that simply did not exist before. Reduced trade barriers provide conditions for enhanced export performance for both traditional and non-traditional products. The removal of state-backed marketing boards and production cooperatives has opened new spaces for smallholder enterprises in agriculture and forest product markets. In addition, the growth of niche markets, such as organic, certified timber, and specialty fruits, can offer incentives for engagement with smallholders in business endeavor. However, relatively little is known about the capacities of these enterprises to engage effectively in increasingly complex market environments, while at the same time deliver sufficient benefits to their members.
Evidence suggests that the development of viable smallholder enterprises requires significant levels of support from development agencies over many years. Research at ICRAF aims to better understand the opportunities for development interventions to more efficiently and effectively support the viability of smallholder enterprises.
Research questions
The overall research question we address is: How can rural enterprise development better contribute to developing value chains and strengthening livelihoods for the poor and particularly women?
More specifically, we are concerned with:
- What are the key marketing interventions for helping farmers improve returns from agroforestry enterprises and improve smallholder competitiveness? How should the interventions be sequenced?
- What are the opportunities and constraints of linking smallholders directly to traders and agribusinesses versus promotion of cottage industries?
- What improved strategies can be designed to improve the organization and development of collective enterprises (e.g. cooperatives), thus allowing for more effective service provision to the rural poor, and for higher levels of competitiveness of these enterprises in local, regional, and international markets.
Key Partners
Africa
- East Africa Dairy Development Project (EADD), Kenya
- Heifer International, USA
- Technoserve, USA
- International Livestock Research Institute (ILRI), Kenya
- University of Ghent, Belgium
- Institut National d'Etudes et Recherches Agronomiques (INERA), Democratic Republic of Congo
- Institute of Agricultural Research for Development (IRAD), Cameroon
- 21 non-governmental organizations and community based organizations in Cameroon
- 25 non-governmental organizations and community based organizations in Democratic Republic of Congo
Latin America
- CATIE, Costa Rica
- Technoservice, USA
- Intercooperation, Bolivia office
- Swisscontact, Bolivia office
- Winrock, USA
Funding
- Bill and Melinda Gates Foundation
- US Agency for International Development (USAID)
- Belgian Development Corporation, Belgium
- International Fund for Agricultural Development (IFAD)
- Ford Foundation
Locations
- Africa: Kenya, Uganda, Rwanda, Cameroon, Democratic Republic of Congo
- Latin America: Bolivia, Peru, Brazil, Colombia
- Asia: China, Philippines
Publications
Application of transaction cost analysis to assess farmers’ evaluation of group marketing arrangements in Cameroon
Foundjem Tita, D., D’Haese, M., Degrande, A ., Tchoundjeu, Z., Van Damme, P. 2011. Farmers’ satisfaction with groupMarket arrangements as a measure of group market performance: a transaction cost analysis of non-timber forest products’producer groups in Cameroon. Forest Policy and Economics (2011) doi: 10.10.1016/j.forpol 2011.07.005
Foundjem Tita, D., Degrande, A D’Haese, M., A. Van Damme, P. Tchoundjeu, Z.,Gyau, A., Facheux, C.and Mbosso, C.2011. Building long-term relationships between producers and trader groups in the non-timber forest product sector in Cameroon. African Journal of Agricultural Research 6 (17) : 10p.
Analysis of farm timber enterprises in Kenya including technological, policy and institutional interventions to improve performance
Holding Anyonge, C.; Franzel, F.; Njuguna, P .; Oncheiku, J.2011. An assessment of farm timber value chains in Mount Kenya area: the application of the “filiere” approach to small and medium scale farm timber businesses. -- Nairobi, Kenya: World Agroforestry Centre (ICRAF) ICRAF Working Paper no. 124, 51p. [2011058] 546.26 LOP
Full Texthttp://intranet.icraf.org/downloads/publications/PDFs/WP11058.PDF
Review of the experiences in the development of certified smallholder enterprises in Latin America and the Caribbean
Stoian, D & J. Donovan. 2010. Poverty-Environment Dividends of Rural Community Enterprises: Insights from a Cross-Sectoral Study in Latin America and the Caribbean. Panama City, Panama:UNDP-UNEP Poverty and Environment Initiative.
Feasibility of small scale indigenous fruit processing enterprises in Southern Africa
Jordaan D du P S, Akinnifesi FK, Ham C, Ajayi O C 2008. The feasibility of small-scale indigenous fruit processing enterprises in Southern Africa. In: Akinnifesi FK, Leakey RRB, Ajayi OC, Sileshi G, Tchoundjeu Z, Matakala P, and Kwesiga F R. Indigenous fruit trees in the tropics: domestication, utilization and commercialization. Wallingford: CAB International.
Training farmer organizations in participatory value chain analysis (available in French)
Review of the experiences in smallholder enterprise development, with evidence from Africa, Southern Asia, Latin America and the United States
Donovan, J., Stoian, D. and Poole, N. 2008. Global Review of Rural Community Enterprises: The Long and Winding Road to Creating Viable Businesses, and Potential Shortcuts. Turrialba, Costa Rica: Technical Bulletin 29/Rural Enterprise Development Collection 2, CATIE.
Opportunities and challenges for collective action to facilitate smallholders gain market share in tree seed sales
Contacts
Dr Jason Donovan, Marketing Specialist, email: j.donovan@cgiar.org
Dr Steven Franzel, Leader, Global Research Project - Tree Product Marketing email: s.franzel@cgiar.org
Website links
EcoNegociosAgricolas-- EcoAgriBusiness
Bilingual (Spanish-English) platforms to link eco-enterprises in the agricultural sector fromLatin America and the Caribbean with the rest of the world.Includes various interactive e-tools for elaborating business plans and an extensive virtual library focused on smallholder enterprise development.
The Doing Business project by IFC and World Bankprovides quantitative measures of the impact of business regulations for enterprises in 183 economies and selected cities at the subnational level.
