CHAPTER 3

Engaging the Agribusiness
Sector in Inclusive Value
Chain Development:
Opportunities and Challenges

AUTHORS
David Tschirley
Thomas Reardon
Steven Haggblade
Thomas S. Jayne
Saweda Liverpool-Tasie
Titus Awokuse
Milu Muyanga
Michigan State University

Anne Wangalachi
Grow Africa Initiative

Austin Makani
Southern Agricultural Growth Corridor of Tanzania (SAGCOT)

ONE

Smallholder farmers need to adapt to big changes in consumer demand and in buyer requirements (especially for safety, quality, and reliability). and must do so in the face of far more competition than in the past.

TWO

A small share, perhaps one-third, of smallholder farmers are in a position to compete effectively in this new and still rapidly changing environment.

THREE

Improved infrastructure and policy are the foundations of improved links of smallholder farmers to agribusiness. Projects and programs to actively create these links are important complements, but will have low payoff in the absence of better policy and infrastructure.

FOUR

Small and medium enterprises (SMEs) have by far the largest role in African agri-food systems and will have for many years. Smallholder farmers, and the traditional markets in which they sell, are the natural source of supply for SMEs. Therefore, strengthening the ability of SMEs to increase their scale of operation and compete in output markets is central to strengthening smallholder farmer links to agribusiness.

FIVE

Efforts to link smallholder farmers to large agribusiness will be important complements to the SME focus and will be increasingly effective as policy and infrastructure improve.