A business model describes how any given enterprise - large or small, informal or formal - does business, markets its products and sources inputs and finance.  Various types of business models link small farmers to agricultural value chains. These include traders, farmer organizations, agri-food processors, retailers, and contract farming arrangements with large buyers. 

Competitiveness of roots and tubers value chains is challenged by a lack of organization along the chain. For example, in the case of potato, many farmers sell individually and most trade goes through spot markets.

Developing Inclusive Business Models (IBM) throughout the roots and tubers sector in the selected countries is a key component of the project. This involves small producer groups, small and medium-sized enterprises (SMEs), traders, and medium and large business in the roots and tubers sector. The goal is to increase the number and monetary value of business transactions between small actors and buyers at domestic and regional levels.

Approach

• Through diagnostic mapping, identifying buyers with a potential and willingness to become active business partners for smallholder suppliers and to drive inclusive growth in the value chain.
• “Building back from business,” identifying farmer organizations (FOs) and small and medium-sized enterprises (SMEs) most capable of responding to the targeted buyers’ needs.
• Appraising existing and potential business models between smallholder suppliers and domestic and regional buyers of cassava, yam and potato – both fresh and processed products.
• Convening producers and buyers to improve business relationships, augment business transactions, identify bottlenecks and resolve ongoing disputes.
• Developing strategies for each business relationship to address the identified bottlenecks in business models. Assisting the implementation of upgraded business models, for example through training of farmer organizations and small and medium enterprises (SMEs) in business management and processing techniques.
• Carrying out activities related to inclusive business models in close collaboration with national commodity platforms, national chambers of commerce, SME associations, national farmer federations and agribusiness teams in the Ministries of Agriculture and Trade.

Examples from project countries

In Rwanda and Uganda, a diagnostic mapping of the biggest buyers of fresh and processed Irish potatoes will be undertaken, followed by selecting the best in terms of their ability to drive inclusive growth. Business models between buyers and suppliers will be appraised.

In Benin, the project will develop inclusive business models in the production and commercialization of gari and yam chips and will build capacity for producer organizations and SMEs in value addition and business management.

In Cameroon, the project will focus the inclusive business model activities on the value chains of gari and cossettes (fermented chips).

In Côte d’Ivoire, the platform approach, with multi-partite contract farming arrangements, has been identified as a promising example of an inclusive business model that improves coordination of actions among value chain actors.

In Ghana, training will take place on inclusive business models for SMEs involved in cassava value chains in order to improve their coordination and commercialization skills.

In Malawi, the project will support linkages between farmer organizations and SMEs and between SMEs and buyers of High Quality Cassava Flour (HQCF). The project will look into the possibility for cassava wet-cake supply to an existing large factory that produces HQCF.