IAP Insights: Smallholder as true shareholders

Javier Ayala
By on August 27, 2018

Across emerging markets we can find a great number of business models engaging with smallholder farmers as co-owners and partners in the value chain1, often referred to as “smallholders as shareholders”.

These business models benefit smallholder farmers in a number of different ways, including improving access to markets, improving access to financing mechanisms, optimizing productivity, increasing produce affordability, improving distribution channel and access to inputs and technologies. Evidently, such models can take many different forms. A more innovative variation of this type of business model occurs when several agricultural cooperatives (ACs) group together with other actors within the value chain to create a new joint venture, where member cooperatives are “true” shareholders in terms of commercial share and legal status. By owning shares, the farmers can exercise influence through their cooperatives over the venture’s activities and directly benefit from the profits, as well as capture a higher share of the added value.

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