Sourcing from Smallholders: Complex Challenge or Commercial Opportunity?
This paper adds to the body of knowledge on the commercial and development impact potential of smallholder-sourcing agribusiness models. Specifically,it quantifies the share of investment flowing to agribusinesses sourcing from smallholder farmers within the broader category of agriculture; and captures 15 investor perspectives on the commercial viability and development impact of companies that source from smallholder farmers. The research revealed that investors see great advantages of sourcing from smallholders, ranging widely, for instance, from access to greater supply volumes, to reductions in purchasing costs and higher sales prices. The most common perceived challenge of smallholder sourcing is ensuring sufficient quantity and quality of raw materials through efficient aggregation models.