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Contract farming (CF) agreements are presently being restructured to form part of more complex Inclusive Business (IB) set-ups. Additional instruments, alongside CF, are implemented to overcome the challenges of CF and to adapt to the policy environment in which the different stakeholders operate. This paper develops a theoretical framework that gives insight into how these complex entities are structured and operate in a developing country context. It finds that a high dependence by the offtaker in the first case study stimulates a higher level of commitment and investment by this stakeholder in the contract arrangement. In turn, this increases the asset specificity aspect, which then requires safeguards to ensure the smallholders adhere to the contractual agreement. A higher dependency in this particular study also resulted in a higher number of smallholders being engaged in the contract, requiring mechanisms to efficiently monitor and coordinate them.

This paper is part of a series of papers on inclusive agribusiness written for the “Towards a Global Research and Learning Agenda for Inclusive Agribusiness” workshop in March 2017. This issue focuses on understanding and influencing enabling policies for Inclusive agribusiness (IAB). Despite the large number of IAB initiatives, little has been done in terms of meta-analysis regarding enabling and constraining policy factors and cross country comparison. A key issue is not just the policy settings, but also the processes and platforms by which business, policy and other actors engage to transparently work on improved enabling conditions. A knowledge and learning agenda would consequently need to look at both substantive policy issues and processes.