TRENDS AND IMPACTS OF FOREIGN INVESTMENT IN DEVELOPING COUNTRY AGRICULTURE

were introduced to enhance productivity. Some
of them promote active collaboration between
farmers (e.g. work in groups), thus strengthening
the local community. The inclusive business
models emphasize continuous improvement
and practical training. Farmers are not viewed
as a passive recipient of training, but rather as a
source of feedback for the improvement of the
course and as potential trainers. Inclusive business
models tend to give farmers an active role to train
their peers. For example, the MBSA project has
organized farmer field schools to train a large
number of farmers to Jatropha production.
Some of the inclusive models have helped
farmers obtain certification against standards that
are demanded in export markets. For example,
the ITFC project in Ghana helped its outgrowers
become certified to the European Union’s organic
agriculture standard and the GlobalGAP standard.
Through the organic certification the farmers
have gained access to the European Union’s
market, the largest market for organic foods in
the world, where they can obtain higher prices
for their products. Similarly, the GlobalGAP
certification gives farmers access to several
large-scale retail chains in developed markets.
Thus, successful inclusive projects can help smallscale
farmers in developing countries access
international value chains and increase the value
of their products. The access is not direct in the
initial stage, in the sense that the farmers export
through the investing company. However, through
this experience the farmer organization learns
the requirements of export markets and gains
marketing skills. This gradually builds its capacity
to export directly in the longer term.
The studies suggest that in inclusive business
models the investor (alone or with partner
organizations) provides a number of public
goods and services to the local community.
These include housing, health and education. In
the Tamale case study, for example, the project
along with development NGOs built housing
facilities for teachers, renovated the school and
provided text books, nutritionally-balanced school
meals and clean drinking water. It also provided
training on health issues, prevention of bush fire,
Part 5: Synthesis of findings
protection of biodiversity and local tree species
and responsible harvesting of medicinal herbs.
In the Kascol case study the company provided
training on health. It should be noted that
the provision of public goods is not a specific
characteristic of such models. There are several
examples of large plantations and nucleus estates
that provide health, water or schooling benefits
to local people. The difference may lie in the fact
that in inclusive projects local people have more
say in the selection of services to be provided in
priority and in their management.
In addition to these tangible benefits,
inclusive business models provide other types of
advantages that may be even more important
to long-term economic and social development.
These include strengthening rural people’s selfesteem;
outgrowers expressed higher levels
of self-satisfaction, motivation and feeling of
ownership than waged workers. The surveyed
inclusive projects supported the organization
of the local community, in particular farmers
in the form of associations or cooperatives.
They strengthened existing farmer associations
and, when no such organization existed, they
facilitated efforts by local farmers to create
one. For example, the ITFC project and partner
organizations (including the Ministry of Food and
Agriculture) facilitated the establishment of the
Organic Mango Outgrowers Association (OMOA)
in Tamale. The association has some 1 200
members. In this way, inclusive business models
contribute to the development of institutional
capital. These are important assets for the
expansion of the business venture and the growth
of the local economy. The lack of effective farmer
organizations is one of the main constraints to
agricultural development in sub-Saharan Africa.
However, the studies suggest that while
inclusive business models can potentially benefit
local economic development to a larger extent
than large-scale land acquisition, the model per
se is not a guarantee that the expected benefits
will arise. More importantly, the expected positive
impacts are unlikely to arise in the short term.
Some commentators have tended to portray
inclusive business models as the ideal solution to
327