Inclusive business: Constructing a model and an indicator for food and agribusiness multinational enterprises for smallholder inclusion in high value-adding supply chains

Many Food and Agribusiness Multinational Enterprises (F&A MNEs) have committed themselves to securing a sustainable supply of commodities produced by smallholders in developing economies - such as cocoa, coffee, tea and bananas - in ways that improve the livelihoods of the smallholders, while retaining a competitive advantage. However, there are several constraints that have to be overcome in order to achieve this inclusive sourcing goal. F&A MNEs therefore need to review their sourcing strategies and related supply chains if they are to deliver value to smallholders, enabling them to improve their livelihoods.

This dissertation provides an answer to this sourcing challenge by constructing an inclusive sourcing model with a list of seven critical success factors (CSFs) and a sourcing indicator based on farm economics theory. Because the model with the list of CSFs as well as the indicator are theoretical in nature, they have initially been tested in case studies. The results being that the best practice cases of Indonesia and India could be conceptualized through the model and a few CSFs have been fine tuned. The applicability of the inclusive sourcing indicator was explored in cocoa certification impact case studies in Ghana and the Ivory Coast. It is recommended that measurement of livelihood improvement of smallholders in high value supply chains should include a standard integral cost price calculation.