Beck, G. & Davies, I., 2013, The Lead-Firm Model: Connecting smallholders to high-value markets in Tanzania, Final project/program report, Oxfam.

2.1 ENABLING ENVIRONMENT

2.1.9 Value Chains and adding value to value chain components

Recommendation: 11. Strengthen exchanges among enterprises from developed and developing countries in order to accelerate knowhow transfer in both directions. Companies in developed countries may, for example, increase their understanding of other cultures and new markets.

Reference: Beck, G. & Davies, I., 2013, The Lead-Firm Model: Connecting smallholders to high-value markets in Tanzania, Final project/program report, Oxfam.

Evidence sample: in Tanzania, Oxfam adopted the ‘Lead-Firm’ Model and partnered with Katani Ltd. to improve smallholder access to markets for sisal. Katani agreed to improve the production and processing capacity of the smallholders, and committed to purchase all quality sisal fibre. Both Oxfam and Katani funded training for smallholders, while Oxfam supplied them with loans to purchase processing equipment. As a result of the project, more buyers were attracted by the new supply of fibres, farmers and processors gained significant increased income, and the local sisal value chain greatly improved with sustainable connections to high-value markets.

It is important to add, however, that the Lead-Firm Model provides many advantages, but the selected private-sector actor can monopolise supply and enforce less beneficial conditions of trade. This risk can be avoided by securing more buyers and less exclusive contracts, and providing loans directly to smallholders through an independent agent.