Sustainable Rural Entrepreneurship in the Global South

Smallholder farmers and technology

Growing population pressure, climate change and urbanization necessitate the increase of agricultural production and innovation. Horticulture by means of protected cultivation primarily for vegetables production seems promising by creating a controlled environment for light, temperature and moisture and against diseases. But there is a gap between the high-tech precision horticulture as practiced for instance in the Netherlands and the context and capacities of African smallholder farmers. On the one side high-tech large-scale greenhouse cultivation is introduced by foreign companies, management and capital, while on the other side many smallholders grapple with lack of quality inputs, lack of funding, lack of frugal small-scale technical solutions (greenhouses, irrigation systems, water provision, disease and residue treatment, monitoring soil fertility etc.), lack of infrastructure and lack of capacity.

Dutch greenhouse constructors and greenhouse entrepreneurs are highly reputed around the world with greenhouse technology that has become high-tech. The aluminium used is sharply calculated and designed, the glass is on the millimetre disposed to let in as much light as possible, the height keeps the temperature lower or warmer for a longer period according to need. The use of artificial substrate prevents diseases, the glass and the nets keep insects out. A sophisticated irrigation system, of course computerized, provides the crops with exactly the right food and fertilizer in the right time sequence, the CO2 added artificially inside the greenhouses stimulates the growth of the plants, and the last invention, artificial led lights of specific colours contributes to that same result. Then comes all the plant knowledge, the precision of the work, strict planning and calculated use of water and heat. And to combat diseases specific insects are released into the greenhouse to counter disease germs.


The bigger problem though is the human (f)actor, as is nicely expressed in the sentence ‘Farming takes place predominantly on a smallholder base in Ghana’ (Gonzales e.a. 2016, 10). This sentence can be applied to all of Africa. Worldwide there are now 500 million smallholder farmers. They produce 80% of the food consumed in Africa and Asia, which means 2 billion people, nearly 1/3 of the population. They are often considered as the weak link in the food chain and not as an asset for increasing food production. Often their property rights are not well secured. Many of them already lost their land due to the introduction of large-scale mechanized farming. The insecurity of their properties, especially if they are not land owners, is a further obstacle for development and investment. Often in the past their economic welfare has been sacrificed to industrial development, by transferring revenues from agriculture to industrialization and keeping food prices artificially low. Neoliberal economic and agricultural policies on top of that have led to a widespread reorientation of rural livelihoods. Roughly 40% of the African rural households’ income is now derived from non-farming sources. Indeed, a landless agrarian class is emerging because many turned to income diversification, finding or trying to find other sources of income besides agriculture. Many farmers are survivor farmers, and many of them women for whom agriculture provides a side income. Research in Kenya shows that the great majority of smallholder farmers does not have sufficiently access to supermarket chains due to lack of financial and human capital. An emerging group of middle-class farmers dominates the supermarket chains. Smallholder farmers could organize themselves in cooperatives in order to enter these supermarket chains, but this can only be effective on condition that they have the capacity to meet the requirements of those supermarkets: year-round supplies, quality and easy procurement. But again the lack of access to finance and lack of organizational capital as well as infrastructure and financial services stand in their way.

Training in entrepreneurship

In order to make SMEs resilient to internal and external threats, would-be entrepreneurs need to be prepared for the demands put on them to survive in this environment. They need to be capable of managing their companies and their external relationships through the labyrinth of trust and distrust, building the external environment required for doing business at the same time as building their business itself. For smallholder farmers improvement of their lot requires many policies, institutionally and economically, to be adapted, like land tenure regimes, license policies, taxation regimes that do not only favour large land owners but also include small-scale producers.

An important issue in fostering entrepreneurship in this regard, not often considered in the literature, is capacity building, in the sense of changing the local narratives and mindsets. The group of smallholder farmers is the most conservative part of rural Africa, often still governed by patriarchal sociocultural norms and practices. Key to these are the gender roles, and the tradition of extensive low risk strategies towards farming. Generally (subsistence) farming is considered as a last resort and not as a respectable and honourable profession. By the use of more modern technology, which is an indispensable requirement for increasing productivity, this imago can be changed. Young and jobless people might take the lead in this transition. The older generation often doesn’t even know of bookkeeping and may not even have a savings account. They always did agriculture without such support systems. In addition, the business environment for agriculture is changing also in emerging economies especially by ICT applications. These are accessible through mobile phone or iPhone, are increasingly available and in use, like for the transfer of money, access of market prices, analytic tools for disease control, weather information, growth monitoring and monitoring of water provisions etc.

The SURE approach

Through many years within the minor program International Entrepreneurship and Development at the Delft University of Technology many experiments and initiatives have been deployed on agricultural entrepreneurship, especially horticulture. Different types of greenhouses in different climatic circumstances have been tried, as well as a number of different technologies and business options. Students participating in the program (by a three months internship abroad) attempted different designs and different prototypes, conducted market explorations, devised business plans, even courses on farming and manuals. Other students did research on related activities like carpentry, e-bikes (for local cheap transport), different types and sizes of solar systems for productive use, the potential of biogas etc. The central question around which these activities revolve is: How can smallholder farmers increase their production, enter the market, become entrepreneurial and grow? This question counts for smallholder farmers, but also for related activities like building greenhouses, water provisions, biogas, solar energy solutions, small-scale machinery for food processing and packaging, etc. etc. These as well offer business opportunities for Sustainable Rural Development (SURE). This SURE approach takes its point of departure from the business opportunities, and the power and motivation of local people. Their initiative is supported in order to create value. In this way they grow in power, ability and capacity. It is the explicit objective of this approach to empower their capacity and promote the development of the countryside on that basis. Another objective is to make the countryside more attractive as a place to live and work instead of suffocating metropoles.

How can smallholder farmers in rural areas, who until now only produce for the subsistence of their own families increase their production and enter the market? Often we are dealing with people who only are involved in agriculture out of necessity, because of the lack of any other resources, job or income. Many housewives do some agriculture as a side job, while their husbands provide the main income, as a support for the family, but not for commercial purposes. But even commercial farmers often specialize in staple foods like rice and maize. Their capacities for running an enterprise should not be overestimated. Besides such ‘soft constraints’ there may as well be some hard constraints like high population density (small plots of land), low soil quality, low rainfall and high temperatures and locations with underdeveloped infrastructure, resulting in little market access.

Nevertheless often the land that is available does offer the possibility to increase the production, at least if water is available. To begin with the farmers could make better use of seeds and fertilizer. A farmer should then buy high quality seeds at the beginning of the season instead of using the seeds left from the harvest of last year. But already at this stage a change of mindset is required. It is a big step to make sure that some money is left at the beginning of the new season in order to be able to buy those better seeds. It requires anticipation and planning and self-restraint in view of other urgent matters that need money. Protected cultivation may be promising, but the farmers need to break with existing cropping systems and they need capacity, technical support and skills to do so. Here as well some ‘hard constraints’ make their influence felt. Many commercial farmers have to sell their produce due to economic need at a time of low prices, during harvest time, while later they have to buy food, when prices are high. High input prices may in such circumstances become serious obstacles. Such ‘hard constraints’ should be surmounted in one stroke with the ‘soft constraints’ such as knowledge, skills, mindset and entrepreneurial values in order to make any progress. For instance, the farmers should know or learn simple facts like that high-quality seeds perform better if they are not just put into the ground, but first grow in a nursery, so that they are not flushed away by the rain. They will also have to learn bookkeeping and keeping track of the produce. They will also have to learn to grow crops in view of customer demand and not based on farmers traditions. For the farmers involved these are big steps, because they are not only learning new things, but they also learn to learn in a new way. This new way of learning itself needs to be learned in the first place. In the former days they would learn from tradition and example and now they have to internalize new knowledge in a more self-conscious way and that often means also to look at oneself from a different perspective: not as a person who goes with the flow, but as an ‘agent of change’. Considering the traditional way of learning, on-the-job learning may be more successful than learning in the classroom. According to the SURE approach it is more suitable to prepare would-be horticultural farmers during a short time in class and start the production with protected cultivation as soon as possible, but do so with a long-term provision for monitoring and for supporting them in their learning curve. Since in capacity training also values and mindsets are involved, it takes a long time to digest new perspectives on farming that are different from what one’s father has taught. But people who have learned to learn and to work in this way can also find another job later, if that turns out to be necessary.

The SURE approach starts small while thinking big. Three steps specifically lead from small to big.

1. Step-by-step improvement of the production.

Some examples have already been mentioned. Better seeds, fertilizers, breeding practices, integrated pest management/spraying, bookkeeping, also water provisions. Horticulture provides a relevant option also for farmers with small parcels of land, by the use of tropical greenhouses. The big advantage of the step-by-step SURE approach is that no big financial investments are required, which are supposed to lead to immediate results, but which do require a high degree of professionalism. The costs of a tropical greenhouse, depending on size, can be recovered already within one or two years, if the produce is chosen strategically. Step-by-step in this way growth takes place at three levels: (1) by means of small investments (and small risks), (2) by learning new skills and expertise, (3) by growth in capacity and entrepreneurial mindset to deal with these innovations effectively. It may be commendable to start with only a small greenhouse, say 8 x 15 m, and become familiar with horticulture in this way, without being fully dependent on it yet. In this way a person can grow into it. But that takes provisions for marketing the produce cooperatively. Also women groups could in this way cooperatively go beyond subsistence farming.

2. Cooperatives and small enterprises.

If a number of farmers are involved in these processes, new steps become possible in as much as the produce increases. Even if only 10 or 20 farmers go along with this approach at a certain moment it will be feasible to cooperate and do something on processing and packaging. This adds value and again leads to an increase in income. Especially in the beginning it can be helpful to share particular facilities. This can be a machine to process cassava and make flour or a machine to produce juice, or simply improving the quality of packaging so that the produce can be transported over larger distances and reach new markets. If other farmers see the good example and the advantage they will follow. First farmers can cooperatively buy inputs. Cooperatives for credit may be more challenging, but the Sacco model of group lending under the supervision of a bank may be a typical African solution that often works. A cooperative for market outreach brings new challenges in the sense of maintaining a standard quality, certification, constant delivery etc. Indeed, in low trust societies cooperatives may be challenging. Training in building trust should therefore be deliberately part of capacity building. And a good advice would be not to make the cooperative too big. The less people know each other, the less they trust each other. If 10 or 20 farmers join hands that is already an enormous change.

3. Chain management, infrastructure and regulation.

Even in order to reach out effectively to the local market some form of chain management may be necessary. The products need to be transported and delivered elsewhere, mostly in the cities, preferably cool and well packed. That takes good logistics, technology and infrastructure. It requires mapping how supply and demand can be brought together per product in order to guarantee a market. In the case of exports good cooperation with customs needs to be established and the produce needs to be certified. That is also important for access to supermarkets. The state authorities are indispensable in doing their part by devising enabling policies and regulations for the increase of agricultural production.

In the SURE approach these three issues – investments, skills/technology, capacity – dovetail into each other in a comprehensive process of growth, step-by-step, bit by bit, in order to keep pace with the learning curve of the smallholder farmers. Which steps should and can be taken often depends on the local context. Precisely through growth in small steps the smallholder farmers will be able to keep pace. The transfer of new knowledge can easily result in shooting over one’s head. Overwhelmed by too much information the farmers involved will not get to grips with the knowledge provided. Everything went too fast. Often people only learn by turning new information into habit and routine. That’s the way farmers mostly learned their profession, from the former generation. The same SURE approach can also be applied to other areas, where not only new knowledge and skills are required, but also a change of mindset.

This is an excerpt from chapter 10 from Kroesen, J. Otto, Darson, R., Ndegwah J. David, 2020. Cross-cultural Entrepreneurship and Social transformation: Innovative Capacity in the Global South, Lambert, Saarbrücken, 331pp.

The book can be found by typing / copying the title on the Internet and Researchgate, the relevant website. A direct link can also be found on the “links” page of this website.