Linking communal smallholder avocado farmers in Venda to high-value lucrative markets in Limpopo Province.

Abstract

Inclusive business models are possible through the identification of a strategic ‘fit’ between large agribusinesses such as Westfalia and smallholder farmers. A gross margin analysis was used to determine the profitability of applying chemical control of avocado fruits to enhance quality and redirect market channels to maximize income. A complementary relationship was found in an early market window when smallholder farmers aligned their production activities with Westfalia. There was a positive impact on the gross margins of small farmers due to the beneficial association with a large company. Key success factors were economies of scale, efficiency in logistics and improved quality. A business model emerged indicating the potential for smallholder farmers to profit from participating in big business in the avocado industry.