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Business models in timber and tree-crop value chains

There is a growing consensus that the transformative potential of markets needs to be better leveraged to achieve development goals. The assumption is that business models which productively integrate smallholders and small- and medium-sized enterprises (SMEs) offer win-win opportunities by increasing buyer access to raw materials while improving smallholder and SME access to profitable (global) markets and services that facilitate the uptake of more intensive and environmentally sustainable production practices.

However, understanding is lacking on the conditions under which such business models can effectively overcome existing bottlenecks and deliver positive, long-term impacts at scale. FTA’s work provides knowledge on opportunities to overcome such bottlenecks by enabling value chain support organizations, public and private, to improve and better link their service delivery in support of more inclusive, gender-responsive, equitable and sustainable business models. FTA emphasizes business models related to forest and agroforestry systems and products.

Current and planned key research activities on business models are:
Learning from past and ongoing projects of development organizations (e.g. the Netherlands Development Organisation [SNV]) on the most effective models for developing smallholder-inclusive business models;
Identifying options for scaling sustainable production of tree-crops (e.g. cocoa in Ghana, coffee in Central America), while leveraging the potential of certification systems;
Developing guidelines for overcoming institutional and operational barriers and obstacles faced by businesses in integrating smallholders into their operations and value chains;
Developing best practice guidelines, tools and metrics for the design, implementation and assessment of business models that are more socially inclusive, economically viable, environmentally sustainable and can potentially produce greater impact at scale;
Developing guidelines for organizations providing technical, business and financial services to value chains for strengthening the capacity of smallholders and SMEs to engage with businesses.

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