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Paper short abstract

We study the case of an inclusive agribusiness model in the dairy sector that adopted digital technologies throughout the value chain. Following a mixed methods study, we seek to answer 'how' and 'how much' is the value created in the process and the value captured by the smallholder dairy farmers.

Paper long abstract

Institutional arrangements promoted for value-chain integration of smallholder farmers have produced mixed results. More recently, inclusive agribusiness models anchored by private sector investments have gained traction. The burgeoning literature shows that they enhance farmers’ income, enable smallholder compliance with standards, and raises productivity. On the contrary, critical agrarian studies suggests that such models can exacerbate social differentiation and vulnerability within the farming class, and favours better endowed farmers. Therefore, the implications of these models are inconclusive at best.

There are a few major gaps in the literature on inclusive agribusiness models. Value creation – gains in productivity and expansion of value adding opportunities – is well examined; value capture by smallholders and their ability to do so are understudied. Further, dairy sector is underrepresented in the literature despite the acknowledgement of the potential of digital technology to transform smallholder dairy farming.

In this paper, we study the case of an inclusive agribusiness model in the dairy sector that connects rural Indian dairy farmers with urban market for organic milk. The anchoring enterprise has adopted digital technologies throughout the value chain. Following a mixed methods study, we seek to answer how and how much is the value created, examine the role of digital infrastructure in value creation at various points in the value chain and unpack the market-mediated mechanisms that affect value capture by the smallholder producers. By comparing the value created and value captured, we offer useful insights to the design of inclusive agribusiness models for improving smallholders’ livelihoods conditions.