Brewing inclusivity: foreign agribusiness and local food security – the case of Heineken in Ethiopia

Abstract

Purpose – Inclusive agribusiness models are recognized as a vital strategy for addressing development challenges by enabling smallholder farmers to profitably engage in agricultural value chains. Hence, the purpose of this study is to explore the impact of a proclaimed inclusive agribusiness model on farmers’ productivity, asset stock and dietary diversity and its indirect effects on the local community in the Arsi Zone, Ethiopia. Design/methodology/approach – This study used a mixed research approach. Survey data from 251 households were analysed using endogenous switching regression and propensity score matching to compare participant and non-participant households in terms of productivity, asset acquisitions and dietary diversity status. To understand the indirect effects on the wider community, interviews with key informants and focus group discussions with participants and non-participants were conducted. Findings – Contracted farmers registered increased malt barley productivity and asset stocks. However, with regard to dietary diversity, there was no significant difference between participating and non-participating farmers. Interviews revealed that this was due to spending on priorities other than food and less diverse food availability in rural markets. Research limitations/implications – Inclusive business approaches can positively contribute to smallholder farmers’ productivity and income, yet this does not automatically translate into improved household diet diversity in rural areas. For this to occur, local food availability and accessibility should be taken into consideration. In addition, evaluating the impact of an inclusive business approach on a small minority (i.e. contract farmers) risks overlooking the impact on the majority, who are not reached by these business arrangements. Originality/value – This study contributes to the literature and debates on private sector-led development by illustrating the impact of presumably inclusive agribusiness on local food security. The unique feature is that this study also considers wider community effects.