Theories of Smallholder Agribusiness Entrepreneurship in the African Context: A Critical Review

Abstract

There have been changes in the political systems of several African countries which were under colonial rule. Consequently, more than 32 African countries launched “land to the tiller” reforms between 1990s and 2000s alone. Land reform programs gave rise to the new breed of farmers, the smallholder farmers. This new breed of farmers is faced with market challenges yet they are key to Africa’s development. This desk study reviews theories of entrepreneurship that could explain how smallholder farmers in Africa engage in markets. Classical theories, neoclassical theories, and neo Austrian theories, and the Schumpeterian approach to entrepreneurship are reviewed. The paper revealed the weaknesses of these theories and concluded that they do not sufficiently explain how smallholder farmers in Africa engage in markets. The theories’ limited insight to the African context gave rise to the concept of collective entrepreneurship which is centered on entrepreneurial behavior and skills of farmer organizations or farmer groups. The review has also found out that although collective entrepreneurship is considered as an appropriate tool for rural development, there are potential problems which can undermine its effectiveness. The paper recommended the concept of collective entrepreneurship to be developed into a theory using evidence from Africa.

Key words: Collective Entrepreneurship, Smallholder farmers, Theories of Entrepreneurship