**3.6 Development impacts of the models**

Research on similar models presented by Scoones [18] at the British-Africa investment summit of 2020 compared three broad types of commercial agricultural investments —estates and plantations, medium-scale commercial farms and out grower schemes— in Ghana, Kenya and Zambia focusing on outcomes for land, labour and livelihoods. The cases included investments with some UK-linked companies, including the Blue Skies company in Ghana, which packages and exports fruit produced by smallholder out growers and an out grower scheme in Zambia, operated by Illovo, now largely owned by British Foods, whereby SHFs' land is incorporated into an estate, and they are paid revenues for the use of land. Scoones [18] concluded that the 'terms of incorporation' into business arrangements really mattered. Too often estates/plantations operated as 'enclaves' separated from the local community, possibly providing employment opportunities, but frequently with poor conditions. Those investments that had substantial linkage effects included those with smallholder-led out grower arrangements, where leverage over terms was effective. Meanwhile, consolidated medium scale farms potentially had positive spill over effects into neighbouring communities through labour, technology and skill sharing linkages. Scoones [18] further argues that private sector investment that has the most impact is usually small, often informal, and deeply linked into local economies. Clusters are usually spontaneous, not planned as part of grand corridor or investment hub schemes.

In relation to this study, perspectives raised by Scoones [18] generally favoured the variations of the contract farming-based models from a development perspective. Scoones' [18] arguments were centred on the yield and livelihood transformation potential of model in question. In addition to that, this study considers the pros and cons of each model —using information gathered from data collected—with respect to climate and environmental risk.

#### **3.7 Environmental impacts of different models**

In the lease-based model, the mitigation of climate and environmental risks related to production —e.g. composting, organic production, pest control, etc.,— is highly linked to market requirements and costs of implementing the initiatives. Thus, if the risk mitigation actions are beneficial for the natural environment but not required by the market, they less likely to be implemented. Regarding access to critical climate and environmental risk information, in the agricultural manager and lease-based model, the manager/lead firm are the source and distributers of information sourced at a lower transaction cost due to the centralised organisational structure. This allows the lease-based models to better access climate risk related information services. The same argument applies to climate and environmental risk financing within the agricultural manager and lease-based models. In the

#### *Climate Change Risks in Horticultural Value Chains: A Case Study from Zimbabwe DOI: http://dx.doi.org/10.5772/intechopen.97211*

lease-based model, climate and environmental risk financing is not much of a challenge as the protagonist —e.g. Schweppes—is well placed to access required financing to deal with climate and environmental risks. The agricultural manager-based model is also similar though could change in a negative direction after the contract between the off-taker and manager lapses given that SHF would have to source their own financing. Regarding climate and environmental risks related to energy, the lease-based model allows for the easy use of alternative —to hydro-electric power—localised electricity generation processes such as solar mini-grids which are most effective and efficient in such centralised systems including the agricultural manager based model.

The contract farming model has better opportunities for mitigating climate and environmental risks related to production. For instance, the use of organic fertilisers may be easier mainstreamed together with minimum tillage principles because of the extensive training— silver, gold and platinum— that the various categories of farmers go through5 . Also, in the contract farming model, social capital levels are high and the social rules and norms are not always driven by profit thus, may see farmers practicing what was taught even if it took a little more of their time and effort. In the contract farming-based model, farmer disaggregation may increase the transaction cost of accessing reliable and useful information thereby making such a model not as effective in dealing with information related climate and environmental risk. Nonetheless, the central role played by the lead firm —e.g. Sondelani ranching— allows for centralised information sourcing though dissemination of the information may be less efficient —due to the disaggregated nature of individual contract farmers— in comparison to the compact lease model. In the contract farming model, the access to financing may not always be extended to the disaggregated smallholder farmers as the risk of loan defaults changes with each SHF in question. Also, In the contract farming model, the decentralised nature of SHFs exacerbates the energy problem and makes a centralised solar PV system difficult to set up. This model therefore leaves the challenging issues related to energy in the domicile of the SHF who in most cases does not have adequate resources to make the investment required to avoid climate risks related to energy.

In all the models the large off-takers have the ability to develop suitable packaging for increasingly high temperatures, humidity and precipitation while maintaining food safety standards. The quality of the packaging however is likely to be a function of market preferences rather than environmental considerations given that the primary objective of the off-taker is like to be profit maximisation.
