ABSTRACT
Small farmers in India are in dire straits due to low farm yields, unstable market prices and lack of various other support mechanisms in the presence of declining size of the landholdings. The only way to help such farmers is to either help cut down their costs of production and marketing, provide stable and remunerable market access and improve price realization or increase yields. Therefore, there is a role for innovations, institutions and institutional innovations in achieving inclusive agricultural development in a context like that of Indian agriculture. Institutions and institutional context are important determinants of development. This chapter locates the rationale for franchising in agribusiness from global literature and from the Indian smallholder agricultural context where other ways of reaching small farmers or linking them with markets have not worked. It also provides an example of non-franchising types of institutional innovations which were in the nature of public-private partnerships (PPPs) and is followed by comparing franchising models with other modes of distribution like conventional mainstream distribution channel and the company owned–company operated (COCO) outlets model, which have been tried by many large players in the recent past without much success. This is followed by an analysis of a few cases of failure and success in franchising in agribusiness by corporate agencies. Furthermore, the chapter describes and analyzes in a comparative perspective the various cases of franchising from cooperative, private and joint (public-private) sectors to learn the strengths of each system and avoid pitfalls. It even examines the value of direct (to farmer) versus indirect franchising (through an agent) to access small farmers in a developing country context. The chapter concludes with major lessons for franchising in agribusiness.
