THE PARTNERING FRAMEWORKS PERTINENT TO PACs AND FRCs. According to Price Waterhouse Coopers (2013: 4), a business model (framework) can be defined as the chosen system of inputs, business activities, outputs and outcomes that aims to create value over the short, medium and long term. Xxxxxxxxx and Cotula (2010: 14) state that while some companies (supermarkets, for instance) may be particularly efficient at partnering along the value chain, others may acquire a distinct comparative advantage in using alternative forms of sourcing agricultural goods and related services. Although the resurgence of agricultural investment in Africa has the potential to create jobs and raise rural incomes, achieving these benefits, however, depends upon whether or not commercial buyers and PACs can discover mutually beneficial ways to work together. A study conducted by the TechnoServe in 2011, on enhancing the profitability of out-grower schemes, found that without land tenure or productivity-enhancing inputs, PACs cannot easily transition from subsistence farming to market-oriented production (TechnoServe 2011: 2). According to Xxxxxxxxx and Cotula (2010: 3) there are two approaches to business modelling that can be used to structure agricultural investments in lower- and middle- income countries. There is the preferred partner model approach, which, according to Xxxxxxx (2012: 1), is the most popular partnership approach, under which a partnering company pre-selects a limited number of partners to partner with. The preferred partner arrangements often include lower pre-established rates among the qualified providers, so the cost reductions are built-in, and the proposal and contract management process is faster and simpler (Xxxxxxx 2012: 1). The second approach, according to Xxxxxxxxx and Xxxxxx (2010: 14), is an inclusive business modelling approach which encompasses a wide range of arrangements, such as shared ownership of key assets, formalised joint ventures, profit- sharing arrangements, contract farming or local content schemes, community land leases and management contracts, or local service agreements. Xxxxxxxxx and Xxxxxx (2010: 16) contend that business models are considered to be more inclusive if they involve close working partnerships with local landholders and operators, and if they share value among the partners. Some models involve large-scale farming, but with closer involvement of local landholders. The following sub-sections with analyse partnering models pertinent to PACs and FRCs.
