Co‐creation of business models for smallholder forest farmers’ organizations: Lessons learned from rural Ethiopia and Tanzania

Forest farmers’ organizations (FFOs) have recently gained scholarly attention as a collective action instrument to upgrade value chains. However, insights into possible business models and organizational forms of FFOs remain fragmented. This study thus aimed to co‐create FFO business models in order to assess the business models in the context of the regulatory framework and the value chain upgrading theory. The Input–Output scheme and the Business Model Canvas (BMC) were merged to create an analytical lens. Participatory workshops with two farmers’ organizations, each in Ethiopia and Tanzania, were conducted and triangulated with ten focus group discussions and 25 key informant interviews. The co‐created business models reflected the grassroots entrepreneurial potential of smallholders to envision FFOs. The gaps requiring external support, namely the know‐how in accessing microfinance, silvicultural practices, and entrepreneurship, were revealed. We argue that the transformation from a farmers’ organization to an FFO enables wood value chain upgrading. Diversifying wood with non‐wood products is key for FFOs. Regardless of how the regulatory framework shapes external support, the local government plays a pivotal role in facilitating the connection between FFOs and (non‐)governmental support actors. Through this research, we develop suggestions for further empirical studies and offer several recommendations for decision‐makers.