This report examines the promise and reality of including smallholders from developing countries in modern value chains as a path to sustainable development. Drawing on an extensive literature review and interviews with diverse stakeholders, we lay out the ambitions, expectations and assumptions hanging on smallholder inclusion with regard to income, gender equity and environmental sustainability. We describe the gaps between expectation and reality, suggesting that inclusion — as conceptualised and implemented — is poorly suited to the complex challenges faced by farmers. We identify five signs of change in the discussion about smallholder inclusion, and reflect on what these might mean for its future.