6 November 2012

Participants Discuss the Future of Smallholder Farmers As Entrepreneurs

press release

Addis Ababa — Over 500 private sector representatives, government officials, donors, civil society representatives, farmer organisations and academics have come together at “Making the Connection: Value Chains for Transforming Smallholder Agriculture”, an international conference that will discuss the future of agricultural value chains and how to incorporate smallholders in them to promote agricultural and rural development.

Hosted by the ACP-EU Technical Centre for Agricultural and Rural Cooperation (CTA) and the United Nations Economic Commission for Africa (UNECA), with the support of many other organisations, the conference takes a novel, market-based approach to solving the challenge of how smallholder farmers can continue to play a major role in meeting consumer demand at domestic, regional and international levels.

Michael Hailu, Director of CTA, says: “This is the first event of its kind to bring all sectors together to specifically explore agricultural value chain development from the perspective of the smallholder farmer. Giving smallholders the resources, entrepreneurial skills and knowledge they need has the potential to increase global food production and offers farmers a chance to work themselves out of hunger and poverty.”

Agriculture is the backbone of the economy in most of the developing world, employing about 60 percent of the workforce in sub-Saharan Africa and contributing an aver­age 30 percent of gross domestic product (GDP).

For the poorest people, GDP growth originating from agriculture is about four times more effective at raising incomes than growth from any other sector.

Smallholder farmers provide the bulk of the food produced in developing countries – up to 80 percent in sub-Saharan Africa. Growing urban populations and greater global wealth are creating additional demand for agricultural products, yet rising food prices suggest that farmers’ productivity is not keeping up with this demand.

Andrew Shepherd, Senior Technical Adviser on Market-led Development at CTA, says: “Smallholder farming must be transformed from a largely subsistence activity to one that is run as a business: generating enough income to boost production, improve rural livelihoods and contribute more significantly to broad economic growth. Value chains can play a vital role in such a transformation as they aim to link all relevant actors together, from farmers and input suppliers through to end-product buyers. Such chains also require support services from financial institutions, transport services, and government agencies.”

In agricultural input markets, value chains can facilitate improved access to quality seed, fertilizer, finance and extension services. This helps boost production and provides a more reliable supply of raw materials for processing, which in turn reduces costs and offers more reliable employment opportunities.

In output markets, improved linkages between farmers and buyers can ensure that farmers tailor their production and sales to benefit most from the demands of the market, thereby avoiding receiving low prices or experiencing high post-harvest losses if products cannot be sold. As value chains become more inclusive, smallholder farmers can also become more actively engaged in markets by adding value to products, improving quality, and by packaging and marketing their products more effectively.

Josué Dioné, Director of the Food Security and Sustainable Development Division at UNECA says: “Connecting smallholder farmers to value chains is crucial for the transformation of agriculture in African, Caribbean and Pacific (ACP) countries from a subsistence-oriented way of life to a market-oriented and profitable business for all. It is key to enabling the majority of farmers to increase food and agricultural productivity and production through enhanced access to knowledge, input supply and supportive services such as finance. It is essential to ensuring the profitability of farmers’ investment in productivity-enhancing technologies and practices by providing them reliable access to markets. It is also key to unleashing the considerable potential of private sector agro-industry and agribusiness services to create income-generating jobs.”

Modern technologies, such as Information and Communication Technologies (ICTs), can also play an important role in making value chains more efficient. Cell phones can now allow farmers to receive extension advice, prices and sales information or even to do their banking; GPS systems can help with crop monitoring or traceability; and the Internet can provide detailed extension advice and facilitate transactions with potential buyers.

CTA has identified value chains as a key priority area with a focus on facilitating multi-stakeholder engagement and knowledge exchange among farmers groups, policy makers, researchers, agribusiness, universities and others. Michael Hailu notes, “More than at any other time in the past, agriculture has been getting considerable global and national attention, particularly after the 2007-2008 food price crises. As a result, the sector is attracting the policy and investment support it needs to fulfil the goals of food security and economic growth.”

Over the past few years, agriculture and food security have also featured regularly in the agendas of both the G-8 and G-20 Heads of State meetings. National and regional policies are also being developed by governments across the developing world to advance agricultural growth and ensure food security for their populations. Notable examples of such policies include the Comprehensive African Agricultural Development Programme (CAADP) – which calls for an investment of at least 10 percent of the national budgets in agriculture and an annual growth of 6 percent – as well as the Food & Nutrition Security Policy of the Caribbean states and that of the Pacific Island states.

Dioné continued: “This conference should foster greater understanding of the importance of an enabling environment, public-private partnerships and multi-stakeholder approaches for successful value chain development that effectively integrates smallholder farmers.”

Participants at the conference will share ideas, knowledge, new approaches and best practices that can strengthen the efficiency and profitability of existing commercial value chains and assist those working to promote value chain development to strengthen economic growth in smallholder communities.

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