8 November 2012

Africa: Making the Connection - Day 2

The second day of the conference was one of the busiest, with three sets of four parallel sessions giving the participants - over 500 from across the world - a wide choice of topics to explore. First, however, there was a plenary session on 'Involving smallholders in modern value chains at scale.'

The last two words - at scale - were added as an afterthought, explained moderator Joost Guijt, a researcher at Wageningen University's Centre for Development Innovation in the Netherlands. "We now have hundreds of examples of wonderful initiatives involving smallholders in value chains, but how many are happening at a significant scale?" he asked.

Guijt provided a brief outline of a major research project which has investigated smallholder involvement in 'inclusive agri-markets'. A major challenge, he suggested, lay in helping 40% of the 500 million asset-limited small farmers around the world to benefit from value-chain development.

"We didn't find many examples of working at scale," he said, "but we did identify two important principles." High levels of trust between businesses and suppliers are essential if a value chain is to work efficiently. The most successful value chains involve a whole range of different actors, from farmers to producer organisations, businesses to researchers. "There are no silver bullets, and everything depends on context," he concluded, before introducing the four members of the panel, each with first-hand experience of different interest groups - farmers, non-governmental organisations (NGOs), government, and the private sector.

Speaking on behalf of smallholder farmers, Jethro Greene of the Caribbean Farmers Network (CaFAN) stressed the importance of small farmers acting together, both to influence policy and gain access to markets. His organisation is helping farmers capture a larger share of local and regional markets. It is also encouraging them to build 'sustainable relationships' with supermarkets, and deal with them directly rather than through intermediaries. It is important, he stressed, to help farmers move up the value chain. "They should see themselves as businessmen and women," he said. "I want to see my farmers buy the best cars - just like farmers in Holland."

Larry Attipoe, director of SNV in Zimbabwe, said that NGOs are well placed to use public funds to try out new approaches and experiments to developing value chains. "The private sector often says it doesn't want to deal with large numbers of smallholder farmers - it's too complicated, and the transaction costs are too high," he explained. NGOs such as SNV are in a good position to act as intermediaries as they have a good understanding of both the private sector and small-scale farming. "NGOs can help smallholders to improve the quality of their produce and become more attractive to the private sector," he said.

Participants then watched a short video about the activities of ECOM, a multinational food commodity buyer, in Kenya. Thomas Delbar described the way in which his company had established an organisation, Sustainable Management Services (SMS), which now provides training and advice to 160,000 small-scale coffee farmers in Kenya. SMS has helped farmers to increase crop yields and incomes and improve the quality of their produce, enabling them to tap specialist markets.

ECOM has subsidised the activities of SMS. However, this is not a sustainable model for the future. "We hope that we will get to the stage where farmers are willing to pay modest sums for the extension services," said Delbar. "Ultimately, there can be no free lunches." This story provided an outstanding example of an inclusive agri-market where both sides - producers and buyers - benefit.

What are the basic activities which governments need to undertake to help smallholders benefit from value chains? This was the question that Guijt put to Steve Wiggins, a researcher at the Overseas Development Institute (ODI) in the UK. Wiggins identified a number of key issues. First, governments need to provide an enabling environment conducive to investment. Second, they must provide the things which the private sector can't, such as education, roads and agricultural research. This does not mean that they must go for perfection, said Wiggins, who provided examples of two countries, China and Ghana, which have achieved much through incremental reform. Third, governments should make sure they do no harm, for example by providing free food aid in areas where villagers have established viable commercial grain banks.

The plenary session was followed by a lively discussion, and there was applause for Jethro Greene's final observation. "We farmers mustn't be arrogant," he said. "We can't go it alone and we need to involve everybody, including university-educated people, researchers, private businesses and NGOs, if we're to create viable and sustainable value chains."

The breakout sessions

Full details about the discussions during the Wednesday breakout sessions will appear on the conference website shortly. After the plenary, the four breakout sessions focused on tools and methodologies for analysing value chains; market information systems in value chains; developing green agri-food value chains; and regional cooperation for coordinated food and agricultural value chain development in Africa.

After lunch, the first four sessions explored improving the connections between farmers and service providers; value chain finance; value chains and capacity building; and farmer organisations in value chain policy-making. Three of the final four sessions looked at regional value chain issues in Eastern and Southern Africa, West and Central Africa, and the Caribbean and the Pacific. The other session looked at smallholder participation in livestock value chains.

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