8 November 2012

Africa: Four Lessons to Help Link Small Farmers to Agricultural Value Chains

Photo: Siegfried Modola/IRIN
A Nairobi City Market trader shows his goods on March 7, 2011.


The "Making the Connection" conference on agricultural value chains is remarkable for the degree to which so many of those speaking agree on the key elements of linking small farmers to markets. A broad consensus can readily be seen.

So what do people agree on? Four sets of thoughts stand out:

Firstly, there are fundamentals which governments have to provide. This is to say, an enabling environment made up of peace, macro-economic stability, clear property rights, basic contract law, weights and measures as well as rural public goods that private firms and citizens will not supply: roads, electricity; education, clean water, health care; and agricultural research and extension. When these are missing, then it's hard for private and collective efforts to prosper.

Secondly, business models must confer realizable benefits for all in the supply chain, not least smallholders. This includes targeting the most promising markets that smallholders can serve without unreasonable demands or risks. Time and again, these turn out to be domestic and regional markets, that are growing quickly and increasingly demanding higher value produce; rather than export markets. There needs to be a commercial approach that admits that all in the value chain have to get a return; that while sometimes this means competition, there are also ways to co-ordinate activity to everyone's benefit.

Common ground can also be found on the fact that we must be realistic about how accessible value chains are to marginal smallholders, at least at first. Market relations have their demands and their risks: they not suitable for all smallholders, not the most marginal. However, this does not mean that these, who often make up half or more of current smallholders, should be abandoned; it only suggests that there are simpler interventions, such as raising yields of food crops that are more appropriate.

Finally, function, not form, matter most when linking small farmers to markets.There are many templates for linking smallholders to markets, through spot market deals to varying degrees of contracting, or through farmer associations and co-operatives. All work in some cases, but fail in others. When looking for lessons, what to scale up, these forms are not the place to look.

What matters more are functions, and the processes and approaches that lead to effective links between smallholders and markets. Time and again, success stories have a number of processes in common, for instance:

- Working within the limits of current capacity, competence and trust amongst the supply chain participants. With time, of course, capacity, competence and trust will develop, thereby allowing more sophisticated linkages;

- Adjusting to changing circumstances: markets will reflect changing customer preferences, competition from other suppliers, advances in logistics. Effective links will thus not be set in stone; and, perhaps as important as anything else;

- Learning from experience - and mistakes - to correct one's actions over time. In the history of most successful linkages, there can be found failed initiatives that were tried, but abandoned. Similarly, one has to accept unexpected obstacles and has to show the determination to overcome them.

Steve Wiggins is a Research Fellow, Agricultural Development and Policy, at the Overseas Development Institute

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