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Linking smallholders to markets

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Presentation by Steve Wiggins at Leaping and Learning event, February 2013

Presentation by Steve Wiggins at Leaping and Learning event, February 2013

Published in: Education, Business, Technology

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  • 1. Linking smallholders to markets
  • 2. SF engage less with markets than expected • to specialise • to get external inputs, technology Given Opportunities: • [Missing, inappropriate technology] • High transport costs • Uninsured risk • High information & transactions costs Because:
  • 3. Linking SF to Market Parastatal Too often: High Cost Inefficient Politicised Then Market Farmer groups & associations Private firms, agri-business NGOs Private foundations Gov’t agencies Now So much to learn from these!
  • 4. Leaping & Learning Review Lit. Consult Stakeholders Synthesise cases
  • 5. CONSENSUS & DEBATE
  • 6. Framework: three considerations • Essential Public Role • Business model Investment Case Organisation Model Approach to Change
  • 7. Investment: Public Role Rural Investment Climate •Doesn’t have to be perfect! Rural Public Goods • Roads, power, irrigation, etc. • Education, Health, Water • Research & Extension
  • 8. Ghana: correcting investment climate 8 0 1 2 3 4 5 1961/62 1963/65 1966/68 1969/71 1972/74 1975/77 1978/80 1981/83 1984/86 1987/89 1990/92 1993/95 1996/98 1999/01 2002/04 2005/07 Agriculturegrossprod:BillUS$2000 2.6 % year 5.1 % year 1974 1982 -3 .1% year 20 30 40 50 60 70 1991/1992 1998/1999 2006 PovertyIncidence(%) Poverty, rural Poverty, cocoa producers Poverty, national 30.3 17.3 0 500 1000 1500 2000 2500 3000 0 10 20 30 40 1983 1986 1989 1992 1995 1998 2001 2004 2007 Kcal/day/cap MalnutritionPrevalence(%) U5 Underweight (DHS) Food supply (kcal/capita/day) (kcal)
  • 9. Business model: Markets Demand: critical … moving target Exports: great ... 0 10 20 30 40 50 60 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Rwanda's coffee exports Export Quantity (1000 tonnes) Export Value (Millions international $)
  • 10. BUT: Domestic markets > Exports Larger, Growing Faster • Certification: high cost trap?! • [GlobalGap Ken, Sen; Ghana MD2] Less Demanding & Less Risky
  • 11. Coming Home: Kenya’s Green Beans 4 31 0 5 10 15 20 25 30 35 40 45 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Exports (thousands of tonnes) Production minus exports Production (thousands of tonnes)
  • 12. ORGANISATION MODELS
  • 13. Crafting Links: Horses for Courses? Spot Markets Contracts: just Produce Contracts with Inputs, TA Vertical Integration
  • 14. Enigma of Association Information costs of dealing with many SF real & high • Dunavant distributors: 65 SF each • Mukwano farmer groups = 54k SF • Kabale potato farmer association Aggregation often essential But: few self-sustaining co-operatives! Why not more?
  • 15. APPROACHES TO CHANGE
  • 16. Processes > Form • Build capacity, competence • Don’t replace Enable, Facilitate private & collective initiative • Exit strategy • Where are learning thresholds? Temporary support may be needed, but … Monitor, Learn, Adapt
  • 17. DILEMMAS
  • 18. Social Inclusion Firms work 1st with better-off SF Functioning collectives may exclude poorest • Ken SF green bean 15 jobs/ha • BF shea factory: 1,500 • Moz cashew factory, etc.] A? Jobs on & off farm
  • 19. Scaling Up Right Organisation Form = Wrong Question? Approach All Important • Challenge Funds • NGO grants •  M & E: document, evaluate But What Public Role?
  • 20. [SLIDE DUMP]
  • 21. Missing out: yield gaps in Central & West Africa 0 0.5 1 1.5 2 2.5 3 3.5 Maize Rice Millet Sorghum Tonnesperhectare Current yield, av. Potential yield Nin Pratt et al 2011, IFPRI
  • 22. Raising agricultural productivity in LIC High transport costs? Insecure property rights? Learning & knowledge diffusion? Transactions Costs: Incomplete, missing, imperfect markets for credit, insurance, inputs?