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

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?