The majority of the poor in the semi-arid tropics live on small farms. Increasing farm production alone will not end poverty. Some farmers struggle to feed themselves and their main concern is ensuring year long food security. But many others are able to sell part of their produce. Often, however, disfunctioning markets prevent them from enjoying better incomes and livelihoods.
What is needed for smallholder farmers to benefit more from markets? An Inclusive Market-Oriented Development approach which includes the following:
Investing to include all smallholder farmers
- Enabling environment: infrastructure, policies and institutions
Road density in rural Sub Saharan Africa is very low, around 30m/km² [source: World Bank]. More than 50% of rural roads are in poor conditions and over 60 % of rural Africans live further than two kilometres of an all-season road [Gwillian, 2008].
The public sector must invest in rural infrastructure and other public goods to better connect smallholder farmers to markets. This includes better roads, water access, storage facilities, better funded agricultural research and extension services and information and knowledge systems.
An enabling investment climate like transparent regulation enforcement is necessary to attract the private sector. Discordant regional policies hinder trade and investment across countries. ICRISAT works with regional organizations such as Africa Seed Trade Association to harmonize seed policies between countries. [ WASA final report ]
Smallholder farmers' engagement is limited: between one third and one quarter sell staple grain in Eastern and Southern Africa (source: ODI report, may 2013).
Small farms vary along a large spectrum from purely subsistence farms to those actively engaged in cash crop production. Their needs related to commercial farming activity and markets may differ, from seeking to maximize their production or prices of produce to reducing risks of production or marketing, or both. Approaches to linking to markets must take into account this variability, having in mind that markets will often not benefit the most vulnerable, who need other services and a poverty reduction approach (social safety schemes, non-farm jobs etc).
Remoteness (lack of infrastructure), low productivity, low farm-gate prices, poor postharvest management and lack of market information, are some of the many constraints hindering smallholder agriculture in the semi-arid tropics from market opportunities.
Access to better technology, advice and financing to boost productivity
Less than 10% of the seed planted in Africa is purchased from the formal market each year. On a global basis, farmers apply an average of more than 100 kg/ha of fertilizers to their soils; in Africa, the average is only 8 kg/ha [ref: AGRA]
Access for poor farmers to high-quality seeds, fertilizer and other inputs will boost their yields. This access can be facilitated through innovative public-private partnerships. For instance, under West Africa Seed Alliance initiative in West Africa, various innovations eg small seed packets, seed fairs and mapping out agro-dealers, helped poor farmers, especially women.
The microdosing-warrantage system is boosting yields in Niger by combining affordable fertilization practice adapted to small scale poor farmers, with better marketing of dryland cereals.
In Karnataka, India, under the Bhoo Chetana initiative, a platform gathers fertilizer companies, government and researchers to develop micronutrient fertilizer packs adapted to small farms.
Building skills to fetch better prices
Farmers' organisations (groups, associations, cooperatives) are a powerful tool to benefit from better financing, increase bargaining power to input and output markets and being able to satisfy required standards.
Examples like the warehouse receipt system, the contract grower model for sorghum in Kenya or finger millet in Uganda, illustrate different formal and informal sale arrangements, to engage smallholder farmers with formal value chains. Read also sweet sorghum feed - food - energy value chain models in India; contract farming for sorghum in Tanzania.
In Zimbabwe, an innovation platform gathers goat herders, traders and other stakeholders along the value chain to identify what cost-effective actions bring better prices for farmers, eg investing in sale pens at local markets or animal feed technologies. Farmers then invest back into their farm enterprise, inducing a virtuous local development cycle.
Small-scale farmers need timely knowledge about market demand and outlook, prices, required food safety and quality standards, new crop products and how to get reliable input supplies. Improving market information access will help them make better informed decisions on their farming systems (eg crop choices and seasonality) for better incomes.
Agricultural research for development has to consider market and value chain approach
Crop breeders include traits according to market and consumer preferences, such as reducing cooking time for pulses or developing varieties for new agro-processing markets such as sorghum beer-making. See also Sorghum Multi Use project
The market dimension is important for adoption of improved varieties eg the rise of chickpea national and export markets in Eastern African countries like Ethiopia means more small farmers cultivate this drought-tolerant grain legume.
Value chain approach helps understanding what needs to be done to bring more value on farm and offer competitive products to the different markets. See our work with NASFAM in Malawi to reduce aflatoxin contamination in groundnut, where a better post-harvest management helped open a new fair trade export market opportunity.[NASFAM CEO testimony video]
IMPACT assessment: What impact does a transition from subsistence to commercially-oriented farming system have on household food security and nutrition? Implications on nutrition security, labour requirement, gender and other social dimensions have to be carefully assessed so that responsible market-based solutions for agricultural development emerge without negative impact. Read more about Inclusive Market-Oriented Development.