Stories tagged: simon winter

What Role for Smallholders in Agribusiness Development?

Over the past two weeks, Farming First participated in a series of roundtable discussions hosted by the All-Party Parliamentary Group on Agriculture and Food for Development inside the UK Parliament.

The sessions focused on exploring the potential role and opportunities for smallholder farmers in future agribusiness development and how they can be supported by other actors such as governments, donors, the private sector and non-governmental organisations. The sessions were also attended by a number of Farming First supporter organisations, including TechnoServe, Farm Africa, Self Help Africa and Agriculture for Impact.

Consensus on the Basics

In both sessions, it was striking to hear how much consensus there seemed to be on the basic forms of support which smallholders needed to participate in the agricultural value chain. Many of the panel speakers discussed some combination of four items:

  • Credit, to buy farm supplies and invest in value-addition activities
  • Training, not only in the form of agronomic extension but also entrepreneurship skills and support in forming farmer cooperatives
  • Inputs, such as improved seeds and fertilizers, both to boost productivity and also to improve resilience
  • Market services, such as real-time pricing and weather information, micro-insurance, storage, transport and commodity exchanges

Sir Gordon Conway of Agriculture for Impact calls this basic list “a modest proposal for feeding Africa” because these are all already well-known needs. What sparked more discussion in the sessions, however, was on how and by whom these basics could be delivered most efficiently and sustainably, and at scale.

The Difficulty is in the Delivery

Creating the right policy environment within which all of these basics can be provided is key. These institutional and legal frameworks guide how markets function and how they are monitored.

The need for more secure land tenure was mentioned frequently as an area requiring more support. It is estimated that most developing countries only have 10 per cent of land parcels documented, which does not incentivise smallholders to make long-term investments on their land (e.g. irrigation) and makes it difficult to use their land as collateral for taking out loans.

Government support is also important. Ray Jordan of Gorta-Self Help Africa talked about how the Ethiopian government had prioritised agriculture to drive broader, pro-poor growth through its Agricultural Transformation Agency (ATA). The ATA is investing in agricultural research, extension and rural infrastructure, among other rural public goods while serving as a catalyst for bringing other actors together across the value chain.

Watch the Farming First TV interview with the ATA’s Chief Executive, Dr. Khalid Bomba:

Mr Jordan also suggested that this government support, alongside the work of development organisations like his, were helping to overcome the aversion to risk which many smallholders understandably share. Through “model farm” initiatives, farmers can see for themselves the benefits of new technologies and practices, as well as asking questions to their peers.

Jean-Pierre Halkin, Head of Unit Rural Development, Food & Nutrition Security at the European Commission, reinforced this view from a donor’s perspective. He also added that power relationships within these supply chains needed to monitored carefully to ensure smallholders benefitted equitably from the rewards arising from any risks taken.

Scale, scale, scale

Helen Edmundson, Private Sector Development Adviser at the UK’s Department for International Development (DfID), observed that net investments of $83 billion a year must be made in agriculture in developing countries in order to meet expected food demand by the year 2050.

Simon Winter, Senior Vice President of TechnoServe, also highlighted that 85 per cent of the expected increase in crop production from 2015 to 2050 is expected to come from developing regions, led by Africa and Asia. This was because yield gaps were still high (50-75 per cent in many cases) compared to developed world regions. Making improvements to yield and cropping intensity (versus increasing the amount of land under cultivation) represents the largest potential for meeting increasing future demand, as the Farming First graph below also illustrates:

Screen Shot 2015-03-31 at 16.27.50

In Africa, rapid demographic shifts are also redefining the marketplaces into which smallholders can sell. In 2000, the total population on the continent was around one billion people, yet by 2030 it is expected to swell by more than 50 per cent to 1.5 billion. At the same time, the continent is urbanising quickly, with the urban share of the population increasing from less than one-third to more than 50 per cent over the same period.

Thus, these growing urban food markets within Africa itself (versus export crops or commodities) are expected to represent almost nine-tenths (88%) of total future income potential for smallholders, according to research compiled by Steve Wiggins at the Overseas Development Institute.

Screen Shot 2015-03-31 at 16.26.39

As an example of this, Sylvia Banda, a Zambian entrepreneur, spoke at a session about her food processing and marketing venture called Sylva Food Solutions, which helps create local markets for indigenous foods grown by smallholders. While her business is thriving (and even expanding into neighbouring Mozambique and Tanzania), she says she still faces everyday difficulties – from high interest rates for credit to difficulties in sourcing proper processing technologies and even packaging materials.

Looking Ahead

These roundtable sessions made it clear that there is no one single solution for connecting smallholders to agribusiness development. Rather, interventions need to be context-specific; the benefits to smallholders need to be clear; and the non-market interventions of other actors need to be structured in such a way that they build and strengthen equitable, resilient and productive value chains for the future.

 Featured image photo credit: Agriculture for Impact (c)