Stories tagged: trade

How to Help Small-Scale Farmers Surmount Trade Barriers in Mexico

In this guest post, Francis Mendez, Director of Fairtrasa Mexico explains the successful model her organisation uses to help small farmers in Mexico reach big markets. 

In my home state of Michoacán, Mexico, many small-scale farmers struggle with poverty and lack of resources. While large agricultural companies and more advanced small-scale farmers are able to sell their products on international markets, many farmers remain marginalized. They lack the proper resources, know-how, and infrastructure to develop their farms and businesses. If they do sell their products, it is to local “middlemen” who pay them negligibly, if at all.

Since 2005, Fairtrasa Mexico (of which I’ve served as Director since 2011) has been dedicated to helping marginalized small-scale farmers empower themselves by producing and exporting certified produce. In almost every case, the farmers we work with have no experience in how to achieve certification for their produce, nor in exportation itself.

This means they are excluded from the benefits of being part of the global food supply chain, such as the ability to earn a significantly higher income than on local markets, and to re-invest this income in farm, business, and community development.

These farmers need help joining the global food supply chain in a sustainable way. At Fairtrasa Mexico, we give farmers the support, resources, and logistical help they need to become certified exporters. In essence, we helps them surmount trade barriers. This has been our model since our company was founded in 2005.

Our work is not easy. We exist in a region riddled with crime and violence. We operate on a for-profit business model, re-investing much of our profit in needy farmers. Our partner farmers have been burned by “outsider” companies in the past, so gaining their trust takes work and time.

Yet our model has been successful and impactful for twelve years, and I see several keys to that success.

International Certifications

For marginalized small-scale farmers, international certifications such as Organic, GlobalGAP, and GRASP are tickets to joining the global food supply chain, as they can be the key to fetching much higher prices – sometimes as high as 25-30% more. And the impact goes beyond the economic: by complying with international standards, farmers professionalize their operations and improve the environmental sustainability of their farms.

However, obtaining these certifications is difficult and costly for marginalized farmers. This is where Fairtrasa can help, by leading them through the application and compliance processes. In Mexico, we focus on helping farmers achieve organic certification for fruit, by carrying out on-farm analyses on their behalf and keeping track of administrative documents, at no cost to the farmer. In some cases, we cover most or all of the costs of certification. When they obtain and maintain these certifications, enormous market opportunities open to them.

Customized Training

Fairtrasa Mexico provides trainings tailored to the specific needs and development levels of our farmers. Our in-house agronomist performs a technical assessment for each farmer, and gives recommendations for optimizing production through sustainable techniques. He then provides or coordinates customized training workshops, and visits each farmer on his or her farm at least once a month. This training focuses on yield optimization, quality control, and meeting the certified standards.

Financial Support

Lack of financing is a huge barrier to many small-scale farmers. They simply do not have the financial resources to plant their fields, obtain certifications, and begin exporting. Fairtrasa Mexico addresses this issue mostly by giving small loans to farmers. In 2016, for example, we loaned a total of US$30,000 toward the costs of fertilizers, pruning, equipment, and staffing, among other aspects of the production and export processes.

Quality Before Quantity

While it’s vitally important to help small-scale farmers improve their yields and export volumes, it’s equally important to help them achieve professional-level quality control. Farmers need to produce consistently high-quality fruit in order to sell on international markets. Even a single bad avocado can lead a buyer to return a container of otherwise high-quality fruit—and a single rejected container can be devastating for upstart exporters. Over the last 12 years, Fairtrasa has learned that it’s essential for farmers to perfect their quality control before expanding their output for export. Patience and attention to detail are therefore extremely important.

Building Trust

Providing training, financing, and support to small-scale farmers is crucial. Yet there is something even more fundamental: the farmers’ trust in us. Many small-scale farmers have had bad experiences with fruit buyers in the past, who often made promises they didn’t keep. In my experience, these are the keys to gaining farmers’ trust:

  • Keep your word: The society of our partner farmers is founded on the value of an individual’s word. If you don’t keep your word with farmers—even once—you will lose them. If you keep your word with farmers, you will begin gaining their trust. This is the essential groundwork for a building a long-term relationship.
  • Locals for locals: Fairtrasa’s founder, Patrick Struebi, came to Mexico from Switzerland in 2005. Although he founded the company by gaining the trust of local, small-scale avocado growers, he immediately understood the importance of finding local leaders to lead our social enterprise. As Fairtrasa replicated its model in Peru, Chile, and the Dominican Republic, the principle has stayed the same. We are emotionally and practically invested in the farmers’ success.
  • Demonstrate and lead by example: One of our team members is our in-house agronomist, Jose Luis Villagomez Solano, whoc is also a farmer in his own right. He owns a prosperous avocado farm where he utilizes sustainable techniques. When he visits our farmers and recommends best practices, he backs it up with his experience and output.

A Passionate Team

Underlying and fuelling our social enterprise is the passion and commitment of our team. Every day is a learning experience. Every day is a battle. But when we see the impact of helping marginalized small-scale farmers surmount trade barriers and thrive within the global food supply chain, it only makes us more passionate about the work we do.

This article originally appeared in WFO’s [email protected]

Nicolas Mounard: British and African Farmers Face Similar Challenges and Opportunities

In this guest blog post, Nicolas Mounard, CEO of Farm Africa, discusses the similar challenges faced by British and African farmers associated with uncertain trading conditions as well as growing and increasingly complex global demands.

Never before has the world asked so much from its farmers. The challenge of feeding a rapidly expanding global population in a changing trade and environmental landscape is a daunting task. Farmers are up to it but to succeed, they need support to sustainably increase production as well as certainty on trade agreements.

A recent meeting in London organised by Farm Africa, an international NGO working to grow farming in eastern Africa, and the UK’s National Farmers’ Union highlighted the importance of well-functioning supply chains to global food security.

Growing population

With the global population set to get bigger and more affluent, the world will inevitably continue to see a rapidly rising demand for food, begging the question whether the supply of food can keep pace.

Britain’s food self-sufficiency is projected to fall from 60 to 50% by 2040, whilst the UN’s Economic Commission for Africa reports that the continent imported 83% of its food in 2013, despite the majority of the population working in subsistence agriculture.

Agneta Mbithe, 25, of Kyakya Youth Group Kitui, Kenya tends to Sorghum crops. (Farm Africa/Mwangi Kirubi)

Agneta Mbithe, 25, of Kyakya Youth Group Kitui, Kenya tends to Sorghum crops. (Farm Africa/Mwangi Kirubi)

These statistics could easily set alarm bells ringing when it comes to outlook for food security here in the UK and in Africa. Indeed, commentators have long feared that the global demand for food will outstrip supply. But as Tim Smith, Group Quality Director at Tesco and Farm Africa’s latest board member, noted at the event: “Fifty years ago, commentators said it would be impossible to feed the population we have now. Yet between everybody working up and down the supply chain those naysayers have been proved wrong”.

Farmers and the agriculture sector as a whole are up to the challenge but the stakes have never been so high. Both the UK and Africa need a clear roadmap on how to achieve long-term, sustainable food security.

Pushing aside important caveats about scale, landscape and context, British and African farmers are facing similar food security challenges: the need to grow more, grow better and secure access to high-value markets.

A participant in Farm Africa’s climate-smart agriculture project in Ethiopia. (Farm Africa/Medhanit Gebremichael)

A participant in Farm Africa’s climate-smart agriculture project in Ethiopia. (Farm Africa/Medhanit Gebremichael)

Growing more, growing smarter

At Farm Africa, every day we see first-hand how ensuring farmers are equipped with the right agronomic skills and high-quality inputs can boost harvests and profits. From our sesame project in Tanzania to our fish farming programme in Kenya, we’ve seen how yields can increase by 200 or 300% within the space of a year. These are much needed gains, given that African farms are performing at only about a quarter of their potential.

Meanwhile, British farmers’ productivity is failing to keep pace with other developed countries: the UK’s agricultural productivity is achieving an average annual growth of just 0.8%, highlighting the need for increased investment and innovation to enable agriculture in the UK to realise its potential.

In Africa, increasing volume only represents one side of the coin, quality is the flipside. Improving the quality of crops to meet the standards needed to penetrate export markets can provide poor farmers with a sizeable and steady income; a vital food security ingredient.

Yet smallholder farmers often need specialist support to make the step-change from subsistence to commercial agriculture. Across many of our projects we are supporting smallholders in developing the business and marketing skills they need to work with international buyers, as well as improving their access to high-quality inputs, such as certified seeds, necessary to meet export standards.

In a project we run in south-eastern Ethiopia helping forest communities to earn a living from the coffee that grows naturally under the shade of trees, we’ve helped 15 out of the 21 coffee cooperatives we work with to export directly to the international market, where their coffee beans will fetch a much higher price.

By making sure that the post-harvest handling, processing and marketing of coffee is the best it can be, we can make sure that coffee farmers can earn a better income from the coffee they produce, helping to bolster livelihoods and protect against food insecurity.

Providing trade certainty

Restrictive trade agreements, as well as poor infrastructure such as inadequate roads, can mean that even when yields are good and quality is high, farmers face challenges getting their goods to market.

Market access is of course of prime importance to British farmers with Brexit negotiations underway. With 73% of British agri food exports currently going to the EU, there’s no doubt that farming will be the most affected sector when the UK leaves the EU.

The lack of certainty about the markets to which British farmers will have access highlights the importance of a stable trading environment to both food security and farmers’ livelihoods.

“Farming is a long-term business. I, like many farmers, am making decisions now for beef products hitting the market in early 2020. Even with the best will and planning, I’m making these decisions not knowing the trading environment I’ll be operating in,” commented Minette Batters, Deputy President of the NFU at the recent Westminster Food & Nutrition Forum.

Regional trade is also high on the agenda in eastern Africa. While Tanzania and Uganda produce a surplus of staple crops, such as rice and maize, every year, Kenya only grows enough maize to feed itself one year in every five.  Until recently, high tariffs on trade within eastern Africa have meant that it has been cheaper for Kenya to import crops from outside Africa. These policies have now changed, opening up new opportunities for regional trade.

Farm Africa is helping rural Ugandan and Tanzanian farmers make the most of this new export market, providing communities with the resources and knowledge to produce high-quality grain, store it safely and get top prices from the market. This not only helps boost the incomes of Tanzanian and Ugandan farmers, but helps secure affordable food for Kenyan consumers year-round.

While a prolonged drought has forced Uganda to employ short-term measures that halt the export of staple crops, Farm Africa is working to ensure that when farmers do achieve a surplus, they will be able to sell their crops regionally.

Degrading the environment degrades food security

It is common knowledge that mankind’s ability to feed itself is inextricably linked to the environment. Less widely recognised is that agriculture is also a major driver of climate change and environmental degradation. Resolving this tension through the adoption of sustainable agricultural practices will prove vital to ensuring the world’s long-term food security.

Both Africa and the UK face environmental problems driven by unsustainable agricultural production, ranging from water scarcity to soil erosion to deforestation and degradation of grazing lands, which threaten future agricultural productivity.

To secure agricultural productivity and livelihoods farmers must focus on sustainable agriculture that conserves the vital natural resources they rely on, as well as support and strengthen existing conservation efforts made by local rural communities.

Going forward

The British and African food and farming industries have more in common than first meets the eye. Global food security has much to gain from players at every stage of supply chains working ever more closely together to increase production, protect the environment and, crucially, ensure access to markets.

Learn more about Farm Africa’s work here or follow @FarmAfrica on Twitter. This post originally appeared in the March edition of the WFO’s [email protected].

Cover photo: Farm Africa/Stephanie Schafrath

The future of Direct Payments in Agriculture

The International Food and Agriculture Trade Policy Council (IPC) have released a new paper in their Policy Focus series looking at the future of direct payments in the US and EU.

Direct payments, or agricultural subsidies, are used as a means of phasing out agricultural market intervention in the form of maintaining high commodity prices and the buying up and disposing of surpluses. They are government subsidies payed to farmers and agribusinesses to supplement their incomes, manage the supply of commodities and influence their cost. Direct payments effectively act as income support to farmers that is not linked to production or price.

In the EU, direct payments account for the largest share of the Common Agricultural Policy budget, spending some €36 billion on them in 2008. The US in turn spends $5 billion dollars a year on direct payments. Over time, the report’s authors argue, these have become a drain on government budgets and have contributed to trade frictions.

The IPC originally welcomed the introduction of direct payments as a move away from market intervention, but with the proviso that these were temporary measures. The paper’s authors emphasise that the linkage of direct payments in the EU to “cross-compliance”, the requirement to meet certain environmental standards, have made direct payments less controversial than in the US.

The paper’s authors provide some key recommendations, which include:

–       The case for continuing payments in the EU needs to be made in a way that is convincing to the public by strengthening the link with the provision of public goods

–       The rationale for continuing payments in the US is weak, and thus should be eliminated on policy reasons

–       In the US, money saved from eliminating payments should go into supporting research and development for productivity enhancement to allow US farmers to compete effectively in world markets.

To read the paper in full, please see: http://www.agritrade.org/Publications/FarmPolicyintheUSandEU.html

Measuring Market Access for Agricultural Products

A newly released study by the International Centre for Trade and Sustainable Development (ICTSD) looks at the potential of establishing a “Composite Index of Market Access” (CIMA) to measure the changes in market access using a single, comprehensive, and operationally-friendly model.

The extent to which markets are open and transparent to trade is an important issue for farmers across the globe.  Farmers must weigh the costs and benefits of subsidies, export tariffs, and other barriers such as technical barriers, health and safety measures, and private voluntary standards which must be met to sell to certain buyers.

What this model attempts to achieve is to “shift the focus from the number and complexity” of measures being considered “to a uniform and comparable index so that negotiations may conclude more transparent and equitable trade agreements in the future.”

While still a conceptual discussion, the paper suggests that a limited test of the indiex on a few commodities could demonstrate whether the CIMA could become an effective tool for policy discussions, such as:

  • determining the current level of market access for negotiation purposes
  • identifying shifts in market access over time
  • targeting sub-issues which might remedy existing trade problems
  • estimating the impact of private standards on market access
  • empowering exporting farmers with useful information on which to base decisions

Experts Brainstorm Key Challenges in Achieving ‘Farming First’ Plan

At a recent side event at the UN Commission for Sustainable Development’s Intergovernmental Preparatory Session (IPM), over 85 people gathered together to brainstorm key challenges to achieving the Farming First plan.

Here are some of the top issues, organised according to each of the Farming First principles:

1. Safeguard natural resources

Key challenges:

– Lack of education/awareness – The public needs to be educated on what sustainable agriculture is. The education of farmers on the sound use of resources also needs to see improvements.
– Framing the issue – Common definitions for “sustainability”, “natural resources” and other terms need to be reassessed.
– Lack of economic incentives – There is a need to incentivize farmers to use sustainable farming techniques, without adding additional costs which cut into their livelihoods.

2. Share knowledge

Key challenges:

– Application of knowledge – knowledge is not applicable to different regions or contexts.
– Dissemination of knowledge – the way in which knowledge is shared or passed on is not appropriate to some context or acts as a restriction
– Access to knowledge – availability of and access to resources, particularly the internet as a major resource for information, is limited.
– Agribusiness and local farmer competition – competition between agri-businesses and local farmers for resources and knowledge can be an impediment. Participants stressed the need for greater coordination among related, overlapping sectors and fields of study within agriculture, business, and science and technology to provide a more holistic approach to agriculture.
– The role of governments – Bureaucracy is a major challenge to the dissemination of knowledge, constituting a strong disincentive for farmers and other stakeholders.  Additionally, food production and agriculture are often not priorities for governments, which limits the number of opportunities for knowledge sharing. Farmer-to-farmer learning should be strengthened in order to cope with this.
– Public image of agriculture – Agriculture does not generally have a positive image as an occupation, yet, as urbanization remains a growing trend, dependence on the remaining farmers is increasing.  The public perception of agriculture needs to be improved and its importance shared with policy-makers and urban populations so that food production and food security are fully understood and made a priority for policy makers and investors.  Agriculture as an industry also needs to coordinate with the technology sector in order to reach and educate younger generations with regards to this challenge

3. Build local access

Key challenges:

– Access to Microcredit/finance – is insufficient and limits farmers capacity to invest, grow and create real opportunities for themselves
– Access to knowledge – lack of access to education and/or research/knowledge is an impediment for farmers and impedes the adoption of best practices.
– Governance – poor governance, excessive bureaucracy and corruption are all major problems for farmers and limit their access to resources and to markets.

4. Protect harvests

Key challenges:

– A lack of education/knowledge among farmers – including inadequate knowledge post-production on food safety and on food storage
– A lack of local farmer coordination on crop growth –  As markets are flooded with particular goods in each season or if sales do not occur rapidly enough, large parts of the crop can be damaged and farmers face adverse conditions because of the glut.

5. Enable access to markets

Key challenges:

– Improving infrastructure – Insufficient transportation and poor infrastructure were common themes as to why farmers were unable to sell their crops once harvested.
– Trade barriers and access to foreign markets – Contributors agreed that constraints on access to markets were one of the most important challenges faced by farmer. It was agreed that farmers would gain far greater access to markets if tariff and trade barriers were eliminated, and they were able to compete on common ground in the global marketplace.  Farmers have goods to sell – they just need the policy and practical supports to buttress their efforts.

6. Prioritise research imperatives

Key challenges:

– Participatory setting – greater participation is required in research activities.  Despite the presence of integrated teams of researchers, it is believed that practitioners are being left out.  Research should include more groups and start from a bottom up approach where more information is collected from farmers.
– Dissemination of research – information should be more widely spread so that the international community can benefit from it.  More joint projects might encourage the sharing of research from advanced countries.
– Needs and resources of scientists and farmers – these two groups should play a bigger role in identifying research needs.  A global source of funding should be established for use by scientists and farmers.