Constraints to smallholder commercialisation

ID-100136355In the wake of the 2008 food price crisis, which exacerbated food insecurity and increased smallholder farmers’ vulnerability to shocks and stresses, recognition of the barriers smallholders face in becoming more productive and developing their farms as commercial businesses has been growing. In 2010, the UN Food and Agriculture Organisation implemented the Multidisciplinary Fund (MDF) project to help develop policies supportive of smallholder commercialisation in Africa, in particular identifying the heterogeneity amongst smallholders in terms of their attitudes to commercialisation.

A new report, Understanding smallholder farmer attitudes to commercialisation – the case of maize in Kenya, by the FAO, focuses on maize producers and rural youth in Kenya by investigating “attitudes, strategies and opportunities related to maize commercialisation” in Meru and Bungoma regions in the country. The report is based on key informant interview, focus group, farmer survey and stakeholder workshop data.

At present farm management is not undertaken with commercial prospects in mind for a variety of reasons – continued reliance on maize production for household consumption and a level of mistrust in markets; production and marketing activities remaining distinct from one another; reactive rather than planned production decision-making processes; poor storage facilities; and low maize quality. That is not to say that there aren’t farmers who do think more commercially but in particular farmers are more likely to require direct payments immediately to meet their household needs rather than selling at times or to traders that might allow them to obtain higher payments for their maize. Net buyers of maize, numbering some 45% of the smallholder farmers surveyed, are found to make more objective business decisions, again likely related to the level of urgent cash needs of poorer households and net buyers of maize. One of the main concerns in finding an outlet to sell maize are the transaction costs and the risks associated with the transaction, most farmers aiming to minimise costs and risks. Those smallholders engaged in more commercial practices, in particular selling maize to more distant traders or modern market channels, were more likely to experience a lack of nearby market opportunities, to specialise in maize, to have access to better price information and to have benefited from government input support programmes.

Given the relatively small amounts of maize sold by most farmers, collective marketing whereby maize is pooled and sold in bulk (and inputs can be bought in bulk) could be beneficial but it was found to be unlikely that net buyers would become net sellers of maize purely through collective marketing. Greater institutional support to partner these collective marketing approaches and a business oriented approach may aid their effectiveness.

The report, a valuable resource in terms of understanding how commercialisation policies may impact farmers on the ground, if at all, also makes recommendations for future work. In particular understanding that many farmers are not yet equipped to be able to take advantage of market opportunities. More transparent markets and maize quality standards as well as a new approach to collective marketing may help. Greater focus on agribusiness development as a beneficial rural economic sector and better coordination across agricultural and other policies relevant to rural households is also needed. Targeting the youth in particular to become part of a growing and innovative rural sector as well as creating systems of clear and secure property rights are also important factors in the enabling environment.

While the report reports on smallholder farmers attitudes towards commercialisation, there is little discussion as to whether commercialisation is the best approach to creating sustainable and profitable food systems. Indeed many would disagree with such an approach in part for the fact that perhaps only the more well-off farmers can engage with wider markets. Greater emphasis needs to be given to why certain farmers cannot, due to various constraints, better plan their farm management for the long-term and for the welfare of their household, with or without future commercialisation.

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Comments

  1. Very informative

  2. Reblogged this on Dr. B. A. Usman's Blog and commented:
    “While the report reports on smallholder farmers attitudes towards commercialisation, there is little discussion as to whether commercialisation is the best approach to creating sustainable and profitable food systems. Indeed many would disagree with such an approach in part for the fact that perhaps only the more well-off farmers can engage with wider markets. Greater emphasis needs to be given to why certain farmers cannot, due to various constraints, better plan their farm management for the long-term and for the welfare of their household, with or without future commercialisation.” – Can we Feed the World

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