Every day in sub-Saharan Africa, over 200 million people are unable to get enough food to eat. By 2050, this situation is set to worsen. With the population expected to double to two billion people, current food production systems – predominantly made up of small-scale farmers – are capable of meeting just 13% of this increased demand.
Finding solutions to tackle chronic hunger and malnutrition is finally becoming a priority on the global development agenda. And it is also becoming more widely acknowledged that market-based models can offer sustainable, long-term solutions for smallholder farmers, if implemented responsibly.
The result can be a considerable boost to broader economic growth in rural areas and for the continent as a whole. According to the World Bank, investments in agriculture are at least twice as effective in reducing poverty than investments made in any other sector.
Making markets work
Last year’s G8 Summit saw the launch of The New Alliance for Food Security and Nutrition, an initiative that aims to increase agricultural productivity and alleviate poverty for 50 million people over the next 10 years. In advance of this year’s G8 meeting in June, David Cameron has written similarly about the need for agricultural market development, noting that “an Africa that can trade will be a lion of global growth”.
Two new reports, launched this month ahead of the 2013 G8 Summit, discuss business-based solutions by compiling a set of guidance and case studies on linking African smallholder farmers to markets more effectively.
The first report, “Leaping and Learning: Linking Smallholders to Markets”, provides a review of previous efforts to link smallholder farmers to markets and highlights a number of recommendations for policymakers, donors, NGOs and investors. The second report, entitled “8 Views for the G8: Business Solutions for African Smallholder Farmers to Address Food Security and Nutrition”, compiles the collective insights of eight leading agricultural NGOs whose work has given them extensive experience in what it takes to effectively connect African smallholders to markets.
The reports highlight the ways in which market-based solutions can be adopted equitably and sustainably to improve the lives of smallholder farmers. They stress the importance of linking smallholders to domestic, regional and global markets, but acknowledge that it is often a lengthy process that involves risk.
Small farmers succeeding in big markets
While much of Africa’s trade in the near future is likely to be for domestic and regional markets (for instance, feeding Africa’s rapidly growing urban areas), export markets also offer potential for high-value returns. Yet it is often debated whether Africa’s smallholder farmers, who have access to just a few acres of land, can also produce these crops for export.
The “8 Views for the G8” report includes several case studies whereby smallholder farmers are being linked to export markets through the work of NGOs which are providing them with quality inputs, extension services and enterprise training, and facilitating their organisation into cooperatives in order to access credit and meet bulk orders.
In 2012, Self Help Africa, supported by DFID and through the African Enterprise Challenge Fund, began a new initiative to link smallholder mango farmers in Malawi with international markets. Whilst local trade in mangos by smallholder farmers, particularly women, has increased, markets are informal and prices are low. Self Help Africa has therefore been helping farmers to increase returns from mangos through value addition and processing, by introducing them to improved mango varieties and providing them with business training and agronomic support. They also run similar programmes with smallholder cashew farmers in Benin who are boosting their yields for export through the promotion of better agronomic practices and increased access to better varieties.
In the cocoa supply chain, ACDI/VOCA is working to make market systems more inclusive and competitive in ways that benefit the poor, through a mix of private and public sector actors. Recognising the economic importance of cocoa to smallholder farmers, and the international cocoa industry’s need for diversified sources, they launched the Sustainable CoCoa Enterprise Solutions for Smallholders (SUCCESS) Alliance, which operates in eight countries to address constraints to cocoa production and marketing to increase the competitiveness and sustainability of the sector. It focuses on farmer education and productivity gains, product improvement and market transaction efficiencies.
TechnoServe works with enterprising people in the developing world to build competitive farms, businesses and industries. It believes that a successful farm should be an integrated and diversified system, where multiple crops help to ensure food security and manage risk. One example of this is Duromina, a cooperative of over 100 coffee farmers in southwestern Ethiopia. With technical support and business advice from TechnoServe, the members constructed a wet mill and started processing fully washed coffee for the first time. Two years later, sales increased and an international panel of professional judges gave Duromina’s coffee the highest score in a regional competition. With their new income, Duromina’s members collectively invested money in services for the community.
No universal cure-all for African agriculture
Despite the success of these three organisations, there are no universal solutions for linking smallholders to markets. A number of factors are critical to ensure that the goals of growth and development are both being met.
Firstly, smallholders are incredibly diverse, with many still unprepared or otherwise unable to participate in markets effectively. Safety nets must remain in place for those who cannot be reached or who try but fail in their efforts.
Secondly, when scaling up successful agricultural programmes such as the ones discussed above, it is vital to recognise that agroecological zones and socio-economic conditions can vary dramatically throughout Africa, and solutions must be adapted to local circumstances if they are to succeed.
Thirdly, there is a danger that some commodity value chains will be developed while others, particularly those commodities grown and consumed by poor people, will be neglected. High-value cash crops such as cocoa and coffee often see higher returns on investment than staple crops and therefore require less public stimulus. Staple crop development alongside the development of export markets should be actively supported – at least, initially – to address access issues and to boost production and productivity.
Beyond the Millennium Development Goals
As we approach the end of the Millennium Development Goals in 2015, it is important to start forming new goals. World leaders have a unique opportunity this year to make a sustained and significant step forward in tackling poverty and eradicating hunger.
Actors across the entire agricultural value chain, including governments, donors, businesses, scientists and development practitioners, should work together to support farmers in overcoming the barriers they face to grow and thrive.
Michael Hoevel is deputy director at Agriculture for Impact, and Bruce McNamer is president and CEO of TechnoServe