Smallholders are getting a raw deal, how can they sell directly to companies and get better market prices?” The objective is clear – farmers need to be linked to markets, but how to do this, and make sure it is an effective, beneficial and sustainable linkage that is formed, is far more challenging? Many attempts have been made with most ending in failure and yet the need is a great as ever.
So today we are delighted to launch AgroDomain Platform where smallholders improve their commercial viability and their livelihoods by helping them reach consumers beyond their local markets. Our starting point is that linkages are important but difficult. And that linkages are not just about buying and selling crops. A market linkage is also the route for provision of services including transport, market information, agricultural inputs and business services. These functions all need to be provided by someone somehow in the value chain. Designing a good linkage means working out what the company does, what third party providers do, and what this means for farmers in practice.
The Benefits of Linking Smallholder Farmers to Market
Agribusiness small and medium agribusiness enterprises are critical to link smallholder producers to national markets, meet food demand and create tomorrow’s jobs. Markets in emerging economies are growing rapidly and creating vast opportunities as incomes rise and diets change. The challenge is to better integrate small scale farmers into markets so that they can make the agricultural sector stronger. Experience shows that when a country’s agricultural sector is not competitive, there is greater reliance on imports and less agriculture-driven poverty reduction in rural areas.
Africa’s food market, valued at about US$ 313 billion a year in 2013, could triple by 2030, with investments in infrastructure, smart business and trade policies and a dynamic agribusiness sector linking farmers with consumers in growing urban areas according to a World Bank report on the potential of agribusiness in Africa. Much investment is needed all along the agribusiness value chain. In addition, enabling everyone from farmers to firms to take up opportunities for inclusive agribusiness development is critical. Connecting producers and entrepreneurs to domestic, regional and global markets either directly or through links to other agribusinesses can raise incomes, deliver food from surplus to deficit regions, and provide diversified sources of growth.
There are many different inclusive agribusiness models – some focus on increasing productivity of smallholder farming, whether through inputs, finance, information or extension. Others focus on sourcing from farmers and providing them market access. Some focus on a specific input or sale, while other initiatives work up and down the value chain. The right infrastructure can reduce transaction costs for farmers, help subsistence farmers scale up to commercial agriculture, improve processing of agriculture products, and reduce post-harvest losses.