05/30/2013 11:03 am ET Updated Jul 30, 2013

Linking Smallholder Farmers to Markets in Africa

This time last year, President Obama announced at the G8 Summit a new initiative aimed at increasing responsible investment in African agriculture and driving sustainable agricultural productivity increases to improve livelihoods and reduce risks for smallholder farmers and vulnerable rural communities.

As this year's G8 Summit approaches, similar sentiments are being voiced by UK Prime Minister David Cameron and his Secretary of State for International Development Justine Greening. Cameron emphasized earlier this month that "an Africa that can trade will be a lion of global growth." Similarly, Greening spoke at great length of the role of agriculture in developing countries as a "win-win for development" by bolstering food security and nutrition while working "to end aid dependency through job creation as a result of improved agriculture markets and systems."

At the heart of these messages is a call for responsible market-based solutions for agricultural development. And it is being echoed by many Africans as well. Philip Kiriro, president of the East Africa Farmers Federation, reiterated this view in a recent panel session at the World Economic Forum on Africa: "We are now seeing agriculture as a business, rather than a philanthropic or social sector."

But are market solutions the be-all and end-all solution for African smallholder farmers? Are certain market investments, interventions and partnerships more effective in addressing and hunger? And how can we ensure that smallholder farmers are included in - and benefit from - agricultural programs throughout the value chain?

New Learnings

Two new reports, launched today ahead of the G8 Summit, aim to address these very questions by reviewing lessons learned to date and compiling a set of guidance on linking African farmers to markets more effectively.

"Leaping and Learning: Linking Smallholders to Markets" -- a report commissioned by Agriculture for Impact and produced by the Overseas Development Institute with support from the UK Department for International Development and the Bill and Melinda Gates Foundation -- offers a comprehensive review of existing case studies and well as a series of recommendations for donors, policymakers and development practitioners for future action.

The second report, entitled "8 Views for the G8: Business Solutions for African Smallholder Farmers to Address Food Security and Nutrition", has collected the insights of eight leading agricultural NGOs which are on the ground working with African smallholders.

Together these reports outline a series of priority areas to be addressed for markets to work better for smallholders, including issues related to:

1. Access -- to inputs, finance and credit, storage and professional advice.
2. Institutional capacity -- to self-organize and benefit from economies of scale.
3. Market information -- related to standards, prices, risk management and enterprise skills.
4. Public sector investment -- in rural infrastructure, agricultural research and extension.
5. Stable policy environments -- avoiding unpredictable policy shifts, weak contract enforcement and restrictive trade flows.

There are already promising solutions to address these challenges across the entire value chain, from policy support and on-the-farm training to trading, processing and export. It is worth highlighting several of these examples here.

To improve seed security in the southern Africa region, the Food, Agriculture and Natural Resources Policy Analysis Network (FANRPAN) has run its Harmonized Seed Security Program (HASSP) in four countries in Africa -- aligning national seed policies, developing the capacity of smallholder farmers to produce quality seed, coordinating strategic partnerships and creating engagement platforms for all stakeholders to share experiences.

To improve food safety, Twin has been working with Malawian smallholder groundnut farmers to prevent contamination from aflotoxin -- a carcinogenic mold which causes serious public health impacts -- through education programmes, proper storage techniques, infrastructure investment and simple technologies. They are also working with farmers to add value to products in-country and connect them to new markets, for instance, by promoting their nuts in the UK under the Liberation brand to drive consumer demand for smallholder produce.

To build more inclusive social enterprises, Farm Africa have created a new franchise business model to deliver products for livestock in Kenya. Called Sidai (which means 'good' in the Maasai language), its 32 franchises enable farmers to access affordable, quality inputs and technical advice, particularly in more remote locations. Similarly, One Acre Fund helps their smallholder farmer "clients" to access affordable seed and fertilizer in the right amount by bulk-buying these inputs, distributing them closer to where farmers live and offering credit until harvest time. And yet another program from SNV works with Zimbabwean agro-dealers to restock their supplies and help them with distribution to more rural areas.

To connect smallholders to export markets, Self Help Africa are working with mango farmers in Malawi and cashew farmers in Benin to improve production and further process their harvests to improve their incomes. ACDI/VOCA are also working with cocoa farmers in West Africa, and TechnoServe are working with Ethiopian coffee farmers in similar ways.

No Easy Solutions

Despite the progress made to date, it is important to remember that markets everywhere, and perhaps especially in the developing world, are imperfect and amoral (albeit not inherently immoral). Thus, certain considerations need to be kept in mind when developing market-based interventions.

Firstly, not all smallholder farmers are the same, and many are still unprepared or otherwise unable to participate in markets. Therefore, safety nets must remain in place for those who cannot be reached or who try but fail in their efforts.

Secondly, a successful approach in one place does not necessarily work in a different context. When scaling up successes, these programs must be adapted for different agro-ecological zones and socio-economic conditions.

Thirdly, various crop markets are often unequally developed. High-value cash crops such as cocoa and coffee often see more investment than staple crops. It is important that the latter are not neglected, and thus may require more public stimulus -- at least, initially -- to address access issues and to boost production and productivity.

Remember the Goal

We must not forget that, in sub-Saharan Africa, over 200 million people remain suffering from hunger and that 40 percent of children under the age of five on the continent are stunted due to malnutrition.

When done responsibly and sustainably, market-based agricultural development can empower smallholder farmers and provide them and their families with a more secure and nutritious supply of food as well as improved livelihoods. But there is still much work to be done.