Role of markets and value chains to support smallholders to access agricultural technologies

Dr. Upali Wickramasinghe, Regional Advisor on Poverty Reduction and Food Security, Center for Alleviation of Poverty through Sustainable Agriculture (CAPSA) led discussions on the role of markets and value chains to support smallholders to access agriculture technologies. He stressed that the world has over 500 million smallholder farmers who own land on less than two hectares and who often occupy marginal land far from markets, extension and basic services.

Issues around small holder farmers are complex and interlinked within socio-economic-political systems. The purpose of this session was to simplify these issues through research and case studies related to market and value chain options to support smallholders. To set the stage, Dr. Wickramasinghe shared an example of farmers from remote areas of Papua New Guinea, who use river to transport their produce (especially peanuts) to the market on tubes. Once arrived, women spend the whole night in the market without any facilities to sell their produce the next day. These are the types of people and communities we need to work with and promote market participation to improve their living standards.

Involving the private sector to commercialize bio-fertilizer in Bangladesh

Mr. Md. Nurul Amin, Director – Operations, IDE Bangladesh, presented a case study on involving the private sector to commercialize Bradyrhizobium (bio-fertlizer) technology: impact on soybean production in Bangladesh. IDE brings small-scale manufacturers and service providers to the market system to promote technology through the private sector. For this, IDE utilizes the market system approach developed by the UK Department for International Development (DFID).

Most development intervention bypass the market system and deliver services without involving the private sector, thus when the project finishes, everything collapses. The private sector needs to be brought into the market system and can function on its own when linkages between producer and the private sector are strong.

Mr. Amin also stressed the concept of the ‘Valley of Death’ where a government-funded research project conducts a research but fails to bring the private sector for dissemination of technology. On the other hand, the private sector shows limited interest to invest in basic research if it sees no clear benefit for itself.

In Bangladesh, the Department of Agriculture Extension (DAE) has developed bio-fertilizer technology and implemented it on a small scale since the 1970s. But because there was no private sector that would market the technology, its development stopped. In response, IDE brings together sellers of agricultural inputs, monitors the demand for bio-fertilizer and communicates the demand to DAE. DAE includes IDE’s information in its planning process for the production and marketing of the bio-fertilizer.

The research conducted by IDE shows positive results by proving a 15 per cent yield increase of soybean if using the bio-fertilizer. A 15 per cent increase in farmers’ income was also demonstrated, however, other factors contributed to this increase as well. With poultry development in Bangladesh, the demand for soybean has been increasing significantly. The use of bio-fertilizer has been increasing proportionately. Because the programme is in its very early stage, it is too early to draw conclusion on commercialization of and policy recommendations for the bio-fertilizer. However, it is clear that DAE cannot produce required quantity. Hence, it needs to bring the private sector in the process to promote scaling up.

Mr. Tengku Dato’ Mohd Ariff, Deputy Director Economy and Technology Development Research Institute of Malaysia Agricultural Research and Development Institute (MARDI) and Mr. R.M. Herath, Agriculture Economist, Department of Agriculture, Sri Lanka, were interested in what has been used as a nitrogen source in the absence of bio-fertilizer. According to IDE, farmers have used cow dung and urea as the main fertilizer. However, bio-fertilizer can replace urea given its promising results with soybean production. As long as the technology is available, affordable and accessible to farmers, the farmers will adopt the technology.

Dr. Johann F. Moltmann, Organizational Management Advisor from the GIZ/ASEAN Bio-agro Input Association of Indonesia, showed concern about how multi-national cooperation is driving contract farming by providing imported technology and inputs. He was particularly concerned about how farmers’ interest might be protected in this context. According to IDE, “The private sector and service providers from different sectors need to work together and provide required packaged inputs for small scale farmers”.

Dr. S. M. Khalilur Rahman, Member Director, Agriculture Economics and Rural Sociology Division, Bangladesh Agriculture Research Council (BARC) concluded that the key limitation why the production of bio-fertilizer has not been picked up is its short shelf-life compared to chemical fertilizer. This seems to be one of the reasons why the private sector does not want to engage in its production. There is no subsidy from the government to motivate the private sector to produce bio-fertilizer.    

Other countries, such as Myanmar, are facing a similar situation as Bangladesh with regard to fertilizer, as explained by Dr. Ohnmar Khaing, Coordinator of Food Security Working Group Myanmar.  Chemical fertilizer plays an important role in the farming system of Myanmar and a few private investors currently engage in production of bio-fertilizer.

Diversifying agriculture to high value crops in the Central Indian Tribal Belt

Mr. Kumar Ayan Deb, Coordinator of Knowledge, Monitoring and Learning, Collective for Integrated Livelihood Initiatives (CiNi), India, presented a joint study conducted by CiNi and BAIF India on experience of diversification of agriculture to high value crops with smallholders in the Central Indian Tribal Belt.

The objectives of the study were to:

• Identify innovative models benefiting small and marginal farmers through short gestation land based interventions on small plots.
• A situational analysis of factors facilitating adoption of high value agriculture by poor farmers.
• A source of learning for practitioners and policy makers for improved programme design.

The presenter stressed that the trial was not intended to secure seeds for farmers as farmers rely on private companies for seed supply. The cultivation of high value crop also focused on low land where land is easy to access. As part of the study, CiNi analysed the following models such as agro-horti-forestry promoted by BAIF, creeper-based vegetable cultivation promoted by SADGURU and market-oriented year-round vegetable promotion promoted by PRADAN.

Agro-horti-forestry

Forest trees are long-term crops that could not generate short- and medium- term income. Thus to help farmers get short-term income, BAIF Development Foundation India, introduced Jasmine plantation for 2,000 households. The local market could not absorb the production, thus BAIF helped organize collectivization of access to regional market (Delhi). Training of local people and logistical support played a vital role in enabling jasmine to access the regional market.

Creeper-based vegetable cultivation

The creeper-based vegetable cultivation project was initiated by SADGURU in Dahod, Gujarat for 2,000 households. The key strategy lies in providing individual support such as initial support cost and quality monitoring. The products are mainly targeted for the local market where a high demand for creeper demand already exists.

Market-oriented year-round vegetable promotion

The project on market-oriented year-round vegetable promotion was initiated by PRADAN for 3,000 households. The key strategy was organizing an agriculture production cluster, establishing a common nursery and collective procurement system to ensure the right quality, quantity and timing.

The presenter highlighted the following points that contributed to the success of the programme:

• Food security first – 96 per cent of early adopters are families with secured food from their own farm
• Organizational approach – importance of perseverant effort, creative use of subsidy,  working through challenges and ready to learn
• Significant returns from the models (69 per cent profit)
• Family labor – an opportunity cost (2-3 family members engaged in agriculture)
• Capacity building at various level (extensionists and farmers)
• Market’s role in various stages – access to timely input and defined time and field operation increases  adoption  by smallholders)

 However, there have been some areas that still need to be explored such as the reasons for early and late adoption, drop outs, risk mitigation, post-harvest losses and links with Government policy on revitalization of green revolution and the interest of small holder farmers.