How Can Markets Identify The Better Farmers?

By Lucas Simons, Founder and CEO of SCOPEinsight and NewForesight Consultancy

How Can Markets Identify The Better Farmers?

The answer to this question is not trivial. In fact, it might mean the difference between a healthy, vital and sustainable agricultural sector and a poor, desperate and very unsustainable one. Ashoka Fellow Lucas Simons explains.

In the next 40 years we need to almost double our food production to feed our fast growing world population. By 2050 almost 10 billion mouths will need to be fed and each mouth will have more money than ever to spend on more varied and better quality food.

Global agriculture is already one of the most unsustainable sectors in the world. It is by far the largest driver for poverty, child labor, slavery, loss of biodiversity, water scarcity, climate change and deforestation. How we double food production without destroying the earth may be the biggest challenge of our life time. And we don’t get a second change to get it right.

Agriculture forms the backbone of many countries in Africa, South East Asia and Latin America. Those countries thus hold most potential to increase food production. So how do we get these farmers to produce more food? The answer to this question lies in how we view agriculture. Do we see it as a way for many poor people to grow something to eat and survive? Or do we see it as a sector where businesses should thrive?

Lucas Simons, founder of SCOPEinsight, strongly believes the solution lies in the latter. Farming in developing countries should be about modern, productive, efficient and well managed businesses that are able to provide sufficient and good quality food in a sustainable way. And just like any business, farmers need access to inputs, finance, markets, services and knowledge.

This is where we get stuck. There is not a bank, consultancy firm or seed, fertilizer or equipment selling company who wants to do business with poor, illiterate farmers who do not make money. Businesses want to do business with other businesses.

So how do you turn a farmer into a business man? SCOPEinsight believes the answer to this question is to assess the level of professionalism and economic viability of cooperatives and medium sized farms. This assessment does two important things: First it helps cooperatives to get insight in how well they do as a business and where and how they should improve. Second, it creates a pipeline of assessed cooperatives and farms to other businesses like banks, input providers or insurance companies that are looking for an opportunity to do business with the better farmers.

This is exactly what we do at SCOPEinsight. SCOPEinsight is a for-profit, for-purpose company started four years ago. We assess farmer groups and we convene and link them to training providers, banks and other businesses.

The effect of this simple intervention is very promising:

  • When better farmers get the recognition and the inputs they need to grow their business this leads to an increase in productivity and income.
  • The farmers get a clear pathway to become better and training providers know what the specific capacity building needs are. This leads to more effective and efficient capacity building program and in turn leads to better businesses.
  • The search and selection costs for banks and input providers who are looking for clients but are often hundreds of kilometers away is significantly lowered making it more interesting to do business with the remote but good farmers.
  • The level of professionalism between farmers can be compared and this reduces risks for potential investors.
  • The data captured provides insight in the agricultural sector, and can help make better informed policy and risk decisions.

A vital, more productive and more sustainable agricultural sector starts with the ability of the market to make a distinction between who is the better and more professional farmers and who is not. This enables investments in the better farmers, and helps them develop their businesses. SCOPEinsights’ assessments provide the first stepping stone for this process of market transformation.

What do you think? Should agricultural markets work with the better farmers?

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