Whilst working in agricultural development in Malawi I find that the same two questions keep on coming up again and again: ‘I want to source commodity directly from smallholder, how can I do this?’ ‘Smallholders are getting a raw deal, how can they sell directly to companies and get better market prices?’
This 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.
Of just over 100 inclusive business projects supported by the Business Innovation Facility, around 40 involve a farmer linkage and so we are tackling the issue head on.
We have drawn on experience across our portfolio to produce a new publication in our ‘Inside Inclusive Business’ series. ‘Inclusive Agribusiness: Linking Smallholder Farmers to Markets‘looks at why farmer-market linkages are needed, what drives them and the lessons that can be learnt from reality of local sourcing in the BIF portfolio.
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 Insider first considers linkages from the business perspective and maps out the range of drivers that have led BIF supported companies to develop linkages. Drivers are a major influence on linkage design. Secondly it looks at the wider value chain, and the services that may be delivered by others. We review the extent of direct engagement between company and farmer, and find that most of our projects fall under ’semi-engagement’ in which there are a variety of roles and actors. Eight short case studies provided the core material, and form the basis for the recommendations to other companies developing linkages.
Where to find out more:
- For more resources and publications on inclusive agribusiness and smallholder value chains, check out our know-how page on working with smallholders.
- Visit our project page listing all the projects in the agriculture and food sector.
- Download more of our Insiders and visit our Publications page for more resources.
Georgina Turner has been a consultant with Imani Consultants in Malawi for the past three years. She has supported the Business Innovation Facility through providing technical expertise to its agri-business projects and learning.
This blog is part of an Inclusive Business Insights Series, brought to you in partnership with the Business Innovation Facility.
Working closely with companies at the ‘coal-face’ of inclusive business, the Business Innovation Facility aims to share lessons learned and insights gained from over 100 projects across five countries. Each month, this blog series will feature selected articles written by members of the team working on the ground, to highlight the challenges and opportunities of implementing inclusive business and to spark fresh thinking and innovative approaches to leveraging business for development.