Approaches to linking producers to markets

Supply chains are changing rapidly, with transactions increasingly based on chains that involve coordinated links between farmers, traders, processors and retailers. It is against this background that organizations working with farmers, such as donors, NGOs and government extension services (“linking organizations”), are seeking to promote farmer welfare by using the “linking farmers to markets” approach, which usually involves organizing farmers into groups to supply identified markets.

This Occasional Paper examines experiences of linking farmers to markets, in order to reach some tentative conclusions regarding success factors. It considers examples of linkages promoted both by linking organizations and by the private sector without external support and then reviews in detail the linkage activities of the former. Emphasis is placed on markets chosen for linkages, on the capacity of the linking organizations, and on the relationship between the private sector, linking organizations and farmers. Mutual trust between all actors in a chain is essential and the paper discusses how such trust can be developed. Linking farmers to new markets invariably involves farmers organizing into formal or informal groups. Experiences with group organization are reviewed, as is the question of finance. Problems faced by farmers in maintaining linkages are examined and sustainability and scaling-up of linkage activities considered.

Broader issues also emerge. Working with farmers will have little impact if the enabling environment that governments provide is inappropriate for development of market linkages. A question that may merit research is whether linking organizations are actually increasing the size of the market or whether they are just replacing one group of farmer suppliers with a new set of “target beneficiaries”. Finally, it needs to be asked whether the limited donor, NGO and government resources would be better channelled towards activities likely to benefit a larger number of farmers.

The paper is aimed at staff of NGOs, both those working at the policy level and in the field; at donor organizations and the projects they support; and at ministry of agriculture policymakers and extension services. It is hoped that it will also prove useful for private sector companies seeking to develop linkages with small farmers.

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