Cluster Marketing as a Solution

Why it?-•Lowering transaction costs•Avoid production loss •The cluster marketing can promote cooperation between producer and buyer.

Advantages of Cluster Marketing•Increasing quality control•Incentive to increase production•Lowering transaction costs•Improving access to credit

Constraints to Cluster Marketing

•No trust amongst the farmers.

•Resistance due to established markets with good prices.

•Little or no surplus on some farmers.

•Many farmers live too far away from each other

CLUSTER MARKETING: A STRATEGY TO OVERCOME THE PROBLEM OF MARKETING FACED BY SMALL-SCALE FARMERS

N. Ndzimande

Department of Rural Development & Agrarian Reform, Eastern Cape Province, P/Bag X3090, Butterworth 4960. Tel (W): 047 491 3615. Email Address: nzimandend@gmail.com

METHODS AND MATERIALS

The study was conducted in two small-scale farms which are Zanyokwe Irrigation Scheme and Silwindlala Women’s Project in the Eastern Cape. The reason for choosing these two sites was to compare the challenges faced by these farmers and give a possible solution to the challenges. The total number of 31 farmers was interviewed where a structured questionnaire was administered to the interviewed farmers. Data was then analyzed using SPSS statistic 17.0 where descriptive statistics with frequencies and tables were obtained and also to analyze the barriers that are faced by those farmers in marketing their produce, multiple regression model was used.

INTRODUCTION

Marketing of agricultural produce has been found one of the major challenges faced by Small scale farmers. A number of factors are affecting the farmers’ participation to formal markets these include lack of information, poor infrastructures, high transaction costs, low production etc. Plans on addressing the issue of lack of information and poor infrastructure are on the mouth of any government and non-government organisation. The issue of Low production and high transaction costs are not given much attention. This study was aimed at proving that Cluster Marketing can help farmers in dealing with Low Production and High Transaction costs leading to high returns for the farmers and improving livelihood of the farmers.

RESULTS & DISCUSSIONGovernment and External institutions are doing all they can in addressing issues of lack of Information and poor infrastructure. This was confirmed in the results where 76.2% of farmers interviewed agreed that they receive the services from the government while 23.8% does not get any help from the government. The type of help that the farmers were getting was the equipment, inputs and assistance with Extension Services. Transaction costs for Zanyokwe Farmers were very high with 85.7 % paying an average of R500 per person/load while for Silwindlala Women's Cooperative they were only paying R500 per load when they combine their produce for selling. High Costs resulted to some farmers quit farming in Zanyokwe whilst for Silwindlala Cooperative the farmers wants to increase their small pieces of land they producing in for them to get more market share and improving their livelihood. Based on the results drawn from Silwindlala, Cluster Marketing was recommended as a solution to the problem of low production and high transaction costs .

Figure 2: Lots of farmers working together to fill a lorry from different farms (Robbin,2004)

Figure 1 : shows 3 farmers that combine their produce when selling.

RECOMMANDATION AND CONCLUSION

Collective selling minimases transaction costs.

Competition amongst farmers involved in a Cluster encourages them to

grow.

In conclusion, as a way of dealing with the above constraints let the

farmers identify the people they feel comfortable to work with, people that

share the same vision of growing and that believe cluster marketing can

work for them.

REFERENCES

Robbin P., et al. 2004. Collective Marketing for smallholder farmers. Manual 4: The territorial Approach to rural Agro-enterprise Development. Uganda.