George Osure, (Syngenta Foundation Kenya)

Agribusiness Forum – Uganda

October 2010

Inclusion of Small Scale Producers in Value Chains

(Best Practices)

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The Small Farm as a Business

•Has Access to Land Sizes < 2Ha•Have Superior labour & farm activity.•Supplements income with Dairy & Poultry•Shares resources from non-farm activities•Has a continuous need for Market Information.•Is Willing to participate in Business Oriented Extension

Systems (BOES).

•Classified by the volume produced and size of the farm

•Faces many challenges related to market oriented

value chains.

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Challenges for the Small Holder Farmer Value Chains

The Smallholder

Farmer

Reducing Land Sizes

Lack of Suitable

Resource Platforms

Reduced Availability

of Water

Lack of Farmer Led Programs

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Challenges

TrainingFarmerClusters

Market

Access

Finance

Technology &

Productivity

Modules to Address Small Holder Value Chain Challenges

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Project Officer

(Reports to Project Manager/Director)

Farmer Led Market at Village Level 1

(350 - Farmers )

Farmer Led Market at Village Level 2

(350-Farmers)

Farmer Led Market at Village Level 3

(350-farmers)

Technical Assistant & Partners

Extension Staff for 1000 Market Oriented Small Holder Farmers

This unit Costs USD

70,000 per year.

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Market Superintendent

(Resource Center Based Farmer)

Market at Village Based on Field Day

Design (Unit 1)

(350 - Farmers )

Market at Village Level Based on Field Day Design (Unit 2)

(350-Farmers)

Market at Village Based on Field Day

Design (Unit 3)

(350-farmers)

Business Manager & Contracts Office

(3-Unit Coverage)

Farmer Led Village Market Development (Management Structure)

•This unit Costs USD

5,000 in first year

only. Future financing

from a 5%Crop levy,

based on volume

Sales.

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Key Small Holder Value Chain Components

Production Plan: Design Based on Contract & Market

Requirements

Crop Volumes available based on Planted areas

Contract Sales Defined

Weekly Crop Aggregation at Collection Centers for the Market

Market

•Buyers

•Transporters

•Finance

Management

Planting

Schedule

Economics of Small Holder Farmers Value Chains

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The Cost of Managing a Farmer under this Model is USD 70 per Farmer per Year.•A 1000-farmer (50-Ha planted in 0.4Ha-units) Annual Production Plan will attract Retailers who supply Super Markets.•Technology based Partnerships will enhance Farmer Business Opportunities: utilizate existing indigenous expertise.• Supplement: Input supplier Extension system.•Business Model: designed to manage 1000- Farmers based on a clearly defined smallholder value chain.

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● The definition is based on a market led extension strategy:

It is a “coordinated” set of activities which subject the Smallholder farmer’s production to an end user who has a set of needs (economic, legal, environmental, technological) that must be fulfilled for the farmer to receive in exchange (mostly through an intermediary) resources which are deemed by the intermediary (not the final recipient) as useful in his social setting.

● Resources deemed suitable by the Intermediary:

– Money at market prices (availability/seasonality).

– Inputs at marked up prices

Defining the Small Holder Value Chain

Best Practices for Inclusion into Value Chains - Considerations

Provide Information on Productivity, Market Access & Crop Insurance, and Finance.

Work Towards Consistent On-Farm Water Availability, Production, and Insuring the Production Inputs to mitigate Risk.

Trust Based on Continuous Training & A Transparent and Cost Effective Business Oriented Extension System.

1

1

Communicate Through Farmer Led Programs

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Train Groups of Farmers as Local Expert Labour Pools

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Improve Productivity Using Indigenous Knowledge

Utilize Specialized Programs to Stimulate Farmer Business

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• Combine Specialized Support Guarantees with the Extension System to ATTRACT Additional Finance for Group Initiatives Valued up to USD 1,500 for High Return Technology led Business e.g. Simple 120-square-meter Greenhouse Generates Income of USD 3,000 of Tomato & USD 7,500 for Capsicum Seasonally.

• Compared to USD 1,800 for 120- square meter open Field Farm

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● Not a correct Statement. Why?

● Classified as Small Scale Producers due to:

– Size of the Enterprise and Challenges associated with production.

● Classification: Should be based on yield per square meter of the farm.

● Small holders produce higher volumes per square meter than some large farms with correct incentive, MARKET with reference to specific crops.

– Tomato produced per sq-m by small holder is 50kg while large producer 15kg. (Ref: Mwea, Kenya – 2009 June)

● Should be Referred to as pre-commercial farmers with intent.

Parting Message: Small Scale Farmers Small Scale Producers?

CONTACT DETAILS

QUESTIONS

THANK YOU FOR YOUR ATTENTION

george.osure@syngenta.com

SYNGENTA FOUNDATION FOR SUSTAINABLE AGRICULTURE

www.syngentafoundation.org

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Summary

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● Farms are under 2Ha & Pre-commercial in character

● Smallholders require market & operational information

● They use on-farm water inefficiently

● We need to review existing farming systems of the 450-million farms which are < 2-Ha size.

● 1/3 of the World Population depends on Smallholder Farming.

● Smallholders should be considered as pre-commercial business units.