By Ides de Willebois, Director & Steven Jonckheere, Knowledge Management Officer for IFAD in West and Central Africa.
Developing an agricultural sector that is inclusive of small farmers
The demand for food and agricultural products is changing in unprecedented ways. Increases in per capita incomes, higher urbanization and the growing numbers of women in the workforce engender greater demand for high-value commodities, processed products and ready-prepared foods. A clear trend exists towards diets that include more animal products such as fish, meat and dairy products, which in turn increases the demand for feed grains. There is also a growing use of agricultural products, particularly grains and oil crops, as bioenergy production feedstock. International trade and communications are accelerating changes in demand, leading to convergence of dietary patterns as well as growing interest in ethnic foods from specific geographical locations. The nature and extent of the changing structure of agri-food demand offer unprecedented opportunities for diversification and value addition in agriculture, particularly in developing countries.
Restructured or modern markets and value chains offer a new environment for smallholders, with potentially profitable opportunities set against higher entry costs and risks of marginalization. There are about half a billion smallholder farms worldwide. In many developing countries, the overwhelming majority of farms are small and family-run, and they produce most of the food consumed locally. Smallholders are also by far the main investors in agriculture in most of the developing world. However, there is scope for large scale farmers as commercial enterprises, often in interaction with smaller scale farmers using institutional frameworks that encourage vertical integration and scale economies in processing and marketing.
There is a sound business case for securing and enhancing small-scale producers’ inclusion in agro-food value chains, which can bring both economic and wider development gains. This requires that appropriate business models are applied and, where applicable, that this is done in partnership with producers, the public sector, intermediaries and development agencies.
Forum for West and Central Africa
The International Fund for Agricultural Development (IFAD) and the Government of the Democratic Republic of Congo organised a forum for West and Central Africa from 13 to 16 May 2014 in Kinshasa, the capital of the Democratic Republic of Congo, to review lessons learned from IFAD-funded projects in the region. The Ministry of Agriculture and Rural Development organized and set the agenda for this forum, showing how Africa's governments are taking the lead in efforts to accelerate rural development and expand food production throughout the region.
The workshop attracted more than 200 participants, including government officials, representatives of other United Nations agencies and bilateral development institutions, as well as members of the private sector and civil society groups and partners from IFAD-funded projects in the region. In keeping with the United Nations’ designation of 2014 as the International Year of Family Farming, and the African Union declaring 2014 as the Year of Agriculture and Food Security, the forum addressed a fundamental aspect of the transformation of rural societies which is the integration of family farming and agricultural sector in order to boost agricultural productivity, increase the incomes of farmers, women as well as men, create jobs for rural young people, assure regular supplies of food to urban centres and ultimately stimulate local economies.
There was a general consensus that family farming is the cornerstone of national food security. Participants agreed that there is still a tremendous untapped potential in smallholder agriculture, and especially among some of its target groups, such as women and youth. Agribusinesses (small, medium and large companies involved in the provision of agricultural input, processing, packaging and food distribution) are an essential segment of agricultural value chains as they link family farmers to urban consumers and allow for a development that is dynamic, sustainable and which created jobs and wealth. Building on their respective comparative advantages, the links between family farming and agribusinesses need to be strengthened through win-win partnerships. Agricultural policies and development actors have a role to play in facilitating the development of value chains that contribute to national food security and the inclusive growth of rural economies.
Three thematic areas were chosen for deeper discussion on good practices: i) value chain development; ii) technologies and innovations; and, iii) financial services. Strong links to markets for poor rural producers are essential to increasing agricultural production, generating economic growth in rural areas and reducing hunger and poverty. Improving these links creates a virtuous circle by boosting productivity, increasing incomes and strengthening food security. The participants identified the following elements as being key to making value chains work for poor rural people:
- A good understanding of the market and an analysis of the entire chain;
- Strong producer institutions;
- Trust between the different value chain actors;
- Different business models need to be discussed and a one-size-fits-all should be avoided;
- Access to finance and inputs is usually a stumbling block which needs to be addressed;
- Hard (infrastructure) and software (capacity building) should go hand in hand; and,
- Quality standards and control procedures need to be discussed and accepted by all actors.
A lack of access to appropriate technology is often a primary cause of poor and vulnerable rural livelihoods. Participants agreed that attention should be given to the following issues:
- Build on traditional knowledge;
- Facilitate dialogue between producers, users and researchers;
- Research and extension should respond to the needs of the producers and the market
- Strengthen the inclusion of post-harvest technologies in value chain projects; and,
- Certified seed systems should respond to the local context, but also to the needs of the market.
IFAD recognizes vast potential to improve the livelihoods of rural people by developing by increasing their access to a wide range of financial services and sound institutions. The main points made during the discussions at the forum were:
- Products need to be developed that meet the demands of people involved with family farming, with a specific attention to youth and women;
- Matching grants should be transitory and complementary with market based credit and saving services;
- Support the expansion of rural financial services, especially the physical access and proximity;
- Support the dialogue between public and private sector and between Producers Unions and apex rural finance institutions;
- Microfinance units should be established at the central bank;
- National rural finance strategies should be developed;
- Facilitate linkages with other sources of refinancing that will continue after the project ends; and,
- Strengthen business approach and market orientation.
Finally, the participants made some general recommendations:
- Engage in policy dialogue on land governance, in order to protect the land rights of smallholder farmers, especially those of women and youth;
- Set up inclusive national and regional platforms where different stakeholders can discuss issues related to agricultural policies
- Mobilise more public and private funds for the development of smallholder agriculture; and,
- Put in place mechanisms to capture and share innovations and good practices.
We would like to thank the Government of the Democratic Republic of Congo for organising the event and everybody who contributed to making the eight Regional Forum a real success.