Innovations needed to improve market access for smallholders - ACET Study

BY: Ama Amankwah Baafi
 Women make up the majority of smallholder farmers in most developing countries
Women make up the majority of smallholder farmers in most developing countries

A virtual agriculture policy forum has advocated innovations that are targeted at smallholder farmers to help deal with the challenges facing them, particularly in accessing markets.

It said that specifically, innovations across three domains; technology; policy/social innovations; and business model innovations were needed to improve market access for smallholders who are among the vulnerable groups in the agricultural value chain, to ensure agricultural transformation in Africa.

During a presentation on a study on “Lessons Learned and Policy Directions from Market studies in Ghana and Kenya,” a Senior Policy Advisor at the African Centre for Energy Transformation (ACET), Dr Julius Gatume, said traditional market failures/challenges continued to impact on smallholders’ ability to access the markets.

He said there was high transaction costs, price and information asymmetries and emerging oligopolies.  

He said storage was a challenge in Ghana where about 40 per cent of products that were not sold were either consumed or given to neighbours. Similarly in Kenya, about 40 per cent of farmers reported either throwing away or not harvesting their products.

“They rely on word-of-mouth mainly from neighbours for information, lack their own means of transport, lack of storage facilities and miss out on new emerging channels as few sell to supermarkets and are mostly not connected to processors,” he said at the virtual policy forum on June 16, 2021, organised by ACET.  

Read: ACET launches Small Holder Voices Portal to aid inclusive policy design and implementation

Dr Gatume said new media had not impacted farmers yet, whereas markets were changing and rapidly presenting new challenges.  

He noted that rising incomes and urbanisation were prompting diets shifts to more processed foods, ready-to-eat foods and imports.

On the other hand, he said, traders were also challenged and faced some risks.

“They lack means to invest in logistics, face many risks on poor quality, corruption and also spoilage

Read: Finance Ministry, IMF, ACET hold joint conference on Moving Beyond Aid

Innovations needed

Dr Gatume said there was significant room for innovations to help solve the above challenges.

These included organising farmers better and increasing the networking capacity to equip them with the capability to use ICT, especially access online markets.

“Lowering risk to farmers through better risk management products especially insurance, innovate relevant technologies (low cost first mile transport solutions) such as motorised tricycles, and upgrading traders to move from pure opportunistic traders to more organised and capitalised logistics services providers and commodity traders are some of the innovations needed,” he said.

The study

It was part of the Smallholder Voices (SHV) project that sought to promote informed agricultural policy dialogue focused on inclusivity and value creation among a wide range of stakeholders.

The SHV project has three components- Global Scan (seeks to draw lessons from around the world on best practices in developing effective advocacy platforms); Market linkages study (seeks to study market challenges of smallholders and identify policy and innovations needed to improve market prospects); and Pan-African Coalition for Transformation (PACT) Chapter on agriculture (seeks to develop platforms to drive dialogues and policy advocacy).

The study sought to, among others, analyse market challenges and weaknesses facing smallholder farmers and propose recommendations for improving agricultural markets, review agric and food market trends, potential market failures and identify challenges smallholder farmers face in accessing markets.

A Chief Research Scientist at the Science and Technology Policy Research Institute of the Council for Scientific and Industrial Research (CSIR-STEPRI), Dr George Owusu Essegbey, said improving market outcomes was important and that research and development should underpin the activities in the agric value chain to be able to achieve the market outcomes expected.

“The market is getting more sophisticated. If the supermarkets are becoming important in the markets then we need to improve on quality, packaging and I believe it’s a role that research institutions can play to also improve market access for smallholder farmers,” he said.

On scaling up frugal innovations, he said more effective farmer-based organisations were needed and how to enhance their performance to ensure access to policy and getting smallholder farmers to engage government and policymakers was necessary.

 “I believe that public private sector partnership is critical to enhancing innovations in the agricultural value chain and the role of innovations / technology centres have become important,” he added.