farm concern international winning markets for farming communities smallholder commercialization...

Farm Concern InternationalWinning markets for farming communities

Smallholder commercialization

Based on

‘Commercial Village Approach’

Mumbi Kimathi Mrs.Market & Chains Analyst

Two Roads In farming Life

PRODUCE IDENTIFY MARKET

FIND MARKETS PLAN TO PRODUCE

“road less traveled”

“road for most”

PRODUCE HARVEST

Burst

Boom

44%

11%

22%

11% 11% 11% 11%

0%

10%

20%

30%

40%

50%

Cassava Flour Trading Challenges in Kampala

Poor quality

Price flactuations

Low demand

none

scarcity

High buying price

High taxes

36

27

18 18

9

0

5

10

15

20

25

30

35

40 Local millers

Distant Millers

Brokers

Farm gate

Own produce

Trigger commercialization

• Identify markets• Conduct value chain analysis• Identify routes for market entry• Develop value chain partnerships• Prioritize products from farmers’ basket –

avoid wide range or too narrow range• Conduct Cost Benefit Analysis along the

Farm-to-Market chain• Assess target farmers• Agro-ecological zone analysis• BDS Mapping

Cash economy

Zone Characteristics

Village status Description Value Chain Status

Zone 4 Commercial BDS systems establishedRelatively high investment levelsMedium / large –scale farmersLow poverty indexHigh private sector investments Cash economyActive regional and global value chainsWell established business partnerships Cash economy

Developed / Commercialized

Zone 3 Semi-commercial production systems Active local value chains Weak national / regional value chains Relatively seasonal value chain Semi-commercial BDS systemRelatively developed marketing infrastructureSeasonal cash economy

Intermediate

Zone 2 Interest by playersInconsistent value chainsUnder-developed Marketing infrastructureMix of food and cash economy Semi commercial production systems

Developing

Zone 1 Minimally identifiable value chains and BDS systemsLargely food economyMinimal economic activities Large parcels of land characterized by low productivity

Remotely developed

Zone 0 Totally underdeveloped value chainsFood economyNo identified economic activities No BDS systemsNo highlighted interest by buyers

Totally undeveloped

Commercial Village Approach

• Commercialize typical African Village • Clusters of producers groups within a village

setting• Comm. Vill.: 500 Households• Currently: 60,000 HH ( Avg. 6 members/HH)• Village co-ordination unit• Multileveled leadership structure

– Executive committees– Commercialization S-B– Marketing S-B– Financial S-B– Social S-B

African Traditional Vegetablescont… Case study

• Consumption for ATV in Nairobi has increased from 31 Tonnes in 2003 with an estimated farm gate value of US$ 6,000 to

• A current 600 Tonnes in 2006 with an estimated farm gate value of US$ 142,860

• Farm gate prices increased by 30% and the current supply of 500 Tonnes is estimated to account for 60% of the demand level.

• The ATV distribution network includes supermarkets, kiosks, informal markets and street markets.

Bridging gap btw poverty & creditworthiness

• Trigger commercialization• Market Access Financial Services

(MacFis), a pro-poor credit line• Graduation from MacFis after 2 years,

market support offered for 4 years• Commercial Village Financial Services

– Commercialization triggered through input credit for poor communities

– Mandatory savings from sales– Repayment for loan recovered from paymentsFarm Concern Intl’ among 5 global winners of

Pro-Poor Innovative Challenge[ PPIC] CGAP