Chris Barrett and Ade FreemanMay 15, 2009Nairobi, Kenya

Synthesis of RecommendationsFrom AGRA/ILRI Conference “Towards Priority Actions for

Market Development for African Farmers”

Priority actions: the policy maker’s perspective

Address the food price dilemmaCreate synergies between agricultural

production and marketsProvide options that address the challenges of

smallholdersCommercial viability of smallholder

agriculture given small farm sizes and land sub division

Functioning of land and labour marketsIdentify options for governments in public

private partnershipsPriority actions must

Meaningfully address these challenges Inform choices/policy decisions

Principles To Guide Priority Actions

1) Actively promote a culture of evidence-based decision-making by governments, donors, communities, NGOs, firms … everyone.

2) Improve coordination of interventions and their evaluation so as to generate more generalizable and directly comparable evidence on what works, what doesn’t, why and for whom.

3) Celebrate and encourage private sector initiative but equally recognize the critical role for government – to create appropriate enabling environment and crowd-in private investment via rule-based interventions .

Principles (continued)4) Essential to promote and involve farmer organizations in identification, design and evaluation of interventions. 5) Pay careful attention to the essential differences between gross benefits and net benefits, and to the

additionality and opportunity cost of using public or donor funds.6) Exports to OECD countries are desirable and beneficial, but focus on far larger domestic and regional markets. 7) Shape modern value chains (supermarkets, etc.) where possible, but focus first on traditional channels, which

remain the most important markets for some time.

Toward priority actions: what we know works

What we know works based on hard empirical evidence.Developing efficient rural input markets

Fertilizer and key inputsAgro-dealer networksSmart subsidies - provide affordable inputs;

stimulate growth of rural enterpriseImproving efficiency of agricultural value chains

Market Information SystemsPrivate standards and certificationICT based MIS for market dev, including use of

mobile phonesImproving integration of smallholders in value chains

including through organizational innovations Farmer organization and collective actionService delivery hubs

Priority Actions for market development

Focus investments to scale up “what works” for greater impacts

Rigorously evaluate interventions and policy changes: identify what works/what does not work, why, and in what contexts

Use lessons to inform strategy formulation and investment programming NEPAD/COMESA policy and advocacy processesCAADP Pillars – investment programming and country

compactsCountry strategies and investmentsDonor strategies and investmentsPrivate for-profit and not-for-profit actors

Learn, document, and mainstream into policy processes and investment programming

Priority Actions: Policies1) Reduce international (tariff and non-tariff) trade barriers.2) Harmonize grades and standards within national and regional markets (for seed, other inputs,

outputs).3) Pay attention to the possible need for anti-trust actions where non-competitive behaviors exist.4) Land and labour (education, health) policies must be right to facilitate smallholder productivity

growth and market participation.

Priority Actions: Investments

1) Improve access to financial services (credit, insurance) for producers and market intermediaries, especially small-scale and women. But How .. Need to know more??? Many candidate instruments – village banks, warehouse receipts, index insurance,

identity-based credentialing, venture capital for SMEs, etc. – evaluate best tool for the particular context. Need experimentation!

2) Extend, upgrade and maintain transport and power infrastructure to reduce commercial transactions costs and crowd-in private investment.

3) Build independent African food policy analysis capacity.

Priority Actions: Investments (continued)

4) Advance technical skills training, in post-harvest value addition activities, water management, new high-value products, food safety standards, etc. to better equip poor farmers and SMEs to increase and stabilize productivity and incomes.

5) Extend, upgrade and maintain town and urban marketing wholesaling infrastructure. 6) Facilitate rapid, broad roll-out of advanced ICT to improve information flow and to help

resolve coordination problems in value chains. Essential to leveling the playing field.

Key areas of agreementInvestment in infrastructure is high priority area of action

Need to re-prioritize infrastructure investments taking into accountReturns to infrastructure investment and comparative

advantage egTransport corridors and rural road networks that

support trade around “bread basket” areasValue chain as useful framework for market development:

focus on institutional arrangements and organizational innovations to improve efficiency and integrate smallholders

Understanding the appropriate role for governmentPolitical economyRule based

How make model/process more efficientActor linkages … need to address coordination failures at

different levels Capacity building.

Thank you for your insights and for refining this synthesis

of a rich discussion