New business models can spell success for African farmers – report

New business models can spell success for African farmers – report

Small-scale farmers in Africa can improve their livelihoods by building sustainable trading relations with international businesses in the food industry, according to a recent report.

The report, jointly undertaken by Catholic Relief Services, Rainforest Alliance, CIAT and the International Institute for Environment and Development (IIED), reveals ways to break down barriers that usually prevent African farmers from reaching lucrative markets in the West.

“Millions of small-scale farmers in Africa depend on export markets for their livelihoods. But while they have the skills and soils to provide high-quality products for the food industry, their entry into these markets is constrained by increasingly stringent standards, volatile prices and lack of credit, among other things,” the report,  funded by the Gates Foundation and led by the Sustainable Food Lab, said.

Over four years, the New Business Models for Sustainable Trading Relationships project investigated how supply chains can be adapted to include and benefit small-scale producers.

“The project has shown how even poor and marginalised farmers can engage with and supply major international corporations, and gain a stable, sustainable source of income,” says IIED researcher Abbi Buxton.

“This requires commitment and action throughout the entire length of supply chains, and by all stakeholders – from farmers and retailers to government agencies and civil society organisations.”

The recent reports — which focus on cocoa in Ghana and Côte d’Ivoire, flowers in Kenya and beans in Ethiopia — follow five earlier reports on other aspects of efforts to link smallholder farmers to modern markets.

  • In Ghana, the project identified the steps needed to enable cocoa farmers to produce fine flavour beans that carry a substantial market premium. This was an effort to emulate the experience of farmers in Latin America, who produce such beans and have reaped three to four times the market value of normal beans.
  • Also in Ghana and Côte d’Ivoire, the project assessed how the Rainforest Alliance managed, in just three years, to certify over 15 000 farmers as producers of environmentally-friendly cocoa.
  • In Kenya, project members acted as ‘ethical agents’ who helped to reshape supply chains at each link to better serve the needs of small-holder flower farmers and enable them to sell directly to major retailers in the United States and Europe. The project team thinks large food companies with strong development targets would benefit from adopting this strategy to employ ethical agents to engage with each node of the supply chain.
  • In Ethiopia, the project team linked thousands of bean farmers to canning factories and retailers in the United Kingdom while improving their productivity and product quality.

“The project has shown that it is possible to develop new business models that link small-scale farmers to modern markets,” says Don Seville of the Sustainable Food Lab. “These new models are fairer, more inclusive schemes that share the risks and rewards across the value chain.

Overcoming the challenges typical to small scale producers – lack of credit, poor transportation, lack of technical assistance, and so – does take time, patience, and creativity but the rewards are there for companies and farmers that commit to work together.

Check the links below to find those reports:

Smallholder flowers from Kenya: the role of ethical agents

Certified cocoa: scaling up farmer participation in West Africa

Fine flavour cocoa in Ghana: reaching high value supermarkets

*PIC: FATUMA CAMARA – Small-scale farmers at work in rural Gambia. A report shows that these farmers can improve their livelihoods in a big way.

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