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Presentation by Steve Wiggins at Leaping and Learning event, February 2013
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Smallholder Commercialisation
Insights from 5 countries
SIX KEY FINDINGS
1. Drivers of change often private & internal
Often initiative from SF & traders
Public — Gov’t & NGO — can help, but not always necessary
Stimulus often from domestic markets, not exports • Domestic marketing demands less stringent
2. Cautious Commercialisation
•Small areas switched to crops for market•SF rarely sacrifice food
crops•Double-edged sword!
•SF intensify• fertiliser, (sometimes)
improved seed & agro-chemicals
• hired labour•Biggest Step? Irrigation
Gradual, marginal changes
3. Active Labour, Land markets …
•2010: 82 days
•2012: 138 days
Lume: > 90% households
hired labour: days annual household:
2010 2012
% households renting in land
13% 45%
US$ per hectare 200 340
4. But sticky Capital Mkts
•NOT: credit from Banks, advances from input dealers, traders or processors
Working K from SF savings
•BUT may•slow process •limit degree •restrict which
households participate
Lack of credit not a
barrier
5. Returns good, Incomes rising …
Tef Wheat Chickpeas Lentils Onion Tomato Green pepper
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Lume, Gross Margin, US$/ha
Kenyan gross margins
Tomatoes, virgin land
Tomatoes, old land
Cabbages, high season
Cabbages, off season
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
US$
per
ha
Farm incomes, by commercialisation
Ethiopia Ghana Malawi Tanzania0
100
200
300
400
500
600
700
800
900
Low CI Mid CI Upper CI
US$
Crop income, by index commercialisation Ghana, Ethiopia & Malawi
- 0.10 0.20 0.30 0.40 0.50 0.60 0.70 0.80 0.90 -
100
200
300
400
500
600
700
800
900
Commercialisation Index
US$
Med
ian
6. … But does it divide?
Households w. more Land, Savings, Assets, (sometimes) better Education take up opps
•Fewer assets than males
Female farmers often
disadvantaged
•BUT commercial farming D farm labour, so landless & poor can benefit
Social differences may widen.
POLICY POINTERS
Paradox of Public Policy
•Comprehensive direct action by state not necessary?!
Not all cases result from
programmes to commercialise
•Encouragement to rural enterprise from painful reforms in 1980s & 90s has paid off
Importance of private initiative
BUT: Public action critical:•Remember: Ghana late 1970s, Ethiopia under Derg, Tanzania late 1970s!
Investment climate
•Schools, health posts
•Investment in Public Goods pays
Roads vital … rural public
goods
No need for magic bullets?
Role for Min Agriculture
•SS irrigation in Lume
•Upgrading irrigation intakes in central Tanzania
Strategic, limited support
by Min Ag helps:
•Commercial opps need for Innovations & Tech support
•Extension services most effective with comm SF?
Technical challenges
Riddle of Rural Finance
Lack of K limits Investment, further gains
Improve rural financial systems • But with care! • Promise: M-pesa, Equity Bank
Correct Female Disadvantage
Agricultural policy will not transform longstanding gender
imbalances … BUT: Recognise &
support women’s rights to land &
water,
Invest in drinking water … things that take women’s time
Providing extension for
female farmers
Thinking on … Futures for SFStrengths Weaknesses
• Self-supervising, diligent labour• Knowledge of land and local
conditions• Flexible production
• Limited access to capital, inputs• Risks in production & marketing• Meeting standards of some
supply chains
Opportunities Threats
• Urban growth• Asian markets• Much unused land: ‘sleeping
giant’• Technical advances, already
known & others likely
• Climate change • Land alienation• Policy biases• Demanding supply chains
Farm household surveys
Ethiopia 160 Sep/Nov 2009
Ghana 300 Nov/Dec 2010
Kenya 200 Nov/Dec 2009
Malawi 300 Oct/Nov 2009
Tanzania 287 Aug/Dec 2009, Oct/Nov 2010
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