Facilitating Smallholder Farmers’ Market Access
In the OIC Member Countries
115
CHAPTER 3: CROSS-CUTTING LESSONS FROM THE CASE
STUDIES AND GLOBAL EXPERIENCE
The urban population of OIC member countries almost doubled in the last two decades,
rising rapidly from 349 million to 664 million, and the urban population share grew in 49
of 54 OIC member countries (for which relevant data are available). Urbanization
transforms agriculture. It compels modernization in agricultural markets, agribusiness,
and agri-food value chains in general to cater successfully to increased urban demand, the
associated changes in consumption patterns, and more stringent food quality and safety
requirements.
The modernizing food supply chains in OIC member countries urgently need strategies to
link smallholder farmers to markets. Eighty percent of individuals whose livelihoods
depend on agriculture in OIC countries are smallholder farmers. Linking them to markets
is a critical step toward ensuring more inclusive development in the process of structural
transformation.
Create the Right Enabling Environment
The historical data make a compelling case that structural change in agriculture is an
inevitable part of development. It can be a part of a powerful dynamic that lifts rural
families from poverty to prosperity. But to fully leverage the opportunities that change
brings and minimize the cost of the adjustments that change requires, governments need
to evaluate where they are on the path of structural change and prepare for what lies
ahead.
As several case studies in the previous chapter highlighted, reforms that have encouraged
the private sector’s role in agricultural marketing and reduced the government’s direct
involvement are often associated with positive outcomes. The case studies also reveal that
positive outcomes depend on certain conditions. If investments in public goods such as
irrigation, roads, agricultural R&D, and extension are lacking, if major shortcomings are
encountered in relevant policies and institutional arrangements, or if macroeconomic
conditions are unfavorable, opening up greater space for the private sector does not
necessarily translate into greater investment and benefits for smallholder farmers.
All of the case studies reinforce the importance of a sound investment climate and
enabling environment for creating a platform that encourages private investment to
increase smallholders’ capacity to raise productivity and link into markets. The
“investment climate” is the policy, institutional, and behavioral environment, both present
and expected, that influences the returns and risks associated with investment. The
investment environment is generally seen as having three main features: macroeconomic
conditions, governance, and infrastructure. The sections that follow look at these features
through the lens of their influence on smallholders’ access to markets.