Facilitating Smallholder Farmers’ Market Access
In the OIC Member Countries
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law, competition policy, investment policies, regulations (of the environment, labor,
health, and safety), and procedures for starting a business, getting utility connections,
registering property, and obtaining finance are also important.
BOX 3: CHILE’S SUCCESSFUL FRUIT EXPORT INDUSTRY SHOWS THE IMPORTANCE OF A
GOOD ENABLING ENVIRONMENT FOR LINKING FARMERS TO MARKETS
In the early 1960s, Chile exported 18,450 tons of fresh fruit, valued at US$ 20 million. By 2012, it was
exporting 2.5 million tons of 75 species of fresh fruit, valued at US$ 4 billion, to more than 100 countries.
Fruit exports generate more than 1.4 million jobs and employ 8.3 percent of the population today. Three
factors have been central to the industry’s phenomenal success.
Cooperation between the public and private sector was close and productive. As part of its overall trade
policy, Chile created a legal framework for trade that favored limited government intervention and free
market conditions. Policies for the horticultural sector were developed in a collaborative, transparent
process that ensured their adoption. The government vigorously negotiated quality and safety standards
with clients and implemented them. It also provided strong support to innovations and private initiatives
that promoted export horticulture. Private organizations representing producers, traders, and other industry
players clearly communicated their needs and cooperated closely with the government to determine the
most efficient, effective use of public financial resources and technical assistance to match private
investments.
Robust programs for research and development (R&D) and capacity building helped the sector
maintain its competitive edge. The R&D program quickly responded to market and logistical challenges by
developing new farming techniques and breeding fruit varieties that satisfied consumers’ preferences and
were suited to long-term transport and storage. To meet new market challenges and keep up with
technological innovations, specialized training agencies continually upgrade the skills of all workers,
including temporary workers.
A skillful export promotion strategy was essential. The industry strategically targeted a range of
individual buyers, including fresh fruit importers, retailers, wholesalers, distributors, food service
companies, and secondary consumers. An even more important strategy was to promote fresh fruit from
Chile under a unified brand that made Chilean products easily recognizable. The sector also dedicated
significant resources to export promotion, such as trade fairs, trade missions, online product promotions, and
more targeted consumer advertising.
Source: Authors, based on Larson, Khidirov, and Ramniceanu 2014.
As indicated in the example from Chile, close cooperation between the public and private
sectors has been essential for successfully linking farmers to markets. Private investment
in the agricultural sector offers significant potential to complement public resources.
Several of the case studies presented in the previous chapter highlighted the importance
of domestic investment as well as FDI in modernizing and upgrading agri-food value
chains. Some large investments in agriculture have managed to achieve broad-based
benefits for rural producers through contract farming, other outgrower arrangements, and
joint ventures with local communities. Investments of this kind have received much
attention in recent years, yet to maximize the benefits and minimize the negative effects of
such investments for rural producers, some key policies need to be in place and some key
practices followed. summarizes the key policies and practices for responsible
investing in agriculture.