Facilitating Smallholder Farmers’ Market Access
In the OIC Member Countries
132
instrument for forging the links between producers or producer organizations and
agribusiness has been competitively allocated matching grants.
Results from the Colombia Productive Partnerships Project highlight the strong potential
of this approach to linking smallholder farmers to markets. By its closure in 2008, the
project had successfully established 136 productive partnerships with a range of private
companies and producers participating in the project. A beneficiary survey at the end of
the project indicated that 40–64 percent of respondents saw their productivity, incomes,
and product quality improve. These benefits appeared to increase over time. More than 60
percent of those surveyed perceived that the program contributed to improvements in
security. Sixty-seven percent perceived that the program had a positive impact on living
conditions. An unintended impact was the significant spillover effects of the partnerships
to neighboring producers, who replicated technologies introduced through the
partnership. The strict competitive rules for grant financing and financial control
mechanisms developed under the project were adopted by other government
departments and projects.210
Contract farming
Contract farming is another avenue for linking small-scale farmers to markets that
smallholders normally cannot enter owing to distance, standards, processing
requirements, or other factors.211 Contract farming can bring smallholder farmers a range
of benefits, including improvements in productivity and profitability as farmers gain
better access to inputs and technical advice and are linked to the market (see .
Experience indicates that contract farming may not be suitable for all farmers, however.
Typically problems occur when farmers or buyers renege on their contractual obligations
(for example, farmers may engage in side-selling, or buyers may not fulfill commitments to
purchase produce); fair pricing models cannot be established; the abuse of power
undermines contractual arrangements; the parties cannot comply with quality or
performance objectives; and mechanisms for resolving disputes are absent or
dysfunctional.212
A recent World Bank report concludes that smallholders who have access to assets and
capital and regularly produce marketable surpluses are in the best position to benefit from
contract farming arrangements. Contract farming may not be suitable for asset-poor
smallholder farmers (such as tenant farmers or the near landless) or even for the majority
of smallholders, who are largely subsistence farmers who sell surplus only occasionally in
the informal market (unless those subsistence farmers are part of an effective producer
organization, with requisite management and financial capabilities).213
210 World Bank (2009b).
211 World Bank (2014a).
212 World Bank (2014a); Wiggins and Keats (2013).
213 World Bank (2014a).