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Facilitating Smallholder Farmers’ Market Access

In the OIC Member Countries

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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.

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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.

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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

Box 10)

.

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.

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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).

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World Bank (2009b).

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World Bank (2014a).

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World Bank (2014a); Wiggins and Keats (2013).

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World Bank (2014a).