Facilitating Smallholder Farmers’ Market Access
In the OIC Member Countries
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Lessons for OIC member countries
In OIC member countries where urbanization has just begun, the value chain that links
producers and consumers can be tenuous, especially if the agricultural sector is made up
of many smallholder farms. Methods of organization are often needed to provide the scale,
quality, and reliability that enable efficient markets to develop. To a degree, informal
systems of intermediaries and cash transactions will connect buyers to sellers, but such
systems work less well for supermarket and restaurant buyers, who need and are willing
to pay for prompt, reliable delivery and a consistently good product.
The skills and institutions required to support more formal market structures must come
from investments in public institutions and actions by private groups. The domestic
demand served by more formal markets and the marketing channels themselves tend to
develop in tandem. Given time and a peaceful environment, more efficient value chains
will likely emerge on their own, although there is some risk that a substantial portion of
the rural population will be unable to participate and will remain locked in less efficient
marketing channels. Farmers’ success in entering higher-end markets will ultimately rest
on comparative advantage. As the agricultural sector and economy evolve over time, the
government’s specific role in supporting formal marketing systems, and the types of
support that are needed most, will evolve as well.
Strengthening the institutions that support investments along the marketing chain is
important. Governance indicators suggest that compared to survey respondents in other
low-income countries, respondents in Uganda view local institutions as being relatively
effective. Access to credit remains an important component of the business environment,
and research suggests that SACCOs are extending savings and credit markets to rural
Uganda. Warehouse receipts, first established to help finance coffee exports, may also help
to facilitate trade finance. This case study also highlights the need for effective food safety
standards to protect farmers and fishermen who rely on export markets, along with the
growing number of individuals who buy food from intermediaries.
Bangladesh
Competitiveness and sustainability issues
Bangladesh, with 155 million inhabitants on a landmass of 147,570 square kilometers, is
among the most densely populated countries in the world. It remains a low-income
country, with a per capita income of US$ 840 in 2012 102 and 31.5 percent of its population
living in poverty. GDP growth has been remarkably stable, despite natural disasters and
political volatility.103 GDP grew by a healthy 5.8 percent per year between 2000 and 2009
and then by an average of 6.3 percent between 2010 and 2012. Growth has been led by the
102 World Bank (2014h).
103 World Bank (2010b).