Improving Institutional Capacity:

Strengthening Farmer Organizations in the OIC Member Countries

Figure 3: FOs’ role among other actors in the agricultural supply chain

Input providers

Individual

smallholder

farmers

Commodity

exchanges

Village-level

processors

Grocers & markets

Input credit

providers

Commercial

farmers

Aggregators and

traders

Commercial

processors

Restaurants &

vendors

Farmer

organizations

(as buying groups)

Farmer

organizations

(as producer co-ops)

Farmer

organizations

(as trading co-ops)

Farmer

organizations

(as processing co-

ops)

Farmer

organizations

(as commodity

associations)

Extension services

Exporters

1.3.1.

Inputs and Production

In the inputs stage, FOs provide the institutional ability for collective purchasing. Inputs in

agriculture are expensive, and group purchasing of seed, fertilizer, irrigation systems, and

other equipment ensures access for those who would not be able to afford the inputs solely on

their own.

FOs also create gains for their members by providing financial services, which allow farmers to

borrow money for seeds and other input needs. More recently, FOs have expanded to

providing crop insurance and other financial and social services.

In the production phase, FOs are significant avenues for the delivery of extension services. FOs

collaborate with agricultural research institutions to disseminate knowledge and training on

the latest agricultural technology, enabling farmers to achieve factor efficiency and improve

productivity. A notable example is the provision of group training in post-harvesting activities,

which can prevent waste and increase the farm gate prices.

1.3.2.

Trading

FOs play an important role in the sale of their members’ output, especially in marketing and

sale pre-processing. Smallholder farmers are often unable to access broader domestic, regional

and international markets for their produce through their own means but FOs ensure access to

these markets and, consequently, improve farm incomes.

This figure is based on Dalberg’s learnings from project experience and analysis of typical agricultural value chains across

Africa and Asia