Improving Institutional Capacity:
Strengthening Farmer Organizations in the OIC Member Countries
36
incentivized as some of the initial premiums are paid directly by farmers or are made part
of the initial financing amount. The product is also accompanied by a programme that
educates farmers on the use of microinsurance.
 Extension services. Extension services in Sudan are provided for free by the Ministry of
Agriculture. However, actual delivery is few and far in between due to government funding
challenges. While the Ministry of Agriculture has developed a wide network of zone-
and/or state-specific agriculture experts, the initial capital required for these experts to
work with farmers and FOs is often missing. Maringa & Jatropha works with the UN World
Food Programme (WFP) to fund extension expertise that already exists and to develop
new capability where possible.
 Farmers and market links. The program, by using mobile phones and extension agents,
aims to make crop prices more transparent. It also works with the World Food Programme
and the Central Bank of Sudan to convince private Sudanese companies, as well as
international companies, to source produce locally. The project has also arranged for the
government’s Strategic Reserve Corporation to act as a buyer of last resort. This
arrangement allows farmers an additional level of security, places pressure on traders to
offer more favorable prices, and improves smallholder bargaining power. In addition,
where the price/quality of farm output is on par with international standards, the WFP
will buy some FO output for its own programs such as school feeding schemes, creating
further incentives for FOs to improve production.
These two examples show that innovative approaches to finance can result in useful products
for small-scale farmer organizations. Such approaches can play two interrelated roles: first,
they can provide much needed financial resources to smallholder farmers, and second, they
can facilitate capacity-building through knowledge sharing and valuable partnerships. Thus,
supporting the development of novel, innovative financing mechanisms (including not just
access to credit but also risk management tools required to hedge against adverse market
developments) and ensuring that FOs are able to access these services on behalf of their
members is an important pro-farmer organization action. It is incumbent upon policymakers
and international actors to help support such innovation, whether through encouraging
dedicated financial institutions for this purpose, setting agricultural lending targets for
commercial and Islamic banks, or simply investing in financial organization capacity-building
and knowledge-sharing.