Promoting Agricultural Value Chains
In the OIC Member Countries
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Indonesia the government implemented policies to ‘formalise’ small-scale farmers by
discontinuing the use of traditional laws (“adat”) which used to co-exist next to
government laws and by linking small-scale farmers to larger estates, either through
Nucleus Estate Farm model, which resembles contract farming schemes elsewhere, or
through joint ventures. The Indonesian Government aims to have this transformation
completed by 2019. Similar policies are in place in Malaysia. In Senegal, the “Plan Senegal
Emergent” of 2012 aims for the co-development of commercial agriculture with small-
scale family farming by establishing 150-200 micro projects designed to learn from the
innovations of commercial agriculture and create synergies between the different types of
farming operations. This is supposed to increase productivity, to diversify production and
to encourage a gradual conversion to high-value crops such as horticultural crops.
2) Promotion of smallholder producer organisations
This policy can be observed in Uganda, where the government promotes farmer
organisations to reduce the number of chain actors (e.g. cut out middlemen) and facilitate
linkages to processors and marketers which individual farmers would not be able to
establish. Producer organisations are also critical in the government’s efforts to facilitate
access to finance for smallholders, which is currently a challenge as individual farmers lack
collateral and loans in agriculture are subject to high interest rates due to changing and
varying weather patterns. To address this problem, the government aims to establish a
credit line through farmer organisations to assist farmers in obtaining land for growing oil
pal, soy beans, sunflower or maize.
3) Public-private partnerships
In several OIC countries, a growing number of public-private partnerships (PPPs) has
formed to leverage private resources in the efforts to link small-scale farmers to markets.
Prominent examples include, but are not limited to, the “Vegetal Oil Development Project”
(VODP) in Uganda by IFAD and a consortium of Ugandan and international companies; the
“Agribusiness Market and Support Activity” (AMARTA) in Indonesia, a joint initiative of
USAID, Olam International and Blommer Chocolate Company; or the “Agribusiness
Linkages Global Development Alliance” between USAID, Heinz International, ACDI/VOCA
which worked together with 13 Egyptian tomato-processing companies to double tomato
production in Egypt.
4) Donor and NGO programmes
A variety of donor and NGO initiatives exist in OIC countries to link smallholder farmers to
value chains. Current and recent examples abound, including the “Value Chains
Development Programme for Poverty Reduction” by IFAD in Mauritania which aims to
develop the value chains of vegetables, dates, milk, poultry, skins and hides, red meat, and
non-timber forest products. Other examples are the “Commodity Value Chain Support
Project” in Cameroon, also by IFAD, which seeks to develop the rice and onion value
chains, or the “Cereal Value Chain” project by USAID in Mali, which works towards
inclusive value chain development and women’s empowerment in the sorghum/millet and
rice value chains. Similarly, the “Productive Agriculture Project” in Tajikistan, also by
USAID, helped farmers transition to commercial production and participate in profitable
value chains through leveraging private sector incentives and relationships between chain
actors.