SUPPLY AND DEMAND SIDE CONSTRAINTS FOR SMALLHOLDER … WEB/working_papers/working_paper1.pdf ·...

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SUPPLY AND DEMAND SIDE CONSTRAINTS FOR SMALLHOLDER FARMERS IN AFRICA: CHALLENGES AND PROSPECTS FOR FARMER ORGANISATIONS By: Africagrowth Institute 1 Abstract The objective of this paper was to identify both the supply and demand side constraints faced by farmer organizations (FOs) in selected African countries in their role to provide food security and improved income levels for small holder farmers (SHFs) in Africa. From the survey data on SHFs and FOs in Ghana, Tanzania, Kenya, Mozambique and Malawi, evidence on constraints in accessing funds, extension services, land tenure, pricing information and market access was documented. The findings have implications for the development of FOs in Africa. Keywords: Smallholder farmers; farmer organisations; access to finance; access to markets; access to extension services; advocacy; participation; income diversification; accountability and governance 1 AFRICRES/AGRA Position Paper 01/13

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SUPPLY AND DEMAND SIDE CONSTRAINTS FOR

SMALLHOLDER FARMERS IN AFRICA: CHALLENGES AND

PROSPECTS FOR FARMER ORGANISATIONS

By:

Africagrowth Institute1

Abstract

The objective of this paper was to identify both the supply and demand side constraints faced by farmer organizations (FOs) in selected African countries in their role to provide food security and improved income levels for small holder farmers (SHFs) in Africa. From the survey data on SHFs and FOs in Ghana, Tanzania, Kenya, Mozambique and Malawi, evidence on constraints in accessing funds, extension services, land tenure, pricing information and market access was documented. The findings have implications for the development of FOs in Africa.

Keywords: Smallholder farmers; farmer organisations; access to finance; access to markets; access to extension services; advocacy; participation; income diversification; accountability and governance

                                                                                                                         1  AFRICRES/AGRA Position Paper 01/13

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1. INTRODUCTION

Studies2 have shown that collective action by smallholder farmers (SHFs) serve as an

institutional solution to overcome some capacity weaknesses and constraints they face

in developing economies in the Sub Saharan Africa (SSA). Collective action provides a

platform for pooling resources, information and technology sharing among SHFs. In

addition, farmers speak with one voice on policy issues as well as pricing of agricultural

produce3. However, despite the history of FOs in Africa, recent empirical evidence4

documents capacity gaps inherent among FOs.

The need to provide an understanding of challenges faced by SHFs and acknowledging

the role of aggregation in ensuring success of collective action forms the basis for this

paper. To this end, Alliance for Green Revolution in Africa (AGRA), in collaboration

with Africa Investment Climate Research (AFRICRES), contracted Africagrowth

Institute to undertake an exploratory approach to assess the key challenges faced by

SHFs and the capacity strengths and weaknesses of FOs across five countries5 in Africa.

The main objective of the study was to identify both the supply-side and demand-side

constraints faced by SHFs and how FOs can be best used as vehicles in addressing these

constraints6. The rest of the paper is organized into the following sections; Section 2

gives an overview of SHF in Africa, Section 3 discusses the role of FOs in supporting

SHF, Section 4 explains the survey methodology. Section 5 discusses the findings from

the empirical analysis standpoint while Section 6 concludes the study.

2. OVERVIEW OF SMALLHOLDER FARMING IN AFRICA

African countries cannot afford to ignore developmental trends and challenges facing

small holder agriculture because the sector’s development is directly linked to wider

economic development in the various economies in the continent. At the beginning of

the 1990’s, 85 per cent of the population of Africa resided in rural areas and more than

a quarter of that was engaged in agriculture and, overwhelmingly, on small holder

                                                                                                                         2 Valentinov (2007), Bernard and Spielman (2009), Markelova et al. (2009), Ouma et al. (2010), Shiferaw et al. (2011) 3 Rao and Qaim (2011); Fischer and Qaim (2012) 4 Barrett (2008); Barham and Chitemi (2009) 5 FO profiling report: Ghana, Tanzania, Kenya, Mozambique and MalawiMalawi 6 The five countries covered in this study include Ghana, Tanzania, Kenya, Mozambique and Malawi.

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operations (Delgado, 1999). Much has not changed since then and small holder

agriculture is still the mainstay of much of Africa’s rural population. It is important to

note that the majority of the poor and food insecure in Africa live in rural areas, and

most of them depend on agriculture for their livelihoods. Further, more than 30

percent of the people in SSA are chronically hungry and are SHFs. The last two decades

have seen food production in Africa lagging behind population growth. Low

productivity has been cited as the major culprit (Garvelink et al, 2012). In addition to

this, SHFs’ access to markets, credit, and technology is limited. This has been

exacerbated by volatile food and energy prices and, very recently, by the global financial

crisis. Despite the number of sound agricultural policies adopted by most African

countries, implementation has been a major setback. Moreover, growing

disenchantment of some developmental agencies within the agricultural sector has

amplified the gap between policy formulation and implementation.

SHFs in Africa can be characterised on the basis of the agro-ecological zones in which

they operate; the type and composition of their farm portfolio and landholding; or can

be characterised on the basis of annual revenue they generate from farming activities. In

areas with high population densities, SHFs usually cultivate less than one hectare of

land, which may increase up to 10 hectares or more in sparsely populated semi-arid

areas, sometimes in combination with livestock of up to 10 animals (Dixon et al, 2003).

On the basis of farm revenue, the operational level of SHFs range from those

producing crops only for family consumption to those in developed countries earning

as much as USD 50,000 a year. Most SHFs’ operations occur in farming systems with

the family at the centre of planning and implementation of key decisions (Salami et al,

2010).

The importance of small holder farming cannot be overstated. Foremost is the

enhancing of food availability at family level among the rural population in Africa.

According to Ravallion (2001), a 2 per cent rise in average household income leads to a

fall in the poverty rates by about 4 percent on average and this will have the potential to

increase the purchasing power of SHFs.. In addition, the World Bank (2008) noted

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that growth originating from agriculture is about four times more effective in reducing

poverty than GDP growth of other economic sectors.

In as much as SHFs improve their productivity which, automatically, boost food

security and reduce incidences of poverty in the continent, they also face a number of

limitations. Land tenure presents a serious challenge for SHFs. The uncertainties

regarding land tenure in some African nations and the inadequate access to land have

been a critical challenge to smallholder farming. The constraints relating to the tenure

system, such as insecurity of land tenure, unequal access to land, and lack of a

mechanism to transfer rights and consolidate plots, have resulted in low investment

levels in African agriculture, high landlessness, food insecurity, and degradation of

natural resource.

Financing agriculture and access to credit is another constraint that SHFs face. In terms of

investment, SSFs in Africa depend on savings from their low incomes, which limits

opportunities for expansion. For example, a survey of a sample of 344 rural households

in Tanzania between May and August 2001 showed that half of total rural household

income came from farming, 46.6 per cent from non-farm employment and less than 4

per cent from remittances. In most cases, SHFs could not meet the rigours of

commercial lending as well as micro-finance institutions (Salami et al, 2010).

Further, access to input and output markets is a challenge that is faced by small holder

farmers in Africa. Improved access to input and output markets is a key precondition

for the transformation of the agricultural sector from subsistence to commercial

production. Most SHFs in Africa do not participate in value addition of their produce

thereby contributing to low participation in outputs markets. In addition, in some

African countries, the markets are thin and, in some cases, do not exist at all (Salami et

al, 2010)

Poor infrastructure continues to impede agricultural activities in Africa. The key

challenges are inadequate and poor conditions of the transportation systems. The road

system, which is the most important for market development in terms of distribution of

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inputs and output to and from farms, is the most serious infrastructural bottleneck

facing agricultural development. According to the 2005/2006 household survey,

conducted in Uganda, 30 percent of agricultural communities surveyed did not have

access to roads that were passable even in the dry season and two-thirds of communities

lacked any bus or taxi connections (Salami et al, 2010).

Agricultural extension and innovation has also been identified as a challenge facing SHFs

in Africa. Research and extension services are disintegrated, poorly-funded and

ineffective for any meaningful technological transfer to take place. This is exacerbated

by the fact that, on average, most African countries spend less than 0.7 percent of

agricultural GDP on research compared to developed nations which spend up to 3

percent (Karugia et al. 2009).

Further, policy-Related and Institutional Constraints are other challenges that these small

holder farmers face. The main policy bottlenecks include those that pertain to land

tenure and land distribution to different segments of the population, marketing of

agricultural commodities and inputs, and price regulatory frameworks (Salami et al,

2010). In addition to this, these small holder farmers face a constraint of climate Change

and Related Food Security Challenges. Climate change, resulting mostly from global

warming, has been among the major causes of reduced agricultural production and

productivity in many parts of Africa. Over the continent, most crop and livestock

farming is rain fed, and therefore, susceptible to weather fluctuations.

Notwithstanding these exogenous factors, SHFs also face the challenge of limited skills

and farm management practices. Many small holder farmers lack formal education and

apply rudimentary farm management techniques in their operations resulting in low

productivity output and profitability.

3. THE ROLE OF FOs IN ENHANCING PRODUCTIVITY OF SHFs IN AFRICA As a result of the need to open up markets and reduce government control of factor

markets, most governments across Africa, with support from World Bank,

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implemented the Structural Adjustment Programs (SAPs) covering all economic activity

areas including the agricultural sector. This, significantly, lessened central

governments’ role in the market in, for instance, the provision of public goods and

services such as agricultural extension services, government backed producer prices etc.

(FAO; 2010). The diminished role of central governments in the agricultural market

created a vacuum which needed to be filled. Soon, a number of supply chain players

took advantage of the market gap. , As a result, this left SHFs at the mercy of these

enterprising players resulting in most of them being marginalised. The opening up of

markets came with some unforeseen challenges which ultimately affected the operations

of SHFs. With the growing need be more vocal ,to bargain for better produce prices, to

access produce markets, to access technology and better extension services, SHFs

quickly organised themselves into producer groups throughout the continent and used

these channels as platforms for resolving pertinent issues.. In particular, NASFAM in

Malawi successfully campaigned for the removal of 7% withholding tax on tobacco sold

through affiliated groups. Benarnd et al (2007) concluded that FOs have successfully

managed to develop channels for governments to reach the rural poor. In addition, the

increased marginalisation of SHFs in the face of supermarket revolution and the rise of

food quality and safety standards added on to the growing debate of FOs as vehicles

that can be used to turn SHFs’ fortunes. Furthermore, climate change and economic

shocks have exacerbated the marginalisation of SHFs and increased the need for

organised agriculture.

FOs have been heralded as leading contributors in poverty reduction and attainment of

food security. Formed through the principle of voluntary and self-driven participation,

FOs have a number of overlapping mandates. Their taxonomy range from village based

producer groups to global producer groups. While the village based groups tend to be

based primarily on social bonds, the districts, national, continental and global tend to

be bridges for farmers to participate in economies outside their locality. Bekele and

Muricho (2011) grouped FOs into categories viz- a viz, i) commodity specific

commercial organisation, ii) advocacy organisations which aim to represent the interests

of their members in numerous policy discussion, iii) development organisations that

aim to improve local capacity and access to information and technology and iv)

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multipurpose organisation that engage in various economic, social development and

empowerment activities. These farmers’ groupings depend on the type of market failure

or transaction costs that the SHFs are facing as well as their spatial integration.

High transaction costs associated with SH farming undermines their ability to adopt

new technologies and increase productivity which ultimately leads to marketable

surpluses. According to Kassam, Stoop and Uphollf (2011), FOs assist members by

enhancing their participation and consultation with stakeholders. This ultimately

reduces transaction cost for SHFs and improves productivity. Studies in Kenya and

Nigeria have revealed that there is a positive correlation between being a member of an

FO and access to technology (Bekele and Muricho; undated). Through collective action

in buying farm inputs and selling farm produce, SHFs enjoy economies of scale and

hence aid in improving their farming practices.

Reduction of the government expenditures in public goods provision across Africa have

led to poor and ill funded agricultural extension services. In the quest to improve

productivity, some FOs have taken the central role of extending extension services,

credit, collective transportation, marketing and procuring of inputs for their respective

members. For instance in Malawian offer some extension service alternatives for

members such as farmer to farmer training under the Malawi Contact Farmer System.

Post-harvest losses are quite costly within the SHF farming sector. ICRISAT (2013)

estimates that between 30-40 percent of produce is lost or wasted between “field and

plate” worldwide and it cost around $ 4 billion on post-harvest grain losses in SSA

alone. Lack of proper post-harvest handling facilities, which is a result of lack of

investment in agriculture and poor agricultural policy implementation, by most

government has resulted in a slow development of post-harvest handling facilities. To

this end, most FOs have taken the onus of providing members with processing, storage

and marketing services for their respective members.

The rise of preferred supplier schemes which are championed by well-established

agribusinesses has limited most SHFs in accessing profitable mainstream agricultural

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markets. In most cases, these markets are associated with strict food quality and safety

standards compounded with rigid certifications processes. Both certification and

maintenance of safety standards increase transaction costs for most of the SHFs thereby

limiting their participation is such market channels. In order to limit the costs

associated with certification, FOs have tended to apply for group certification which

lowers the cost of individual SHFs in obtaining one. In some cases, FOs offer new entry

points for farmers’ access to market. For instance, the Ethiopia Commodity Exchange

offers new entry in the farming business and alternative market channel.

FOs also play a crucial role in linking SHFs to global value chains which are, in most

cases, very profitable. In addition, they also link SHFs to international agencies

initiatives such as the Purchase for Progress (World Food Program initiative). Through

these initiatives, SHFs are connected to stable and viable markets (Collin and Rondot,

1999). Although FOs are important vehicles for SHFs agricultural development, as

highlighted in the previous sections above, most of them still lack the capacity to serve

their members. This has been exacerbated by group heterogeneity and dynamics which

often makes it very difficult to coordinate FO activities leading to poor performance. In

addition, spatial distribution of SHFs also leads to coordination failures. Given such

scenarios there is need for soliciting of services from specialised service providers (SPs).

SPs play the crucial role of taking forward FOs’ needs through capacity building,

mentoring, training, and participation in on farm trials. Given such background, it is

imperative to have a platform on which FOs and SPs interact and share information

and knowledge. Ad-hoc interaction helps in the mitigation of negative impacts

associated with information asymmetries and lows levels of technology adoption.

4. METHODOLOGY

Data collection for the paper was done on a two stage approach with the aid of

structured questionnaires. The two stage approach was done concurrently and the basis

for that was to capture both the individual SHF’s capacity gaps and the role of

aggregation in addressing those capacity gaps. The structured questionnaire for the

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SHFs was designed to capture the benefits associated with being a member of FO. In

addition, the questionnaire also captured capacity gaps of FOs on a SHF’s perspective.

On the other hand, the structured questionnaire for the FOs was designed to capture

seven performance capacity indicators for FOs which are namely; participation,

accountability, strategic potential, income diversity, marketing, advocacy and

professional capacity.

The surveys were conducted in five SSA AGRA beneficiary countries which are namely;

Kenya, Malawi, Tanzania, Ghana and Mozambique. It targeted on average 30 FOs and

60 SHFs who are current members of a FOs operating within the breadbasket areas of

the aforementioned countries. Data collection was done through field surveys by

qualified and trained enumerators. FOs were drawn randomly from a database of FOs

that AFRICRES built using lists of FOs in the selected countries solicited from the

World Food Programme (WFP) and AGRA. On the other hand SHFs were drawn

through both simple random and snowballing sampling procedures in cases where

farmers listing were present and not present respectively. Table 4.1 shows a summary of

the survey regions and sample sizes.

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Table 4.1: Survey region and number of respondents

Country Region Districts Number

FOs Profiled

Number of SHFs

interviewed

Mozambique

Zambezia Morrumbala, Mopeia, Lugela, Alto-Molocue,Nicoadala, Mocuba

9 15

Sofala Grudja, Bândua, Nhamatanda-Sede 5 10

Manica Muzongo, Manhene, Machipanda, Chitewe, Vanduzi- belas, Vanduzi

15 30

Kenya

Central Kenya Nyandarua South, Nyandarua Central

5 10

Rift valley Eldoret West, Transnzoia West, Wareng, Nandi Central, Uasin Gishu

15 30

Western Kenya Bungoma East, Lugari, Bungoma North, Busia, Kakamega Central, Likuyani

10 20

Tanzania

Mbeya Mbarali 7 13 Njombe Njombe, Wanging'ombe 8 12 Morogoro Mvomero 8 14 Singida Ikungi, Singida Urban 9 17

Malawi Central Region

Mchinji, Lilongwe, Kasungu, Chimwala, Salima, Ntchisi, Dedza, Dowa

30 60

Ghana

Southern Region

Ejura Sekyere Dumase Municipality 18 28

Northern region Savelugu Nantong, Tamale, Mion, Kumbugu, Tolon

15 38

Total 154 297 Source: Field Research Data, AFRICRES, 2013

5. EVIDENCE FROM FIVE SELECTED SSA COUNTRIES

5.1 Demand and supply-side constraints from a smallholder farmer perspective

This section discusses the major challenges faced by SHFs as identified in the survey.

One of the major challenges was identified as limited access to funding from mainstream

banking. Only 1 per cent of the SHFs in Ghana had access to commercial banking

finance. Limited access was also recorded in Mozambique and Tanzania with 2 and 7

percent respectively. Overall, only 10 percent of the surveyed SHFs had access to

commercial banking financing options. In most cases, SHFs lacked the strict lending

requirements of commercial banks. The results indicated that SHFs had access to other

funding options such as FOs, community money lenders and local stores. SHFs in

Kenya enjoyed high financial support from FOs while the contribution of FOs in the

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other four countries account for less than one fifth of SHF financing. Needless to say,

SHFs in Ghana have the lowest financial support from FOs.

Table 5.1: Source of agricultural finance Tanzania Kenya Malawi Mozambique Ghana

Commercial bank 7% 38.9% 27% 2% 1% Community money lender 33% 0% 0% 5% 7% Farmers’ Organisations 17% 31.1% 7% 16% 2% Savings club/local store 19% 13% 15% 2% 0% Others 24% 17% 51% 75% 90%

Source: Field Research Data, AFRICRES, 2013

Land tenure constraints were also identified as an inhibiting factor to unleash the

potential of small holder farming as shown in table 5.2 below. Most of the SHFs have

small plots which limit the scope of their agricultural activities. SHFs in Ghana have

the highest average farming land at 11.2 ha while SHFs in Kenya scored the smallest

farm size at 1.5 ha. Most SHFs surveys still do not use irrigation and this is largely

because of high initial capital cost normally required to operate a sustainable irrigation

project. The largest average land under irrigation was recorded in Ghana at 16.3 ha. In

addition, land leasing is common practise in most of the countries surveyed except for

Mozambique. Highest average leases were recorded in Tanzania at $ 134 per ha

annually while SHFs in Malawi pay the lowest lease fees at $ 56 per hectare.

Table 5.2: Land Tenure

Kenya Tanzania Malawi Mozambique

Ghana

Average size farming land 1.5 6.6 3.7 3.2 11.2 Average size of owned irrigated land

0.0 0.4 0.4 1.0 16.2

Average owned un-irrigated land 1.5 2.7 2.3 2.2 10.4 Average leased irrigated land 0.0 0.6 0.2 N/A 9.6 Average leased un-irrigated land 0.1 1.1 0.8 N/A 12.25 Average communal un-irrigated land

0 1.8 0 0 0

Leasing conditions: Average lease amount $US115 $134 US$56.00 N/A $US68

Average lease period in years 1.2 1.2years 1 year N/A 4

Source: Field Research Data, AFRICRES, 2013

Access to inputs market is also another constraint that is faced by small farmers from the

surveyed African countries. This is a key precondition for the transformation of the

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agricultural sector from subsistence to commercial production. The role of FOs in

easing the access to input markets and through central purchasing cannot be

overstated. At 24 per cent, SHFs in Ghana registered the highest percentage in

improved access to inputs through joining FOs. The lowest percentage was recorded in

Tanzania with only 1.8 per cent of the SHFs acknowledging to improved access to

inputs after joining their respective FOs.

Figure 5.1: Access to input markets

Source: Field Research Data, AFRICRES, 2013

Further to this, SHFs face limited access to output markets. Most SHFs’ participation in

mainstream agricultural output is very low. Notwithstanding this, the survey indicates

an overwhelming percentage of SHFs who participate in the local markets. About 79

per cent of the SHFs from the surveyed countries participate in local markets as

indicated in table 5.3 below. Only 6 per cent of SHFs had access to regional markets.

Very few SHFs have access to international markets as indicated in table 5.3 below.

Only 2 per cent of the SHFs had access to international markets. Kenyan SHFs

recorded the highest percentage of international market penetration at 8 per cent. Of

particular importance Access to international markets is usually a profitable venture.

In this study, however, this is underscored with low participation of SHF.

0  

5  

10  

15  

20  

25  

6  

24  

6  

2  

11  

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Table 5.3: Scope of Market Access Ghana Mozambique Malawi Tanzania Kenya

Local 68% 89% 72% 91% 73%

Regional 0% 7% 13% 4% 7%

National 24% 0% 7% 0% 3%

International 2% 0% 0% 0% 8%

Family consumption 6% 4% 9% 6% 8%

Source: Field Research Data, AFRICRES, 2013

Given the low market penetration on international, national and regional markets, it is

imperative to strengthen the role of FOs in improving market access for SHFs. Of the

interviewed SHFs, 8 per cent reported an increase in access to output markets after

joining a FO. Figure 5.2 below shows the percentage of FO members who registered an

increase in market access after joining an FO.

Figure 5.2: Access to Output Markets

Source: Field Research Data, AFRICRES, 2013

Compounding to the problem of market access is the availability of market price

information. Agricultural radio talk shows were the most effective way of market price

dissemination with very few farmers having access to modern cost effective methods of

accessing market price information such as the SMS as shown in table 5.4 below. In

addition, social networks also scored high percentages, however, reliability of price

information is debatable. Notably, agricultural produce buyers in Tanzania play a

crucial role in price information dissemination.

0  

5  

10  

15  

20  

25  

Malawi   Ghana   Mozambique   Tanzania   Kenya  

6  

2  

11  

2  

22  

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Table 5.4: Source of Price Information Kenya Tanzania Malawi Mozambique Ghana

Agricultural radio talk shows 37 7 27 9 40

Agricultural television sessions 51 2 12 0 0

Produce buyers 0 91 0 19 0

SMS 10 0 9 0 8

Agricultural extension officers 0 0 14 0 0

Social networks 0 0 34 67 49

Print media (farmers’ magazines etc.) 4 0 0 0 2

Not applicable 2 0 5 0 1

Source: Field Research Data, AFRICRES, 2013

Agricultural extension plays a crucial role in linking research and farmers. However, from

the survey, very few SHFs have access to agricultural extension. Of the surveyed

countries, 14 per cent of the SHFs recorded an increase in access to extension services

as a result of being a member of a FO. Thirty percent of SHF in Malawi acknowledged

to having increase in extension services after joining a FO. Ghana, on the other hand,

had the lowest percentage (3 per cent).

Figure 5.3: Access to Extension Services

Source: Field Research Data, AFRICRES, 2013

Post-harvest handling of agricultural remains a critical challenge in the smallholder

farming sector in the surveyed countries. Proper storage of farm produce averts pressure

associated with selling produce when price are low. However, of the surveyed SHFs,

produce storage is still done using traditional methods which are not optimal and in

many cases leads to produce loss. Most SHFs do not have access to warehouses, which

offer optimal storage conditions of their produce. Of the surveyed SHFs, Ghanaian

SHFs had the best storage means available, 42 per cent indicated that they had access to

0  

5  

10  

15  

20  

25  

30  

Malawi   Ghana   Mozambique   Tanzania   Kenya  

30  

3  6  

12  

19  

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a warehouse to store their produce while. Tanzanian SHFs, on the other hand, had the

worst storage facilities, with only 4 per cent having access to warehouses as shown in

table 5.4 below.

Figure 5.4: Modes of Storage for produce

Source: Field Research Data, AFRICRES, 2013

Access and availability of draught power plays a critical role in farming activities and,

in particular, the planning time-sensitive farm operations such as ploughing, planting

and cultivation. Of the surveyed SHFs, 83 per cent in Ghana acknowledged that they

hire draught power from locals followed by Kenyan SHFs at 58 percent. Furthermore,

SHFs indicated that they also source their draught requirements from their respective

FOs. Kenya recorded 12 percent with only 2 per cent of SHFs in Tanzania sourcing

draught power from their respective FOs. Although most of the SHFs in Malawi

acknowledged to having their own draught power, this accounted to labour intensive

time consuming rudimentary operations such as hand tilling and hoeing. This trend

was also observed in Mozambique.

0  10  20  30  40  50  60  70  80  90  

100  

Mozambique  

Ghana  

Malawi  

Kenya  

Tanzania  

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Table 5.5: Sources of draught power Tanzania Kenya Malawi Mozambique Ghana

Source of draught power Own 20 10 49 16 1 Hire from locals 55 58 2 37 83 Hire from central mechanisation unit 0 20 0 5 5 Hire from FO 2 12 5 4 11 Hand hoeing 23 0 44 39 0

Source: Field Research Data, AFRICRES, 2013

SHFs also face a challenge of record keeping. Without proper records, it is difficult to

determine farm labour productivity and profitability. It only results in guess work which

can severely undermine growth prospects and often exposes famers to various business

risks. Of the surveyed SHFs, 44 per cent indicated that they do not keep any form of

records. This presents an opportunity for Farmer Organisations to assist the farmers

keep record of the various measurable processes. Table 5.6 below indicates the types of

records that are kept by the small holder farmers in the African countries surveyed.

Table 5.6: Types of Farm records Type of farm records Kenya Tanzania Malawi Mozambique Ghana

Farm inventory records 52 2 15 4 10

Farm marketing records 10 43 18 55 10

Farm production records 13 2 18 8 11

Farm weather records 0 0 0 0 11

Do not keep any records 25 53 49 33 58

Source: Field Research Data, AFRICRES, 2013

SHFs in Kenya scored the highest in farm inventory record keeping with 52 per cent.

Only 2 per cent of the surveyed SHFs in Tanzania acknowledged to keeping marketing

records. Only Ghana’s SHF keeps farm weather records. This is important area that is

overlooked because, in most cases, SHFs heavily depend on rain-fed agricultural

operations. Changes in weather patterns need to be well documented in order to

optimise on planned farming activities.

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5.2 Demand and supply-side constraints for smallholder farmers: A farmer

organisation perspective

This study also highlighted the role of aggregation in mitigating some of the challenges

faced by SHFs. In order to ascertain the extend of to which FOs respond to some of the

challenges faced by SHFs, six capacity performance indicators of FOs were analysed viz-

a-viz marketing, advocacy, participation, income diversity, professional capacity and

accountability, As a result of the need to enable market access of their members, FOs

play the crucial role of soliciting marketing opportunities for their members. Market

access is achieved through a number of attributes which include among others, produce

bulking, collective transportation, produce quality assurance and produce price

lobbying. Through bulking, FOs ensure that SHFs reach the required market volumes.

Of the 5 countries, the quality assurance element received the highest, with Kenya

scoring the highest at 77 per cent. This is important in establishing homogenous

product units which can penetrate the market easily. The transport element scored the

least overall with FOs in Tanzania receiving 11 per cent. This goes to show that most of

the FOs do not, sufficiently, offer transport to their members to get their produce to

the market on time.

Table 5.7: Marketing Access Tanzania Kenya Malawi Mozambique Ghana

Storage 29% 42% 42% 48% 60% Transport 11% 46% 36% 36% 50% Quality Assurance 22% 77% 46% 37% 60%

Source: Field Research Data, AFRICRES, 2013

Agricultural policy and price lobbying forms an integral part of agricultural

development. The FOs surveyed all scored well in regards to outreach, with FOs in

Mozambique performing best with 71 per cent. However, most FOs across the 5

surveyed countries do not have proper modes of communication. Needless to say, use

of digital communication technology such as internet and social networks is quite low

with a score of 19 percent for mode of communication. This might be attributed to

unavailability of infrastructure as well as low literacy levels in FOs management

structures. Notwithstanding this, most FOs are fairly networked with the exception of

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Tanzanian FOs. Networks provide a platform for policy and price debates as well as

sharing new information and technological issues.

Table 5.8: Advocacy Tanzania Kenya Malawi Mozambique Ghana

Mode of campaign 13% 43% 35% 14% 36% Outreach 36% 70% 63% 71% 56% Mode of communicat ion 15% 16% 28% 15% 21% Networking 39% 70% 51% 50% 50% Frequency of Lobbying 67% 39% 35% 65% 46%

Participation was another key indicator examined in the survey. From the survey, the

participation attribute scored the highest overall average, with Kenya scoring 92 per

cent. This indicates that FOs have developed sound feedback mechanisms to cater for

their members’ grievances. Another challenge that is faced by most FOs is low youth

participation in FO leadership positions as well as FO activities as shown in table 5.9

below. The youth participation element scores the least overall score with Mozambique

scoring 6 per cent. This downplays the role that youth play in SSA agriculture. This

calls for the need for sensitizing youth in FO activities.

Table 5.9: Participation Tanzania Kenya Malawi Mozambique Ghana

Female Part ic ipat ion 44% 50% 36% 20% 20% Youth Part ic ipat ion 43% 44% 27% 6% 25% Active membership 55% 78% 55% 71% 67% Part ic ipat ion Channels 79% 92% 90% 78% 80%

Source: Field Research Data, AFRICRES, 2013

FOs, in surveyed countries, also faced the challenge of low income diversity. This has

been attributed to lack of diversification of the product-base and low external financial

assistance. The Table 5.10 below shows average scores on the income diversity indicator

from the profiling survey. The diversity of income sources element recorded the highest

overall score, with FOs in Tanzania achieving 81 per cent. This means that most FOs

do not rely only on their membership and annual subscriptions. The donor assistance

element records the lowest score; with FOs in Tanzania scoring 12 per cent. This might

be due to low capacities to develop good proposals for funding or technical assistance.

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Table 5.10: Income Diversification Tanzania Kenya Malawi Mozambique Ghana

Divers i ty o f income sources 81% 71% 76% 59% 63% Divers i ty o f Product base 68% 65% 53% 48% 53% Donor Ass i s tance 12% 30% 26% 27% 28% Access to f inance 52% 90% 55% 50% 33%

Source: Field Research Data, AFRICRES, 2013

Lastly, the professional capacity indicator was also considered in the survey. The

diversity of staff element for Kenya scored 95 per cent. This indicates that the FOs have

a specialized management component, for instance they have presidents, treasurers,

secretaries and other management team members.. The educational qualification

element scored the least with Mozambique recording 18 per cent. Most FOs in the

surveyed countries are headed by leaders with low education. This, in particular, may

lead to low adoption of new farming technologies and practices.

Table 5.11: Professional Capacity Tanzania Kenya Malawi Mozambique Ghana

Educat ional Qual i f icat ion

20% 30% 21% 18% 45%

Access to Training 10% 73% 58% 64% 81% Divers i ty o f Staf f 81% 95% 90% 31% 63%

Source: Field Research Data, AFRICRES, 2013

Contrary to all other indicators analysed, FOs showed strength in accountability as

shown in table 5.12 below. From the survey, the reporting quality element recorded 70

percent for FOs in Malawi. This implies that meetings are not only held regularly, but

they are participatory in nature. In addition, members also receive meeting agendas well

in advance which encourage fruitful deliberations. However, the record quality

attribute recorded 57 percent for FOs in Mozambique. This indicates average

recording of meeting proceedings.

Table 5.12: Accountability Tanzania Kenya Malawi Mozambique Ghana Legal Compliance 44% 84% 96% 68% 79% Performance Evaluation

76% 83% 76% 55% 79%

Reporting Quality 66% 87% 79% 71% 75% Record Quality 58% 84% 81% 57% 67%

Source: Field Research Data, AFRICRES, 2013

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6. CONCLUSIONS AND POLICY RECOMMENDATIONS

The role of FOs in enhancing capacity performance of individual SHFs cannot be over-

emphasized. This paper highlighted some of the demand and supply side constraints

that are faced by SHFs and FOs in 5 selected SS African countries that were examined

based on a structured questionnaire administered to 297 and 150 SHFs and FOs

respectively. The survey identified some of the challenges faced by SHF and examined

the role of aggregation in mitigating some these challenges.

Leading challenges for SHFs included among others; limited access to funding , land tenure

constraints, poor access to inputs and outputs markets , unavailability of market price

information, agricultural extension, post-harvest handling, record keeping. The challenges’

intensity and extend, however, differed across the sample. For instance, while low

access to finance was found in Ghana, Kenyan SHFs enjoyed a relatively high access to

finance. With respect to land tenure, which represents the availability and cost of

farming lands, the study revealed low levels of access to farming land in the four

countries except Ghana. With regards to market access, while the study finds that

majority of the SHF mainly focused on local markets with very limited access to

international markets, less than 30% of SHF in each of the surveyed countries

indicated an improvement in access to inputs from for being part of a FO. Only

marginal improvements were recorded in access to output market. Information on

output prices was difficult to access by the SHF across the sample whereas access to

extensions services remained a major challenge. For The FOs surveyed identified

marketing strategy, advocacy, participation, income diversity, and professional capacity

as major challenges. These challenges mirrors the various challenges faced by the SHF.

Hence addressing the challenges at the FO level would go a long way in developing

SHF in Africa. Since most of the challenges are country specific, identifying the capacity

needs of SHFs and FOs are necessary in solving these challenges.

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The general conclusion is that membership of a farmer organization does not

necessarily solve the challenges faced by SHF. This is because FOs, broadly, lacks the

capacity to adequately address the challenges faced its members. We, thus, recommend

that SHF specific challenges should be identified at the FO level and that specific

programmes be developed to solve these challenges. This could pave way for the

employment of SPs as a means of providing capacity for both the SHFs and FOs.

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