Income Diversification and Poverty Income Diversification and Poverty

Chapter 5: Income Diversification from the Farmers’ Perspective
Table 5-35. Reason for selling crops to current buyer
Accessibility
Reason Low 2 3 High Total
(number of respondents)
Only one 4 6 19 0 29
Offers assistance 0 1 2 0 3
Gives best price 67 101 102 110 380
Trust/relationship 12 16 30 12 70
Owe money to him 0 2 0 0 2
Other 19 9 5 2 35
Total 102 135 158 124 519
Two other questions were used to explore the relationship between the farm household and
the most important buyer (in value terms). When asked how many years the household has sold to
this buyer, 28 percent of the respondents said this was the first year and 43 percent said just a few
years. This suggests that not only do farmers sell in spot markets for the most part, but there is a lot
of turnover in the farmer-buyer relationship. This is positive in demonstrating that farmers have a
choice and are not locked into a relationship, but it is also a matter of concern because it indicates that
buyers are not likely to provide assistance (in the form of market information, credit, or inputs) to
farmers under these conditions.
Table 5-36. Number of years selling to buyer by accessibility category
Number of years
Accessibility
selling to buyer Low 2 3 High Total
Many years 7 11 3 9 7
Several years 17 16 22 30 21
Just a few years 30 44 55 39 43
This was first year 46 29 21 21 28
Total 100 100 100 100 100
When asked how much the respondent trusts that they are getting a “fair price” from the
buyer, 37 percent reported that they trust the buyer to give a fair price and another 58 percent state
that they “trust the buyer more or less but verify prices.” Just 4 percent said they “don’t trust much”
or “don’t trust at all.”
Table 5-37. Trust in buyer by accessibility category
Accessibility
Trust in buyer Low 2 3 High Total
Trust for fair price 40 42 36 29 37
Trust but verify 49 53 61 68 58
Don’t trust much 11 5 2 0 4
Don’t trust at all 0 0 1 4 1
Total 57 60 84 56 257
100 100. 100 100 100
Finally, respondents were asked whether a private trader or processor had ever given the
household any encouragement or assistance to try a new crop. Given the results presented earlier, it is
not surprising that 99 percent of the respondents said no.
In summary, the bad news is that there is little or no “vertical coordination” between farmers
and buyers. Farmers sell on spot markets and receive virtually no guidance (much less credit or other
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