Agroindustrial project analysi

THE PROCUREMENT FACTOR 111size; empirical evidence from developing countries indicates that"overall, an absence of economies of scale or changing total factorproductivity with size seems to be typical." 20One effective method for a processor's initiating a producers'organization is for the processor to identify the multiple constraintssurrounding the small farmers' efforts in produce marketing andthen to suggest a solution. The most common marketing barriersinclude infrastructure (for example, roads and storage), services(for example, transport and shelling), inputs (for example, bagsand credit), and information (for example, prices and market standards).Because the marketing system is also a social system, barriersfrom social obligations and behavioral patterns can also beexpected. 2 'Frequently, several barriers must be confronted simultaneouslybefore the market stimulus from the agroindustry can affect thefarmer. This was the conclusion of CONASUPO (Companiia Nacionalde Subsistencias Populares), the Mexican government's agriculturalproduce-marketing organization. 2 2 Although CONASUPO'S supportprices were higher than those of intermediaries, few farmers sold tothe organization and, consequently, its warehouses had a tremendousexcess capacity. A survey revealed that farmers lacked transportfor their grain to the CONASUPO warehouses, adequate priceinformation, bags, and shelling equipment; furthermore, thefarmers had promised their crops to buyers who had lent them preharvestmoney. In response to these findings, CONASUPO mounted aprogram to reimburse farmers for the cost of farm-to-warehousetransport, with the farmers assembling their grains and locatingthe means of transport; to provide shelling services at cost; to lend20. R. Albert Berry, "Cross-country Evidence on Farm Size/Factor ProductivityRelationships," in Small-Farm Agriculture: Studies in Developing Nations,Station Bulletin no. 101 (West Lafayette, Ind.: Purdue University,Department of Agricultural Economics, Agricultural Experiment Station, September1975), p. 20.21. An instructive discussion of agricultural marketing constraints operativein rural Africa can be found in Uma Lele, The Design of Rural Development:Lessons from Africa (Baltimore: Johns Hopkins University Press, 1975; 3dprinting, with new postscript, 1979), pp. 100-15.22. James E. Austin, "CONASUPO and Rural Development: Program Description,Analysis, and Recommendation," consultant's report to World Bank(Washington, D.C., December 1976; processed).