Regional Markets

Regional Markets for Local Development
lising rural communities: once economic opportunities become available, farmers join
in large numbers. The smallholder-based banana value chain in Zimbabwe started with
two associations and 300 banana farmers, expanding to 2,500 men and women members
within two years. Even despite the negative reputation of producer associations,
many farmers were eager to join. The impact was even larger if we consider the spillover
effects of farmers who did not join, but obtained information and knowledge and
improved their farm without being linked to the associations. All in all, 7,000 smallholder
households in the area adopted the new technologies that were introduced, even
though they were not all official members of the farmers organisations. Both largerscale
farmers (with gross margins of over USD 1,800 per year) and small-scale farmers
(too poor to purchase fertilisers, chemicals and the irrigation needed to achieve
maximum yields) benefitted. The poorer smallholders in particular enjoyed a marked
improvement in their livelihood, reaching a gross margin of USD 700 per year without
irrigation and inputs (compared to USD 200 at the start of the project).
Many organisations adopt a combined approach to pro-poor development: direct support
to farmers for procurement of inputs and reduction of transaction costs, combined
with a bottom-up approach, focused on local organisation and social movements. RUDI
in Tanzania for example follows a similar track, working with 14,000 smallholder riceproducing
households and 550 small-scale maize producers. Traditional smallholders
usually have 1–5 acre plots; small irrigation farmers own 1 hectare (2.5 acres), and large
irrigation farmers may have as much as 5 hectares (12 acres). RUDI focuses on tackling
two main challenges: the low prices offered to farmers and their weak negotiating
position. As crop markets are mostly absent—villagers lack marketing skills and market
information is not readily accessible, if available at all—RUDI promotes the organisation
of farmers and provides training (harvest technologies, marketing skills, branding,
and farm gross margin calculations) to help them secure better prices for their commodities.
Furthermore, farmers established associations in their respective areas to pursue
collective marketing. They also started a warehouse receipt system, allowing farmers
to receive immediate payments for their crops, while the association stores the grains to
take advantage of higher grain prices later in the season.
Another interesting conclusion came from cases that focused on more than one
(export or niche) crop. This mixed crop cultivation can provide a diversified and more
secure approach to pro-poor development for small-scale, risk-averse farmers. In the
Kilimanjaro region of Tanzania, TechnoServe supported smallholder coffee growers, as
coffee production for export was more profitable than maize. 18 When coffee prices fell
on the world market, many farmers abandoned their coffee farms in favour of other
18 Even though export-oriented coffee production falls outside of the main theme of food commodities for
local markets, this case does show that focusing on an export-oriented commodity can have a very positive influence on
local food security for poor producers.
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