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4 Opportunities for development visible in local and national markets (at least there is no direct link). Figure 4.7 illustrates the estimated or recorded improvements in producer prices in the different cases. Looking across the cases, it would seem that there is some room for improvement in transparency and availability of information in regional markets. Price transparency can build stronger relationships between producers and buyers in the value chain, as each actor comes to understand the circumstances of the other. Fair prices and strong relationships are necessary ingredients for a sustainable chain. This goal requires a slow development of these value chains, from a mostly hierarchical structure to one that is more network-based. Figure 4.7 Focus on price policy as an instrument RUDI FoSHoL C:AVA Cotton ZIM TAHA ZIM banana FT LOW HIGH NGOMA Coffee TZ Senegal Fig 4.7 illustrates the estimated or recorded improvements in producer prices in the different cases. Innovation and sustainability How can indigenous knowledge, research and development assist sustainable production systems in the context of regional markets? Production and marketing innovations that are lucrative for all actors in the value chains—especially smallholders— need to be introduced without external donor support to make the chain sustainable (more efficient compared to the competition). This question is commonly considered when looking at export-oriented production, and we anticipate that it is also very relevant for regional and local markets. Innovation and sustainability do not necessarily go hand in hand. Some of the cases expressed sustainability concerns—economic, social or environmental—but the majority of the innovations focused first and foremost on economic concerns, such as improving yields and boosting incomes. In that sense, they were not very different from innovations in export market value chains. Non-economic innovations were also utilised, ranging from organisational innovations to targeted trainings and new marketing approaches. In fact, many of the studied cases discuss the implementation of several complementary innovations. For example, RUDI complements its technical trainings with marketing skills, to both increase 157
<strong>Regional</strong> <strong>Markets</strong> for Local Development the quality and quantity of production as well as to enable farmers to find an outlet for the increased production volume. FoSHoL combines the provision of improved seeds with more sustainable environmental practices, such as soil and water conservation. NGOMA is another case that combines investments in technology (dairy cooler plants) with innovations in group organisation, to help group marketing and service provision. Improvement of crop varieties was a prominent feature in several cases (Senegal, FoSHoL, as well as the cotton case and banana cases, both in Zimbabwe). It was generally utilised to increase yields or to produce varieties that are more in demand. The case owners in the writeshop believed that the introduction of new varieties had been successful in boosting yields and allowing the establishment of a marketing outlet. For unknown reasons, ‘recovering traditional knowledge’ did not feature in any of the project activities, even though the case owners themselves felt that it is very important. Environmental sustainability did not feature prominently in the discussion on sustainability either. This does not necessarily mean that the projects are not environmentally conscious. Fairtrade is one case where environmentally sustainable practices are explicitly encouraged. The case owners believe that innovations have been important for expanding the impact of the intervention. While they generally think that innovations lead to enhanced economic opportunities, some also mentioned the associated higher equipment costs: dryers (C:AVA), processing units (Senegal), and milk coolers (NGOMA). The return on these investments needs to be carefully weighed against the associated risks especially in a local market with limited elasticity. Other small businesses may seek to learn from these experiences, and it is essential to show the best lessons learned (especially as some of these budding initiatives may not enjoy donor support). Making correct cost-benefit analyses when considering innovation investments is essential for the sustainable economic development of small-scale producers. This may be even more important for cases where poor farmers are engaged, as their risk profile is even more constraining than exporters’ may be. Interestingly, the case owners did not explicitly mention sustainability in the context of building relationships with other value chain actors. Taking advantage of such opportunity to establish durable business relationships can go a long way in helping smallholders secure a larger portion of the profits from the final marketing of the produce and thus reduce risks overall. As stated above, although most innovations focused on economic concerns, such as improving yields and boosting incomes, it seems that most cases also considered innovations at social, organisational and—maybe to a lesser extent—environmental levels to be important when developing regional market value chains. Figure 4.8 shows the importance that cases attach to innovation. We would like to stress that nearly all cases discuss the implementation of several complementary innovations, i.e. economic as well as non-economic. Figure 4.9 illustrates the extent to which the projects’ interventions 158
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Editors: Fred Zaal, Jacqueline Slui
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Regional Markets for Local Developm
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Acknowledgements Acknowledgements F
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Foreword Bart de Steenhuijsen Piter
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Photo: ©FAO/Paballo Thekiso / FAO
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1 Introduction The challenge is to
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1 Introduction in this publication
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1 Introduction agro-related service
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1 Introduction is used). Market kno
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1 Introduction their borders to foo
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1 Introduction When individual valu
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2 Inclusion of smallholder farmers
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3 Cases Photo: ©FAO/Daniel Hayduk
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3 Cases RUDI empowers micro-small e
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3 Cases The last type is the larger
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3 Cases Transport The two main mode
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3 Cases Impact of the intervention
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3 Cases opportunities need to be co
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3 Cases Photo: Lora Forsythe 3.3 Ad
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3 Cases matter (e.g. dust) and—mo
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3 Cases the sun-dried HQCF VC. The
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3 Cases feedstock for processing in
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3 Cases (USD 39 to USD 46 per ton f
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3 Cases Photo: ©FAO/Simon Maina /
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3 Cases than 7,000 smallholders in
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3 Cases tices, productivity and qua
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3 Cases Infrastructure and governan
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3 Cases One unanticipated developme
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3 Cases Photo: ©FAO/Giampiero Dian
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3 Cases be secured at lower prices.
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3 Cases Figure 3.2 FoSHoL seed prod
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3 Cases secure some additional inco
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3 Cases Table 3.6 Cost and profit c
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3 Cases Photo: ©FAO/Daniel Hayduk
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3 Cases holder farmers are gathered
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3 Cases Table 3.7 Relative market s
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