Betwixt & Between

Challenges facing smallholder farmers

The key challenge for including smallholder farmers as partners in new types of food systems lies in overcoming mental, social, technological, economic, legal, institutional, logistical, cultural and other barriers in connecting smallholders to markets in new ways. The challenge is enormous, as it means working out ways to help millions of dispersed smallholders reach consumers by improving productivity, assuring food quality, increasing food processing, responding to consumer preferences, and cutting out intermediaries.

Referring to the experience of two partnership brokers who are reorganising local food systems in Poland and Zambia, this paper explores how partnership brokering can make a difference given the right support and investment.

In Poland, there are around 1.5 million farms, with a large sector of smallholder and part-time farmers – concentrated especially in south-east Poland. In the Malopolska region of southern Poland alone, there are 140,000 small farms, averaging around 5 hectares in size. They are not perceived as being of much economic significance, but do have political importance on account of the numbers involved. They are marginalised by the mainstream agricultural market because they lack capacity and productivity to meet its requirements and operate largely in the informal economy.

Farmers are tied to their land and to their families; they are dispersed and not organised into any one particularly powerful lobby or movement. They constitute a traditional and an independent sector, operating outside of the mainstream formal economy. They are also not seen as a viable economic opportunity in the European Union context as its systems and policies are geared much more on industrial scale production and intensive farming. What’s more, Polish agricultural policy is geared to agricultural exports and favours large scale farming to the detriment of small-scale farming.

In Africa, most of the market for fruits and vegetables is offered by Shoprite, the continent’s largest food retailer operating in 1,825 corporate and 363 franchise outlets in 15 countries across Africa and the Indian Ocean Islands. Reducing import costs and broadening their product range is pushing them to look at localised sources of agricultural produce. The biggest challenge for local farmers is meeting capacity and meeting Shoprite’s standards.

In Zambia, the Zambia Business in Development Facility (ZBiDF) has set up two out-grower pilot projects with two lead farmers, 22 smallholder farmers from Mufulira and 87 from Chingola to supply the Shoprite Stores on the Copperbelt and North Western Provinces.

The two lead farmers will aggregate and then distribute the produce to the various shops while also offering extension services to the smallholder farmers. Plans are in place to replicate and scale this model to 5,000 smallholder farmers in the two provinces in the next five years.

However, some major constraints for these farmers remain, with the main challenge being with the monopolistic way Freshmark, the procurement agency for Shoprite and some of the main hotels, operates. It is probably the single biggest purchaser of fruit and vegetables in Zambia, buying an estimated USD 5 million of locally grown horticultural product, from about 70 to 75 farmers; about 30 of these are preferred larger suppliers. Its main depot in Zambia is in Lusaka. Despite a little progress, Freshmark tends to side-line and overlook the smallholder farmers as a source of supply to meet its demand. This is shown in the sourcing of produce from Lusaka without considering that it had earlier placed orders with the farmers on the Copperbelt. The farmers’ produce ends up being rejected by the shops in the Copperbelt because Freshmark have already sourced from their long established suppliers in Lusaka. This challenge could also be on Shoprite’s side in that the farmers would not respect the contract terms and do some side-selling, especially when the prices go up in leaps and bounds.

Other challenges for Zambian smallholder farmers include lack of access to finance, lack of skills or knowledge in best agricultural practices as well as lack of entrepreneurial skills, particularly in running a farm as a business. The commercial or public sectors do not necessarily see them as an important component of the value chain. The farmers also feel that where efforts are made to collaborate, the actualisation of the partnership is taking too long and frustrations mount.

Drivers of change

In Poland, consumers are the primary drivers for change. They care increasingly about food, they want to know where it comes from, how it is produced – they want something that is tasty, fresh and chemical-free. They want food of known origin and to buy directly from the food producer. To respond, smallholders and consumers must solve a distribution and logistical problem that connects distributed and dispersed producers with consumers who want to buy directly from them. In the meantime, supermarkets are increasingly claiming local sourcing as part of their marketing campaigns, creating new opportunities for small-scale producers in the process.

As consumer demand changes food markets, new opportunities are appearing for innovators in financial services, logistical solutions, IT platforms, production processes, organisational arrangements and distribution channels. The race is on to work out new ways of connecting producers and consumers. The growing interest among innovators can potentially change the nature and attractiveness of small-scale farming in coming years. This has special significance for farming families with young people with a foot in both the urban and rural worlds, who could potentially choose food production, distribution and sale as an attractive business or career option.

The large size of the smallholder farming population means that food producers represent a substantial political force – yet unrealised and unleashed – which may grow in significance as food security and access to food of known origin become more and more important to consumers.

In Zambia, there are similar drivers: feedback from the consumers on what they would like to eat is having influence on the suppliers. Shoprite, for instance, is setting the standards and quality of the produce they pick up. The market for local produce already exists – it is there, it does not need to be created from scratch. There is a growing population on the Copperbelt and North Western Provinces in Zambia due to the opening up of new mines which have created new jobs and business opportunities. Smallholder farmers need access to that market and to improve their productivity to meet its demand. The ZBiDF has intervened to convene the farmers into a partnership, cutting out the middlemen for the farmers so they can have direct access to the market in order to earn more. Multiple stakeholders are working together in ‘The Consortium of Fresh Fruit and Vegetable Producers’ Partnership’.

Market access for small-scale food producers

In Poland, the key solution is to cut out intermediaries and shorten the social and geographical distance between consumers and food producers in ways that reduce costs and guarantee consumers traceability. With financial support from the Swiss Contribution, the Polish Environmental Partnership Foundation has been developing the Local Products from Malopolska system to shorten the food supply chain by organising farmers and small food producers into a collaborating and self-organising partnership aimed at increasing access to locally-produced food. [3]

To achieve scale in terms of participation of producers and consumers and range of products offered and volume of sales, the scheme focuses on organising and replicating buyers’ clubs, which bring together producers and consumers. Each Club is co-created by a group of farmers and small food producers and a group of consumers – sales, delivery systems and marketing are all possible, thanks to new types of flexible financing, logistical arrangements and IT tools. The Clubs increase the attractiveness of their offer by making products available from other Clubs. The key thing in this arrangement is that the joint action puts the food producers in charge. But the success of each specific Club depends on responding to consumer needs, especially their shopping convenience. The scheme currently includes 7 Clubs, involving 140 producers and over 2500 consumers. As a sales and distribution channel, which merges the formal and informal systems of food production and distribution, the Clubs are still marginal in terms of the bigger food market in Malopolska. However, they do represent a scalable solution, with the potential to be replicated in other places, given the right infrastructural, organisational and investment support. The success of the approach depends on ensuring that the relationship between producer and consumer is a personal one, giving small scale producers who are typically excluded from conventional industrial food systems that are driven by cheap food imports, to play a leading role.

In Zambia, the response has been to put in place partnerships between commercial and smallholder farmers and build value chains from the farm to the market. ZBiDF’s task is to facilitate building the capacity of smallholder farmers to improve their productivity, provide them with technical assistance and entrepreneurial skills in order for them to meet Shoprite’s expectations. The partnerships are already yielding outcomes: farmers are earning more; they are able to grow more high value crops; the shops are stocked with fresher produce; and the opportunity for lead farmers to construct distribution centres has been enhanced.

The promise of partnership-based food systems

In Poland, the biggest achievement has been that in excess of 400 producers in Malopolska have opted to operate jointly to build the Local Product from Malopolska system, reaching over 5,000 buyers each week through direct sales each and every week through a farmers’ market, a bistro in Krakow, on-farm sales and Buyers’ Clubs – all of which contribute to a new food culture. Locally-produced food is being made available in ever new ways. Other schemes have been launched in this space, which suggests that fundamental and transformative changes are under way in the way food systems operate in Poland.

The second achievement is to re-position the role of partnering in the mind-set. We now see a change in the attitude and organisational capability of the farmers to be active in a bigger movement without having to sacrifice their individual identity and offering. It is they who are the face and brand of the Local Product from Malopolska system and it is they who assure the authenticity of the products offered through mutual verification. IT technology and organisational innovation has made all this possible. But without partnership action, there would be little prospect of assuring and scaling up the product offering and gaining market access in a sustained way.

An important feature of the scaling-up process is to find resource efficiency gains from leveraging what the farmers already have, but do not fully exploit. For instance, most farmers have a vehicle, storage space and family members in the city.  Partnership means responding to the needs of other farmers in storing or transporting their products in a coordinated way. By operating together they do not have to bring in third-parties but can buy services from each other. The key here is organisational innovation and organising the coordination function. Similarly, producers through their relationship with consumers have direct access to market information. In this way, they can avoid the kinds of cash costs that conventional food chains require and therefore their joint action gives them a chance to compete in a marketplace that still favours the supermarket culture.

In Zambia, similar potential exists in scaling up and replication in other areas and looking at alternative markets. Shoprite is the biggest stakeholder in the partnership, but ZBiDF is seeking to reduce dependency on a single route to market and find new markets for the farmers such as Spar, Pick n Pay, Choppies, and other supermarkets.

In other areas, farmers were seen as minor stakeholders and not as equals with an equity of voice and influence. In order to change this, 30 stakeholders, including farmers, were taken through a training programme on how to partner more effectively. The training raised the confidence of those farmers who had felt marginalised, generating more equity for farmers in the relationships shaping the food system.

Multi-stakeholder partnerships as disruptors of the conventional food model

There are more and more organisational initiatives which nurture joint partnership action on the side of both producers and consumers and the interaction between them. Innovation in the institutional or organisational infrastructure that merges informal social systems with more formal sales and distribution systems through collective action is creating market access, which is transforming the nature of the market at the same time. Examples include social enterprises, social intermediaries, food cooperatives, farming collectives, community-assisted agriculture and urban farming. There is space for simple solutions that bring together relatively small groups of producers and consumers in personalised ways that are creating new patterns of production and consumption.

Experience from Poland and Zambia suggests that enabling access to technology, social capital, and knowledge builds and nurtures a partnership culture, which is disrupting business as usual by providing alternatives to the anonymous industrial food systems that still dominate and seek to dominate economy and society. What is new and exciting is the scalability and inclusiveness of these new partnership-based organisational solutions.

At its broadest objective level, the partnership paradigm appears to offer a way of helping smallholder farmers and producers gain access to markets on their own terms, retaining some measure of control. Their capacity to collaborate is the key determining factor in meeting market demand, improving food quality and continuity of supply and identifying and overcoming other barriers to market access. A multi-stakeholder partnership with effective market intervention and access strategies can help smallholders become more competitive, especially where the costs of accessing markets are high due to poor infrastructure, inadequate technology and / or information barriers.

Engaging partners and mobilising resources

Successful partnerships demand engagement with key stakeholders who share in a desire to make the food systems in which they are participating more effective. They must mobilise and share resources in ways that would not be possible by individuals or individual organisations acting alone. Such partnerships might include:

• Empathetic suppliers, wholesalers, food processors  and retailers;
• Government representatives from Ministries – e.g. Agriculture, Rural Development etc.;
• Business organisations representing local businesses operating in / with agriculture & food production;
• Microfinance institutions and credit providers;
• Agricultural research institutes and universities;
• Local NGOs & community groups.

Partnerships and awareness of the significance and benefits of partnering constitute an ongoing social process that is always unfinished and means always identifying and engaging with new and additional partners. The role of the partnership broker or of a partnership brokering organisation is to keep this process alive through interaction and adaptation with stakeholders, who must constantly be encouraged and enabled to act as responsible and accountable partners.

At the most fundamental level, in both Zambia and Poland, food partnerships have helped make smallholder farmers something more than passive beneficiaries “in need of assistance” – by giving them voice and a stake in new forms of local food systems.  Collectively smallholders can co-create the new food systems that are emerging in ways that they could not if acting alone or individually. Their invisible social and other assets and resources gain value when they are mobilised as a collective while engendering the pride and dignity that comes from being self-sufficient and self-reliant:

Table 1: Assessing impact of partnerships for enabling market access for smallholder farmers from an assets perspective

Type of asset	Potential Outcomes
Financial	Access to credit financing, micro-financing, mobile banking to  improve  the cash flow and financing of production Increase  in  incomes  through better prices, increased productivity and lower costs Economies of scale through pooled buying and selling processes
Business	Access to market knowledge & information e.g. establishing a market information database or service   for   researching, gathering, providing, analysing  up-to-date information to  producers  on  demand,  prices,  volumes,  quality,  variety  and  other  key  market information Increased market / business   literacy   of   farmers and greater  market  understanding and ownership within communities Improved productivity, quality and standards and reorientation of production in line with market demand broadened customer base – direct to consumers but also to new potential buyers Improved capacity  of  agricultural  and  agronomic  practices  to  improve  the  quality, volume and consistency of supply Improved farmers’ collective bargaining power Access to technology-based and other solutions for more effective marketing, supply chain management, logistics etc. and for supporting farming organisations, creation of small businesses, networks and co-operatives Improved marketing of products, such as labelling, packaging, promotion and distribution channels Improved capacity for value-adding activities to increase the prices achieved but also to make optimal use of the crop (e.g. in times of glut)
Human	Enhanced knowledge, skill and experience in economic development and improved capacity of small-scale farming communities to understand market dynamics Access to people and technology solutions for education, vocational training and access to knowledge, technical assistance, data and information; small enterprise development, business management etc. Improved networking skills/networks to effectively build  relationships
Social	Improved well-being of children and families in target communities Changed mind-set –  dignity,  confidence, self-reliance, collective efficacy, more positive attitudes conducive to business development
Physical	Access to equipment & appropriate technology for smarter solutions to transportation, housing, energy utilisation Improved resource sharing of community assets and solutions for transport, storage, distribution etc.
Natural	Sustainable use of natural environmental and biological assets (produced or wild) that communities have access to through individual or communal ownership or stewardship e.g. wells, rivers, lakes & other water areas with their ecosystems, subsoil assets, air, etc. – solutions for more effective water and waste management, for better soil, forestry, fisheries management

Both the Zambian and Polish experiences further suggest that unleashing the potential of smallholder farmers to produce and sell food can create a self-reinforcing ‘virtuous circle’: increasing the farmers’ household income where they may typically use more than a third of this additional income to purchase food. After food needs are met, they can invest in increased agricultural production, pay for children’s education, and purchase basic healthcare services. Emphasising markets and selling can help smallholder farmers break out of the subsidy culture and dependency on external resources – be they EU grants and subsidies in Poland or international aid subsidies in Zambia.

Thanks to IT technology and social media, smallholder farmers and their families (operating often in both urban and rural contexts) are more able to obtain the necessary information, reach quality standards and operate on a larger scale when they pool financial, information and labour resources together in clever ways to create new socially-based and personalised distribution and sales systems that bring together producers and consumers in a direct way. Such short food chain systems that combine IT and social media technology with traditional food production can enable farmers (and their families) to sell in new domestic or international markets which are simply out of reach to individual smallholders.

At a systemic level, such personalised approaches promise a more resilient and abundant global food supply – provided they can achieve sustainability, scale and continuity.

Tasking partnership brokers

In both Poland and Zambia, the challenge for dispersed small food producers relates to building a competitive model for market access which can contend with situations that favour large scale producers and distributors of cheap, industrially-produced food, which is often transported over large distances.

A promising response in both Poland and Zambia is to build food systems that bring together producers and consumers as directly as possible in a limited geographic area that treat the nearest urban centres as key markets. The task for the partnership broker is not just to mobilise resources for building partnering capability among those involved, but also to put into place partnership arrangements that can sustain and strengthen a self-organising local food system.

In many respects, the partnership broker becomes more of an economic  development  facilitator who  has  the  skills  to  meet  the  market  linkage  needs of their particular location. His/her task is to leverage the conditions that already exist (rather than just create new ones) to assist producers to build the necessary relationships with consumers so as to improve their connection with markets. At the practical level, partnership brokering can help mobilise public, private and civil society organisations to:

• set up territorial guarantee schemes suitable for small-scale farmers and producers seeking to connect with groups of consumers operating within the frame of a local food system;
• set up territorial ‘food hubs’ or ‘one stop shops’ which enable groups of farmers and producers to collaborate to serve the needs of large customers;
• access markets that require substantial volumes like public sector procurement and hotel, restaurant and catering markets;
• set up collaborative logistics and distribution solutions and identify the most efficient routes and opportunities for back-filling and joint deliveries;
• develop funding models for encouraging collaboration like crowd-funding, peer to peer lending and venture capital;
• decrease barriers to new entrants like access to land and credit, and configure appropriate business models together with consumers;
• overcome barriers to the uptake and adoption of technical innovations to support and further collaboration;
• promote local food systems and their role (now and in the future) in creating better access to affordable, healthy food for the most vulnerable groups in society;
• take on initiatives to reduce food loss and food waste.

At the systemic level, partnership brokers will also need to be sensitive to shifts in attitudes of consumers, business trends, political and economic climates that affect and change the context for partnerships and partnering. Sometimes this can be a hesitant, “wait and see” shift. For example, in Zambia, people know there will be elections on 11th August of 2016: this creates some uncertainty in the minds of many public and private sector organisations and slows down decision-making. Here, the partnership broker can contest the “wait and see” culture by working to replace it with a “can do” culture that seeks to identify and take advantage of opportunities in situations which are seen as problematic. In such situations, partnership action can be an enabler and risk reducer.

The types of activities that partnership brokers could be facilitating must certainly be tailored to the specific needs and contexts of the local producer groups and the consumer groups they seek to engage with.

Partnership brokering can play a key role in contributing to food security[4] by working out ways of helping smallholders stay on the land and transform themselves into “modern peasants” as partners co-creating productive, efficient and resilient local food systems. As modern peasants, agricultural smallholders and small food producers can provide urban consumers with healthy food.

In addition, they can become stewards of natural resources, reduce fossil fuels and use less agro-chemicals in order to preserve biodiversity in a more diversified and sustainable production system. In this way, partnership brokering can contribute to transforming food systems into labour-and knowledge-intensive forms of agriculture, with the production and processing of high-quality goods, including in particular for local/regional markets. In this scenario, farms would not inevitably increase in size but rather – thanks to partnership brokering – strengthen their linkages with each other and other partners and stakeholders in an increasingly interactive and adaptive food system.

 Authors

Choongo Chibawe is an Agriculture Consultant with ZBiDF, supporting the creation of partnerships in the manufacturing, extractives and agriculture sectors of the Zambian economy. This is in line with the Government’s strategy to industrialise and create jobs under the Private Sector Development Industrialisation and Job Creation Office (PSDIJCO) within the Cabinet Office.

ZBiDF is a multi-stakeholder platform, comprising champions from business, government, donors and civil society in Zambia, designed to engage business, facilitate dialogue and innovation, and directly support public private partnership action on key business and development challenges (http://zbidf.org/)

At ZBiDF, Choongo leads the development of the Agriculture Sector partnership interventions including the development of partnership agreements, securing partner roles and resources, supporting partnership management and monitoring and measuring effective delivery of the partnerships.

He is also an independent AgriBusiness Consultant and can be reached by email on choongo.chibawe@amscobv.com and on Mobile Number +260 966 778 854.

Footnotes