Farmers listen to a lecture on sustainable farming techniques, Nigeria. Image: Oxfam
Farmers listen to a lecture on sustainable farming techniques, Nigeria. Image: Oxfam

Day 5: Group Mutuality Paves the Way to a Sustainable Future for Smallholders

13 December, 2012 | Future of Agriculture: Online Discussion

The fundamental problem for both female and male smallholders is the size of their farms. They are simply too small to generate an acceptable livelihood. An incorporated farm model could overcome many of the current obstacles and be the farming system of the future.

By Nicko Debenham, Director, Development & Sustainability at Armajaro Trading Ltd.

The fundamental problem of both female and male smallholder farmers is the size of their farms and their geographical isolation. They are simply too small to generate an acceptable livelihood. 

The reason why farms are so small is due to an inheritance culture which sees the land left to all the children of the deceased. As generations pass, plot sizes become smaller and smaller, and farmers’ incomes shrink. In many cases, families have reached the point where farms are a burden, rather than a legacy. 

“Families have reached the point where farms are a burden, rather than a legacy.”

One consequence of the abundance of small and geographically dispersed farms is a low level of knowledge transfer between farmers and other actors in the supply chain such as research institutions, extension services and financial service providers. The difficulty and expense of trying to communicate with such a wide-reaching group of individuals means that knowledge of better farming practices is not shared. If farmers had access to industry knowledge there would be more agricultural innovation and a better use of technology. 

A further concern is that smallholder farmers struggle to make well-informed budgeting decisions. They are often financially illiterate, and their level of income is quite volatile. Therefore, even those few farmers who have access to financial tools are rarely able to obtain loans, because repayment is so uncertain. When loans are available, they tend to be at a high cost because of the perceived risk and expense of administering many small loans when dealing with multiple smallholder farmers. 

If farmers were able to raise finance, they would be in a better position to invest in technology and innovations, such as improved planting material and vital inputs.

“Only when farming is viable will it be a credible career choice for youth.”

The situation just described is more severe for women farmers, because of a traditional mindset that views males as the bread-winners. Access to training, membership in farmer organisations and agricultural leadership roles are frequently denied to women. If men and women had equal opportunities in the agricultural sector, not only could families in farming communities benefit from the superior credit-worthiness which women tend to have, but women living in rural areas could be empowered by greater choice and earning potential. 

Help farmers understand the opportunities
Smallholder farmers should be inspired to manage their farms as profitable businesses using a sustainable business model that will attract new generations of farmers into the industry. Only when farming is viable will it be a credible career choice for youth. 

It is a dismal reality that a legacy of land passed down through so many generations may no longer be capable of supporting an individual or a family, regardless of the size of investment in inputs. If farmers were to realize the potential production capacity of their farms, they could make better informed budgeting and lifestyle decisions.  Farmers must assess whether their farming pursuits are viable. 

A recent and ongoing exercise by the independent group GeoTraceability found evidence that an average cocoa farm size in West Africa is less than 1.6 hectares,  significantly lower than the previous industry-wide assumption of 2.5 hectares. This implies that many farmers have unrealistic expectations of their potential output and may be investing in false hopes. They may be remaining in a profession which will never be able to provide an income above subsistence level. 

“Farmers may be investing in false hopes “

With an accurate representation of a plot’s production capacity to evaluate their current and potential income, farmers will be more inclined to adopt an entrepreneurial approach in order to raise production. 

Additionally, earning capacities can then be more accurately compared to alternative employment opportunities. The point is not that an individual must seek off-farm employment, but for farmers to have a realistic appreciation of what can make their farms profitable. 

Encourage farmers to work together
Imagine a group of farmers pooling their farms together in mutual ownership. Such a larger-scale, ‘incorporated’ farm could reduce costs and improve access to market knowledge, industry technology and innovations, and financial tools. Under this business model, each smallholder could choose whether to be a shareholder only, or both a wage-earner and a shareholder. 

“The mutuality of the group enables easier knowledge transfer from research centres to farmers, which in turn encourages individual farmers to invest and innovate.”

A group structure would enable better communication and cooperation between farmers and external bodies such as research and financial institutions, to facilitate knowledge transfer. An incorporated farm model would also allow individuals to specialize their roles so that farming efficiency improves and credibility can be built up over time. 

Many development organizations take the approach of encouraging farmers to work together and support each other mutually.  Farmers often form groups which choose their own leaders and then are offered training in sustainable agricultural practices, access to necessary inputs, proven planting material, financial support, community infrastructure and information technology. 

Because the farmer group takes mutual responsibility for each member, financial institutions have fewer logistical challenges and can have greater confidence. Leaders usually coordinate the distribution of inputs and planting material relevant to the size and profile of the farms in the group. Over time, the mutuality of the group enables easier knowledge transfer from research centres to farmers groups, which in turn encourages individual farmers to invest and innovate. 

Conclusion
Farming must become an aspirational occupation where entrepreneurial farmers belonging to a group and mutually responsible for each other can generate a more-than-acceptable living through sustainable farming. For this to be achieved, the structure of today’s agricultural landscape must be adapted to escape the limitations imposed by undersized farms. A new movement consisting of an incorporated farm model may be the key to overcoming this crucial obstacle.


Comments

farmers should have stronger position in value chain

 This is really an interesting reading.

To position farmers in stronger position in value chain, the group/ cooperative approach is one of the successful models, the organised farmers groups are always in better position to negotiate better price for their produce, get better support services from the government  extension workers and other development programmes , generate local capital base through their saving and credit initiatives,  and  the farmers  to  farmers to farmers support / knowledge transfer will be stronger, however to  keep their relation stronger and sustainable , they have to maintain  a good governance  mechanism.  If farmers groups /cooperatives are well organised, it will be easy to establish lead firm linkages or contract farming mechanism

Farming models for the future

Yesterday's discussion continued the conversation on agriculture's use of energy, and also considered the relative importance of changes in policies and consumer demand for achieving sustainability; but how much can poor consumers (including farmers) influence overall market dynamics? Week one of the debate concludes today with three essays on farming models. 
 
Debenbam proposes here an ‘incorporated’ farm model to reduce costs and improve access to market knowledge, industry technology and innovations, and financial tools. Under this business model, each smallholder could choose whether to be a shareholder only, or both a wage-earner and a shareholder. Nicolás Ibáñez proposes three models for the southern Peruvian Andes. Which model or combinations of these will make farming sufficiently appealing and profitable for younger generations so Godwin doesn'’t have to worry about her (grand)daughters'’ futures?

Power of Farmers Demanding Together

Very interesting.. and would like to share an example from the GROW work that we are doing in Pakistan. We (Oxfam and its partners) believe that farmers getting together and demanding their rights from the government collectively is the way whereby governments would realise the potential of small farmers and will tilt their policies in their favour. Wheat procurement by the government is one such policy that excludes women's entitlement to sell their produce to the state agencies at a better price. Groups of farmers raised this issue and demanded collectively to change this policy as women farmers should be treated equally andthey have a right to sell their produce.

After a continuous lobbying and advocacy with the government by the farmers, government changed their policy and instructed for special measures to procure wheat from women small farmers as well.

 

Organization needs investment

The only way is organization, only through it can overcome the disadvantages in economies of scale, distances to markets and access to technology. But knowing what to do is very different from knowing how to do it. Any organization is subject to the problems that we all know (because we all work in one). Not all work: leadership sometimes fail or captures the profits, training and knowledge is scarce, and collective work works better in some cultures than in others. But it is so important that it is justified to invest much, and long term, in accompaniments that produce real results. This is expensive and money to do it is scarce. But it should be known that you don't train leaders and hold them accountable with two workshops and one powerpoint. It's long-term accompaniment. Do we invest enough?

Another point of view

Some really wonderful articles on this site, appreciate it for contribution. "Gratitude is merely the secret hope of further favors." by La Rochefoucauld.

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