SNV has supported the Union of Onion Producers of Tsernaoua (Niger) since 2005 by strengthening the technical and organisational capacities of the 1,200 producers and, with funding from a donor foundation, the Union built an onion trading centre in Tsernaoua. Strengthening onion farmers led to in an increase in the quantity and quality of their production, whereas the trading centre enabled the Union to better organise the marketing of its products for export in the region. The centre has doubled its annual sales volume, and producers saw an annual increase in incomes derived from onions of 100%, which enables them to better meet their family needs, and to increase investments in onion production. The professionalism of the producers and the existence of a well-organised trading centre have attracted the interest of local producer organisations in nearby areas, who replicated the model, and international agri-businesses, such as Nestlé, which are keen to diversify their supply sources.
SNV coordinates The Rural Agro-dealers Restocking Programme (RARP) in Zimbabwe, a market-led approach to revitalizing agricultural production. The programme, now in its third phase, addresses systemic issues in agriculture with a focus on restocking of agro-dealers with agricultural inputs. In this way key needs and risks of small holder farmers are addressed, allowing them to obtain sustainable returns to their agricultural enterprises. To achieve this, SNV partnered with wholesalers, agro-dealers, and development agencies DANIDA, FAO, and HELP (Germany) as well as local capacity builders to improve the performance of dealers and others.
RARP contributed significantly to farmer access to agricultural inputs. Through a relatively simple and small investment (a total amount of US$112,000) in insurance of financial risks, in total 659 agro-dealers were linked to wholesalers to receive agricultural inputs. Some 500 agro-dealers were also trained in retail business management. The agro-dealers distributed inputs worth over 9 million USD through voucher and cash sales. An estimated 113,800 farmers accessed inputs in this way. In the third phase a further link is made to output marketing (i.e. agricultural produce) as well, ensuring markets for farmers who saw increased productivity due to the programme.
Leading Peruvian coffee exporter Perhusa discovered the value of working with small-scale producers in order to increase its market share in certified specialty coffees. The farmer’s technical and organisational capabilities were increased by an extension program developed by Perhusa and SNV, and are now integrated in the specialty coffee value chain. After successful engagement with 4,000 farmers, with technical and financial assistance from SNV and IDB, the company expanded the programme to include an additional 5,000 farmers at its own cost. Farmer’s income from coffee production has grown by over 30%, on the basis of increased production and improved prices for the certified specialty coffee. Fifty people in the coffee company were trained in Good Agricultural Practices (GAP) for the production and management of specialty coffees and rural extension methodologies. Perhusa can now continue to expand the impact of the program.
The Nununa Federation brings together 4,000 women shea producers in Burkina Faso. Shea is traditionally collected and processed by women. In 2009, the Federation changed its business model completely with the support of SNV to become, today, a profitable semi-industrial processing unit with diversified export outlets, whose shareholders are the women producers. The production of shea butter was increased by industrializing the processing of the butter, which enabled the Federation to become more competitive, to increase profitability and redistribute more profits to its thousands of women members. At the same time women earned more from selling the kernels and could diversify their income by for example producing and selling sesame. The 4,000 members have profited from a 95% increase in income from shea production, while the position and workload of women shea nut collectors has also improved. Additionally, together with their families, they are benefiting from social activities stimulated and financed by the Federation, such as health insurance and education. In total, these changes in shea production have changed the lives of more than 24,000 people.
Ethnic minority farmers located on the hillsides of North-Central Vietnam are being offered opportunities to improve their livelihoods and incomes in a sustainable way, by working together with cassava processing enterprises who want to develop cassava in an environmentally sound manner. With a grant from the Ford Foundation this value chain improvement project affected an estimated 10,000 households during the 2008-2011 period: increasing average incomes by more than 20% with additional improvements in environmental sustainability of growing practices as well as increased reliability in business relations. The companies also benefited from increased supply of cassava of higher quality. The scaling-up of the project to include 200,000 farmers is now being explored via possible collaboration between IFAD, CIAT and actors in Vietnam, Cambodia and Laos. The potential for collaboration between farmers and processors is enormous in Vietnam and neighbouring countries as cassava is rapidly becoming a major commodity, with hundreds of thousands of smallholders supplying products to processing enterprises.
See also: Inclusive Business at SNV
Ethiopia exported its first consignment of honey to the European Union (EU) in 2008 after a three year period of preparations towards attaining Third Country Listing status. This was the result of a deliberate set of interventions to help increase processing capacity in combination with an out-grower scheme to supply honey. This case study explains how increasing exports was achieved with inclusion and expansion of smallholder beekeeping practices, and the development of the business sector as a whole.
The 8,193 small holder farmers, who were directly trained as part of the out-growers programme of 8 leading exporters, saw an increase in production of 23%, and a revenue increase of 27%(US$) / 83%(ETB) during the last three years alone. An additional 72,000 beekeepers experienced indirect and smaller effects of the training on their income. The additional incomes enabled farmers to improve the living conditions of their families and send their children to school. Based on its 122% growth in exports value and 107% growth in its share of the world exports, Ethiopian honey export was categorized by the International Trade Centre as a ‘star’ in structural performance.
See also: Inclusive Business at SNV
The outreach of the cotton sub-sector in West Africa is huge: in countries like Benin, Burkina and Mali it has encompassed over 750,000 households. In the past 20 years, as a result of cotton sub-sector reforms, multi-tier cotton farmers’ organisations have emerged, which today act as primary stakeholders in cotton supply chains and whose role goes beyond producing cotton. They played a vital role in the expansion of the chain in the 1980-90s and in achieving the establishment of a more balanced sub-sector in the 2000s. Faced with the challenge of taking on new roles, these farmers’ organisations have developed new capacities, often supported by SNV and others. They have represented and supported their members in various fields, of which two dimensions are highlighted in the case: price negotiations and farm management services. In 2010, producers through negotiations were able to increase the farm gate price by 15 FCFA/kg (9% increase) amounting to an extra 6 Million Euro revenues. Farm management services have been localized, helping farmers to improve efficiency and productivity of their farm enterprises; and to balance returns from cotton exports with food crops grown for the local and regional markets as well as for home consumption. The producer organisations thus became crucial in keeping the chain and farming systems economically viable as well as contributing substantially to food security in the region.
The case study presents a relatively small but meaningful pilot project that is presently scaling up from 400 to 3,000 farmers (with an ultimate goal of 10,000 participants) in Nepal’s most important apple growing district. The project focuses on increasing market access for small farmers from a remote district through brokering improved commercial relationships with agribusinesses operating in the national market. A concrete account is given of a value chain development intervention that addresses demand, transactions, supply and policy issues. Farmers’ incomes improved as apple prices increased with 200 to 300%. Business have benefited significantly due to more reliable supply, improved quality grading and certification, and import substitution.
In Zimbabwe, contract farming for seed production has traditionally been the domain of commercial farmers due to the high levels of care necessary in production and perceived high risks associated with contracting small holder farmers. With limited supply and market options, medium-sized seed company Agriseeds sought to use smallholder farmers as a production base and approached SNV to facilitate the development of a workable smallholder out-grower model. The co-operation of Agriseeds with smallholder farmers was very successful for both parties: the farmers increased their incomes significantly from US$250 per annum to an average of US$800 per annum, leading to improved quality of life; whereas the company had by 2011 ended up with three years’ worth of stock that could be exported. The programme has attracted the interest of other companies, who want to enter into contract schemes with small holder farmers, as they have realised that it is possible for rural farmers to be reliable business partners.
The case sketches a rapid development in Uganda’s oil seed sector; with increases in production of over 400% from 2005 to 2009. It focuses on a combination of two interventions; a) a collaboration between the leading Uganda processing firm Mukwano and SNV, to develop a contract farming scheme for more than 50,000 farmers; and b) the facilitation of multi-stakeholder platforms at both national and regional levels to facilitate joint agenda setting. The emerging collaboration between various actors led to improvements in general farming practices, business relations and input provision. Jointly they also influenced government policies and financing streams. The combination of these two interventions was particularly powerful and eventually helped to improve the incomes of more than 100,000 farmers. A strong focus was put on improving farmer capacity to deal with markets and vibrancy of the farmers-market interface. It led to major productivity increases and an increase in price of oilseeds of 350% with a corresponding rise in farmers’ incomes, and significant substitution of national imports.
Dole in Peru, a company that traditionally sources from large producers and company-owned plantations, implemented an Inclusive Business model that links small-scale banana producers to the company’s value chain through a mutually beneficial relationship. Productivity and quality of production of 2500 small farmers was increased with 75% over a period of 3 years. This went together with the organic certification of their product, and forward integration of farmers in the chain: they are now obtaining added value to their product through packaging the bananas themselves. Certification, together with the transfer of processing capacities to farmers’ associations generates increased sustainable incomes for the producers and improves employment conditions in an economically depressed zone that has considerable potential for agricultural business. The company gained through increased efficiency and larger export and trading of organic banana, a product with a growing demand in international markets.
See also: Inclusive Business at SNV
The Enhancing Milled Rice Production in Lao PDR (EMRIP) Project has been able to develop fair trading relations between 21,361 small holder rice producing households and 21 selected rice mills within 23 months of the project’s duration. The project proved a unique success due to the stimulation of co-operation between millers and farmers; millers supported farmers with inputs, extension services and better prices. In return for investing their time and money in small farmers, millers received project support, funded by SNV, Helvetas and an EU grant, to improve milling facilities and equipment. At the base of the success of the project lies a rigorous selection process which chose the most promising millers for the project. Farmer crop yields increased by 30%; income from rice increased by around 60% and millers saw improved profitability in addition to a 10 percent increase in throughputs and supply of high quality, single variety rice. Elements of the programme are now spreading (including spontaneously), especially through “miller groups”.