After years of under-investment agriculture is back in the spotlight, with much of the focus on increasing output from smallholder farmers. There are around 500 million smallholder farmers in the world, and they produce up to 80% of the food consumed in Africa and Asia. They are net buyers of food and very vulnerable to food price increases and spikes. As a group, they are among the poorest and most marginalised in the world. They are also stewards of increasingly scarce natural resources and on the frontline of dealing with the impacts of climate change. Smallholders therefore play a critical role in addressing the challenges of food security, poverty and climate change.
Africa’s smallholder farmers face many challenges preventing them from scaling up their participation in markets, including insecure rights to land and natural resources, lack of access to quality inputs and financial services, inadequate support from research and extension services, and high transaction costs caused by poor rural infrastructure. Smallholders have little say in policy decisions that impact on their lives, or in the design of research agendas. In addition, domestic and international markets for agricultural produce are changing rapidly and dramatically, with smaller producers finding it increasingly hard to participate in these markets. Challenges are even greater for women farmers, who constitute the majority of farmers in Africa.
International efforts to support smallholder farmers tend to follow a conventional approach to boosting agricultural productivity, with much of the emphasis on commercialising agriculture using modern inputs and encouraging integration of smallholders into agricultural value chains, particularly those producing for export markets. However, evidence suggests that only a small group of wealthier and better-connected smallholders are currently likely to be able to benefit from opportunities created in this way. For the majority of small-scale farmers, and particularly those that are more marginalised, including women farmers, different forms of support are needed to facilitate their greater participation in markets as a means of increasing food security at the national and household level.
Members of the African Small Farmers Group (ASFG) have extensive experience of supporting smallholders in scaling up their participation in markets, and engage in advocacy for policy change to increase the support farmers receive from national governments and the international development community.
The Group has commissioned a literature review to take stock of the policies, laws, regulations and practices that can support Africa’s smallholder farmers in becoming more entrepreneurial. These have been arranged into a framework that includes:
Based on evidence from the literature review and supported by case studies, the framework suggests a range of possible indicator questions to assess whether governments have in place the right enabling environment to facilitate smallholders’ greater participation in markets. The framework is comprehensive, but not exhaustive and is aimed at influencing processes at a national, regional and global level that endeavor to create a more enabling environment for smallholders to participate equitably and sustainably in markets.
The policy framework’s foundations represent necessary but not sufficient conditions to improve smallholder farmers’ access to markets. The three foundations that this framework rests on are
Foundation 1: Rural infrastructure
Investment in rural public goods such as infrastructure and public services are essential to bring about agricultural growth and poverty reduction, as is a policy environment helpful to small and medium-sized business. Africa continues to suffer from a significant infrastructure gap, particularly in paved and rural feeder road coverage and irrigation infrastructure. Governments should be encouraged to increase their spending on rural infrastructure to the 10 per cent of GDP level committed to through CAADP, and donors should align their support behind this objective. The following indicator questions are suggested:
Foundation 2: Rural public services
Public service provision in much of Africa is generally poor and in some cases non-existent. Evidence suggests that public service expenditure, especially on health and education, can influence input productivity and efficiency in agriculture.
Foundation 3: (Rural) Investment climate
A supportive overall business environment provides the basis on which entrepreneurship can flourish and encourages investment, including in the agriculture sector which could create both value chain and off-farm work opportunities for smallholder farmers. It could also increase the availability of essential private sector-provided farm inputs. Small businesses also benefit from a strong enabling environment, creating the scope for further job creation and increasing the linkages from farming to the rest of the rural economy. Indicator questions in this area are relevant to the broader economy, and they include:
Pillars encompass factors that impact directly and specifically on smallholder farmers in Africa. This section aims to identify those areas where the current consensus approach makes inadequate provision for the conditions that are needed to create a supportive enabling environment specifically for smaller producers.
Pillar 1: Access to land and water
The natural resources on which agriculture is based, particularly land and water, are becoming degraded and there is growing competition for their use. Smallholders with weak rights to land and water are facing increasing threats to their access. The effects of climate change exacerbate the situation, and these are expected to intensify over time.
Lack of secure tenure and land use rights is one of the key factors influencing African smallholder farmers’ productivity and scope for participating in markets. Women’s rights are particularly weak. Secure tenure does not necessarily require individual ownership of land or control over resources. Land tenure policy frameworks should accommodate and build on customary norms and practices. Protecting farmers’ rights of access and use require urgent attention in the face of large-scale land acquisitions in many African countries. Proposed indicator questions include:
Reliable and affordable access to water is a constant challenge for many African smallholder farmers. Governments should invest in irrigation, but for many smallholders, particularly those in remote areas, good on-farm water management is even more important. This could include rainwater harvesting, water conservation and efficient use in dryland areas. More research is needed into drought-tolerant species. Farmers face growing threats to their water access, including from ‘water grabs’. Governments can intervene through the recognition and protection of water rights and regulating for good governance of privately-managed water resources.
Pillar 2: Inputs and credit
Agricultural inputs are typically provided by private enterprises but input markets are characterised by many failures. State intervention is required to correct these failures, though it is a challenge to design interventions in a way that effectively delivers improved access to inputs and credit markets for smaller producers, in particular to women farmers. Subsidies can help to overcome the issue of cost, although there are strong arguments for redirecting these towards environmentally and financially sustainable, resource-enhancing and affordable farming approaches that work well for smallholder farmers with limited assets and incomes. Suggested indicator questions are:
African farmers make much less use of improved seed varieties, which contributes to low yields, especially in areas becoming drier or more flood-prone as a result of climate change. A lot of emphasis is being placed on addressing this problem through greater use of biotechnology, but supporters of more sustainable approaches and many small-scale farmers argue that local seed systems are socially, financially and environmentally more sustainable than international seed systems and that it would be more cost-effective and feasible to focus on strengthening these. In addition, the introduction of laws to protect the property rights of companies to the modern plant varieties they have bred raise the costs of these seeds, and also prevent farmers from saving seeds they have purchased from these companies.
Soils in Africa are often fragile and degraded, and need urgent replenishment, but there are strong differences in opinion on the best way to manage soil fertility. Many African governments and donors focus their efforts on increased use of chemical fertiliser, which can dramatically improve yields. But promoters of more agroecological farming methods question the sustainability of an excessive reliance on chemical inputs, pointing to the negative effects of incorrect and long-term chemical fertiliser use. Evidence shows that impressive yield increases can be achieved using a range of environmentally sustainable methods. An integrated soil fertility management approach recognises the importance of both chemical and organic inputs. Proposed indicator questions in this area are:
Smallholders have little access to credit and other financial services, which limits their capacity to invest in productivity-enhancing assets and receive higher prices for their output. Agricultural value chains offer one route to increased access to credit, but so far they seem to benefit primarily better-off farmers and those belonging to efficient farmer groups. Governments and donors should provide incentives to encourage private sector innovation in tailoring financial services and products to smallholders’ needs. There could also be a role for state-run agricultural finance institutions.
Pillar 3: Markets
Support for smallholder farmers should not focus only on helping them increase production; access to markets that deliver fair returns is as important. Farmers need to have an entrepreneurial market-oriented mindset, thinking from the outset about what they will sell, to whom, and when; but they also need more support from both the public and private sector to access buyers and optimise their returns. Domestic markets hold greater promise for smallholders due to fierce competition in export markets and the high cost of certification and meeting standards. Governments can take steps to boost local demand and provide incentives to buyers, both in the public and private sectors, to source from smaller producers. The majority of farmers will not benefit from being integrated into corporate supply chains such as contract farming without concerted action to protect their interests and ensure fair value sharing, and support for farmer groups. International trade policies continue to damage smallholders’ market opportunities by distorting local prices. Proposed indicator questions are:
Pillar 4: Research and extension services
Evidence confirms that investments in agricultural research for development have a significant effect on growth in the agricultural sector. Investment levels in Africa are far below what is needed to help farmers effectively respond to the challenges of increasing production sustainably and building resilience in the face of climate change. Funding for such research would need to come primarily from public funding. Farmers need to have a greater say in setting research agendas. A strong extension system is critical to moving research between the laboratory and the field, but extension coverage in Africa is very low, requiring renewed investment from the state, including in providing incentives for private providers. Extension services can no longer have a simply technical agenda. In the service provision model the focus is shifting to pluralistic and demand-led approaches. Appropriate research and extension can also help narrow the gender gap in agriculture. Suggested indictors include:
4b. Extension services
Pillar 5: Collective action
Collective action allows farmers to utilise economies of scale to lower their costs and improve their competitiveness, as well as strengthening their marketing capacity and helping them manage risks. Groups are better placed to lobby policy makers and influence research and development assistance agendas. Cooperatives and other producer organisations have a poor track record but this relates more to failures in the mechanisms of collective action in different contexts, rather than the principle. Collective action is particularly beneficial to women farmers. Governments should recognise farmer groups, including more informal ones, and should encourage and facilitate collective action, including through offering tax incentives to producer organisations. Proposed indicator questions on collective action are:
C. Cross-cutting issues
In this conceptual framework consisting of Foundations that support the entire rural economy and Pillars that support smallholder farmers specifically, a number of issues run through the entire structure as overarching or cross-cutting supports, of great relevance to discussions dealing with every other area included in the framework. The issues cutting across this policy framework are
No policy indicator questions are suggested specifically for these cross-cutting issues (a brief summary of the main issues can be found in the report). Any policies and regulations aimed at promoting smallholder market participation need to take account of gender equity, climate change and food security.