Hivos International

Small-scale farmers’ agency: how the poor make markets work for them

Small Producer Agency in the Globalised Market June 2012

Many of the people attending the 2012 Earth Summit (Rio+20) in June see promise for sustainable development through private-sector initiatives — and expect that improved links to markets can reduce poverty among half a billion small-scale farmers who feed much of the developing world. But most of the ‘inclusive business’ models already set up to do that are reaching only a narrow minority of farmers. To get the future right for the other 90 per cent, policymakers, businesses and nongovernment organisations must ask the right questions. Instead of thinking about how to make markets work for the poor, we must look at how the poor make markets work for them.

Agriculture is still a small-farm story: half a billion farmers, working plots of less than two hectares, produce a significant proportion of the world’s food — estimated at more than 90 per cent in sub-Saharan Africa, and 50 per cent in India. Poverty reduction, too, is closely linked to small farms. Three quarters of the world’s 1.2 billion poor people live in rural areas, and most are small-scale producers who depend partly or completely on agriculture and natural resources for their livelihoods.

Since the food crisis of 2007–2008 and its aftershocks galvanised interest in the future of agriculture, small-scale farmers have risen high on international agendas. Surging commodity prices have underlined the vulnerability of the world’s food supply to global change, and lent immediacy to the challenge of feeding a growing population under tightening environmental constraints. On top of these challenges, globalisation has opened borders and exposed smallscale farmers directly to the opportunities and risks that come with direct exposure to world markets.

Governments, donors and the development community at large, as well as many in the private sector, have embraced the need to support small-scale farmers in agricultural markets; and recent G8 negotiations Many of the people attending the 2012 Earth Summit (Rio+20) in June see promise for sustainable development through private-sector initiatives — and expect that improved links to markets can reduce poverty among half a billion small-scale farmers who feed much of the developing world. But most of the ‘inclusive business’ models already set up to do that are reaching only a narrow minority of farmers. To get the future right for the other 90 per cent, policymakers, businesses and nongovernment organisations must ask the right questions.

Instead of thinking about how to make markets work for the poor, we must look at how the poor make markets work for them. and discussions leading up to Rio+20 have all heard the argument that private companies should play a much greater role in sustainable development.

Advocates of ‘market-based’ development argue that, through market inclusion, small-scale producers can survive and even prosper in the face of major shifts in agriculture and food markets ushered in by globalisation. In this new agenda, small-scale producers are seen not only as the key to reducing rural poverty, but also as a pillar of global food security, stewards of natural resources and biodiversity, and part of the solution to climate change.

For international businesses, establishing relationships with small farmers is a chance to secure supplies of agricultural produce, and develop new markets for seeds and other farm inputs. Some of the world’s biggest companies, including Walmart and Unilever, have announced ambitious goals to bring small-scale farmers into their supply networks.

 

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