MEAS Brief #4 - Linking Smallholder Farmers to Markets and the Implications for Extension and Advisory Services
There are approximately 1.5 billion smallholder farmers in the world, a figure that includes 75% of the world’s poorest people. Recent improvements in global commodity prices and growth in emerging economies are expanding domestic and export markets, creating opportunities for smallholder farmers who can consistently link high production with sales. The expansion of high value horticulture across the developing world is also providing opportunities. Large corporations are starting to see farmers (including smallholder farmers) in Africa, Asia and Latin America as potential new suppliers for international supply chains, as well as growing domestic and regional markets. Despite the risks associated with emerging markets, these changes may bring improved support services for farmers, such as technology, extension, finance and insurance. Several global agencies have recently renewed their investments in these areas, recognizing that agriculture is the best way for the rural poor to escape poverty: income growth generated by agriculture is up to four times more effective in reducing poverty than growth in other sectors (Growth Commission, 2008).
While these changes are encouraging,smallholder commercial prospects remain weak. Studies from Africa and Asia show that50–70% of smallholders are not transitioningfrom subsistence to commercial farming. Few developing economies are creating enough offfarm jobs, which prevents the consolidation and acceleration of agricultural commercialization. Instead, millions of smallholders are locked in poverty with increasingly small parcels of land. Finding ways to link smallholder farmers to markets is key to reducing rural poverty and hunger. Governments need to invest in localinfrastructure, strengthen business services and improve farmers’ skills, while extension systems are needed to upgrade production and market performance. This brief explores the changing role of agricultural extension services and the growing focus on smallholder farmers, outlining how agriculture can, over time, provide a pathway out of poverty. The techniques outlined can empower extension workers to find new ways to assist smallholder farmers, through business-oriented approaches that encourage self-sufficiency.