An FAO (Food and Agriculture Organization) report states that approximately 1.5 billion people are engaged in smallholder agriculture across the world. And that number includes a whopping 75% of the world’s poorest people, most of who live in rural communities, and whose livelihood prospects are fully dependent on agriculture. Despite the fact that their role as food producers is so crucial in sustaining the world, they continue to remain unrepresented when it comes to reaping the commercial benefits of various agri-business prospects.
One alternative strategy for smallholder farmers and communities is to invest in educating their children so that they can diversify their pathways to prosperity through off-farm opportunities. However, this long-term farm strategy also requires present-day smallholders to achieve food security and earn consistently to pay for their children’s upbringing.
To overcome this barrier, we require an upgrade in processes, infrastructure, and farmer skills. Even then, the big question remains – what exactly will provide sustainable results in helping smallholder farmers improve their market realization?
We have seen how improved infrastructure and communications have helped generate opportunities for those farmers who have been able to link their production to sales. Take for instance the growth of Vietnamese smallholder coffee producers since the 1980s. Vietnam dominates the coffee industry as the second-largest producer in the world, only behind Brazil. Massive improvements in technology, promotion of gender equality, and implementing sustainable farming practices have helped the country create more than 3 million jobs from coffee-based agriculture. This is not only true for Vietnam, but many nations have reaped benefits from creating market opportunities for smallholder farmers.
Given this example, finding innovative solutions to link smallholder farmers to markets is possibly the most critical component of a long-term agri-business strategy. In India, we have mostly witnessed long marketing chains in agriculture owing to the presence of multiple intermediaries that add to the cost without really increasing value for smallholders. Similarly, when one looks at traditional procurement systems, they tend to limit the access of small farmers to alternative markets and channels.
That is why creating direct marketing opportunities through suitable linkages is one option that not only benefits producers, but also end consumers. This practice can help bring down costs, and also reduce the pitfalls associated with multiple handling of crop produce that leads to wastage. To attain this, the method of using an FPO (Farmer Producer Company) is the most effective way to link smallholders to the market. The advantage that FPOs offers is that they can tap high value markets and enter into partnerships with private organisations on terms that benefit everyone. This can give smallholders a better bargain, and create a much more transparent agri-market that rewards all stakeholders.
Currently, there are more than 1000 such farmer producer companies in the country, and they have performed exceedingly well to help smallholders prosper. Constant support for an agri-business model like this can integrate many more smallholder farmers into the value chain, and ensure food and income security for them. And once we have established this support system, it will also open up the doors for farmers to access many more services such as technology and finance, that can help them operate to their full potential.