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Project Record

Objectives:

Marketing of horticultural produce and tree crops improved.

Mechanisms developed to increase market awareness and market orientation of targetted farmers, traders and agro-processors.

Background:

Smallholder farmers in SSA face a range of marketing problems, among which information constraints are widely acknowledged but little researched. Smallholders often do not have timely access to salient and accurate information on prices, locations of effective demand, preferred quality characteristics of horticultural produce, or on alternative marketing channels. Producers experience a weak bargaining position vis-a-vis traders. Information that is available to rural communities may not be equally distributed, and smaller scale producers and those distanced further from the market are more disadvantaged. Geographic constraints constitute barriers to information flows just as much as to physical flows of produce. Therefore, remoteness from markets exacerbates information problems. There is a range of other factors which affect market efficency and may constitute barriers to market access and information flows of a horizontal nature. Among these are gender, family, educational levels, social and ethnicity, specialisation of production and the effect of reputation, and the existence of trust and repeat dealing (clientisation). The results of the information barriers are unexploited market opportunities, seasonal gluts, and produce with inadequate quality specification and control, inequitable returns to producers, peri-harvest (in field pre-, and post-harvest) losses and fundamentally poor returns to the production and marketing systems as a whole.

Intended Outputs:

Overview and critical assessment of previous research and knowledge of information systems within the rural smallholder markets, smallholder and trader marketing strategies and public and private roles in information provision.

Appropriate research methodology.

Increased knowledge and understanding of local rural market systems, information problems and requirements.

Presentation of research findings and discussions with project and market stakeholders.

Market information strategies communicated to target institutions in a relevant form.

Dissemination of project results to public and private sector organisations. NGOs and the national and international research community.

Progress and Impact:

The UK-based and first in-country consultations have been conducted to prepare a draft literature review and detailed research plan. Second visits to each target country were undertaken as planned, to implement the field research. Data collection has been completed in Ghana and Tanzania, and is drawing to a close in Zimbabwe. Country reports for Ghana and Tanzania are in preparation. Because of the developed state of the commercial vegetable market in Zimbabwe (compared with Ghana and Tanzania), a different evaluation and reporting methodology has been agreed. Feedback to farmers in Zimbabwe of marketing information will precede the new season.

Ghana
In Ghana, various approaches and roles have been identified for private initiatives, NGOs and sectoral associations, commercial interests and local public sector authorities. Expectations of local government should be consistent with local capacity, and should not be raised unrealistically because of decentralisation. Recommendations and issues needing further research are highlighted, specifically about the collection and provision of market knowledge, and improved contractural arrangements to overcome the significant imperfections.

The findings support other empirical research, that the primary channels for the provision of price and marketing information to producers are informal networks. However, current levels of market knowledge are sub-optimal for efficient exchange. Acquisition of information requires active strategies. Farmers can use their own sources of historic price information if, they keep records from one year to the next. Free-flowing informal networks of community-sourced information are invaluable, but cannot alone deliver new, accurate, exogenous information on changing consumer preferences, new technologies, current prices and alternative market opportunities. New formal information sources are required.

Fostering closer vertical trading relationships
Additional sources of market knowledge include mutual information exchange between farmers and traders. Enhanced information sharing between otherwise competing market stakeholders requires a high level of trust, or new institutional mechanisms to restructure incentivestowwards the adoption of joint business strategies.

Given trust, client relationships are an institutional mechanism to provide market services and reduce uncertainty. Under current conditions, uncertainty is pervasive, traders are not the expected source of input and credit, and producers (and sometimes traders) either run high marketing risks, or must incur considerable transaction costs to overcome lack of information. Under conditions of pervasive mistrust, formal contracts are an alternative institutional mechanism to create information, reduce transaction costs and create the cohesion of information, input, credit and output markets. The suggestion of instituting written contracts to mitigate mistrust was made independently, by farmers who were discussing potential mechanisms for improving marketing in the parallel seminar in Tanzania.

Tanzania
Low levels of producer organisation, and therefore the cost of obtaining market information, are usually borne by the individual in both time and money, and can be relatively high. The case study showed how important innovative and successful farmers have been to the development of a successful horticulture production project. However, it also raises a number of questions. Some might expect this group to be very co-operative and egalitarian, however, the in-depth interviews with the leaders and members of the group, as well as other farmers on the fringes of the group, suggest otherwise. Two leading figures appear to dominate the activities and effectively manage the group. While this may appear unfair, it could well be part of their success, since these two have clearly attracted several young and keen farmers to join their group, and

Associated References:

R6630