Innovations to enhance smallholder market access must be supported by effective policies – ACET report

October 30, 2020
Innovations to enhance market access for smallholder farmers and upgrade value chains in an inclusive manner must be supported by effective formulation and implementation of policies, according to preliminary results from an African Center for Economic Transformation (ACET) study on market linkages in Kenya.

The Smallholder Voices in Policy Discourse Market Linkages StudyKenya Report, is part of a current project on smallholder farmers being conducted by ACET in partnership with the Open Society Foundations (OSF). The two-country study also includes Ghana.

The main objective of the Kenya study was to identify innovations being deployed to improve farmers’ access to markets and the potential for scaling up these innovations, including policies and actions needed.

Preliminary results of the study were presented at a virtual validation workshop held this week with agricultural experts from Kenya under the theme: “Improving Smallholder Access to Markets: Farmer Driven Innovations”.

Presenting findings of the study, Dr. Julius Gatune, Senior Policy Advisor, ACET, said smallholder farmers in Kenya continue to face several key issues that hinder their access to markets including high transaction costs, price asymmetry, information asymmetry, and emerging oligopolies.

At the same time, rapidly changing markets in Kenya also present opportunities for smallholder farmers. Gatune highlighted the need for innovation in three broad domains – technological innovation, policy/social innovation and business model innovation – to help elevate smallholder voices and improve farmers’ access to profitable markets.

“We need to look at innovation from a broader perspective,” said Dr. Ann Kingiri, Secretary General, AfricaLics & African Centre for Technology Studies (ACTS), which is based in Kenya. She noted that stakeholders often tend to think about innovation in agriculture only from a technological perspective, such as producing hybrid seeds, vaccines for livestock, and ICT material like mobile phones. However, she added, it is important to see innovation more broadly to include markets, how actors in the markets partner each other, and business models to improve markets.

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Among needed innovations identified in the report are: organizing farmers and increasing their networking capacity to equip them with the capability to use ICTs, especially access online markets; lowering risk to farmers through better risk management products especially insurance; Improving access to credit to help farmers produce a surplus for markets; and innovating relevant technologies such as low-cost “first mile” transport solutions like motorized tricycles.

The report also stresses the need to upgrade traders to move from pure opportunistic traders within the value chain to more organized and capitalized logistics services providers and commodity traders. This will require consolidation of the sector to a few well-capitalized traders.

While innovations will be critical to improving market access, polices will be crucial enablers. Key policies identified in the study include: building an ecosystem that will ensure that both smallholders and large farmers work symbiotically; supporting farmers and traders to use new technologies to gather information and improve communication; subsidizing the establishment of strong farmer-based-organizations modeled on private sector business models; and empowering traders to play a bigger role, especially as credit providers and extension support to farmers.

Policy is also needed to support the emergence of innovation platforms that bring industry, academia, government and civil society to collaborate on developing needed innovations.

Dr. Edward Brown, Senior Director, Research and Policy Engagements, ACET, said results from both the Kenya and Ghana market linkages studies will provide critical evidence for informed policy conversations and policy uptake through ACET’s Smallholder Voices Portal, launched earlier this year.

ACET intends to produce a synthesis report from the two country reports and will also hold a policy learning event that would bring together stakeholders and policy makers from the study countries and other Africa countries to share experiences and learn from each other.

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