Transcript Ensuring informed and empowered participation in markets for the

Ensuring Informed and
Empowered Participation in
Markets for the Small
Producers
All producers participate in markets in
some manner.
Smallholders in traditional, developing
economies are weak participants
in markets. This participation is
characterized by
•High transactions costs
•High price risks
•Monopolistic/oligopolistic conditions
•Significant risks of realizing payments
Participation can be improved if small
holders have access to:
•Information to product demand, seasonality, product features
•Reliable and affordable credit for financing stocks and
working capital
•Logistics of weighment, grading,storage and transport
•Assurances for covering their survival costs to be able to
take risks of new crops/markets
Attributes which influence the demands
on the quality of the above access are:
•Diversity in product type
•Homogeniety in the product
•Need for identity preservation
•Need for traceability
•Determinants of price discovery
•Fragmentation
•Transaction velocity
•Non-value adding transactions costs
Improvement of market access and hence
of participation quality will require
information on:
•Locating markets
•Identifying market intermediaries and players
•Current market institutions and its practices and procedures
•Availability of safeguards from monopolists
•Evolving ways of reducing and managing transactions costs
•Price discovery
•Demand trends
Strengthening and fine tuning of production
base of small holders will involve:
•Identifying the right technology
•Localizing and adapting the technology to small holder needs and
resource conditions
•Evolving package of practices appropriate to small holders
•Scaling down the technology in sizes appropriate to small holders
•Hand holding in initial stages of production and post-harvest practices
What do the existing players do?
A. Market Linkage field
Attribhute
Corporate
NGO
Co-ops
Producer
groups
Individual
service
providers
Primary
motivation
Market share,
profits
livelihoods
Improving
producer share
in value
Individual
gain through
collective
efforts
Own
livelihoods
Market links
Some times
weak
Strong links
yes
No
price
discovery
yes
no
yes
no
No
Logistics
yes
partially
SOS
SOS
No
Diversity and
homogeneity
management
seldom
no
no
no
Yes
Identity
preservation
yes
no
no
Need does not
arise
Yes
Remarks
What do existing players do?
B: About improving production and post harvest
Attribute
corporate
ngo
Co-ops
Producer groups
Individual
service
providers
Agronomy
extension
yes
Yes
uncommon
informally
yes
Adaptive R&D
no
Some times
no
yes
Seldom
Training
rarely
Yes
Some times
no
Yes, of a
practical type
Problem solving
no
No
no
yes
Yes
Sourcing
technology and
materials
Yes, but at a
large scale
Yes
no
yes
Yes
Credit
no
Yes
yes
no
No
Aggregation
yes
Yes
yes
yes
No
Risk absorption
and mitigation
rarely
Yes
yes
no
No
Remarks
The most hurtful gaps:
•Production and post harvest side:
•Adaptive R&D
•Problem solving during production
•Sourcing technology of the right scale and cost
•Risk mitigation
Market side:
•Generating value using heterogeneity, diversity, preserved identity
and traceability
•Costless price discovery
•Quality preserving logistics