Transcript 4 Market Oriented Extension - LIVES

Market Oriented Extension Service
Berhanu Gebremedhin, Scientist, ILRI
Three key elements in market oriented
agriculture
• Improved technology and practices
• Information/Knowledge
• Skills
Commercial transformation of smallholder
agriculture
• Commercial transformation of agriculture in
Ethiopia
• Market oriented agriculture?
– Market orientation in production planning
– Market participation in output markets
• Why commercial transformation?
– Better income and wealth accumulation
Commercial transformation
• Commercial transformation requires
extension service include:
– Promotion of improved technologies and
practices
– Advising and supporting farmers to produce
profitable market oriented commodities
– Facilitating market linkages
– Provision of market information
– Building marketing and agribusiness capacity of
farmers
– Facilitating organization of farmers to conduct
collective marketing
The production-oriented extension
• Historical emphasis on food security through own
production
• Extension: technology and production oriented
• Lack of awareness about market-oriented extension
• Lack of capacity to provide market-oriented
extension (MOE)
• Training of DAs and SMSs oriented towards
production technologies and productivity
– Marketing, agribusiness, farm planning and management,
market oriented extension methods mainly missing.
– Mid career program good start
From Production-oriented to Market-oriented
extension
• Shift towards commercialization implies attention
to:
– market-oriented production planning
– Input and output marketing support services
• Hence, commercial transformation requires
expanded mandate of the extension service
– aim is to support to rural households and their
enterprises to earn better income
– Need to combine technology promotion and productivity
enhancement with market support
Promoting Market Oriented extension
• Raise awareness about the importance of MOE
and
• Build the capacity to provide MOE service
• Enhance understanding of front-line workers
about market-oriented production, agricultural
marketing and value chains
• Equip extension agents with tools and methods
of market-oriented extension
What is market-oriented extension?
• Total effort of extension service to:
– Advise and support farmers to plan and produce
profitable commodities using appropriate
technologies and practices
– Build marketing capacity of producers
– Collect and communicate market-related
information
– Identify profitable markets and buyers
– Link farmers to buyers
– Facilitate and support collective marketing
Key Principles of market-oriented
extension
• Business principle
• Commodity development approach
• Based on value chain framework
• Bottom-up and participatory
Roles of the market-oriented extension
agent
• Facilitator of identification of profitable
commodities
• Promoter of agricultural technologies
• Supporter and advisor of business plan
development
• Facilitator of linkages with input
suppliers, credit providers,
transporters, processors, and output
buyers
Role (2)
• Builder of marketing capacity
• Collector, processor and disseminator of
market information
• Repository of technical and market related
information
• Facilitator and supporter of collective
marketing
• Facilitator of market infrastructure
development and market service
development
Facilitating the supply of market
information
• Market information:
– All the information about the buying and selling of
agricultural products
– More than just information on prices and quantities
• Market information service:
– The function of collecting and processing market data
systematically and continuously, and of making it
available to market participants in a form relevant to
their decision-making.
• Market information becomes more important in
distant markets and as market orientation of
farmers increases
Identifying market opportunities
• Fundamental considerations:
– Current and future size of the market
– Current and predicted profitability of the market
Types of market opportunities
•
Exiting products, existing markets
•
Existing products, new markets
•
New products, existing market
•
New products, new markets
•
Niche marketing
•
Organic marketing
•
Diversifying export markets
•
Brand promotion
•
Encouraging local consumption
•
Adding value
Facilitating collective marketing
• Common marketing problems faced by
smallholders
– Low volume of supply and high per unit marketing
cost
– Quality and standard problem
– Storage problem
– Transportation problem
– Low marketing skills
– Little prior contact with buyers
– Low bargaining power
– Inadequate market information
Advantages of collective marketing
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Economies of scale
Maintaining product supply
Improving product quality
Maintain existing markets
Develop new markets
Activities in collective marketing
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Identification of markets
Identification of quality attributes
Ensuring produce quality standards
Developing market infrastructure
Perform marketing functions
Organizing farmers for collective
marketing
• Formal collective marketing
• Informal collective marketing
Key considerations to avoid collective
marketing failure
• Right to supply
• Quality assurance
• Side-selling
• Profit sharing arrangements
THANK YOU!