Transcript Cluster Marketing as a Solution

CLUSTER MARKETING: A STRATEGY TO OVERCOME THE PROBLEM OF
MARKETING FACED BY SMALL-SCALE FARMERS
N. Ndzimande
Department of Rural Development & Agrarian Reform, Eastern Cape Province, P/Bag X3090, Butterworth 4960. Tel (W): 047 491 3615.
Email Address: [email protected]
INTRODUCTION
METHODS AND MATERIALS
Marketing of agricultural produce has been found one of the major
challenges faced by Small scale farmers. A number of factors are affecting
the farmers’ participation to formal markets these include lack of
information, poor infrastructures, high transaction costs, low production etc.
Plans on addressing the issue of lack of information and poor infrastructure
are on the mouth of any government and non-government organisation. The
issue of Low production and high transaction costs are not given much
attention. This study was aimed at proving that Cluster Marketing can help
farmers in dealing with Low Production and High Transaction costs leading
to high returns for the farmers and improving livelihood of the farmers.
The study was conducted in two small-scale farms which are Zanyokwe
Irrigation Scheme and Silwindlala Women’s Project in the Eastern Cape. The
reason for choosing these two sites was to compare the challenges faced by
these farmers and give a possible solution to the challenges. The total number
of 31 farmers was interviewed where a structured questionnaire was
administered to the interviewed farmers. Data was then analyzed using SPSS
statistic 17.0 where descriptive statistics with frequencies and tables were
obtained and also to analyze the barriers that are faced by those farmers in
marketing their produce, multiple regression model was used.
RESULTS & DISCUSSION
Government and External institutions are doing all they can in addressing issues of lack of Information and poor infrastructure. This was
confirmed in the results where 76.2% of farmers interviewed agreed that they receive the services from the government while 23.8%
does not get any help from the government. The type of help that the farmers were getting was the equipment, inputs and assistance with
Extension Services. Transaction costs for Zanyokwe Farmers were very high with 85.7 % paying an average of R500 per person/load
while for Silwindlala Women's Cooperative they were only paying R500 per load when they combine their produce for selling. High
Costs resulted to some farmers quit farming in Zanyokwe whilst for Silwindlala Cooperative the farmers wants to increase their small
pieces of land they producing in for them to get more market share and improving their livelihood. Based on the results drawn from
Silwindlala, Cluster Marketing was recommended as a solution to the problem of low production and high transaction costs .
Cluster Marketing as a Solution
Why it?• Lowering transaction costs
• Avoid production loss
• The cluster marketing can promote cooperation between producer and buyer.
Figure 1 : shows 3 farmers that combine their produce when selling.
Advantages of Cluster Marketing
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Increasing quality control
Incentive to increase production
Lowering transaction costs
Improving access to credit
Constraints to Cluster Marketing
• No trust amongst the farmers.
• Resistance due to established markets with good prices.
• Little or no surplus on some farmers.
• Many farmers live too far away from each other
Figure 2: Lots of farmers working together to fill a lorry from different
farms (Robbin,2004)
REFERENCES
RECOMMANDATION AND CONCLUSION
Robbin P., et al. 2004. Collective Marketing for smallholder farmers. Manual
4: The territorial Approach to rural Agro-enterprise Development. Uganda.
 Collective selling minimases transaction costs.
 Competition amongst farmers involved in a Cluster encourages them to
grow.
 In conclusion, as a way of dealing with the above constraints let the
farmers identify the people they feel comfortable to work with, people
that share the same vision of growing and that believe cluster marketing
can work for them.