Presentation by Steve Wiggins at Leaping and Learning event, February 2013

1. Smallholder
Commercialisation
Insights from 5
countries

7. SIX KEY FINDINGS

8. 1. Drivers of change
often private &
internal
Often initiative from SF & traders
Public — Gov’t & NGO — can help, but not
always necessary
Stimulus often from domestic markets, not
exports
• Domestic marketing demands less stringent

9. 2. Cautious
Commercialisation
• Small areas switched to crops for
market
• SF rarely sacrifice food crops
• Double-edged sword!
• SF intensify
•  fertiliser,  (sometimes)
improved seed & agro-chemicals
•  hired labour
• Biggest Step? Irrigation
Gradual, marginal
changes

10. 3. Active Labour, Land
markets …
•2010: 82 days
•2012: 138 days
Lume: > 90%
households
hired labour:
days annual
household:
2010 2012
% households renting
in land
13% 45%
US$ per hectare 200 340

11. 4. But sticky Capital Mkts
• NOT: credit from
Banks, advances from input
dealers, traders or processors
Working K
from SF
savings
• BUT may
• slow process
• limit degree
• restrict which households
participate
Lack of
credit not
a barrier

12. 5. Returns good, Incomes
rising …
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Tef Wheat Chickpeas Lentils Onion Tomato Green
pepper
Lume, Gross Margin, US$/ha

13. Kenyan gross margins
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Tomatoes, virgin landTomatoes, old landCabbages, high seasonCabbages, off season
US$perha

14. Farm incomes, by
commercialisation
0
100
200
300
400
500
600
700
800
900
Ethiopia Ghana Malawi Tanzania
US$
Low CI Mid CI Upper CI

15. Crop income, by index
commercialisation Ghana, Ethiopia &
Malawi
-
100
200
300
400
500
600
700
800
900
- 0.20 0.40 0.60 0.80 1.00
US$Median
Commercialisation Index

16. 6. … But does it divide?
Households w. more
Land, Savings, Assets, (sometimes) better
Education take up opps
• Fewer assets than males
Female farmers
often
disadvantaged
• BUT commercial farming  D
farm labour, so landless & poor
can benefit
Social
differences may
widen.

17. POLICY POINTERS

18. Paradox of Public Policy
•Comprehensive direct
action by state not
necessary?!
Not all cases
result from
programmes to
commercialise
• Encouragement to rural
enterprise from painful
reforms in 1980s & 90s has
paid off
Importance
of private
initiative

19. BUT: Public action critical:
• Remember: Ghana late
1970s, Ethiopia under
Derg, Tanzania late 1970s!
Investment
climate
• Schools, health posts
• Investment in Public Goods pays
Roads vital …
rural public
goods
No need for magic bullets?

20. Role for Min Agriculture
• SS irrigation in Lume
• Upgrading irrigation intakes in
central Tanzania
Strategic, limited
support by Min
Ag helps:
• Commercial opps  need
for Innovations & Tech support
• Extension services most
effective with comm SF?
Technical
challenges

21. Riddle of Rural Finance
Lack of K limits
Investment, further gains
Improve rural financial
systems
• But with care!
• Promise: M-pesa, Equity Bank

22. Correct Female Disadvantage
Agricultural policy
will not transform
longstanding gender
imbalances … BUT:Recognise
& support
women’s
rights to
land &
water,
Invest in
drinking water
… things that
take women’s
time
Providing
extension
for female
farmers

23. Thinking on … Futures for SF
Strengths Weaknesses
• Self-supervising, diligent labour
• Knowledge of land and local
conditions
• Flexible production
• Limited access to capital, inputs
• Risks in production & marketing
• Meeting standards of some
supply chains
Opportunities Threats
• Urban growth
• Asian markets
• Much unused land: ‘sleeping
giant’
• Technical advances, already
known & others likely
• Climate change
• Land alienation
• Policy biases
• Demanding supply chains

24. Farm household surveys
Ethiopia 160 Sep/Nov 2009
Ghana 300 Nov/Dec 2010
Kenya 200 Nov/Dec 2009
Malawi 300 Oct/Nov 2009
Tanzania 287 Aug/Dec 2009,
Oct/Nov 2010