Smallholder extension: whose role is it anyway?
When we held our NGO / private sector workshop back in November in Malawi, the unwritten assumption was that NGOs could play a valuable role in helping link the private sector to smallholder suppliers. NGOs have naturally been stepping into this gap since their social programmes mean they are already working closely with communities who need assistance with growing their livelihoods. This role would fall to government in a wealthier country, but in Malawi, as in many other developing countries, poor state capacity means that smallholder support services are limited. A recent estimate stated that there is approximately one agricultural extension worker for every 1,500 farmers, which is woefully inadequate.
Dealing with farmers requires them to be organized, and this organization does not happen organically in Malawi, presenting a major hurdle for private sector buyers looking for reliable contract volumes from small scale producers. The solution of business-NGO partnering can work: one of our BIF clients has had extensive experience collaborating with NGOs who work with farmers and his views are that a good, strong co-operative relationship can yield:
- a conduit to the smallholder market;
- independent and trusted facilitation in negotiations with farmers;
- benefits to the business through leveraging the skills of the NGO in organizing farmers; and
- assistance in monitoring of payments – especially as contracts are hard to enforce.
Some practitioners in the agri-business development field argue that having NGOs stepping in to the role of farmer organisers and mediators is “unsustainable”. The logic behind this argument is that NGOs typically have short timeframes (in the context of longer term supply chain requirements) and will fail to deliver a working system that links the farmers to their commercial buyer before exiting when their funds run dry. It is also suggested that NGOs can offer a relatively expensive solution due to high overheads driven by the need to continue to fundraise to maintain their existence – but is this cost really going to be higher than a provider looking for a financial return? If government is unable and NGOs are too short term - is there a commercial solution to this “market failure”? Are there examples of private sector extension and farmer liaison services that have worked for all those concerned?
We have been speaking with the Irish NGO Goal who have already engaged with farmers as part of their food security programme and wish to find the best solutions to helping low income farmers reach markets. They would be interested to hear experiences of others who have used the private sector to carry out extension services such as training in agriculture and business, distribution of seeds and price information. Please add your comment below if you have some perspectives!
To read more about the transition from an NGO programme to a self-sustaining inclusive business see our KnowHow page on commercialising NGOs, which includes links to our March Newsletter on this theme, links to related blogs, projects and more.