Why farmer investment is a good proxy indicator

As anyone who has tried to choose indicators  to track results will know, there is an eternal trade-off between feasibility and coverage: few indicators make it manageable, but can leave real gaps when trying to answer the headline questions.

Workshopping  through this issue again recently, I concluded that farmer investment in farming inputs or new stock could be a useful proxy indicator on a number of counts.  

My scenario here is an agribusiness initiative that gives farmers access to new markets (e.g. a processor) supported by inputs  to boost quality and quantity (credit, extension etc). My question is what indicators to track year on year to indicate progress.

Farmer investment in inputs tell you something about four critical factors:

• Whether productivity and earnings from the ‘improved’ value chain is sufficient to allow for reinvestment. This is the critical missing link in most underperforming smallholder systems.
• Whether farmers behaviour has changed towards input use: not only whether someone has offered it to them, whether it has been used once,  but whether they have adopted it themselves
• Whether farmers have confidence in the future of this crop.
• Whether a good diagnosis is needed of the constraints, if the finding is that virtually no farmers are investing in inputs!

Of course it does not tell the whole story on any of these. The whole story would requires more indicators and more work. But it might be possible to ask less about access to inputs, use of inputs, use of income, and expectations of the future, if this question provides  a first guide.   

Of course the really useful question, whether farmers did or did not invest in the crop is Why? his will be essential to understand to make the system work better.  Find out whether they are investing and then find out why or why not.

This investment  indicator does not obviate the need for some of the other basic metrics that are nearly always needed: quantity and quality of production that is sold, yield (if possible, it’s complex) and income of the farmer, and the external market and climate.

It’s not a silver bullet.  But I like it because it captures something of the dynamic and complex nature of the smallholder challenge. The agri-business workshop held by BIF in Malawi recently identified a great deal of activity at various stages of the agri value chain - in inputs, in processing, and marketing.  But the gap arose on closing the loop. If farmers are not earning enough from selling into markets to reinvest back into inputs, then nothing changes long term.

I also like it because of what I have learnt about hand-washing and nutrition. Consumer products are not just focused on sales, but on consumers changing behaviour – washing hands with soap, valuing more nutritious food, or using toilets. In agriculture, there are a host of initiatives that provide training and inputs, but translating that into adoption is another matter. Adoption may be constrained for a host of reasons, and we need to focus on these, not just on provision.   Understanding investment is a proxy for understanding adoption.

If investment in inputs and new stock is the indicator, what exactly is the metric? That will vary from crop to crop and context to context. If might be fertiliser, new seeds, new tree stock. Working that out in each setting is another story.