1. Modernizing Extension and Advisory Services
Linking Smallholder Farmers to
Markets and the Implications for
Extension and Advisory services
MEAS Global Learning Exchange Shaun Ferris
on Best Fit Approaches in Catholic Relief Services
Extension and Advisory Services
Washington, D.C., June 6, 2012

2. Trends in Private Sector led
Agricultural Market Development
• 1700’s - Plantation farming (sugar, rubber, pineapples, banana)
• 1800’s - Estate farms and outgrowers (tea, horticulture)
• 1900’s - Outgrowers (coffee, cotton, oil palm)
• 1900’s - Contract Farming (cotton, horticulture, potatoes)
• 1940’s - Certification (coffee, cocoa, cotton, textiles, etc)
• 2000’s - Agro-Dealer networks (Export trading, Farmers Gold)
• 2000’s - New Business Models (Unilever, Sysco, Mars)
• The private sector trends are shifting from seeking supply flexibility
through smallholders, towards a greater emphasis on sustainability
and quality of supply through identified smallholder suppliers.

3. Trends in Public led
Agricultural Market Development
– 1960’s-1970’s - Green revolution (supply led)
– 1970’s – 1980’s - Farming systems / Participatory
– 1995 - 2000 Testing supply chains (chain-wide)
– 1990’ – mid 2000’s Making markets work for the Poor (BDS)
– 1990’s – date Territorial methods (diversification)
– 2009 – date New Business Models (private sector led)

4. The Investment Dilemma
Public Development Sector Private / Government Sector
More sustainable and equitable Economic Growth for more
progress for the Poorer farmers Endowed farmers
• Focus on reducing hunger & • Focus on returns to
strengthening resilience. investment.
• Provides pathways out of • Can provides clear links to
poverty, but progress is slow more rapid results.
• Success transforms poor • Success accelerates overall
people’s lives, but may shift growth leading to
national economic growth measurable national wealth
levels. creation and employment.

5. Key factors in Market Linkage
Key factors
Location
Farm size Formal Markets
Access to Financial services
Access to Technologies
Farmer types
Skills training
Farmer organization
Use of farm labor Informal Markets
Access to water resources
Roads and transport
Education
Information Technologies

6. Key Questions for the role of extension
in linking farmers to markets
• Which farmers?
• Which markets?
• What factors improve market performance?
• How does better market access help farmers?
• How can we improve market linkage?
• Can existing extension services do the job?

7. Types of Farmers
• Highly heterogeneous
• Different options
• Different ambitions
• Different starting
points
• Scope for women
• Opportunities for
Youth?

8. Maize Farmer Segmentation
in East and Southern Africa
Commercial Top 1-2% of farmers who produce up to 50%
Scaled farmers of the traded grain
Commercial 15-18% of smallholders who sell the bulk
smallholders of the other 50% of traded grain
20-30 % of farmers who are market
Vulnerable but Viable neutral
Vulnerable 30-50% of farmers who
are net buyers
Highly Vulnerable Ultra poor Require food
safety net
Source: Adapted from Nicholas Sitko, 2011.

9. Three market areas
• Informal markets
– Remain the major market option for smallholders
– Limited services
– Limited grading
• Formal markets
– Push :pull markets
– Higher value
– Graded
– Traceable
• Structured public markets
– Formal market systems that target smallholder suppliers

10. Linking Farmers to Informal markets
These are the mass markets in which most smallholder farmers are engaged.
However, these are largely unregulated, untaxed and lack services….
Net sellers Net buyers
A fraction of the farming community The majority of farmers
16% of rice farmers in Madagascar produce 50% farmers net buyers East Africa (Weber 1988)
50% traded grain (Barrett & Dorosh, 1996) 61% of Somali farmers net buyers (Weber 1988)
10% Kenyan farmers sell 75% of all maize sold 73% Rwandan farmers net buyers (Weber 1988)
by smallholders in 1997/98 (Nyoro 1999) 71% Kenyan Maize farmers (Nyoro et al, 1999)
6% of Mozambican farmers sold 70% maize, 70% maize farmers in Kenya, Malawi, Zambia
(Jayne et al, 1996) and Madagascar net buyers (Jayne et al, 2010)
2% maize farmers sell 50% of grain in market
(Jayne et al 2008)
Have land assets of 6 ha and above, but larger Below 4 ha, often lower than 2 ha
farmers will have 100+ ha
Source: Adapted from Christopher Barrett, 2008. Smallholder participation in E and S Africa.

11. Linking farmers to Formal Markets
• Increasing number of
studies show that
smallholder farmers
can prosper when
linked effectively to
formal, growing
private sector
markets.
http://www.linkingworlds.org/images/stories/PDF/ValueChains_Paper_WEB.pdf

12. Source: Adapted from Jefferson Shriver, 2011.

13. Linking farmers to Public Markets
• New approaches to
public procurement
are using market
instruments to buy
produce from
smallholder farmers
• Supply people and Purchase for Progress P4P
institutions that
require publically
supported food
interventions. Local and regional Procurement LRP

14. Following example is based on extension
strategies for farmer segments
• Farmers with < 4 ha • Farmers with > 4 ha
(70% of farmers) (20-30% of farmers)
– Less endowed – Better endowed
– Limited market access farmers
– Women – Good market access
– Youth – Experienced male
• Improved productivity of farmers
key staples • Focus on key value chain.
• Diversification into • Improve business capacity
higher value products and links to BDS
• Off-farm labour options • Improve labour use and
labour productivity

15. Methods for Market linkage
• There are many types of market linkage methods being
used, but they typically have the following
components…
“Produce what you can sell don’t try to sell what you
have produced”
1. Set up
2. Market Evaluation
3. Business planning and investment
4. Implementation (skills training x training)
5. Marketing and market sales (quality, grades traceability)
6. Evaluation and upgrading
7. Scaling

16. Missing skills in Extension?
• Ability to evaluate market opportunities
• Gather marketing data
• Assess production costs and service quality
• Develop business plans
• Negotiate new business models with partners
• Evaluate profitability against plans
• Provide farmers with upgrading plans that go
beyond natural resource management

17. Scaling up new extension services will require
greater use of information technology
• New extension
approach can take
advantage of the scale
and cost with ICT.
• However, much needs
to be done to make
these systems effective
and more sustainable.
• Finding farmer focused
methods is an
important part of this
task

18. Conclusions
• Transforming extension is a major global challenge
– Requires new models and incentive structures to integrate
public and private sector partners
• Greater focus on business development
– According to some leading firms, farmers respond better to
business services than production support.
– Careful targeting of subsidies
– Co-investment between service providers and users
• Extension services require upgrading, outsourcing and
integration with ICT community of service providers
– Rigorous monitoring of activities
– Performance payments

19. This presentation was given:
By Shaun Ferris, CRS, on behalf of MEAS
at the Global Learning Exchange on Best Fit
Approaches in Extension and Advisory
Services
in Washington, D.C.
on June 6, 2012

20. Terms of Use:
© Shaun Ferris and MEAS project. This work is licensed under a
Creative Commons Attribution 3.0 Unported License.
Users are free:
• to Share — to copy, distribute and transmit the work
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Under the following conditions:
• Attribution — Users must attribute the work to the author(s)/institution
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user’s use of the work).

21. Disclaimer:
This presentation was made possible by the generous support of
the American people through the United States Agency for
International Development, USAID. The contents are the
responsibility of the author(s) and do not necessarily reflect the
views of USAID or the United States Government.
www.meas-extension.org

22. Farmer
Segment
Commercial 100 ha + Sell 95% +
Large
Farmers
corporations (1-2% population)
Commercial 5-10 ha + Sell 50% +
smallholders Value chain (10-15 % population)
Intermediary
Vulnerable but 2- 5 ha Market Neutral
aggregators
viable farmers
Intensification Local (20-30 % population)
Vulnerable & <2 ha traders
Net buyers
farmers Diversification
(30-40 % population)
Highly Food <1 ha or no Regularly Need
vulnerable / security land
emerging from food support
shock (5-10 % population)