Marketing agencies linking producers and _
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Agrifood systems are undergoing rapid transformation. Increasing concentration in
processing, trading, marketing and retailing is being observed in all regions of the world
and in all segments of production-distribution chains. The traditional way in which food is
produced, without farmers having a clear idea in advance of when, to whom and at what
price they are going to sell their crops, is being replaced by practices more akin to
manufacturing processes, with far greater coordination between farmers, processors,
retailers and others in the supply chain. Farmers increasingly produce to meet the
requirements of buyers rather than relying on markets to absorb what they produce.
As incomes increase, food consumption is changing. Demand for fruits and
vegetables, animal products and oil crops is growing and farmers are diversifying
production to respond to this. Consumers are also becoming more demanding in terms of
quality and safety and demographic and income trends are leading more affluent consumers
to demand convenience foods such as frozen, pre-cut, pre-cooked and ready-to-eat items,
together with assurances of product safety. Production, processing and distribution systems
have been adapting to reflect this. These trends offer considerable threats for farmers,
especially small, asset-poor and unorganized farmers, but, for the more efficient ones at
least, may also present many opportunities.
It is against this background that donors, non-governmental organizations (NGOs)
and others are recognizing that the traditional agricultural assistance projects that
concentrated on building up farmers’ production capabilities are no longer sufficient to
ensure sustainable income growth (if, indeed, they ever were). There is now an increasing
understanding that production support activities must be linked to market demand and that
production activities must be looked at within the context of the whole supply chain and
the linkages, or business relations, within that chain. Thus concepts such as “Linking
Producers to Markets” or “Linking Farmers with Markets” are very much in vogue.
However, while the underlying ideas of those working with farmers may now be more
realistic, little will be achieved unless the approach adopted is also realistic. In particular,
organizations must be prepared to adopt a much more commercial approach than hitherto,
employing staff with a strong understanding of marketing and of the functioning of the
private sector.
This paper draws lessons from experiences with linking farmers to markets, while
bearing in mind that many linkages have only been in operation for a few years and it may
as yet be too early to draw conclusions about what may or may not work. The main
purpose is to provide practical advice to NGOs, farmer associations and others who are
seeking to help farmers to improve their livelihoods. Funding agencies should also find it
useful. The importance of developing appropriate input marketing channels is recognized
but not considered in this paper. Emphasis is placed on how to develop sustainable
linkages for farm outputs between farmers and private sector traders, exporters, retailers
and agroprocessors. Many successful linkages are developed directly by the private sector
without the intervention of third parties and the private sector is increasingly paying
attention to the sustainability of links with its suppliers. Thus it is hoped that the issues
raised here will also assist the work of the private sector
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