What have we learned from trying to help poor farmers use markets better?

March 21, 2012 12 By admin

After some pretty rarified policy wonkery on agriculture and development last week, Erinch Sahan, an Oxfam private sector adviser, summarizes what we Indonesia - Flores - Cocoa3have learned from our work in the field  (for once, the right expression). And no, there doesn’t appear to be much obvious overlap with the topics covered in the earlier posts, but I think it’s there if you dig a bit.

Like most NGOs, Oxfam has lots of ‘livelihoods programmes’ that try and find ways to use markets to improve people’s incomes and economic security. Usually, this is around agriculture, as we see the huge potential in smallholder farming. Recently, we’ve been trying to capture the underlying philosophy behind this work. By ‘we’, I mean a bunch of livelihoods advisers, led by markets guru David Bright. I’m not sure there’s a definitive set of interventions that constitute an ‘Oxfam approach’ to ‘gendered market and enterprise development’ (sorry), but we have found that our philosophy doesn’t fit neatly with the standard models floating around in this field, such as value-chains, sustainable livelihoods and making markets work for the poor (M4P). This is because, at its heart, Oxfam programmes are sceptical about getting just any kind of economic growth. We’ve seen that this can leave the poorest behind and fail to address inequality between men and women. However, triggering the right economic opportunities for poor people is tricky and the approach can look very different in different contexts. So having said all of that, here’s where we’ve got to on an alternative:

1. Intervene to rebalance power in favour of poor producers, particularly women

Sounds good, but how can it be done?

a) Support producer organisations. Ok, there are probably as many bad examples of collectives, co-operatives and other producer organisations as good ones, with most excluding women, but let’s not throw out the baby with the bathwater here. Collective market action is a great way to get to the volume of production you need to interest buyers, and also means you have the power to get better deals on inputs and services. There is a plethora of research on this and we wrote a book that attempts to describe what good ones look like, as well as running a research project on women’s collective action.

b) Support specialised enterprises that help smallholders trade. We love smallholders here at Oxfam and think that businesses that try to help them are just as super. If we can create a business that goes and finds different market options for smallholders, we’ll support this business with financing, training, information, machinery or whatever is needed to make it viable. These businesses can also provide services to ensure women and other marginalised smallholders can access markets and help them get their product quality right. All this can really empower smallholders to choose the best deal, rather than take whatever is on offer. Sometimes money can be made by doing these things, but the enterprise must be focused on being an intermediary for smallholders. It’s even better when smallholders themselves own these enterprises.

c) Give direct support to allow the poorest to make a start. Especially to small businesses that are creating jobs and market opportunities for poor people. This can be a crèche so women are freed to participate in business or sometimes it’s providing finance, such as match funding for a harvesting or processing machine. Where possible, we want the business, business partners, markets or the local government to provide support for these things, but where these fail, we are willing to step in to get things going. However, the end goal is always to create a business that can stand on its own feet. The challenge is doing it sustainably, so the asset (e.g. easily repairable machinery) is used to generate a revenue stream, rather than being left to go rusty.

d) Change the rules of the game. That means helping poor people gain a voice with their governments or in how a company operates. It could mean setting up the right forum for them to talk or getting people to speak collectively, so the many small voices become one bigger voice. It could be about building coalitions with those who share their interests (including local businesses). It could be as simple as having somewhere to resolve contract disputes between a company and a farmer or working to ensure women can take higher value roles beyond the low or unpaid roles customarily considered ‘women’s work’. Here’s an example from Colombia.

e) Build on catalytic events. It’s as much about the when as the how. We do this by being opportunistic and jumping in when something big has happened to shake things up. That can be a new government that is changing the regulatory landscape, a major new investor who’s challenging existing monopolies or even a natural disaster that means much of the local economy is being rebuilt. These are situations where we can take the ‘market systems approach’ (see below) and look for ways to shift the balance of power in favour of small producers

women rice farmersf) Ask the question at every opportunity, how is this empowering women? The focus needs to be on women right from the very beginning (starting with research on the roles women play in the market and the home).

2. Look at the whole market-system

The points above are key to our livelihoods programmes, but how do you choose where or how to intervene? We do this by putting on a market-systems lens. We’re most like M4P in this respect and least like value-chains (which essentially focus on connecting producers to buyers). By market-systems I mean spending time to understand all the things that surround poor producers and their enterprises, including government, infrastructure, and hidden forces such as cultural beliefs and practices. It’s about identifying and ‘unlocking’ hidden problems that cause the whole market-system to fail for poor people. An example is providing finance for remote, rural and women-owned enterprises. We also try and work out who is going to ‘drive’ that new service or change the policy or grow the trade in the system when we withdraw. We often have to help out to pilot the new service or prove the benefit of changing the policy etc. 

3. Also intervene outside the market system

Poor people don’t only interact with the market system but also with their household system and the eco-system. Women in particular are heavily constrained by what happens in their homes as well as the market and everyone can be held back when nature stops cooperating (e.g. soils becoming infertile or rivers running out of water). Often, we intervene in all three systems. For instance, a programme may try to free women up from onerous chores at home (intervention in the household system, such as installing local water standpipes to avoid a 2 hour daily walk), while helping a new producer-owned business get off the ground (intervention in the market system, such as helping locals demand a new road), and also teaching new ways of conducting sustainable agriculture (intervention in the eco-system, such as knowing how to adapt to heavy but infrequent rain). We’ve found that intervening in one system alone while ignoring the others can be ineffective.

4. Intervening directly where facilitating is not an option

If we find a way to play a direct role to help poor people, we’re happy to play that role. This could mean giving cows to women with absolutely no other assets so they can get on the ‘first rung’ of the economy to produce, consume and sell small amounts of milk. But what we can do on our own is always going to be a drop in the ocean, so we search for ways to get those already in the system to play this role. This could be a local bank lending people money so they can buy their own cow, or a local company who’ll benefit from the improved productivity agreeing to provide farmers with training. However, too many of the people we want to help are too poor for those in the system to bother doing business with them. And where we can’t find a way to get markets to work for the poorest, we’re open to intervening directly. This may be as simple as paying for analysis to show how women producers are key to a business. This is probably where we disagree most with the M4P crowd (we agree strongly on the systems stuff).

These are just snippets of things we’ve noticed in the programmes we like best. Feel free to comment/add your own.