Event / ILRI / LIVESTOCK-FISH / PIM / Value Chains / WorldFish

Smallholder participation in livestock and fish value chains

In November 2012, ILRI scientist Derek Baker with Froukje Kruijssen (WorldFish) organized a session at the CTA conference ‘Making the Connection.’ The session examined livestock and fish value chains and drew out lessons from participants’ experience of interventions and the reasons contributing to the success or failure of these interventions (the session notes here are also online)

Three panel members set the scene for the discussion in which the entire audience was actively involved:

  • Gizaw Negussie, Senior Technical Advisor of the Namibian Meat Board, the regulatory body of the meat industry in Namibia. A unique feature of the Namibian livestock industry is its division into two parts, the large scale export sector and the small scale communal segment. To support the communal farmers, commercial farmers have self-imposed a levy on the exports of beef and smallstock from commercial farms, thereby generating funds to help develop livestock in the communal areas, north of the county’s export-enforced quarantine fence.
  • Sherif Sadek, Aquaculture Consultant from Egypt, who has worked with aquaculture producers in Egypt, Algeria, and other countries on a wide range of aquaculture development projects on mullet, seabream and tilapia. He advises companies on production technologies and market-related issues for both smallholders and large commercial farms.
  • Mayasa Ayoub Simba, Registrar of the Tanzanian Dairy Board, a statutory body which promotes production, collection, and marketing of quality milk through facilitating dairy smallholders along the value chain. Milk production in Tanzania is carried out in two distinct production systems: small, low input extensive systems and large commercialised dairy farms – with the former producing the great majority of milk.

Value proposition: when challenged by the facilitator, participants had initial difficulty in identifying specific “value propositions” as offered by smallholder in livestock value chains. Discussion helped focus these definitions, which centred on two themes: consumer segments (those demanding high quality) and cost savings by way of improved organization or access to inputs and services. For example, poor tilapia producers can take advantage of consumer segments by supplying lower grade fish to poor consumers. Attributes identified by ILRI in the past such as food safety, colour, presentation, and packaging as value propositions resonated with the participants’ experience.

Upgrading opportunities for smallholders: The panel members and the audience agreed that there is great potential for poor, small-scale producers to take advantage of the opportunities presented by the growing demand for meat, milk and fish. Interventions highlighted included organizational change (collective action, auction systems), training for all value chain actors in value adding activities (especially for producers and traders), facilitation and co-ordination of inputs and sales, and trade interventions and barriers imposed by government. Examples were given of organization of dairy farmers into farmer groups and cooperatives in Tanzania, Nigeria and Senegal and establishing collection centres to overcome marketing and logistic challenges of dairy farmers’ being scattered over large areas. These cooperative models also facilitated the introduction of capacity building and payment systems based on quality. Cooperative models also have been successful for small-scale fish farmers, allowing producers to share costs and make efficient use of natural resources. In terms of more direct government interventions, Namibian experience of government-financed upgrading of facilities for production of higher quality beef products was cited, enabling the product to compete in the international market, and allowing access to new (international) markets for smallholders.

Formal and informal markets: Examples of co-existing formal and informal markets were provided from the Tanzanian dairy sector and the South African beef market. The dual systems provide opportunities for smallholders through different routes, either by providing more employment opportunities (dairy Tanzania) or by allowing farmers to take advantage of price fluctuations in both markets (South African beef).

Intermediaries: Participants expressed a range of opinions and experiences on the role of traders. Informal Kenyan goat markets were reported to be constrained by excessive trader margins and traders were considered to be exploiting farmers. However, experience in Ethiopian value chain development focused on building relationships and trust so that market actors could work together. Also in Ethiopia, traders were engaged in enabling pastoral farmers to supply dairy processors.

Financing for livestock and fish value chains: Participants highlighted options to attract more capital into the chain. It was emphasized that cooperatives should operate as businesses rather than non-profit organizations in order to attract investments. In some countries governments have provided funds to lower risks and enhance incentives for commercial banks to lend to producers of livestock and fish. In South Africa levies on meat exports contribute to investment. In several countries, it was reported that government is offering grants and soft loans through development institutions for farmer organizations which in turn lend to producers. Producer organisations are used in this way because they understand the producers’ needs, and the risks they face.

Gender roles in livestock and fish value chains: All participants reported a clear role for women in livestock and fish value chains and made observations about their control over income derived from these chains. However, some participants reported appropriation of such benefits by men, as marketing became more organized and profitable, although this was not observed everywhere (e.g. not in Tanzania dairy). Simultaneously, women in some cases became liable for input costs and household expenses as their income grew.

Roles for value chain actors and stakeholders
The best role for producer groups was stated to be the creation of critical mass of product and producers, to attract buyers and input sellers and to create a visible partner for external contacts and trade. Transformation of producer groups into financial and business entities was advocated by most participants.

The majority of the group felt that their government did not have a vision to develop smallholder value chains. This vision is considered important in order to transform subsistence farmers into productive farmers. Ideas on ideal government roles included the provision of an enabling environment of infrastructure such as roads and setting up institutional bodies that represent the interests of the smallholders. Some participants also felt the government should protect the local producers by putting in place tariffs on imported substitutes for local produce. In Nigeria, a policy forcing a large foreign dairy company to include a proportion of local milk into their process, has helped local dairy producers to overcome challenges in trying to compete with foreign powdered milk.

Examples were given of situations where governments were successful enablers, growing the livestock sector through supportive policies, and providing preferred supplier arrangements for smallholders with public institutions.

The ideal role for the private sector was among others seen to be promoted by public-private partnerships. The proposed key to success of involvement of the private sector is that both buyers and producers have an incentive to participate. An important role for the private sector was considered to be training and information provision to producers so that they can produce high quality products that meet the requirements of the buyer.

 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s