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Wed, 4 Apr 2018 18:35:34 +0000
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Hi everyone,

A couple of days ago, I asked for more input on Topic #5 "The importance of food businesses to small farms” - And I am happy to see many of you responding with your valued input — AND I mean it when I say “valued input”! :-) — just read through this summary. You’ll see the variety of input, and practical examples. Mmmm, just lovin’ it, and please keep it coming!

So, here we go with the aggregated input on this topic, coming from Nigeria, Ghana, India, Israel and the UK.
— Peter



Q5.1/3 - Question: "5.1.  What kind of food businesses are important to small farms in your region? Which of these are small food businesses? Please also explain how you define small food businesses."

1/ From: Aliyu Bamalli <[log in to unmask]> (Nigeria)

The importance of food businesses cannot be over emphasized over here in Nigeria as both dryland farming and farming in rain-fed areas are prosperous.

60% of farmers here are rural farmers yet they sustain the consumers’ daily need of "dinner table requirement" of vegetables and fruits. I know of some people that are engaged into the productions of tomatoes, onions and spices in the dry season, gaining average income of near $6000 yearly with just small investments of less than $700.

These products can be seen on the road side, which they are bought bit by bit, by households. These people does not even care to process, store or even convert there produce into more profitable products, yet they are happy, as they reserve some of their financial incomes to invest in rainy season farming for instance for the purchase of fertilizers and other farm services.
A collection of such farmers makes a lot of difference in terms of food requirements here. We don't need to buy processing systems to preserved potatoes or vegetables due to their relentless services helping us to procure such goods at a giveaway price, while maintaining their livelihood.

Without such farmers we, as consumers, could starve in looking and hopping around to find such products from producers elsewhere.

However, what needs to be done, is to intervene to improve production capacity, storage facilities and processing equipments/systems.


2/ From: Richard W. N. Yeboah <[log in to unmask]> (Ghana)
I am Dr. Richard W. N. Yeboah, a senior lecturer in the University for Development Studies, Tamale Ghana and a member of the SALSA team.

The food business subsector of the food system in our reference region (Gushegu Ghana) is not well developed. The food businesses are mainly the trade in raw produce.  The major food businesses are Aggregation of farm produce, marketing of farm produce, cooked food sold in ‘chop bars’ (local restaurants). There are also a few warehouse service providers (storage), grinding mill service providers and food transport service providers. Processing of food items is minimal.

Food business (a part of agribusiness) deals with all the activities that are carried out on the crops produced including all those that add value to the produce and make them available at the right places and the right time and in the form needed.


3/ From: Mahesh Chander <[log in to unmask]> (India)
The share of small farmers’ price in consumers’ price is very small. There is a huge gap in what farmers earn and consumers pay for the agri-produce sold in India. The small scale farmers are the victim of this marketing  imperfection. This can be solved to some extent by new trends seen in recent past in India.

The big retailers are trying to reach directly to the small farmers<https://www.livemint.com/Opinion/xQmunAF6TpRpNaTrqGCcFK/When-big-retail-meets-small-farmers.html> through collectives and bring them into the system. For example, with more than 20 collection centres across the country, Bigbasket procures about 60% of its FFVs directly from farmers and the company reportedly expects that number to go up to 80% as it adds more collection centres. Others big retailers like METRO Cash & Carry, Walmart, Mother Dairy, Reliance Fresh, Heritage and PepsiCo also have similar arrangements. Some of these retailers educate and help farmers to adopt good agricultural practices. They guide farmers on post-harvest care and facilitate packaging and transportation services to the associated farmers. For example,  SAFAL has established Collection-cum-Grading Centres in rural areas each covering a cluster of 8-10 villages. The farmers supply their produce through associations or in individual capacity.
The entire procurement network of Mother Dairy’ SAFAL<https://www.motherdairy.com/branddetails/22/3> is spread over 20 states  in India, comprising nearly 8000 farmer members from 93 Safal growers associations. And the 600-store strong RELIANCE FRESH<https://relianceretail.com/reliance-fresh.html> has gone beyond direct purchase from farmers to assisting farmers to grow commodities like papaya and banana which helps in better yield and end-consumer pricing. Reliance Retail directly partners with a large number of farmers and small vendors in a farm-to-fork model. The linkages with the farm has brought about transformational changes in the quality of life of the farmers as also enhancing the quality of produce, reducing wastage by shortening the time to move fresh produce and reducing intermediaries in the value chain thereby benefiting all. These retail chains have managed to bring down prices with several new initiatives such as increasing direct sourcing from farmers, assisting farmers in crop cultivation to bargain better prices, driving efficiencies in supply-chain and benchmarking their prices with local retail market more frequently which will also help to compete against the general trade.
Linking supermarkets and farmers could be good for farmers and consumers both. So it is important to explore the ways how best the super markets models can help integrate the small and marginal farmers with supply chain system in India and may be elsewhere too. Farmer organizations/producer companies can help smallholder farmers specifically in improving their position in the emerging value chains.<https://www.sciencedirect.com/science/article/pii/S0306919213001851> The need for organizing farmers into groups for running agriculture like business is being felt with every passing day. Farmers' producer companies as a new concept for collective action is rapidly gaining ground in India. A new corporate India is in the making as close to 1,000 companies owned by young farmers take shape and engage in businesses such as exports and direct marketing with revenue of a few crore rupees<https://economictimes.indiatimes.com/news/economy/agriculture/farmer-producer-companies-help-pool-market-produce-resources/articleshow/41990332.cms>.

4/ From E.M.Muralidharan <[log in to unmask]> (India)

Food processing with modern technology is now becoming increasingly available around the world and is now affordable to small businesses and therefore can serve an important role in supporting local small farmers with surplus produce after selling in the local market during the glut in the peak season.

Usually wastage due to spoilage and distress sale, results with a loss to the farmer. In many parts of India, this is a recurring story with tomato farmers who have often in protest dumped truckloads of harvest into garbage bins or left them to rot since prices were too low to incur the harvesting costs.
If they had access to decentralised processing plants distributed across the region this could have been avoided.
Cooperatives of small farmers could easily get into this business of processing vegetables and fruits locally  - something that today seems to be restricted to small-scale units manufacturing just pickles.
Some countries like Sri Lanka appear to be better at it and a diversity of products,  for example, made of coconut had come into the market many years back.  In the south-west coastal region of India where I live, small landholdings with a diversity of crops ranging from fruits to vegetables to spices is the norm.
Fruits like banana, plantains,  jack fruit etc are being processed into snack foods by small businesses in recent years but the scope is really much more in volume as well as in the range of crops.

_____________


Q5.2/2 - Question: "5.2.  Do food businesses in your region play an important role within the food system? How? Please provide specific examples."

1/ From: Gary  Brenner <[log in to unmask]> (Israel)

I come from the side of the food and nutrition business. We are an informal group of business people who have been studying, of late, the Bambara groundnut as a potential source of alternative proteins in industrial food processing.

Our research has been primarily in Africa. In our vision, implementing such a business venture will be dependent upon five key success factors:
(i) choosing the most suitable of the 7-10 Bambara varieties,
(ii) creating an infrastructure for a cluster of emerging farmers,
(iii) post-harvest processing into a suitable food protein source for multiple food & beverage products,
(iv) branding and go-to-market, and
(v) project investment and long-term financing.


2/ From: Gary Vaughan-Smith <[log in to unmask]> (UK)

In our experience, the presence of food businesses that can buy crop off small-holder farmers is of crucial importance to the improvement of their incomes and to improve on-farm practices. This is particularly the case when the new food business wants to buy a crop that is high valued and does well in rotation with the existing staple crop. This means that the farmer can introduce the crop into his/her rotation thereby improving farming practices as well as his/her income.

We describe this as the ‘hub-out-grower model’: a market is created for a new, more valuable crop by the introduction of a processing plant. Small-holder farmers are then engaged with to help grow the new crop as ‘out-growers’ alongside their existing crops. Vegetables, fruit, legumes and pulses are all viable candidates for small-holder production under the hub-out-grower model.

Case study: introducing a legume in an area where maize is the predominant crop:
Where the staple is maize and where this is largely mono-cropped, as it is done in much of Central and East Africa, the introduction of a legume such as soya beans or sugar beans can create a substantial impact. We established the first soya processing plant in Tanzania thus providing a sustainable market for small-holder soya for the first time.
Soya beans have three important benefits for small-holder farmers and for the environment:
Greater income: It is a higher value crop than maize which is mono-cropped in the productive Southern half of Tanzania where the business is located.  We pay ~$450/t for soya vs the maize price of $150/t typically achieved by these farmers.
More sustainable farming: Soya works well in rotation with maize and leads to more sustainable farming practices and substantially reduced environmental impact. If one mono-crops maize then the diseases attacking maize eventually build up in the soils so that after 6-7 years the plot needs to be abandoned, leading to deforestation of neighbouring savanna woodlands. Soya is a legume and maize is from the grass family, so different viruses and fungi attack each. Rotating a legume and a grass crop is a sustainable approach therefore.
Soya, like all legumes, has a special property in that it takes nitrogen from the air and ‘fix’ it in the soils as ‘nitrates’. If one buys a bag of fertiliser, around 50% of the weight is made up by ‘nitrates’. Soya thus replenishes the soils naturally so that subsequent crops have higher yields per hectare.

We estimate that incomes per farmer have increased from ~$600 p.a. to ~$1,250 p.a. simply as a result of providing a market for soya. At present 9,000 farmers are growing soya up from zero in 2013 and we are targeting reaching 30,000 by 2020.


3/ From: Richard W. N. Yeboah <[log in to unmask]> (Ghana)
Without the services of the food business subsector, production would be minimal.
Many of the food growing areas are far from the regional capital or big towns, and road linking these places are quite bad. Without the services of these food businesses especially the aggregator and transport service providers, small farmers would have difficulty in selling their surplus and hence may not have the incentive to produce more than they need. Hence though not well developed and very small in nature they are very important to the food system.



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