The No. 1 reason small scale farmers remain small and impoverished
Growing up, I couldn’t understand why despite extreme effort invested in the farms with often good harvests, my family remained poor and stagnated.
“Dad, why is it that those who feed the world are poor and hungry?” – I often ask my Dad who always blamed the situation on poor market conditions.
Angered by this childhood experience, when I turned 25 (in 2009) I set out to fix this one problem for farmers – the problem of poverty.
Knowing that widespread poverty among farmers is an effect not a cause, I first wanted to uncover the No. 1 reason (the root cause) for this problem.
Over the years, I posed this question – a variant of the same question I asked my Dad 20 years ago – to many agricultural actors including Farmer Union Leaders, PhD Scholars, Government Delegates, Agribusiness Leaders, Bankers, etc.
From the many responses, a pattern developed:
- Lack of farm to market roads
- Lack of access to funding or capital
- Lack of access to market
- Poor market conditions (my Dad’s favorite)
- Lack of transport facility
- Lack of storage facility
- Absence of good [agricultural] policies
- Poor governance
- Witchcraft (Ha I like this one)
- Poor and unreliable energy infrastructure
- Lack of irrigation systems
- Farmers are uneducated or not adequately trained
- Low quality farm inputs
- Farmers lack entrepreneurial zeal and skill.
- Lack of machines and modern technology
Trying out different solution models for 7 years, my team and I worked with diverse farmers across diverse communities growing diverse crops and we came to one conclusion:
“Lack of access to profitable sustainable markets is the No. 1 reason small scale farmers remain small and impoverished.“
Take note that this is NOT the same as response (3) above as those 3 underlined words are important. Before you dismiss this outright, let me clarify what each of the words mean in this context:
More than 90% of small scale farmers do not track their expenses/incomes and so they are tempted to think of the money they make from their harvests as profits.
The sad truth though is that they are actually selling at a loss. Any business in this position is bound to close down unless money keeps coming from an external source.
Luckily most small scale farmers work on land they – or their family – own and they invest their own labour. This is the only reason most of them are still able to survive albeit poor.
Sustainable means it can be maintained at length without interruption or weakening. Since most small scale farmers produce small quantities, this problem inherent in our traditional markets often go unnoticed to most.
Consider what happens during peak harvest seasons when slight increase in supply results in disproportionate drop in prices. Some farmer groups – like the Yam Farmers Association in Bonakanda – go extra mile to impose quotas on their members in order to control this situation.
Our local traditional markets on which small scale farmers rely are too fragile/volatile hence unsustainable for large scale agriculture.
If your business sells directly to customers without a contract and you can count the number of customers who buy from you at any given point in time, then you’ve got CUSTOMERS NOT a MARKET.
Small scale farmers often sell their products to a handful of known customers who can be petty traders (middlemen), restaurants, schools, etc. Mistakenly, they assume they have a market whereas in fact they have customers.
Too often, these customers they rely on either go out of business or they get better deals from competitors or they simply become dubious and this forces the farmer into a bad position.
Sadly, marketing is an activity small scale farmers neglect thinking presumptuously they will secure good market when their products are ready. Then when the products are ready, a customer shows up and they are happy forgetting they are now left at the mercy of that customer.
I hope by now you have probably come to the same conclusion as we have about scaling agriculture and overcoming poverty among small scale farmers.
If you are still in doubt, I invite you to check out our upcoming post (Friday, May 6, 2016) which will provide justification as to why each of the causes listed above will lead you nowhere if the No. 1 cause is not resolved.
If you are a farmer reading this, don’t be discouraged as it turns out this is also the No. 1 reason why most small scale businesses remain small (Check out Les Mckeown’s presentation on this topic). The lesson you should take home from this is that you should seek relentlessly for your profitable sustainable market – or seek help from someone or an organization that is specialized in marketing.
Do you know of another cause why small scale farmers remain small and impoverished? Please share with us in the comments below. I will take your contributions into consideration in the upcoming post.