Building Resilient Market Systems
By Paul Sippola
Dynamic and professional Agricultural Input Retailers help maintain productivity and food security during market shocks like COVID-19
The Cultivating New Frontiers in Agriculture (CNFA) market systems approach identifies the root causes of market failures and inefficiencies, and then engages with public and private-sector partners to transform and strengthen those market systems. In doing so, we help market systems generate sustainable growth opportunities and improve market participation by small-scale producers, small and medium-sized enterprises, poor households, and others who are systemically marginalized from economic activity.
Economic shocks and other pressures cause agricultural market systems to be more fragile and likely to fail at the “last mile” where service providers and markets serve smallholder farmers. During the current COVID-19 crisis, we have observed rural smallholders in countries where we operate struggling to remain connected to larger market actors which, although they support production and marketing, often are not located near rural farmers. Furthermore, recently imposed travel and gathering restrictions impede farmers from aggregating crops at collection points and traveling to nearby towns to purchase inputs such as seed, fertilizer, and crop protection products.
Inclusive market systems that better serve rural smallholders are more resilient, because they include small and micro-enterprises that can more conveniently provide farmers with inputs and services. They also can better facilitate marketing of crops because they are located relatively close to farmers, or — in some cases — have mobile agents that can reach far-flung communities. While every situation is different — and every set of market system actors faces their own unique challenges — it has been proven over time that professionalized, rural input retailers with strong business linkages to local farming communities can address critical service gaps and significantly help create market systems that are more resilient and inclusive.
In recognition of this, CNFA has developed market-oriented, private-sector models and tools to support better delivery of agricultural inputs and services to rural populations. These models help to drive improvements across existing input and service networks — from small, village-level agrodealers and regional wholesalers to major input manufacturers and distributors. They also facilitate investments in business expansions and startups to fill critical service gaps, particularly those affecting marginalized smallholder farmers. A cornerstone of this approach is the Farm Service Center (FSC) Development Model. FSCs are rural, one-stop-shops that provide a complete range of inputs, services, information and output marketing linkages that farmers need to move from subsistence farming to commercial production.
In Rwanda, CNFA has collaborated with USAID, AGRA and the Government of Rwanda to help ensure agricultural input supply chains are effective during the COVID-19 crisis. CNFA has organized hundreds of agrodealers, input distributors and importers, and government representatives through a digital platform that facilitates planning and troubleshooting to ensure the uninterrupted distribution of agricultural inputs to rural smallholder farmers.
Rural input retailer networks such as these FSCs ensure that rural smallholders remain connected to input and output markets. During significant market shocks like those caused by the current pandemic, these ”last mile” input networks serve as critical and indispensable infrastructure that helps government and donors adapt rapidly in order to continue to distribute inputs to rural farm communities and provide them with the information they need to maintain productivity and food security.
Paul Sippola is the Senior Vice President of Programs at CNFA.
