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IFAD
and market access
IFAD has, since its establishment, recognized the importance of marketing issues to rural poor households, and indeed, over one third of all projects and programmes financed by IFAD over the past 25 years have included at least some sub-components related to agricultural marketing. However, IFAD's understanding of those marketing issues, and appropriate responses to them, has evolved considerably over that period. During the first decade or so of IFAD lending, the Fund's support for marketing was typically provided within the context of the parastatal marketing framework prevailing at the time, and was in many cases geared towards, on one hand, the supply of agricultural inputs in a number of cases for the direct importation and distribution to farmers of seeds and fertilizers, and on the other, the construction of physical marketing infrastructure. With the liberalization of agricultural marketing and the contraction of parastatal marketing organizations in the late 1980s and early 1990s, the institutional framework within which project initiatives had been fitted effectively ceased to exist, and it was no longer immediately evident how IFAD could support the marketing chain. Thus, the proportion of projects with a specific ‘marketing’ component fell from 30% between 1981 and 1985 to only 12% between 1991 and 1995. It gradually became apparent, however, that while, in theory, liberalization
of agricultural marketing offered space for the emergence of new private-sector
market intermediaries, in practice they were operating primarily in
those areas with good communications, where there was a significant
production surplus. In other, less favoured rural areas, the withdrawal
of the state apparatus resulted in a marketing vacuum, and some rural
producers found themselves able neither to access agri-inputs nor
to market their crops.It became increasingly evident that there was
a new role for IFAD to play: supporting in As early as 1995, IFAD was piloting new approaches to the provision of support. One of the first such efforts, developed together with the non-governmental organization (NGO) CARE, resulted in the Agribusiness Entrepreneur Network and Training Development Project – a small project in Zimbabwe aimed at improving smallholder producers’ access to agri-inputs by supporting the emergence of a class of village-based input suppliers. In other regions too, the late 1990s saw a new attention given to helping small producers to link to markets better. Moreover, an increasing number of projects included activities or components that sought to assist smallholder farmers in establishing stronger linkages to markets. Significantly, overcoming market constraints became increasingly important as a project objective, and the proportion of IFAD-financed projects with objectives relating to markets increased from 18% over the period 1991-95 to 38% between 1999 and 2001. Learning from others IFAD has not been alone in seeking to assist developing countries, and poor producers in developing countries, to respond to the changing market environment; and the experiences and analyses of a number of donor agencies and NGOs have provided valuable lessons that have helped IFAD to shape its current approach. Within the donor community, the United States Agency for International Development (USAID) has played a particularly significant role: a long and proactive supporter of private-sector and agribusiness development, it has financed programmes promoting the development of a commercialized agricultural sector in many developing countries. Others such as the European Union, the Danish International Development Assistance, and the Dutch Government are also active in this broad area. The World Bank and other multilateral organizations are giving increasing attention to trade-related capacity-building activities – even if none of them is specifically focusing on the agricultural sector and the rural poor; and the Food and Agriculture Organization of the United Nations (FAO) is currently organizing a major study on the impact of trade liberalization on the agricultural sector in developing countries. A number of NGO's both international and local – are also active in supporting market-access activities. Many of these have gained that experience under USAID financed programmes including in particular the Cooperative League of the U.S.A (CLUSA), which specializes in supporting the development of farmer enterprise groups; Technoserve, which promotes rural business development; CARE, which has developed expertise in a number of areas relative to market linkage development; and the Citizen's Network for Foreign Affairs (CNFA), which works to support the emergence of commercial rural input supply networks. Other NGOs are engaged in advocacy activities at the international level: Oxfam in particular has focused on the overall economic environment facing developing countries, and on issues related to tariffs and subsidies, commodity prices and the role of the World Trade Organization (WTO). Current Directions As practical experience was gained, and lessons learned, so the necessity of IFAD's assisting poor rural producers in accessing markets more effectively became better understood: not only as a means of enabling them to respond to new opportunities – and so increase their income levels – but also as a way of helping them to confront and respond to the enormous and frightening challenges posed by these new unpredictable and inequitable markets. As a result, the issue of market linkage support was increasingly taken up at the corporate level. The strategic framework defines increasing the access of rural poor people to markets (and financial services) as one of IFAD's three pillars for enabling the rural poor to overcome their poverty. It explicitly recognizes that efforts to increase agricultural productivity can be effective only if they are linked to an appreciation of market potential; and it calls for integrated approaches along the full continuum of production, processing and marketing. Transport infrastructure is recognized as being critical for developing links with markets. Diversifying income sources, either by producing and marketing non-traditional crops or by exploiting off-farm opportunities, is also proposed. Source: Promoting market access for the rural poor in order to achieve the Millennium Development Goals, IFAD (2003) |
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