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Small-scale farmers become entrepreneurs Have you ever wondered where the cabbages, potatoes, tomatoes and green beans sitting on supermarket shelves come from? In Mozambique if you shop at Shoprite, Africa's largest food retailer, which has operations in 16 countries, you'll be buying vegetables produced locally by small-scale farmers.
The IFAD-funded PAMA Programme - the Agricultural Markets Support Programme - supports the implementation of major economic reforms launched by the government during the 1990s, including the commercialization of small-scale farming through better access to markets and improved linkages with private sector operators.
The programme enables small-scale farmers in Boane, 30 km south of Maputo, to cultivate cabbages, potatoes, tomatoes and other cash crops in the rehabilitated irrigation schemes which were severely damaged during 16 years of civil war. The province of Maputo is taking advantage of existing irrigation infrastructure to improve market linkages and increase agricultural production. Today, in the Boane area, the irrigation schemes cover 405 ha of land and the programme works with approximately 400 farmers.
"Before, the farmers did not have any know-how, they did not know which crop would be more marketable," explains Mário Quissico, the marketing specialist from AGEMA. "Now farmers know what the market needs. They negotiate directly with the buyer and cultivate to meet demand. As a result their activity is profitable and sustainable." The PAMA team contracted AGEMA to provide support to farmers. Together they had to work hard to get the farmers to where they are today. "Before we came into the picture, farmers produced low quality products. They were unable to sell directly to the buyer and had no idea of how to link up with big buyers. At best they sold their goods through intermediaries or at farm gate, and had little or no negotiating power" says Rui N. Ribeiro, PAMA coordinator. "Now they are organized in associations and as a result have more bargaining power." PAMA's vision was to enable farmers to produce high quality products and to link them directly to the market. Thanks to the programme, farmers are using fertilizers and improved seedlings to produce high value crops that they sell to supermarkets, hotels, restaurants and the main hospital in Maputo. Strengthening capacity, institutions and influencing policy "Getting the farmers around the negotiating table with buyers was a rewarding challenge," says Quissico with a smile.
"To enter the market and trade with commercial entities, farmers needed to issue invoices and receipts. To do that they needed to become a legal entity, and consequently they had to organize themselves into associations." PAMA worked closely with small-scale farmers to strengthen their capacity and their organizations. The programme facilitated the creation of farmers’ associations, organized marketing committees and equipped farmers to conduct market research. "Before the programme's intervention, registering as an association was a costly affair and immense challenge" says Alessandro Marini, IFAD Country Programme Manager for Mozambique. "The programme, together with other stakeholders, lobbied with the government and raised awareness about the importance of having an easy process for registering associations." "They played a key role in facilitating the registration process which led to improving market linkages for small-scale farmers", says Marini. As a result the Government of Mozambique passed a new law on decentralizing registration formality to district level. Building on this fruitful policy, the Government of Mozambique is developing and implementing marketing strategies and pro-poor programmes supporting market linkages. Thanks to the efforts of Ribeiro and his team, the farmers’ associations are now well established in the market. The associations have matured and are well organized. Each association has a president, a treasurer and a secretary. The programme is providing support through marketing and production specialists and two supervisors who provide continuous technical assistance. The associations now are supported by a marketing committee responsible for coordinating production and marketing activities.
Small-scale farmers become marketing experts "We've organized ourselves in a way that avoids competition. The marketing committee produces a plan based on demand and shares it with the small-scale farmers. The farmers decide and agree on who will plant what," says Jose Mundau Mula, president of the Massaca farmers’ association. "By doing so we avoid having everyone harvesting the same crop at the same time, which would lead to an over-supply and drop in price." "Also, the various associations meet to exchange knowledge, learn about new crops and discuss the possibility and potential of expanding our horizons. This has helped us raise our bargaining power", says Mula
Building social capital Subsequently the farmers visited the supermarket where they saw first-hand the quality of the products on the shelves.
"We took this opportunity to discuss our needs with the farmers," explains Pine Oppesmon, fruit and vegetable manager at Shoprite. "For example, we told them we needed tomatoes that were half-green because they have a longer shelf life, and that we would buy potatoes from them only if they had been washed." "Since we started buying from the associations, the supermarket’s revenue has increased by 4 per cent," says Oppesmon. "You know, labour is much cheaper here than in South Africa. Now I am buying 25 per cent of products locally. I hope one day I'll be able to buy 80 to 90 per cent of products locally." "These guys have a great potential, they are producing at European standards. If they get a bit better in packaging, they will make a quantum leap", says Oppesmon.
Challenges ahead "Today farmers sell excess or low quality products as animal feed. Linking them to agro-processing industries would mean, for example, that they would be able to sell ripe tomatoes for tomato paste." Linking with agro-processors would boost farmers' incomes. It would create more market outlets and increase income-generating activities. The PAMA Programme started in 2001. IFAD's loan is US$23.6 million. The Government of Mozambique contributes US$3,827,000. The programme is cofinanced by Ireland for a total of US$1.0 million. Total programme cost is US$27.4 million. The programme reaches out to 230,000 households. |
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