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Commercialization of Smallholders: The Tale of A Transforming Family
Berhanu Gebremedhin, IPMS-ILRI
Market oriented small holder development
IPMS experience sharing Workshop
June 2 & 3, 2011
Subsistence family and farm profile: 2000
Family Profile:
•Ato Gebeyaneh Mirchaye, age 30•W/o Malefia Tirete, age 28•Two children •1.5 hectares of land
•A pair of oxen and farm implements•Two local cows and a calf•Ten sheep and goats•Some chicken•Thatched mud house and farm compound• 3 extension agents working in the
village
Farm Profile:
Subsistence family farm planning, 2000Ato
Geb
eyan
eh:
Male
fia, th
e
rainy
seas
on is
appr
oach
ing. W
e
shou
ld ta
lk ab
out
our f
arm
plan
.
W/o Malefia: Oh!, Yes, it is time for planning. We should aim to produce the different
types of food for the family; we will use our own seed and
manure, and other inputs. why don’t you go ahead and
prepare a plan.
Commodity Area (tsimad)
Teff 2Wheat 2Pulses 2
Ato Gebeyaneh: Okay! Here is a plan:
This will ensure our household food
needs.
W/o Malefia: It looks good. But, wait! We will need money for family expenses. Aha! don’t worry! We may be able to sell some of our produce if we can; sell some of the sheep or goats or some butter to generate cash for family expenses. In the last resort,
you may try to work off-farm
•Objective: food self sufficiency•Input sources: own•Cash income: secondary
Subsistence family’s struggle for survival, 2005
Ato Gebeyaneh: No, Malefia! We can not proceed like this! I heard that our government
has a new policy for agriculture. I do not know
what it is. Maybe the DAs will lead us in a new direction.
Ato Gebneyaheh: Malefia, the extension agents are
trying to help us use better technologies and practices to produce more and feed ourselves. They are good people. But, we are still
poor, and sometimes unable to feed ourselves for the year. What can we do?
W/o Malefia: My dear!, What else can we do? The DAs will
just tell us to produce more. We just pray to God! We have no
choice other than try to produce our food to feed
ourselves!
W/o Malefia: Oh! God bless you, my dear! You are right. The DAs get training every time.
Maybe they will come up with some more useful
ideas.
•Subsistence agriculture: sustainable way out of poverty and food insecurity?•Role of extension in subsistence agriculture: limited to technology and production!
Role of the extension service, 2005Extension agent: Ato Gebeyaneh, I
would like to talk to you about how you can improve your life. My service to you
was limited only to technology and production. Now, I have come back from
training on market oriented transformation of subsistence
agriculture. Sustainable way out of poverty and food insecurity is through
market oriented agriculture.
Extension Agent: You produce commodities that you can sell and get higher income.
Then you can buy food in the market to feed your family. You can then save part of the
income, thereby accumulate wealth. In this way, you will be rich and food secure!! Next time, we would like to talk to you and your
wife together.
Ato Gebeyaneh: I always liked you. You
are here to help us. But, what you are telling me today is
difficult to understand. I should
think about it and also talk to Malefia!
Ato Gebeyaneh:
What is market
oriented agriculture
my dear?
•Commercialization has two aspects:-Market oriented production planning-Market participation
•Interventions needed at the two fronts•Introduction of new ideas can be difficult initially
Transformation can be gradual
Ato Gebeyaneh: Malefia, the extension agents talked to me today. They were not themselves. They want me to be like a trader!! My parents never did this.
W/o Malefia:
What did they
say, my dear?
Ato Gebeyaneh: They said we should
produce to sell, get cash and buy food from the market. It is amazing, isn’t it Malefia? Also,
they want to talk to us together.
W/o Malefia: My God! In deed, they are not themselves.
How can we feed our family if we do not produce our food?
•Commercial transformation can be gradual•Persistence in interventions and learning are required•Husband and wife training in extension very useful
Concerns in transformation
Extension Agent:
Ato Gebeyaneh and
W/o Malefia: Have
you thought of
what we told you?
Ato Gebeyaneh: Yes! We have! We are concerned about markets! We have three major concerns:•Will we get buyers for our produce?•Will we get food to buy in the market?•What about if the prices collapse?
Extension Agent: There are private and public solutions to all of these problems.
•Government is working to improve the output markets.•Demand for the market oriented commodities is increasing due to rising income, urbanization, and population growth•Trading business is developing
W/o Malefia: Okay! Let us think more about it and we will see you in
a few days!!
•Input and output markets major concern to commercializing farmers•Interventions to improve markets critical•Policies to promote private sector critical
Concerns in transformation
Extension Agent:
Ato Gebeyaneh,
and w/o Malefia,
do you still have
concerns?
Ato Gebeyaneh: Sure!! How are you going to assist us? In the past
you only helped us use better technologies and produce more. Now, we are going to produce for the market. Will you assist us in
input marketing, market oriented production planning and output
marketing?
Extension agents: You have hit the nail on its head!! Now, we have got training in market oriented extension service. Our role now is to help you:•Plan market oriented production•Build your capacity to adopt and use technologies and practices for the market oriented commodities•Link you up with input suppliers, credit suppliers and output buyers•Provide you with market information•Are you satisfied, Ato Gebeyaneh and W/o Malefia?
W/o Malefia: It sounds good! But,
perhaps, we should start it small. We should produce
both food crops and the market oriented
commodities. If it works for us, we
may expand.
•Broader extension service required
Semi-commercial family (farm planning conversation), 2007
Ato Gebeyaneh: Malefia,
the rainy se
ason is
approaching. We sh
ould
talk about our fa
rm plan.
W/o Malefia:
Yes! Now, w
e should
think of getting good
cash income. But, we
should not forget our
food crops as well.
Ato Gebeyaneh: You are right, Malefia. We
should also use purchased inputs in addition to our
own inputs.
W/o Malefia: Do you also realize there is going to be a lot more work than before. We may consider
hiring in labor.
•Objective: food production and cash income•Input sources: both own and purchased•Demand for inputs and technology increases
Semi-commercial family farm plan, 2007
Farm resource allocation: Commodity Area (ha.)
Fruits 0.25
Vegetables (onion, pepper) 0.25
Forage 0.25
Teff 0.50
Pulses 0.25
•One cross-bred lactating dairy cow bought using credit from micro-finance•Shoats fattening enterprise (4 shoats fattened for three months cycle)
•Vegetables good source of income, fruits not yet producing•Dairy demand unable to be met
•Fattened shoats fetching twice purchase price, good profit
Income:
Semi-commercial family (life improved), 2008
Ato Gebeyaneh: Malefia,
we are now better-off than
when we were producing to
eat. But, this is too much
work. You and I are working
a lot harder than we used
to. What shall we do?
Ato Gebeyaneh: But, don’t you think that we should specialize in fewer enterprises? In that case, we can learn the job better
and do it better.
W/o Malefia: I told you,
my dear! We should hire
in labor. We can get the
money to pay for.
Besides, we should buy
farm machinery and
better farm equipment,
because our farm is profitable.
W/o Malefia: Oh! That is a good idea! I think we should focus on dairy and horticulture. We
need to get more credit to buy few more improved dairy cows. We need to introduce drip irrigation to use water more efficiently.
We should also rent in land from other farmers. This way, not only do we specialize,
but we also expand.
•Need for specialization arises in the process•Demand for credit increases
Extension agent revisits - 2009Extension agent: Ato Gebeyaneh and W/o
Malefia, you see! your life has improved now! You
have good income and your family is food secure. Are
you happy with our service to you?
W/o Malefia: Thank you very much! You are helping
us very well. You have shown us how to plan
market oriented production, adopt and use improved technologies.
Extension Agent: W/o Malefia, don’t forget the
other value chain aspects we are helping you with; Did you
forget them? Market information, linkages with
input suppliers, credit suppliers and output markets
have been also critical for your success.
Ato Gebeyaneh: My apologies, my dear!
She forgot about them. Without
these value chain aspects, we would
have been dead meat!
•The value chain approach for extension service
Commercial family farm planning, 2015
Ato Gebeyaneh: Malefia, It is that time of farm planning again. As you said, we should specialize in dairy and horticulture. We will
also allocate some land for teff.
Ato Gebeyaneh: You are right, Malefia! Efficiency and
competitiveness are now our prime issues. We will also need to rent in land, buy more improved dairy cows. We can hire trained
labor, because we will have the money to pay for.
W/o Malefia: Sure! but, we
need to reduce cost of
production, and be better
competitors in the market.
Besides, w
e should increase
our scale of production.
W/o Malefia: The public extension agents are always with us, but we
should also be able to pay for additional extension service as we need it.
•Objective: Cash income•Input source: External•Extension can be demand driven•Commercial farmers may not completely abandon food crops
Commercial family (functional value chains established), 2015
•More than 150 person-days of labor hired
Commodity Size
Vegetables 1.0 haFruits 0.25 ha
Improved dairy cows 10
Teff 0.25 haForage and maize(primarily as feed)
1.0 ha
Resource allocation:
•Closer links with vegetable buyers, and dairy processors established.•Regular connection with input suppliers established.
•Credit worthiness firmly established and securing credit easy
Inputs and credit:
•Vegetables and dairy good sources of income . •Cereals and pulses bought from market at harvest time and stocked.
Income and nutrition:
•W/o Malefia making sure adequate nutrition to the family, especially children.
•Irrigation facility well established and frequency of harvest increased
Farmer Groups & Attributes Broader Options for Transformation
Broad Commercialization Options and Strategies for Smallholder Farmers
Subsistence Farmers Assist them to become semi-commercial farmers through either surplus
production of subsistence enterprises and/or introduction of market oriented production:
Low tech skills development (technology) Entrepreneurial skills development Linkages with input and output markets Small-scale microfinance
Safety nets Providing conducive environment for out migration.
Semi – Commercialized Farmers Assist them to become more market oriented and commercial farmers through
intensification of staples and market oriented commodities: Medium tech skills development (technology) Entrepreneurial skills development Linkages with input and output markets Small-scale micro-finance and medium scale rural banks
Insurance Providing conducive environment for outmigration.
Commercialized Farmers Assist them to be more efficient, competitive, and economically viable. Facilitate consolidation to become medium to large scale farmers. Insurance Property rights, including land policy Providing conducive environment for outmigration
Thank you!