1203089728879 Mainstreming Small Holders Mrema Herment

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					Mainstreaming Small Holder
  Farmers into the World
 Economy – Using Farmer
    Ownership Model –
       Nairobi Kenya
    Oct. 16 – 17, 2007
Why Farmers are Poor
   They are in a poverty circle
   Small production for self consumption
    and small surplus for sale - money to
    buy basic items they do not produce
    (soap, paraffin oil, sugar, match box)
   They sell the small surplus at a give
    away price – exploited by middle men
    and become price takers (need for
    immediate cash)
   For cash crops they sell as individuals, not
    adding value to justify the basis to negotiate
    and bargain for a better price
   For those farmers who are selling through
    cooperatives or associations they do not have
    the sense of ownership hence they surrender
    ownership to the managers and leaders who
    assume free ownership without investing on
    the production – Advance payment assumed to
    be the price of their crop, and additional
    payment is taken as manner from heaven
   Small production because they cultivate a
    small piece of land using hand hoe technology
   They are not organized to apply the farming is
    business, pay on performance principles and
    benefit from group power
   They cannot access efficiently business
    facilitation tools (credit, inputs, skills,
    knowledge, appropriate technologies, market
    access, price and market information)
   They are not marketing value added
    products at a negotiable and
    competitive prices, hence earning less.
   They cannot accumulate capital – to
    invest and increase production
   Lack of investment result to low
   Low production - low incomes – low
Reversing the Poverty Circle
   Organize farmers into business groups( 25 – 35 per
    group) using a strategic crops in a holistic, integrated
    and harmonized manner within the farming systems,
    and get their businesses names registered with the
    Registrar of Companies for legal backing (can be sued,
    sue, open bank accounts and enter into a contracts etc).
   Assist groups to profile their baseline and establish
    baseline data that will be used to develop vision based
    business plans and implementation strategies
   Assist groups to develop survival and Working Capital
    accumulation strategies
    How Capital is Accumulated
   Identify source, use of cash and deficit (
    assist the groups to come up with simple
    cash flow statements and identify sources for
    financing their deficits. – borrowing (group
    guaranteed), development partners -
   Identify immediate opportunities to improve
    cash generation and cash management
    (avoiding unnecessary expenditures)
   Initiate small savings mobilization schemes
    which will also enhance groups cohesiveness
    and having a sense of ownership.
   Groups lending to members to finance their
    immediate needs so that they can postpone
    individual sales of their produce at a give
    away price
   Encourage value addition by stopping selling
    to middle men and move higher to the
    nearest bigger market with bigger volumes
   Group marketing of all products for bargain
    power due to bigger volumes and value
   Increased income and savings
   More Farmers become members of groups as they
    learn from the others
   More value addition – moving to processing,
    packaging, labeling, export and internal market
    consumption promotion – price setters
   Establish traceability to the source of origin that can
    be certified or verified targeting niche markets i.e.
    fair trade, utz kapeh, organic, rainforest alliance etc.
   Farmers being active participants, profitably taking
    advantage or market liberalization policies and
    become part of the global economy
Who are better positioned to Empower
Stakeholder along the Supply Chain

   Private Sector Service Providers
   Who strongly believe that farmer and other
    stakeholders empowerment is a viable
   Willing to invest their own resources till
    positive results are achieved
   Should not have vested interest in the Chain
    (no ownership of the product or process)
   Willing to be paid on Performance (Value for
   Opportunity to commercialize extension
    services which become part of the product cost
    Why Farmers Organization
    leaders, staff and gvt. officials
    cannot empower farmers
   “Lions cannot organize cows” due to conflict of
    interest – They have vested interest not
    necessary farmers’ interest in the process.
   It is not their job to organize farmers and have
    no capacity to do so
   They should play the role of facilitation,
    coordination, linking farmers to source of
    resources and provide enabling environment
    (legal, order, infrastructure and security)
   Leaders, staff and others are paid on
    performance (value for money)
Role of Middlemen
   Becomes a facilitators, coordinators and
    providers of goods and services needed by
    the farmer as a result of increased purchasing
   Assume ownership based on the level of
    investments into the processes such as
    purchase and installation of machinery, value
    goods and services to be provided etc.
   Will no longer take ownership of commodities
    along the supply value chain
Key for Success
   Attitude change by thinking in “we” instead of
    “me” - being smart greedy
   High level of trust, integrity, honesty,
    efficiency, commitment, determination,
    transparency and accountability within the
   Continuous flow of resources to empower the
    farmers and risks management till there is a
    complete real change
   Setting up “Innovative Rural Development
    Revolving Fund” funded and managed jointly
    by all key stakeholders.
   Minimize waste and misuse of resources
   Promote harmonization of use of resources
    and interventions (Farmers able to select who
    to work with and for what value)
   Paradigm shift “ Supply chain influencing the
   Increased economy and efficiency
   Maximization of Farmers Income
   Wealth creation and Poverty eradication in
    very short period of time
National Union of Coffee Agribusinesses and Farm
Enterprises – (NUCAFE - Uganda) – Success Story

   Recognition and support from the Government of
    Uganda and its institutions
   Funding and support from International organizations
   Presence in all five growing regions in Uganda, have
    been able to work with 18,000 farmers to organize 600
    farmer groups consisted of 30 farmers per group and
    these farmers were able to market a total of 1,200
    m/tons of green coffee in the last 3 years
   Increased income of an average of 40% over equivalent
    green coffee at farm gate price
   120 groups with bank accounts and savings averaging
    Ug Shs 360,000 per group.
   Market linkage fees collected amount to over UG Shs 10
    million (US$ 6,000)
Presented by:
   Herment A. Mrema
   Executive Director
   Africa Rural Development Support Initiative
   P.O. Box 11415
   Kampala
   Uganda
   Tel: 256 – 75 – 3- 301494/71-2-301494
   Email: arudesiafrica@yahoo.co.uk
           hmrema@hotmail.com

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