 Sustainable
Agriculture Extension Manual
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Marketing produce as a group
Small-scale farmers grow a variety of crops individually on small farms for subsistence and for sale. They commonly market their produce individually, selling it to merchants at the farm gate or taking it to the nearest local market, where prices are low and may vary widely over time. In addition, transport is expensive, and the roads are few and in poor repair.
Farmers feel that marketing is a major problem. They feel that merchants control produce prices, or can buy produce at very low prices during the harvest season, transport it to another area and sell it at a large profit. Farmers can overcome this problem by marketing their produce as a group.
Advantages
- The group can sell directly
to
retailers at a higher price, bypassing the merchants altogether. - They can provide a larger amount of produce and maintain a continuous supply.
- They are in a stronger bargaining position in relation to merchants and retailers.
Disadvantages
- Marketing requires skills that farmers may have to learn through trial-and-error. They should be ready to make mistakes and take on risks.
- Establishing a marketing system takes time. Farmers must be patient: they should not expect to become millionaires overnight.
- Setting up a marketing system may be difficult for a group of farmers to do on their own. An outside organization such as an NGO may be needed to provide the skills and make them with initial linkages with buyers.
Procedure
This section assumes that an outside organization such as an NGO is helping groups of farmers to identify opportunities and set up a marketing system for a crop. A similar approach can be used for other produce (milk, eggs, chickens, animals, flowers, honey). Many of the activities described below are continuous and happen at the same time.
1. Get to know the market for a particular type of produce, such as vegetables, that the farmers already grow, or could grow. See the box below for some questions to ask.
2. Alert the farmers to the market situation, and discuss with them their interest in supplying particular types of produce.
3. Select retailers (such as supermarkets or greengrocers) and explore their interest in trading with the farmer group.
4. Help the farmer group and the retailers reach an understanding on the type of produce to be delivered, the quantity, quality and timing of deliveries. Have the group and the buyers sign a written agreement detailing their responsibilities and what happens if, for example, the farmers cannot supply the produce because of bad weather.
5. Train the farmers in how to grow the crop, control pests and diseases, harvest the crop and handle it (for example, packing it into crates for shipment). This is particularly important if the crop is a new one. It is important to maintain good quality of the produce to assure a good price and the retailer's interest in the trade.
6. Also provide training to the farmers in group organization, crop planning, marketing and record-keeping.
7. Help the farmers plan the dates of planting and harvest so they can supply the produce at the right time. They may have to plant a small amount of the crop every two weeks throughout the season to make sure there is a continuous supply ready for harvesting and shipping to the town.
8. During the growing season, provide extension advice to the farmers and help them solve problems as they arise.
9. At harvest, the farmers collect their produce in one place, grade and weigh it, pack it into crates, and load it onto a lorry. Keep careful records of how much each farmer delivers.
10. Transport the produce to the retailer in town. Representatives of the group should travel with the lorry and receive the payment from the retailer.
11. Have the payment deposited into the group's bank account.
12. Deduct a portion of the payment to cover the cost of the transport. A percentage can also go into the group's own fund, and to cover the NGO's costs. The remainder is divided among the group members according to the amount of produce they have delivered.
Issues
- Corruption may be a problem. Keep careful records of all transactions, and make sure that these are transparent (everyone knows and understands them). Keeping the records should be the responsibility of several people, rather than just one, and this responsibility can rotate among the members so they can all keep check on the funds. Different group members can accompany the produce into town each week; this means that they will all become familiar with how the transactions work.
- Pests, diseases and bad weather can disrupt the crop production. The group should take precautions to avoid as many such problems as possible (for instance by using integrated pest management or providing additional inputs such as organic matter and irrigation water). The agreement with the buyer should also take the possibility of such problems into account.
- Running a smooth marketing system requires co-ordination and management skills. The NGO should provide training and assistance to the group to ensure they have these abilities.
The two examples below describe the experiences of NGOs and groups of farmers in Kenya in marketing organically grown produce.
"Conservation Supreme" in Kenya
In April 1997, the Association for Better Land Husbandry began a pilot project called "Conservation Supreme", working with four smallholder farmer groups in Ndia division, Kirinyaga district. The 68 farmers in these groups produce 12 different crops and market them collectively in six Nairobi outlets. The crops include hot peppers, beetroots, brinjals, carrots, coriander, snow-peas, spring onions, sage and turnips. They sell these as ecologically sound produce, which commands higher price.
ABLH has trained the farmers in various aspects of crop husbandry, the safe use of pesticides, harvesting and handling, packaging, record-keeping, labelling and loading. Every week, the farmers harvest the crops, sort them, and take them to a group consolidation point. After grading and weighing, the farmers receive a receipt, and the produce is taken to a packaging shed for labelling, packing and sealing. An ABLH vehicle driven by a farmer takes it to Nairobi, and delivers it to the retailer. To begin with, an ABLH staff member accompanied the vehicle; later the farmers were able to handle the transactions themselves.
While it is still too early to know if this marketing system will be sustainable, the farmers are very interested in continuing it and learning further. The group is considering getting their produce certified as produced in an environmentally sound way, so it will fetch higher prices. —For more information, contact the Marketing Project, ABLH, Kenya.
Marketing vegetables by women's groups in Kenya
SACRED, the Sustainable Agriculture Centre for Research and Development in Africa, has helped women's groups in western Kenya to grow and market organic vegetables. SACRED distributed horticultural seeds to 22 groups of women; the seeds included beetroot, cabbage, carrot, Chinese cabbage, dania, eggplant, kale, lettuce, onion, radish, tomato and turnip. These vegetables were imported from America, but grew well in the local conditions. The farmers also grew several local types of indigenous vegetables, including black nightshade, crotalaria and chute plant.
SACRED and the women's groups have found that marketing these products requires training and careful preparation. The women were not confident in selling their products in the towns; they felt more comfortable in a rural setting. To begin with, they merely waited for SACRED to market the produce for them; despite training, they took a long time to understand that the project was theirs, and that they would have to take initiative in management and marketing.
The women found that each type of market has advantages and disadvantages.
- Local markets, such as sale to neighbours, avoided the cost of transport, but were viable only for those types of vegetables which have a local demand. Imported vegetables, such as many of those grown by the SACRED-supported groups, had to be transported to the towns in order to be sold.
- Institutions, such as schools, hospitals and prisons, were good outlets for some types of produce, but they bought on credit and took a long time to pay.
- Open-air buyers were exploitative in their prices. They bought produce by the bag rather than by weight, and squeezed as much as possible into each bag.
- Supermarkets have proved to be good customers, but they have stringent requirements that farmers find difficult to fulfil: high-quality, graded produce, pre-packaged in batches of 1 or 2 kg, and delivered on time and in the right quantities. The farmers have sometimes failed to provide the right amount of produce; for instance they have over-supplied certain types, leading to wastage and losses. The groups may need to invest, for example in equipment to seal plastic packaging, in order to meet the supermarkets' needs. For some low-value crops, such as kale, the packaging was worth more than the crop being sold. It therefore made sense to sell only processed produce to supermarkets.
Careful management and planning have proven necessary. Certain quick-maturing types of crops must be planted every 2 weeks in order to keep up with market demand. Farmers must plan their planting and harvesting according to expected demand and purchasers' orders. For new crops, they must learn how to grow the crops and when to harvest them. They must keep careful records, and study the market in order to decide what to plant and where and when to sell it. —For more information, contact SACRED, Kenya.
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