Following the framework to analyse the way farmer organisations work that was presented in the June issue of Farming Matters, the Empowering Smallholder Farmers in Marke

ts (ESFIM) research programme is looking in detail at the ways in which organisations handle the tensions between groups and individuals, and is drawing lessons that can help these organisations be more efficient.

Not surprisingly, we’ve found that holding a group together is not easy, and that we all need “organisational intelligence”. The efforts of different organisations in Bolivia illustrate the iterative process that leads to organisational learning.

Quality Assurance Systems

In collective marketing, an organisation will de!ne the terms of trade on the basis of the quality and quantity it can offer. Once a deal is made, the organisation has to ensure that its members’ products meet the defined standards.

“We had problems with members who supplied tarwi (a traditional Andean cereal) of a lower quality. To solve this, we introduced sanctions for those who did this more than once, fining them Bs 100 (or US$ 15). These sanctions are not included in our statutes, but were agreed to in our Assembly. Quality control is done by a specially appointed board member, who has to taste the tarwi and then decide whether to accept or reject the product. To prevent the influence of family ties we had the entire group observing that no bad products were allowed. This group control has been decisive Hard work Finding rules that keep a group together in making the system work. It also helped that we are a small organisation. The first time there is a problem we just give a warning and this usually prevents any problems reoccurring. Sometimes, we have had to impose sanctions, but only a few members have been fined.” (ASAFOP, an organisation in Sucre selling tarwi to school feeding programmes)

Coping with working capital constraints

Most smallholder farmers face cash constraints. Organisations involved in processing, exporting or supplying governments often have to wait several months before they are paid. While every organisation finds it better to pay its members after all the financial transactions have been completed, most members cannot wait that long.

“We have set up a fund with the pro!ts we make, so we pay our members on delivery of the product. We pay one boliviano per pound of product (‘reintegro’) and use the rest to capitalise this fund. Every member pays an annual contribution of Bs 50. Nevertheless, we are looking for ways to get extra funds as we do not have enough working capital. Due to this shortage, we have to accept that members also sell to other buyers: we cannot prevent them selling their alpaca !bre to others as we cannot always pay them in cash. We need to find strategies to solve this. We are thinking of a bank loan or of an additional member contribution, but this will affect all members, so it has to be planned with caution.” (APCA, an organisation on the Altiplano selling alpaca wool)

Anticipating side-selling

There is a serious risk that farmers “side-sell” their produce to competing traders or processors from whom they receive no services or inputs, and with whom they have no monetary obligations. Most organisations need mechanisms to prevent this occurring and avoid losses, or find other ways to recover the costs incurred in providing services to its members.

“It takes a lot of effort to have ‘loyal’ members. Some do not understand that as an organisation we have additional costs that external agents or brokers do not have. We decided that those who did not supply our organisation exclusively would not benefit from the external support or grants we get as a group. But this did not work. Another mechanism has been to try to convince members of the fairness of the price we pay, developing a cost-benefit analysis in a participatory way. We start indicating the price in the market and the costs we have to pay as an association. Then, we look at the pro!t and we define the on-farm price. Until now, we have not been able to !nd an effective mechanism. Fortunately, fewer than 10% of our members need convincing…” (AOCEMM, an organisation in Tarija supplying honey to a national nutrition programme)

Differentiating between services to members and non-members

Most economic organisations need contributions from their members to do business or to provide efficient services. However, members face a number of disincentives to do so. The most common one is free-riding: why contribute when you can get the same services without being a member?

“In our latest Assembly we decided that members would receive a better price than non-members. We hope to implement this decision this autumn, though it may not work. If we had bigger pro!ts we could pay our members higher prices but we don’t have enough money. And we cannot pay less to non-members: they won’t sell to us if we do not pay them more than our competitors. We do a service that differentiates between members and nonmembers: the grain mill. Members pay Bs 0.50 less for each kilo milled in it, so a lot of producers have indicated their interest in joining our association. However, the existing members are hesitant to allow this because they think that new members will bene!t from the mill without having contributed to it. They argue that new members should pay more, but the new ones do not accept this condition.” (APEMAK, an organisation in a remote area of Azurduy that sells cereals to urban traders)

What are your experiences in dealing with such problems? We are interested in stories that show innovative ways farmer organisations have coped with these and similar challenges when marketing collectively. All contributions will be entered into an extensive database of experiences, which will be accessible through a special website, www.collectivemarketing.org, later this year. Please send your contributions, short or long, told as stories or analysed, to: cases@esfim.org. Be part of this crowd-sourcing project!

Text: Giel Ton, Lithzy Flores and Evaristo Yana

This project benefits from financial support from ICCO, IFAD and the Dutch Government and is part of the ESFIM research support programme to national farmer organisations (www.esfim.org), implemented by AGRINATURA (www.agrinatura.eu) through Wageningen UR, CIRAD and NRI. Giel Ton (giel.ton@wur.nl) is ESFIM’s research co-ordinator. Working with the programme, Lithzy Flores, Evaristo Yana and Rubén Monasterios applied the framework presented in the June issue of Farming Matters in their in-depth interviews with forty Bolivian farmer organisations.

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Smallholder farmers are, by definition, scattered, and so they generally need to bulk their produce in order to access urban markets or the processing industry. This bulking has a strong logistical component, and requires working capital (trade finance) and a cost-efficient organisation that can control transactions.

Successful collective marketing has built organisational assets that make their life easier. Farmers’ organisations regularly fine-tune their internal management and aspects of their transactional relationships (with members and non-members), relating to pricing, payments and quantity or quality requirements. Through learning-by-doing processes, they have developed internal rules, contract conditions and control systems that have proven to be effective and feasible in the prevailing market conditions.

The ESFIM programme (Empowering Smallholder Farmers in Markets) tries to capture and share this knowledge through a website and database containing specific case-studies (www.collectivemarketing.org). This website provides crowd-sourced knowledge on internal organisational regulations that can make life easier, providing solutions to common challenges that groups face when developing their marketing activities. As these solutions will always be contextspecific (depending on the product, the support of institutions, or the scale of the organisation), this crowd-sourcing is facilitated by a comparative framework that helps others to find solutions or lessons relevant to specific types of challenge.

Challenging the tensions that can break organisations

Collective marketing is characterised by a number of basic tensions. All organisations will be affected by some of these tensions, though they will not necessarily experience them as being problematic.

Typically, a farmers’ organisation will only become aware of them at times of change or crisis, when decisions have to be made to resolve problems, prevent damage, or to mediate conflicts – factors which force them to redefine their internal regulations.

By organising their experiences according to the type of tension, we facilitate a process whereby users can find useful lessons on those aspects that are most relevant to them at that particular point in time.

By searching for and double-clicking on an experience that seems interesting to them, more detailed information will appear, with the reference to the document or source describing the experience. These are not presented as “best practices”, but as “inputs for learning”.

The box (right) presents eight areas where the tensions between members and the organisation tend to be found and which, if badly handled, may even cause the disintegration of the group.
Many organisations have found (often quite innovative) ways to overcome these threats to group cohesion: solutions that may inspire other organisations to implement similar approaches to resolve their specific challenges.

ESFIM is looking for examples of this organisational intelligence to add to the www.collectivemarketing.org website. Many practitioners who work with farmers’ organisations may already have such information at their disposal, as most project activities are internally documented.
We ask you to share these stories with us. They can be sent to giel.ton@esfim.org. All quality submissions will be included on the website. The most relevant examples will be considered for inclusion in a planned hard-copy publication.

We welcome unstructured stories and will extract the relevant organisational solutions for the database and website.

However, we would welcome even more stories that document how farmers’ organisations have coped with these tensions, and which highlight the following features:

• The context: tell us about the group’s activitiess and the problems that led them to come up with their solution.
• The mechanism: tell us about the organisational mechanisms used to resolve the tensions between group and individual interests.
• The outcome: what was the result of the introduction of the mechanism? How did it change the behaviour of the members, or affect the way that the group performed its functions and activities?
• An evaluation: would you recommend this solution to other farmers’ organisations? Are there any preconditions to be met in order to introduce and use this mechanism? Or, can you suggest better ways to cope with similar problems?

Join and contribute to ESFIM by submitting your stories!

Text: Giel Ton
Giel Ton works as senior researcher at the Agricultural Research Institute (LEI), Wageningen, and is co-ordinator of the ESFIM programme (www.esfim.org).
E-mail: giel.ton@esfim.org

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Most frequently, smallholders lack sufficient access to information, timely analysis and feasible, legal and technical proposals that can support their “voice”. As a result, their position is weak – especially when compared to other economic and political interest groups, such as agricultural companies, importers and exporters of commodities, agro-processors, retailers, or even consumers.

Yet smallholder farmers are important. There are millions of them worldwide, and they play a key role in household and national food supply and economic development. At the same time there is a huge concentration of poverty in rural areas.

Decision-making on agricultural and food security issues often favours the interests of consumers, and the interests of smallholders are rarely considered in regional and national discussions. This reflects the way in which food security policies are usually responses to short-term problems, rarely looking at the medium to long term development of the agriculture sector – further aggravating a situation of food instability and insecurity. Strengthening the voice of smallholders can help to re-balance these policies and interventions in ways that provide smallholders with incentives to invest in their farms and in value-adding activities, thereby structurally improving food security in both rural and urban areas.

ESFIM in Peru
 
Peru has a strong advocacy platform called CONVEAGRO, an influential alliance of farmers’ organisations, NGOs and research institutes. The majority of the involved farmers’ organisations do not engage in collective marketing services, although some of them do. This group wanted CONVEAGRO to pay more attention to economic issues and to make them more effective at advocacy. To this end they formed a sub-group that partnered with ESFIM. During the first ESFIM workshop in 2009, they identified three priority areas where research support was needed: government procurement procedures; quality requirements and internal control systems, and management challenges in collective marketing.
 
The platform undertook a critical reflection on the government procurement policies. Peru has an extensive legal framework related to government procurement from small-scale farmers. The most prominent programme is PRONAA, a national initiative that procures for nutritional programmes, which has the explicit mission of acquiring products from smallscale farmers.
 
However, reality is more complex, with middlemen brokering deals with buyers and collecting false certificates that show that farmers supplied them with the products. As a result of this and other malpractices, many farmers’ associations and cooperatives are excluded. In addition, government programmes take a long time to pay and the procedures are complicated. Farmers’ organisations find it hard to get access to capital because of their lack of collateral.
 
To analyse this, and further develop the advocacy agenda on government procurement policies, in-depth case-studies were commissioned to examine successful experiences, where organised producer groups have managed to sell their produce to government procurement programmes. These studies are now being used by CONVEAGRO and others to lobby in favour of changes that will give smallholders better access to government programmes and as learning material for organisations that want to benefit from this market.

Defining the agenda

The ESFIM programme is designed to tackle this. It seeks to reinforce the capacities of farmers’ organisations to articulate their members’ needs and interests, through a process of collaborative research.

The identification of specific research priorities and strategies is determined at a national level, usually through a series of participative workshops, involving key organisations and their members. These workshops are enriched with the input of government officials and NGOs, helping participants identify critical and strategic issues.

This process of setting priorities is designed to maximise learning within all the participating organisations. With funds from IFAD and the Dutch Ministry of Economic Affairs, Agriculture and Innovation, AGRINATURA and local consultants have provided research support and helped participating organisations to refine their proposals. Local research institutes and independent consultants are subcontracted by farmers’ organisations to develop the thematic issues discussed in the national workshop.

At the moment, activities are in full swing in ten countries. In the Philippines, for example, the aim is to establish an Agricultural Commodity Exchange System to improve the co-ordination mechanisms between stakeholders throughout the country.

In Benin, specific attention is being given to maize value chains, aiming to make them “more competitive, sustainable and inclusive”. The National Smallholder Farmers’ Association of Malawi is working towards improving the seed supply system. The ESFIM website (www.esfim.org) presents news and results from each of the participating countries.

Coming up

ESFIM intends to scale-out its approach to other countries, and link these national experiences in evidence-based advocacy at the regional and global level, through regional networks of farmers’ organisations.

Key findings and experiences were recently presented at the Farmers’ Forum organised by IFAD in Rome, and will be discussed extensively in an international seminar planned for mid-2012.

ESFIM wants to stimulate farmers’ organisations to exchange their experiences on advocacy strategies that empower smallholders. This exchange will not be restricted to the organisations that are working with ESFIM funding, but will also include other similar or complementary organisations, initiatives and activities.

We plan to use Farming Matters as a platform to facilitate this exchange and outreach. More news in the coming issues!

Text: Giel Ton

Giel Ton (giel.ton@wur.nl) a senior researcher in the Agricultural Research Institute (LEI), part of Wageningen UR, is the ESFIM Programme Coordinator. More information about the programme and about the participating organisations can be found online at www.esfim.org

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