Reliable market access boosts productivity, increases incomes and strengthens food security. It can contribute to reducing poverty and hunger for producing families and their communities, if appropriate measures are taken to reduce market risks and unequal market power.
Many rural producers often face serious difficulties in accessing markets to sell their goods in the marketplace. They are constrained by their remote location, high transportation costs, limited knowledge, and the lack of business skills and an organization that could give them the bargaining power they require to interact on equal terms with other market intermediaries.
Agricultural and food product markets have changed significantly over the past 30 years. Modern value chains serving national and regional markets – particularly in urban areas – now complement traditional markets. Demand for high-value products continues to grow. All of this means more opportunities for smallholder producers, but also risks if they are pushed out of these markets.
It isn’t always easy to connect smallholders to markets, nor to ensure their produce meets market standards. Unequal distributions of power also mean small producers can earn significantly less than other actors, such as larger processors, retailers and exporters.
Selling more food at fairer prices
Increasing poor rural people’s access to markets is a top priority for IFAD. The proportion of IFAD-supported projects that include work on market access has increased dramatically over the years – from 3 per cent in 1999 to more than 75 per cent in 2014.
Better access to domestic and international markets allows small producers to reliably sell more produce, with better quality and at higher prices. This in turn encourages farmers to invest in their own businesses and increase the quantity, quality and diversity of the goods they produce.
Equitable, win-win partnerships
IFAD-supported projects work to increase greater market access and market development for the rural poor. Some of IFAD’s projects support infrastructure development to improve the physical access to markets. Others support segments of (mostly production, primary processing and marketing) or the entire value chain. These value chains are complex, involving not just producers but also input dealiers, traders, processors, retailers, and other service providers. Interventions at various links of the value chain have the potential to create income for the rural poor.
IFAD is dedicated to promoting a more systematic and pro-poor way of doing business with the private sector working in value chains. That is why we have developed the public-private-producers partnership (4P) approach, which ensures smallholder producers are equal and respected partners in value-chain partnership arrangements.
IFAD and Bangladesh invest US$92.4 million to improve livelihoods for poorest rural households in flood-prone areas
IFAD and Indonesia invest US$55 million to sustainably improve smallholder farmers` incomes and livelihoods
IFAD and Cambodia to increase smallholder farmers’ incomes by expanding market opportunities
South-South and triangular cooperation: changing lives through partnership
South-South and triangular cooperation has an enormous potential role in agriculture and rural development in developing countries, both in unlocking diverse experiences and lessons and in providing solutions to pressing development challenges.
From the cases that follow, a number of common lessons emerge. First, it is important to create a space for interaction and cross-country learning. In the Scaling up Micro-Irrigation Systems project or with the household mentoring approach, for instance, workshops and ‘writeshops’ gathered people from diverse countries who could then share their own knowledge and experiences. In such spaces, participants could compare how a similar approach or technology required certain adaptations to better fit with local cultural, social and environmental contexts, offering important lessons for future scaling up.
Sometimes individual champions can make a difference. In Madagascar, the project design for a public/private partnership improved drastically when an IFAD consultant with similar experience in another country became involved. In this case, it was also an ‘unexpected outcome’, as the innovation came from a replacement for the regular consultant, who had broken his foot …. So even through small staff changes, knowledge of a complementary innovation from another country can have a big impact.
Rural Development Report 2016: Fostering inclusive rural transformation
The 2016 Rural Development Report focuses on inclusive rural transformation as a central element of the global efforts to eliminate poverty and hunger, and build inclusive and sustainable societies for all. It analyses global, regional and national pathways of rural transformation, and suggests four categories into which most countries and regions fall, each with distinct objectives for rural development strategies to promote inclusive rural transformation: to adapt, to amplify, to accelerate, and a combination of them.
How to do note: Public-private-producer partnerships (4Ps) in Agricultural Value Chains
This HTDN provides guidance for project design teams on how to design a 4P component and how to support the implementation of 4Ps within IFAD-funded projects.
It builds on findings and lessons learned from previous IFAD-supported projects, as summarized in the 2013 report, IFAD and Public-Private Partnerships: Selected Project Experiences, and the Institute of Development Studies (IDS)/IFAD publication, Brokering Development: Enabling Factors for Public-Private-Producer Partnerships in Agricultural Value Chains.
This HTDN begins by defining the 4P and related concepts and then analyses the basic elements that need to be considered when designing and establishing a 4P followed by recommendations for the implementation of 4Ps.