Seventythree Field Notes 02: The Village Business

February 21, 2017
Dominic Elson


Linking farmers to markets needs local enterprises.

READ THE FULL ARTICLE: 73_Field Notes_FN02_Cacao-CVC_Jan17.pdf (604KB)

This latest Field Note from Seventythree explains how building ‘village entrepreneurship’ in the Cacao Farmer Centre can be the means to improve productivity and sustainability for commodities. It can also be the foundation for revitalising village economies that would otherwise be squeezed between increasing input prices on one side, and volatile commodity prices on the other. These village-level enterprises are not projects or Corporate Social Responsibility window dressing. They must be real businesses in every respect, and thus a legitimate part of the private sector.

The insights gained from this intervention, that can be applied to other commodity value chains that seek to link small rural producers to processors (from cashew nuts to seafood), are as follows:

– Programs to improve technical skills and practices among producers require local legitimacy if they are too be adopted. Sporadic training workshops do not tend to bring about behavioural change.

– Distribution of equipment or inputs may satisfy local political objectives, but has not always been effective in increasing yields or improving market access.

– Linking producers (in this case smallholders) directly to buyers may not lead to equitable partnerships, partly owing to the power disparity between the actors. A strategic intermediary, such as the CFC and the supporting CDC, can go some way to improving negotiating power, channelling assistance and responding to market signals (e.g. price, quality, delivery).

– Cooperatives may in some places be the best option for aggregation and negotiation with buyers. But in other places the local conditions may inhibit the development of cooperatives, and an entrepreneur-led model is preferable, providing the owner is accepted by the local group of farmers they seek to serve.

Where programs are ostensibly designed to help rural producers, yet focus mainly on facilitating the buyer’s access to the commodity, their effectiveness may be limited. Markets are not neutral technical entities into which a cacao smallholder or artisanal fisherman can be ‘plugged in’, as if it were like obtaining an electricity supply. On the contrary, markets are socially constructed and reflect the power structures, prejudices and inequality to be found in society at large. Therefore, the CFC method works by starting from the objective of building up local entrepreneurship, in order to incubate market actors within the local community instead of adjacent to it. The long term goal is not so much the smooth conveyance of commodities through the value chain, but is to build up the independence, integrity and skills of each node in the chain. This, in turn, is likely to be one element of a wider objective to diversify rural economies and improve resilience.