A MArket FAcilitAtor’s Guide to

Participatory Agroenterprise Development

Shaun Ferris, Elly Kaganzi, Rupert Best, Carlos Ostertag, Mark Lundy, and Tiago Wandschneider A MArket FAcilitAtor’s Guide to

Participatory Agroenterprise Development

Shaun Ferris, Elly Kaganzi, Rupert Best, Carlos Ostertag, Mark Lundy, and Tiago Wandschneider i

Copyright © 2006 Centro Internacional de Agricultura Tropical Reprint edition published by Catholic Relief Services, Baltimore, 2008.

ISBN 0-945356-36-6

First edition published 2006 by

Centro Internacional de Agricultura Tropical

(International Centre for Tropical Agriculture)

Cali, Colombia

ISBN 958-694-083-7

For information, address

Catholic Relief Services

228 W. Lexington St.

Baltimore MD 20201

USA

www.crs.org

AGROVOC descriptors in English:

1. Agroindustrial sector. 2. Development projects. 3 Small farms. 4. Planning.

5. Partnerships. 6. Community involvement. 7. Marketing. 8. Market research.

9. Supply balance. 10. Teaching materials. 11. Latin America. 12. Africa. 13. Asia.

Local descriptors in English:

1. Agroindustry. 2. Participatory research.

AGROVOC descriptors in Spanish:

1. Sector agroindustrial. 2. Proyectos de dessarrollo. 3 Explotación en pequeña escala.

4. Planificación. 5. Coparticipación. 6. Participación comunitaria. 7. Mercadeo.

8. Investigación de mercados. 9. Oferta y demanda. 10. Materiales de enseñanza.

11. América Latina. 12. África. 13. Asia.

Local descriptors in English:

1. Agroindustria. 2. Investigación participativa.

This report is made possible by the generous support of the American People through the United States Agency for International Development (USAID) Bureau for Democracy, Conflict, and Humanitarian Assistance’s Office of Food for Peace under the terms of Catholic Relief Services’ Institutional Capacity Building Grant Award Number AFP-A-00-03-00015-00. The contents do not necessarily reflect the views of USAID or the United States Government.

ii

Contents

Page

Preface

ix

Acknowledgments

x

Introduction and Background to the Guide

1

Purpose

1

Objectives

1

Who Should Use the Guide?

2

How to Use the Guide

2

THE THEORY

Section 1. Overview of the Participatory Agroenterprise Development Approach 5

Introduction

5

Why Use this Approach?

7

Key Features of the Participatory Agroenterprise Development Approach 7

Entry Points for Starting an Agroenterprise Development Process 9

Section 2. Marketing Basics

11

Why Is Marketing Important?

11

What Is Marketing?

11

Supply and Demand

13

The Marketing Mix

13

Market Participants and Intermediaries

13

Types of Market

15

Marketing Functions and Services

15

Business Development Services (BDS)

17

Market Drivers and Trends

18

The Marketing Context for Small Farmers

20

Section 3. Institutional Preparation and Planning

22

Rapid Reconnaissance Survey

22

Assessing Levels of “In-House” Skills for Agroenterprise and Market Facilitation 23

Selecting Partner Organisations

23

Example of Partners

24

Evaluating Farmer Group Organisations

25

Networking and Establishing Ground Rules

26

Client Support and Provision of Physical and Financial Assets 27

Exit Strategies

30

Section 4. Tools for Working with a Community

34

Working with the Community

34

The Philosophy behind Community Engagement

34

Gender Sensitivity and Cultural Values

34

Getting to Know the Community

35

Participatory Tools for Community Diagnosis and Market Planning 36

Evaluating the “Entrepreneurial Spirit” or Finding the “Sparky People”

47

Summary

49

iii

A Market Facilitator’s Guide to Participatory Agroenterprise Development Page

THE PRACTICAL WORK

Section 5. Management and Partner Selection

53

Management and Partners

53

Additional Tools for Selecting Enterprise or Farmer Groups 55

Identifying Leadership Qualities

55

Farmer Groups

55

Farmer or Product Clusters

56

Section 6. Project Site Selection and Evaluation

57

Project Site Resource Assessment

57

Community Action Planning (Visioning)

58

Forming Committees

60

Visioning to Develop a Common Goal for the Future

63

Section 7. Product Screening and Market Opportunity Identification 65

Options for Product Screening

65

Importance of Community Participation

66

Strategy 1: Screening “Existing” Products

67

Strategy 2: Surveying to Identify Market Opportunities

69

Market Survey Results

71

The Dynamic Nature of Markets

71

Section 8. Selecting the Best Product or Enterprise Option with the Clients 72

Establishing Evaluation Criteria

72

Selecting the Most Viable Agroenterprises from a List of Options 73

Why Learning these Skills Is Important

76

Section 9. Market Chain Analysis

78

Introduction

78

Sub-sectors and Market Chains

79

A Method for Rapid Market Analysis

81

Using the Market Survey Results to Develop a Proactive Enterprise Plan 86

Section 10. Developing an Enterprise or Intervention Action Plan 87

Designing Action Plans for Selected Enterprise Interventions 87

Detailed Enterprise Planning

89

Business Checklist

94

Policy Interventions

94

Adapting to Risk

94

Taking the Plunge

96

Section 11. Evaluating Progress and Scaling Up

98

Monitoring and Evaluation

98

Planning the Next Enterprise

100

Next Steps for the Market Facilitator

100

Monitoring the Rural Agroenterprise Development Project

101

iv

Contents

Page

Appendices

105

1. Criteria for Selecting Communities

107

2. Assessing the Capacity and Competence of Agroenterprise Personnel 108

3. Farmer Group Competence Checklist

109

4. A Summary Description of “Appreciative Inquiry”

110

5. A Suggested Outline of a Project Site Resource Assessment Report 111

6. An Example of a Questionnaire for Identifying Market Opportunities 113

7. A Report Outline for the Market Opportunities Identification Study 114

8. Checklist for a Market Chain or Sub-sector Analysis

115

9. A Summary Sheet for Market Interviews: An Example from a Banana Survey 117

10. An Outline for Writing Up a Market Chain Report

118

Glossary

121

Bibliography

129

v

A Market Facilitator’s Guide to Participatory Agroenterprise Development Page

List of Figures

1. Flow chart of key stages in the participatory agroenterprise development approach 6

2. Market chain showing actors, functions and services

14

3. Using the Ansoff matrix for risk assessment

21

4A and 4B. The River Code scene 1 “Bearing the load”

37

4C. The River Code scene 2 “Let’s work together”

38

4D. The River Code scene 3 “Crossing together”

38

4E. The River Code scene 4 “Together we can succeed”

39

5. Community resource map developed for Tororo Village, Uganda 40

6. Market map, existing groundnut marketing, Embu District, Kenya 45

7. Market map, desired marketing for groundnut in Embu

46

8. Partnerships and links in the working group

54

9. Steps in arranging a market survey

68

10. Results of a market survey conducted by farmers in Uganda 69

11. Selecting market options according to three levels of selection or discard 73

12. An example of a production matrix

74

13. An example of a marketing matrix

75

14. Profitability analysis: “gross margin” for beans in Uganda 76

15. Idealised scheme of a sub-sector and its many market chains 79

16. Links in the market chain and business support services 80

17. Market chains for local, domestic and international products 83

18. A checklist questionnaire and the key informants

84

19. Prioritising critical points in the market chain and activities to address them 88

20. Wealth or enterprise transitions for clients in agroenterprise development 104

List of Tables

1. The marketing mix: product, price, place, and promotion 14

2. Transitional exit strategy with a 5 to10-year time frame 32

3. Cropping calendar for various products and poverty indicators 41

4. Importance of crops for income within the group

42

5. Historical calendar for Mbuule village, Tanzania

43

6. Institutional inventory of services received by Ttaago village, Tanzania 44

7. Activity options to shift from today’s situation to a desired state 47

8. Tool kit for participatory diagnosis and market mapping 50

9. Checklist for analysing a project site for agroenterprise development 58

10. Agroenterprise checklist at community level

59

11. Suggested organogram of posts within a farmer group

61

12. An example of an organogram of posts within a farmer group 62

13. Visioning from current to a desired state, Katamata Group, Tanzania 64

14. Matrix format to plan which data to collect at which point of sale in the chain 70

15. A matrix of the final evaluation and selection of income-generating activities 77

16. An example list of prioritised interventions and associated chain actors 88

17. Actions to be taken at specific points in the market chain 88

18. Financial requirements, sources and activity sequencing matrix 89

19. General action plan for Nyabyumba Farmers Group enterprise, Uganda 91

20. Detailed “portion only” of action plan for the Nyabyumba Farmers Group, Uganda 93

21. Business checklist to review enterprise plan

95

22. Changes in horizontal and vertical linkages

103

23. Product value market type assessment matrix

103

24. Example of capacity framework for evaluation of process performance 103

vi

Page

List of Boxes

1. An example partnership between CIAT and Africare, Kabale, Uganda 25

2. How financial conditions affect planning

29

3. Examples of committees in Kware Vegetable Growers Group, Hai District, Tanzania 62

4. Case study: Enterprise selection by the Katamata Farmers Group, Tororo, Uganda 77

5. Enterprise design with the Nyabyumba Farmers Group, Kabale District, Uganda 97

vii

Preface

This Market Facilitator’s Guide is a product

options. To date, the titles in the CIAT

of the experiences and lessons learned

Agroenterprise “good practice guide” series

while implementing agroenterprise projects in

include:

eastern and southern Africa. The Guide is based

on a resource-to-consumption framework, which

· Strategy Paper: A Participatory and Area-

is the central theme of the “enabling rural

based Approach to Rural Agroenterprise

innovation” (ERI) approach for rural

Development.

development. This approach seeks to empower

· A Guide to Developing Partnerships, Area-

farmer groups with the necessary skills to make

based Resource Assessment and Planning

informed decisions for their economic

Together.

development, based on an analysis of their

· A Guide to Identifying Market Opportunities

surroundings, assets and skills. The methodology

for Smallholder Producers.

also aims for outcomes that are equitable, gender

· Strategies to Improve the Competitiveness of

focused and participatory.

Market Chains for Smallholder Producers.

· Evaluating and Strengthening Rural Business

The central figure in this Guide is the “market

Development Services.

facilitator”, whose role is to identify market

A Market Facilitator’s Guide to

·

opportunities with representatives from farmer

Participatory Agroenterprise Development.

groups and guide the groups through a process

· Collective Marketing for Smallholder

of market analysis and business planning to

Producers.

develop a new agroenterprise. The Guide advises

· A Guide to Rapid Market Appraisals to

on issues such as project site selection,

Support Smallholder Agroenterprise

partnership development, community

Development.

involvement, participatory tools for market

· A Guide to Policy Analysis for Smallholder

opportunity identification, enterprise selection,

Agroenterprise Development and Advocacy.

and methods for agroenterprise design and

development.

Note to users

Service providers should read the guides in their

This Guide is one of a series of agroenterprise

entirety, to absorb the ideas and concepts prior

publications developed by CIAT’s Rural

to starting the fieldwork. Our experience has

Agroenterprise Development project. The aim of

shown that best results are attained when these

this set of methods and tools is to enable service

processes are not implemented in a mechanical

providers to empower rural communities to

manner; rather that the principles are interpreted

engage more effectively in the marketplace so as

and adapted to local conditions based on the

to increase their income, their capacity to

marketing environment, available resources, and

innovate and ultimately improve their livelihood

anticipated scale of implementation.

Discover your Innovation

ix

A Market Facilitator’s Guide to Participatory Agroenterprise Development Acknowledgments

The CIAT team would like to thank the many

President/General Manager of Normin Corp,

partner institutions, farmer groups, traders and

Mindanao, the Philippines, for her support with

particularly the market facilitators that worked

business plans.

alongside CIAT’s Enabling Rural Innovation

team since 1998 and contributed towards

We give our special thanks to CIDA, DGDC and

developing this guide to the agroenterprise

DFID for their logistic and financial support

development approach.

over many years which have enabled partners

to learn, discover and create this body of

Particular thanks go to the Catholic Relief

knowledge.

Services for their increasing support to this

work, Africare, NARO’s Bulindi Agricultural

Thanks also go to USAID and CRS for providing

Research and Development Centre, Hoima

funds to publish these documents.

District Local Government, Hoima District

Farmers Association, and Africa2000 Network,

Technical and language editing of this

all in Uganda; Concern Universal, Plan Malawi,

document was done by Libby Finney and

Department of Agricultural Research Services

Elizabeth McAdam.

(DARS), Lilongwe Agricultural Development

Division (ADD), in Malawi; and Traditional

A special word of thanks goes to Joel Opio in

Irrigation and Environmental Development

Uganda for his pencil drawings. These simple

Organisation (TIP), District Agricultural and

illustrations faithfully depict the different

Livestock Development Office (DALDO), Faida

stages of participatory agroenterprise

MaLi, World Vision, Sanya Area Development

development and capture the cultural

Programme (SADP), and Usambara Lishe Trust

background of the farmer groups with whom we

(ULT), in Tanzania.

worked.

We also thank Joan C. Uy, Chair of the Resource

Mobilisation Committee of Normin Veggies and

x

Introduction and Background to the Guide

Working with smallholder farmers to design and

the laws of supply and demand, rapid

set up new income-generating enterprise

oversupply in the market leads to rapidly falling

opportunities is complex, taking time and

prices and, in the long run, reduced income for

dedication to be successful. However, it can also

farmers.

be highly rewarding, as it touches on crucial

social issues such as building trust, learning

In other words, instead of producing what the

new skills and, when done well, produces many

market wants, farmers and their facilitators

benefits for the community.

often expend energy on finding markets for what

is produced. Lack of attention to markets

For service providers, the agroenterprise

frequently results in farmers being “stuck” with

approach offers not only a method for

unwanted produce that they are forced to sell at

addressing rural poverty, but also the

very low prices because of the market’s lack of

opportunity of finding ways of stimulating

interest.

demand for technical and social innovations. It

helps identify areas that require support from

This Guide seeks to promote a simple

research, finance, and local policy. As such, this

methodology that service providers can use to

agroenterprise approach can provide the

help farmer groups and local entrepreneurs to

tantalising “win–win” situation for service

produce goods and services based on market

providers and their beneficiaries.`

demand. It deals specifically with methods for

identifying and evaluating market opportunities

Purpose

and for selecting the most attractive business

options a given community may have.

Traditionally, agricultural support from service

providers has focused on increasing production.

Objectives

This approach works well if the primary concern

is food security and if a ready buyer is available

This manual’s overall objective is to guide

for any surpluses. Unfortunately, increasing

market facilitators and other service providers

supply often only works for a limited period,

through a participatory process for identifying

with local markets becoming quickly

market opportunities and developing viable

oversupplied as production increases. Following

agroenterprises that are sustainable and which

1

A Market Facilitator’s Guide to Participatory Agroenterprise Development improve the incomes of rural farmers,

development. The order of tasks is planned so

processors, and traders. Specifically, the

that results obtained from one section are used

manual aims to:

as the starting point for the next section. The

sections are:

• Provide facilitators with skills in articipatory

methods that will enable them to help

1. Overview of the participatory agroenterprise

farmers engage with markets.

development approach.

• Guide in market identification and selection

2. Marketing basics.

of attractive enterprise options, based on

3. Institutional preparation and planning.

information gathered from the market and

4. Tools for working with a community.

market chain.

5. Management, and partner selection.

• Build agroenterprise skills within the

6. Project site selection and evaluation.

community so that groups can continue to

7. Product screening and market opportunity

effectively engage with the marketplace in

identification.

the future.

8. Selecting the best product or enterprise

option with the clients.

Who Should Use the Guide?

9. Market chain analysis.

10. Developing an enterprise or intervention

The Guide is intended for use by any institution

action plan.

interested in building staff capacity in market

11. Evaluating progress and scaling up.

facilitation. The manual focuses on how a

market facilitator can help development agents

Although the Guide describes a systematic

within a rural community and farmer groups

process for agroenterprise development and is

assess market opportunities and develop new

designed to be followed from start to finish, the

agroenterprises. The market facilitator may be

method should not be considered as “fail-safe”.

an extension officer in agriculture, animal

Any type of business is inherently risky and the

husbandry, and fisheries; a community

user should therefore adapt and apply the

development officer; or a staff member of a non-

methods according to the needs, skills, and

governmental organisation (NGO) or other

resources of local farmer groups and their

private establishments, including farmer

service providers.

groups, co-operatives, and businesses.

How to Use the Guide

The Guide is divided into sections that

correspond to key stages of agroenterprise

2

THE THEORY

Blanca

4

Overview of the Participatory Agroenterprise Development Approach SECTION 1

Overview of the Participatory Agroenterprise

Development Approach

By the end of this section, the reader should have

Together, these methods make up the

a basic understanding of the:

component parts of what is termed “an area-

based, participatory approach to rural

• Sequence of tasks in the participatory

agroenterprise development”. This approach

agroenterprise development approach.

was developed in response to demand from

• Reasons for using such an approach.

partners in agricultural development who

• Entry points for different types of service

wanted a systematic method for shifting from a

providers and clients.

food security strategy that focused on

production to a market-oriented approach that

Introduction

emphasises income generation and market

demand.

The Guide describes a strategy developed by

CIAT’s Rural Agroenterprise Development

In this Guide, the term agroenterprise refers to a (RAeD) project to address the entrepreneurial

business venture, typically small-scale, that can

development needs of institutions that support

be undertaken either on-farm, or a service that

rural communities. The methods, tools, and

can be used to support other businesses. The

learning approaches described here are the

agroenterprise is generally focused on groups of

result of many collaborative projects undertaken

actors at the producer level and individual

over the last 10 years in Latin America, Africa,

actors that provide services within the market

and Asia. The implementation draws heavily on

chain.

experiences with partners in Africa and

highlights methods that can assist a facilitating

Examples of agroenterprises include a crop or

institute to focus on realising new business

livestock product which is produced by a farmer

opportunities for rural communities. The basic

group and sold into an identified market; a

steps in the strategy are shown in Figure 1.

product which is processed in some fashion to

5

A Market Facilitator’s Guide to Participatory Agroenterprise Development Identify site

Form working group

Area-based resource assessment

Select market options and interventions

(classify market options according to

risk levels)

Strategy 1

Strategy 2

Lower risk, short term

Higher risk, longer term

Select the most promising, existing,

Market opportunity identification

higher income product(s)

( diversification)

( market penetration)

Market visits

Market chain analysis

Intervention design and implementation

Assess probability of intervention and scale up

Evaluate process performance and impact

Knowledge management and policy messages

Activities:

Working group

Market team

Intervention group

Figure 1. Flow chart of key stages in the participatory agroenterprise development approach.

6

Overview of the Participatory Agroenterprise Development Approach add value to a primary product, such as cereal

2. Achieve economies of scale through

products that are bulked and graded, cassava

collective action for production and

that has been processed into dried chips, or milk

marketing.

processed into cheese for sale into an identified

3. Gain access to business development

market. In the service area examples include,

services that improve access to higher value

providing a service such as the provision of

and/or more competitive markets and

inputs, processing (such as a shelling service to

provide employment opportunities.

groundnut producers) and advisory services such

4. Diversify into higher value crops and/or

as supporting the marketing of farmer group

livestock that are linked to growth markets.

produce.

5. Add value to products by changing farming

practices to access higher income markets,

The participatory agroenterprise development

enhance product quality, and incorporate

approach provides the user with a stepwise

processing activities.

procedure for introducing new marketing

6. Enter new types of business agreements

techniques to a rural community. (Criteria for

based on forward sales (contract farming) or

selecting communities are given in Appendix 1).

“appellation1” that “lock in” buyers over

We fully appreciate the challenges in changing

longer time periods at advantageous rates.

the habits of farming communities, particularly

7. Find off-farm work options or migrate to

poor communities. Therefore, any agency

more lucrative employment areas such as

considering this approach should carefully

urban centres.

consider the time and resources required. The

problems associated with marketing and setting

The agroenterprise methods developed by RAeD

up new organisational structures pose serious

have incorporated these basic marketing and

challenges to poor farming communities,

business principles in a stepwise process that

particularly those who have been accustomed to

facilitates market engagement. The approach is

producing only basic food staples for food

(1) non-commodity specific, (2) supports a

security.

balance between on- and off-farm interventions,

and (3) supports collective action,

Why Use this Approach?

diversification, and “added value” as viable

pathways out of poverty.

The economic prospects of many rural

communities in many parts of the developing

Key Features of the Participatory

world, particularly in Africa, are not improving.

Despite considerable gains in productivity of food

Agroenterprise Development

crops, the income of farm households is, in most

Approach

cases, falling over time because of a combination

Defined geographical area

of weak local economic growth and increasing

The approach focuses on improving the

competition from global markets.

livelihoods of beneficiaries within a defined

geographical area2. Product selection and

Unfortunately, the real price or value of most

intervention design are based on expected

agricultural commodities has declined over the

employment and income impact in a targeted

last 2 to 3 decades. Smallholder farmers are

region or area. While the approach aims to have

facing increasing competition from medium-sized

the greatest impact on community-based

to large-scale farmers. As such, most small-

agroenterprises, it also takes into account the

farming families are stuck on a production

development of business services and changes

“treadmill”, whereby many millions of individual

in local policy and regulatory frameworks. The

farmers produce the same undifferentiated

geographical focus of this approach also aims to

commodities, using traditional, low-input

systems. Inevitably, these farmers are price

takers in the market and their food-security

approach, which focuses on always increasing

1. Appellation is a system by which a product is

differentiated on the market based on its place or

production, can depress the market situation

origin, specific method of production or a

even further. The options small farmers have to

combination of product qualities such as variety,

confront this adverse market situation are to:

year, production method and place of origin. Wine is

a good example of a product that uses appellation to

1.

distinguish products and thereby add value based on

Improve the competitiveness of their

a specific variety of grape, year of production and

products in local, national, and regional

location of vineyard.

markets.

2. Geographical area or territory.

7

A Market Facilitator’s Guide to Participatory Agroenterprise Development enhance monitoring, and to facilitate

resources to see practical ways of improving

institutionalising and scaling up the process

their farming and marketing practices.

with local partners.

A stepwise approach

Participatory

The agroenterprise method comprises several

The approach is participatory. At the project

steps, which can be aggregated into activities

level, this approach aims to establish a “working

implemented by groups of actors. Three key

group” of stakeholders who share a common

areas of activity are (1) developing project site

goal in improving business activities. This

partnerships and resource assessment,

informal group comprises development

(2) market analysis, and (3) intervention design,

agencies, public and private service providers,

implementation, and scaling up. These activities

traders, and entrepreneurs. At the community

are led by members of the working group,

level, the approach aims to empower farmer

market survey team, and enterprise groups,

groups and local service providers in developing

respectively.

new agroenterprise options. These stakeholders

can participate at different stages of the

Scaleable

approach but all influence the decisions that

A major feature of this method is the ability to

are made in planning, experimenting,

scale up from successful pilot work with

implementing, and scaling up the interventions.

support from partners. Interventions should be

biased towards those that can reach larger

Growth market focus

numbers of beneficiaries at the outset, as it is

This approach is market-led, not production-

easier to scale up from a larger starting point

led. The objective is to enable enterprises and

such as many farmer groups than from a

entrepreneurs in a given area to identify and

limited pool of beneficiaries.

access remunerative opportunities for existing

or new products in existing or new markets. The

Encouraging continuous innovation

approach focuses on interventions with

Market engagement is a continuous process

products having growth potential or on

rather than a one-off exercise. Markets are

consumer groups with increasing income.

dynamic and agroenterprises will be constantly

confronted by new challenges and

“Thinking outside the farm”

opportunities. The agroenterprise approach can

The approach encourages partners and

enable local stakeholders to follow up on new

stakeholders to “think outside the farm”. This

developments and identify appropriate

concept underlies the approach’s focus on the

strategies and interventions. Mainstreaming the

market chain, thus supporting interventions

approach within local planning and policy

that address critical constraints at different

processes is a useful way of enabling local

points along the market chain or address

development agencies to assist agroenterprises

market chain efficiency through better access to

in tackling emerging challenges, when direct

business support services. The agroenterprise

project work is phased out.

approach therefore aims to implement

interventions that achieve the greatest impact

Builds skills and empowering communities

for a given investment. Market-based

The approach builds on the existing skills and

interventions include collective action,

resources of local communities, including

facilitating market linkages, strengthening local

farmers, processors, and traders. The goal is to

business services, and disseminating improved

build capacity in local service providers, farmer

production approaches and other innovations.

groups and local entrepreneurs so that the

community can benefit from being involved in

Fostering business links

the approach over the long-term. The approach

Many development approaches focus entirely on

does not promote the supply of services from

one type of market chain actor: the resource-

development agencies, but the facilitation and

poor smallholders. While farmers are important

strengthening of local actors in the private

business partners, market linkage may be more

sector.

effective when undertaken alongside or in

partnership with larger farmers or by linking

Accommodating minority issues

with larger traders or processors. Such links

Agroenterprise is gender neutral in the sense

will give buyers greater confidence and will also

that markets, in most cases, accommodate

provide a learning ground for farmers with fewer

everyone. However, this approach can be

8

Overview of the Participatory Agroenterprise Development Approach adapted to support the specific needs of

4. Whether decisions have been made at a

women’s groups and address the needs of

project’s outset on the products and/or

vulnerable groups such as the youth, the old,

market chains to be supported throughout

and people living with HIV/AIDS.

the project.

5. Level of intervention at the outset, that is,

Flexible but rigorous

will the project start by supporting a few

Agroenterprise activities are complicated social

(1–10) or many (20–50+) farmer groups?

activities that need to be facilitated by skilled

6. Financial resources, manpower, and time

staff with motivated partners. In all cases, the

available to undertake the task.

approach requires that methods and

institutional arrangements be adapted to local

These issues need to be fully discussed at the

conditions and that roles and responsibilities be

outset of an agroenterprise development

agreed on at the outset. Planning and

process, so that partners are clear about their

investment should be client-led and

roles and responsibilities and the targeted

performance be critically observed. Success is

communities also have clear expectations.

only possible when the agroenterprise method is

Development agents have different capacities

applied with both effort and due

and skills, and rural communities are also

professionalism.

highly heterogeneous in terms of social classes,

asset base, level of organisation, agroenterprise

A long-term framework

capacity, and access to both markets and

Our experience shows that for this approach to

support services. This mix of skills and

be effective, service providers and farmer groups

opportunities means that agroenterprise

need to acquire new skills and different ways of

activities must be tailored to local conditions

doing business. This change requires time and

and that a project can start at various entry

finances, which is why we recommend the

points in the process. The following section

approach is first introduced with a long-term

describes a range of different entry points that

capacity-building programme, typically for at

apply to different types of client groups and

least 2 to 4 years, depending on local capacities

appropriate strategies.

and market access. However, successfully

integrating all the components of an

Entry point 1: Starting out

agroenterprise development process in a

This may be the entry point for market

shocked society may take 8 to 10 years. Such

facilitators who are using an agroenterprise

time is needed to establish numerous farmer

development approach for the first time, or who

groups and then link them into second-order

are working with farmers that are not well

associations and strengthen local business

organised. Farmers in this category tend to

support services so that they have sufficient

operate as individuals, occasionally selling

economies of scale to compete on a long-term

small amounts of surplus produce to the

commercial basis in the marketplace.

market. Key issues to take into consideration

are (1) sensitising partners in the selected area

Cautionary note

that a project will be piloting an agroenterprise

In certain locations, for example, areas suffering

development approach, (2) organising farmers

from civil insecurity or chronic food insecurity,

into functional groups, and (3) initiating the

this method may not be appropriate.

approach through a pilot project, using existing

income-oriented products grown by most

Entry Points for Starting an

farmers in the targeted community or area.

Agroenterprise Development Process

The main task for the approach is to conduct a

The entry point for the agroenterprise

pilot enterprise so that both the market

development approach is flexible, depending on

facilitator and farmer groups can better

factors such as:

understand how marketing works and how

farmers can work together. The focus of this

1. The in-house agroenterprise development

entry point is to (1) improve the farmers’

capacity of the lead organisation involved in

organisational skills and enable them to market

a new project.

existing products more effectively, (2) find

2. Skills, asset base, and level of organisation

development partners who will work towards a

of the intended client or beneficiary group.

common goal, and (3) gain in-house competence

3. The level of participation.

in agroenterprise activities.

9

A Market Facilitator’s Guide to Participatory Agroenterprise Development

Entry point 2: More organised farmers

workshops. Whatever the process, if a product

This entry point is for farmer groups who are

has been pre-selected, then the starting point

more organised, working in groups that sell

will be a more detailed market chain study of

products collectively and/or on a regular basis.

that product. This will enable the market

For this type of farmers or groups, the

facilitator and farmer group to focus on a

intervention should focus on diversification or

particular market chain, to supply a local,

finding ways to add value to their produce. If

district, national or specialised market option.

the group has a strong opinion on a new

The market facilitator may also need to work on

product in which to invest next, then the

improving farmer group organisation to supply

marketing process should proceed to a market

a given market and also initiating links with

study of that product. If the group wants to

other service providers.

evaluate new products, it should proceed with a

participatory market opportunities identification

Entry point 5: Existing buyer or contract

(MOI) study. The MOI will provide a list of new

farming

opportunities to assess in more detail through

Sometimes, an entrepreneur, trading company,

market-chain analysis and enterprise design. At

or new type of “market linkage” NGO will

the same time, the market facilitator should

approach a service provider and ask for support

also work to strengthen business and market

in supplying a particular product or commodity.

linkage skills. The group should also initiate

In such a case, higher order market actors will

savings schemes and maintain regular record

drive the marketing process. The service

keeping in preparation for linking with financial

provider’s role will then be to work with farmer

services.

groups to design enterprise plans for the

competitive supply of the identified product.

Entry point 3: Well-organised farmers

This process will rapidly move from design to

In this case, farmers are working in groups and

implementation. The service provider will focus

adding value to a range of low and higher value

on building farmer organisation and seeking

products. The focus of this entry point is to

support from specialised service providers to

(1) improve competitiveness of existing higher

evaluate new technical innovations to increase

value options; (2) increase scale of operations,

the competitiveness of the supply.

including linking with other larger organisations

or farmer groups; (3) evaluate new opportunities

Entry point 6: Support for business

for higher value options; (4) strengthen the

development services

groups’ business skills; and (5) increase links

Sometimes, discussions with farmer groups and

with more specialised service providers or

traders, or findings from the marketing studies

higher order market-chain entrepreneurs. The

will reveal that the most important constraint

process should begin with a business plan of

for improving a marketing chain is to acquire

the existing product portfolio and a review of its

access to a particular business support service.

financial management. The market facilitator in

This service may be related to inputs, value

this case advises on ways to optimise existing

addition, storage, or market linkage. In this

activities, seeks out new higher value options,

case, the market facilitator should work with

and then proceeds to strengthen financial skills

other players in the market chain or local

and improve links to financial and marketing

entrepreneurs to develop or access the service

and/or business services.

that will address the key constraint. By working

at a higher level in the market chain, this type

Entry point 4: Pre-selected commodity

of intervention aims to have greater benefit for

Development projects often start with a plan to

many lower order chain actors such as farmers

invest in a particular commodity or product.

for a limited investment. The market facilitator

The selection of a product is often part of a

will need to determine the most cost-effective

pre-project design phase that reviews

way of enhancing specific service provision and

macroeconomic data to prioritise products, or

work to strengthen the business unit at this

select products based on stakeholder

level.

10

SECTION 2

Marketing Basics

In this section, the reader is taken through a

To be successful in the marketplace, rural

review of basic marketing principles.

communities need to adopt new technologies,

access new types of information, and gain new

The information within this section is essential for

enterprise skills so that they are in a position to

service providers who have limited knowledge of

evaluate and invest in new opportunities as they

market economics and business strategies.

arise. In the future, successful smallholder

farmers will be those who can produce quality

For market facilitators who do have a good

products and find ways of adding value to these

grounding, this section provides a reference for

primary goods. In most cases, smallholders will

discussion with client groups and other partners.

not be able to compete as individuals, and will

need to bulk their commodities with other

Why Is Marketing Important?

farmers through group marketing. As farmer

groups gain new marketing skills, they will also

In today’s commercial world, success in the

need to take on new contractual arrangements to

marketplace is becoming increasingly important

ensure a more consistent supply of goods to a

for livelihood development. Rural communities

known buyer at a pre-arranged quality, volume,

can no longer rely on governments to provide

and price.

subsidies for agricultural goods and services.

Increasing competition across the world means

To enable rural communities achieve these goals,

that farmers are not just competing with their

the next generation of service providers also need

neighbours for local markets, but also with

to acquire marketing and agroenterprise skills.

farmers from other countries. Within this

environment, understanding how markets

What Is Marketing?

function and how to engage in the marketplace

is a vital skill. Such skill comprises an ability to

Marketing can be described as the “delivery of

identify, quantify, and meet the needs, wants,

customer satisfaction at a profit”. However, the

and desires of consumers, that is, of those

marketing process has many elements, and as

people who create market demand.

consumers become more discerning, marketing

11

A Market Facilitator’s Guide to Participatory Agroenterprise Development develops into a more sophisticated area of

If we consider products and services as benefits,

research and social interaction. For the last

consumers will choose those products and

50 years, attitudes towards marketing have

services that provide them with the best value for

changed dramatically, as the business

money. Value is based on an individual’s

community changed from focusing on production

estimation of satisfaction; many degrees of

to product quality, to sales, to marketing and,

fulfilment exist when making a purchase.

most recently, to social marketing. This rapid

Decisions to buy a given product are based on a

evolution has been driven by the need for

multitude of cultural, ethical, moral, weather,

companies to remain competitive in the

and wealth-related reasons. Aiming to make our

marketplace. Being competitive is based on the

choices easier, producers and marketing agents

ability to attract new customers with the promise

have developed a mesmerising range of quality,

of better value and retain existing customers by

price, and emotionally loaded options.

delivering satisfaction. The role of the marketing

group is therefore not only to capture today “our

For example, when buying what seems to be an

hearts and minds”, but also to identify what we

innocuous pair of sports shoes, consumers face

will need tomorrow.

an incredible range of options in the marketplace.

Some consumers may buy a simple pair of shoes

Because of the increasing exposure to marketing

that will enable them to play sports at low cost,

and its concerted effort to sell things to people,

let’s say $10. Others will select the latest fashion

widely differing views exist on marketing. Some

of a world brand in sports shoes, endorsed by a

people view marketing as “an essential

world-renowned sports star for $150. The brand

component of sound business practice”, whereas

shoes apparently offer more than the cheap shoes

others consider marketing as “a fraudulent

such as ultimate levels of technical protection for

activity used to persuade people to buy goods

the heel, instep, and toes, foot comfort, luxurious

they don’t need at inflated prices”. Like it or not,

materials, and other less tangible features that

marketing is an evermore pervasive element of

reflect highly valued aspects of style, glamour,

our daily lives and being successful at marketing

and status. Marketing is therefore based around

products is crucial to developing a sustainable

the idea of providing a range of products with

business or agroenterprise.

different value-to-price levels that match

consumers’ needs, desires, and ability to pay.

According to Kotler et al. (2002), marketing can

be defined as “a social and managerial process

Given this modern and globalised view of

by which individuals and groups obtain what

marketing, how does this relate to smallholder

they need and want through creating and

farmers located in remote rural settings? At first

exchanging products and value with others”. The

glance, not much, but when we analyse the

process of marketing is therefore finding ways to

situation of smallholder farmers, we can

provide people with products and services that

recognise that they have all the same elements of

they either need to function normally or desire to

a commercial company. Farmers have valuable

improve their well being.

assets such as land and location. They know

what is grown or produced in their locality and

Marketing aims to service three distinct

can access labour, albeit their own and their

categories of need. The first refers to basic

family’s. They produce a range of goods and

physical needs such as food, clothing, shelter,

services for others in the community and know

and safety; the second to social needs, which

what community members like in general and

relate to belonging and affection; and the third to

what they can afford.

individual needs, which relate to satisfying

yearnings for knowledge and self-expression. The

However difficult their situation in regard to

last category includes wants or desires, which go

infrastructure, social organisation, remoteness

beyond the immediate needs for basic human

from markets, and income levels, all farmers sell operations and social interaction. Desires are an

a proportion of their produce and many offer

unlimited set of perceived needs that people seek

services to others. Therefore, all farmers have a

to satisfy through ideas, products, and services.

sales and marketing challenge and as such can

benefit from increasing their knowledge about

Whichever category, the consequences are

marketing and how to engage the marketplace.

similar in the marketplace, in that, when wants

are supported by the ability to pay, these wants

As many of these ideas may be abstract to the

can be translated into market demand.

farmers on first hearing about them, the service

12

Marketing Basics

provider needs to adapt the marketing approach

In the participatory agroenterprise development

so that selected farmer groups can, with

approach, the market facilitator will guide farmer

practice, gain marketing skills to sell their goods

groups through a series of activities that will

and services more profitably and on a more

collect information from the market that is

sustainable basis.

related to market demand, market supply, and

how the four marketing variables can be used to

Given this introduction, the first rule of

increase sales and revenue. Readers who are

marketing for small-scale farmers is to:

interested in more detailed information on this

marketing topic should consult marketing

Produce what you can sell, instead of

textbooks such as those by Kotler et al. (2002).

trying to sell what you have produced

Market Participants and

This is a simple rule, but to achieve this in the

Intermediaries

agricultural context means that farmer groups

and service providers need to know what

As part of work, the market facilitator will be

consumers are demanding in the marketplace;

exposed to a number of new terms used to

how the laws of demand and supply affect prices,

describe market actors, types of markets and the

price trends, and volumes being sold; and how to

different roles and functions that people perform

interpret these laws in terms of their own market

in a market chain. Many different types of

opportunities.

participants or market actors are involved in

producing, buying, processing, selling and

Supply and Demand

receiving agriculture produce. There are also

people involved in providing services to support

• Supply: the quantity of products that

the sales of a given product. Market

producers can offer for sale.

intermediaries or “traders” are the people who

• Demand: the quantity of products that

handle a product from the time it leaves the farm

consumers can buy.

until it reaches the hands of the final consumer.

The links between the producer and the

The marketplace generally operates on the laws

consumer are often referred to as the market

of demand and supply. In simple terms, this can

chain, shown in Figure 2. The following section

be interpreted as “when supply increases, prices

provides a list of some of the most important

fall and vice versa”. To make informed decisions,

market intermediaries, where they work and

clients (farmers, processors, and traders) need to

types of functions that they are involved with in

know how their production fits within this law in

agricultural marketing.

the marketplace.

Important market chain actors

Although, the law of supply and demand appears

Collectors: These are small, mobile traders who simple, in reality, the dynamics of the

visit villages and rural markets. They buy from

marketplace are complicated. Many factors and

village bulking agents and directly from farmers.

trends (see “ Market Drivers and Trends” on

Collectors operate over short distances; they

page 18) affect the workings of the market and,

trade small volumes at a time, using limited

consequently, influence supply and demand.

amounts of money and use simple means of

Factors affecting supply in agriculture include

transport, such as donkeys, bicycles, motorbikes

weather, seasonality, access to inputs, roads,

and carts. They are most common in areas where

and transport to market. Factors that affect

farmers are poorly organised.

demand are consumer driven and include price,

quality, availability, and awareness of the

Assembly traders: These traders normally buy product.

from farmers and collectors, and sell to larger

wholesalers. Their main function is to gather

The Marketing Mix

produce for sale to large traders who do not have

To address these market issues, producers and

the time to carry out small purchases from

sellers develop marketing and business strategies

scattered producers and collectors. Assembly

to improve product sales. The basic components

traders are normally based in rural markets or

that sellers use in developing a marketing plan

towns. They may own or rent small, motorised

are referred to as “marketing variables”,

transport vehicles and small storage facilities.

“marketing mix”, or simply as “the four Ps”—

Product, Price, Place, and Promotion (Table 1).

13

A Market Facilitator’s Guide to Participatory Agroenterprise Development Table 1. The marketing mix: product, price, place, and promotion.

Marketing variable Definition

Aspects of this variable include:

Product

Everything that we sell that satisfies a

Variety, quality, design, characteristics,

need or a want; includes material objects,

brand, packaging, sizes, services,

services, persons, places, organisations,

guarantees

and ideas

Price

The monetary value that a seller seeks from

Price lists, discounts, price margins, credit

a buyer for a product or service

conditions

Place

• Distribution and marketing channels

Market sales points, spatial coverage of

• A series of independent organisations

market sales points, locations within

involved in the process whereby the

markets, inventories of products,

consumer or industrial user can use or

transportation channels

consume the product or service

Promotion

The means for convincing or persuading

Advertising, personal sales, trade and

potential users of the quality or features of

consumer promotions, public relations

the products or services being offered

Consumption

Retailing

Research

Trading

Transportation

Processing

Government policy regulation

Trading

Communications

Technical & business training & assistance

Post harvest

handling

Market information and intelligence

Production

Financial services

Production input supply

Figure 2. Market chain showing actors, functions and services.

Wholesalers: Wholesalers vary in size, but deal anticipation of price rises, i.e., to speculate on with larger volumes than collectors and

the market. These traders cater for the needs of

assemblers and often store goods. They normally

larger markets with many other wholesalers,

own or rent medium to large vehicles for

retailers and consumers, i.e. large towns and

transporting agricultural products, and own or

cities. They sometimes buy produce from

rent medium to large size storage premises

farmers and collectors, but tend to rely on

which allows them to postpone sales in

assembly traders and other wholesalers as the

14

Marketing Basics

main source of supplies. Wholesalers sell in bulk

Wholesale markets offer the advantage of trading

to other wholesalers, processors, industries,

large quantities of produce in one place which

institutional buyers and retailers.

enables prices to be based on the level of supply

and demand of produce to the market.

Retailers: The main role of retailers is the distribution of products to consumers. Their

Retail markets

function is to obtain supplies and display them

These are markets where consumers and small

in forms and at times convenient to consumers.

businesses, such as restaurants and street food

Retailers are very diverse in size and operation

vendors, buy their supplies. Retail markets can

from small kiosks and hawkers or roadside

be found in rural as well as urban areas. Many

sellers that sell small volumes of a limited

villages have their own retail market. They may

number of goods, to shops, and supermarket

open daily or at certain days during the week.

chains that deal with a vast range of agricultural

Formal retail markets account for only a small

products. Some retailers specialise in specific

share of sales as consumers can also buy from

products, whereas others sell a range of fresh,

small retail shops and supermarkets, as well as

processed and frozen products.

from traders and entrepreneurs selling from

trucks, bicycles, and roadside stalls.

Processors/commercial buyers: Processors are individuals and firms involved in the

Supermarkets

transformation of agricultural commodities. Rice

As urbanisation has created ever larger market

and maize millers, bakeries, fruit juice makers

centres with higher levels of market demand,

and cassava starch manufacturers are examples.

supermarkets have emerged as a convenient,

Processors can be small household enterprises

safe, well managed marketplace for the mid to

or fairly large formal firms. Large processors

higher income urban consumer. Supermarkets

tend to have significant stocks of raw material to

are rapidly becoming a feature of large towns in

ensure continuous processing activity and high

virtually all countries including developing

utilisation of installed equipment during the offcountries. Farmers can sell to supermarkets but season.

the buying conditions are more stringent than

the wholesale markets, in terms of food quality,

Types of Market

but also in terms of supply frequency and

The market intermediaries operate for the most

financial regulation.

part in a range of different market locations, as

illustrated below:

Marketing Functions and Services

Marketing functions are the roles performed by

Assembly markets

market participants as the produce moves from

These are markets where produce is sold by

the farm to the consumer. Each function is

farmers and small local traders before being

associated with the provision of one or more

taken to wholesale markets. Assembly markets

services and each of these services add value to

play an important role because it is more

the produce. Below some important market

efficient for traders to be able to purchase from

functions are explained.

farmers at a few places, at a particular time,

rather than visit individual producers on an

Bulking

ad-hoc basis. Assembly markets are normally

One of the most basic marketing functions that

located in rural areas, but can often be found in

can be performed by farmer groups or local

small towns close to farming areas.

traders is to bulk produce from several farmers.

This enables the farmers to sell larger amounts

Wholesale markets

of product at one time which enables, for

Wholesale markets are generally found in larger

example a farmers group to negotiate for more

towns and cities. These are markets where

favourable prices with traders. Farmers who

retailers and businesses buy their supplies.

bulk 2 to 3 100 kg sacks of produce can only sell

Farmers can deliver produce to wholesale

to a local trader. If farmers wish to negotiate

markets; however, the main suppliers are

with a larger trader, they may need to bulk, 2 to

usually traders who have bought from farmers

10 metric tonnes of produce to fill a pick up or

and small traders. In most cases, a wholesaler in

lorry. For the traders this is attractive as it

the market will buy agricultural produce for sale

reduces the costs of collecting small amounts of

to retailers or wholesalers from other markets.

variable quality product from many sources.

15

A Market Facilitator’s Guide to Participatory Agroenterprise Development Therefore the trader is willing to pay a higher

need to physically see a product as it flows

price per kg for the bulked commodity.

through the market chain, or provides a means

for very distant buyers to buy without seeing the

Cleaning

product.

Harvested produce needs to be cleaned before

processing and/or consumption. Through this

Standard weights and measures include the use

activity, foreign matter such as sand, straw and

of national, imperial or metric units, all of which

stones are removed. Agricultural produce can be

can be understood and verified throughout the

cleaned by hand or through the use of manual

region of trade. For international trade, the

and motorised equipment.

standard units normally refer to centimetres and

metres for length, weight as measured by grams,

Drying

kilograms and metric tonnes and volume as

Moisture content (m.c.) influences the

measured by litres, and cubic metres. Produce

perishability (or shelf life) of a product and the

that is sold in sacks are generally sold in

efficiency of processing. For many products,

standard 20, 50 or 100 kg units. These are

moisture content is the most critical quality

easily recognised and allow for rapid transfer of

criteria, especially those products that are likely

goods upon agreement of sale.

to be stored for a considerable period of time,

i.e., from 1 to 6 months. Consequently, buyers

Processing

often have maximum moisture content

Some agricultural products require processing in

specifications. For crops such as maize, they are

order to meet consumers’ needs and tastes. For

often harvested with a moisture content of

example, in urban areas people have more

perhaps 20% to 23%. Field drying, if conditions

sophisticated demands and are prepared to pay

are sunny, can dry this down to the optimal

for processed foods, including prepared foods,

moisture content of 11% to 13% m.c. If the crop

canned and frozen products. In some cases,

is sold with a moisture content above 14%, it is

agricultural commodities cannot be consumed

likely to suffer from serious storage problems

without processing. This is the case, for

associated with pests and diseases. In this case

example, of rice and livestock. Paddy rice must

a higher price is paid for grain which is in the

be milled into rice and animals must be

optimal storage range of 11% to 13%.

slaughtered, dressed, and divided into

conveniently sized pieces before they can be

Sorting or grading

consumed. Finally, processing may prolong the

Harvested produce usually requires some form

shelf life of a product, as in the case of maize

of sorting to meet the grades required by

flour and dried or canned fish.

processors, exporters, and consumers. Sorting

differentiates produce according to certain

Storage

attributes or characteristics, including variety,

To avoid price slumps and reduce post harvest

size, colour, shape, degree of impurity, and

losses, storage facilities are needed at various

ripeness. Because the sorting of produce is

stages of the marketing chain. For some

labour-intensive and time-consuming, market

products storage is not feasible due to product

participants will only be willing to sort their

perishability, as in the case of tomatoes, whereas

produce if buyers are prepared to pay a higher

more durable agricultural commodities may be

price for differentiated and higher quality

kept for very long periods. Sometimes storage is

products.

required for just a few days, while the product is

awaiting transport or the seller is searching for

Standard weights and measures

buyers.

Another aspect of grading is to sell produce in

standard unit measures of length, weight or

Storage involves costs and risks. For storage to

volume. Standard weights and measures were

be profitable, the actors involved must receive a

introduced to make trading both more efficient

future price that is higher than the present price

and also so that buyers and sellers who were

plus storage costs, including rent, labour, pest

unable to meet to negotiate a transaction would

control, product losses, and interest rates on the

still know how much they were buying for a

capital borrowed. In practice, the costs of

given price. As with sorting and grading, the use

storage depend on the commodity stored, the

of standard units provides an opportunity to

type of storage system, and unpredictable and

either reduce the number of intermediaries, who

variable factors, such as the incidence of pests

16

Marketing Basics

and climatic conditions. Considerable amounts

The role of BDS in marketing and agroenterprise

of money can be gained or lost by storing

development cannot be underestimated as these

produce at one time of the year and selling at a

are the services that not only enable the market

later time. Typically traders who store produce,

to perform efficiently, but they are also

buy when prices are low, at the peak of the

responsible for a large part of the new

harvest season and sell the stored grains as

innovations that can occur in a market and

prices start to increase.

provide for increased competitiveness and

therefore sustainability.

However, speculative storage is fraught with

risks, prices vary for many reasons and stored

Supply of inputs

goods are often lost due to losses from pests and

Access to good quality and affordable inputs, in

diseases, adverse weather and other factors.

the right form and volume, is critical to the

There are considerable skills needed to be able to

activity of different actors in a market chain.

speculate on markets and this is why most

Key inputs for farming include seed,

storage is undertaken by traders who

agro-chemicals, irrigation water, agricultural

understand the finer details of marketing

implements, and post harvest equipment.

compared with farmers, who are more

Processing often requires access to water and

specialised in production.

electric power, equipment, and spare parts.

Packaging, labelling and branding

Research

Many products need to be packaged in some way

Research is essential for the development of

if they are to be marketed widely and efficiently.

appropriate technologies and methods that

Packaging reduces physical deterioration, theft

enhance production, post harvest, storage,

and adulteration of produce. It may also ensure

processing and marketing. The development and

product cleanliness and facilitate

release of improved varieties can lower

standardisation of weights and measures.

production costs, increase produce supply and

quality, reduce product perishability, and/or

Packaging also provides producers with the

enable off-season production. The development of

opportunity to differentiate their product by

agro-processing technology can reduce waste and

labelling with product attributes including a logo

costs, increase production capacity, and improve

to identify the source, product descriptions,

product quality. It is often new technologies that

ingredients and/or sales instructions. This

make the difference between subsistence and

information can be used for promotion and

more competitive production.

advertising purposes, making the product more

attractive to the consumer. In time, a well

Advisory services (extension/ development)

recognised label with strong consumer loyalty

To be successful market participants can benefit

can become a “brand”, which many consumers

considerably from specialised information and

recognise as a product with strong consumer

advice on their area of action. This may cover a

support.

wide range of areas, including production,

natural resource management, post harvest,

Business Development Services (BDS)

processing, marketing, management, and

business planning. Such services are provided by

In addition to the market intermediaries who

agricultural and market extension officers,

directly handle the transfer of produce through

government agencies and information services,

the market chain are a number of business

non-governmental development organisations

development services (BDS) that are critical for

(NGOs) and consultancy firms are common

effective marketing performance. To improve

sources of specialised advice and information.

market efficiency participants in agricultural

supply chains require a number of support

Transport

services to develop their business activities.

A major cause of marketing problems often lies

There are many support services, here we will

in the limited availability and high cost of

focus on: supply of inputs, research,

transport services, especially in remote areas

advisory/development services, transport,

that are difficult to reach. Transport of produce

communications, market information, and

from such areas is only justified when the selling

finance.

price in destination markets is well above the

purchasing price in those areas. The transport

17

A Market Facilitator’s Guide to Participatory Agroenterprise Development market, like any market however, offers a range

In most developing countries it is difficult to

of different modes, and prices. Farmers should

access formal bank loans. As a result, farmers,

find the most cost effective means of

traders and processors tend to rely on savings

transporting their goods and constantly review

and informal sources. Farmers may receive

this market in order to find the most cost

inputs from traders or commercial buyers on

efficient means.

credit, repaying the loan at a later date with

produce or cash. They may also sell their crops

Communications

on credit, thereby helping to fund the activity of

Post, telephone, SMS, e-mail, Internet services

buyers. Wholesalers and processors may advance

and word of mouth are critical for smooth

funds to collectors and assembly traders for the

information flow and low-cost transactions

purchase of agricultural products.

along the market chain. The increasing

availability of mobile phone networks, e-mail

Marketing chains

and Internet services in the developing world

All of these marketing actors, functions business

has had a major impact on the efficiency of

services and policy frameworks, provide the

marketing systems and for many market actors,

operational environment in which marketing

the mobile phone is the most effective means of

chains operate3. Market chain being the term

communication. In areas where mobile phones

used to describe the multiple market channels

have become ubiquitous, many buyers will only

through which a product or service moves until

now operate with suppliers that have a phone,

reaching the consumer. Farmers rarely sell an

to ease and reduce the costs of transaction.

agricultural product directly to the consumer.

Instead, agricultural products tend to change

Market information

hands several times and go through different

Market information is essential for decision

stages before being consumed, as shown in

making, reducing transaction costs and risks, Figure 3.

enabling efficient storage, and facilitating the

flow of goods from production to consumption

Market Drivers and Trends

areas. Access to information reduces business

risk and allows market participants to explore

Several key factors drive changes in the

profitable opportunities and meet consumer

marketplace in terms of the quantity, quality,

needs. The scope for cheating and unfair pricing

and types of products that are in demand. The

practices is also significantly reduced when

following overview describes the major factors

information is available to all market

that influence market trends and how these

participants. Although, most developing

affect markets, whether for the short, medium, or

countries have national policies to provide

long-term.

market information to farmers, in a timely and

accurate manner, this is rarely the case.

Population growth

In Africa, the rate of population growth ranges

Farmers should have an idea of input sources

from 2% to 3%. This means that, every year, a

and prices, current product prices in local

significantly higher number of people need to be

markets, the degree of price volatility in these

supplied with agriculturally based goods. For

markets, the best time of the day to sell, and

many countries in sub-Saharan Africa, the

price trends and seasonality. They should also

populations are likely to double within the next

have information about the number and type of

15 to 20 years, suggesting a significant increase

buyers operating in different local markets, their

in demand for basic goods.

volume and quality requirements, and selling

arrangements.

Urbanisation

Last century, the world urbanised at an alarming

Finance

rate, and about 50% of the world’s population

Finance is necessary for goods to move along

now lives in towns and cities. In developed

the marketing system. Farmers need to

nations, the level of urbanisation is particularly

purchase inputs and may want to hold on to

their crops after harvest to benefit from higher

prices. Traders and processors need to finance

3.

investments as well as marketing and

In this manual, the terms marketing chain, market

chain, product chain, supply chain, and value chain

processing activities.

are used interchangeably.

18

Marketing Basics

high, but rates of urbanisation are, in fact,

liberalisation can cause serious economic

highest in developing countries, especially in

difficulties. Globalisation is considered by many

Africa. The rapid movement of people from rural

to be the most influential trend on market forces,

areas to urban centres means that more

having both a positive and negative effect for

consumers want to buy, not grow, food.

producers.

Rising incomes, particularly urban

Declining commodity prices

In most countries, incomes are rising. As

One devastating effect of globalisation has been

incomes grow, people tend to spend a lower

the steady fall in global prices of major

percentage of their income on food. This means

agricultural commodities traded on the world

that people can select either higher quality or

market. For virtually all of the top 20 traded

more processed foods. The fastest rate of income

agricultural commodities, their value has fallen

growth is found in urban centres and, as a

to its lowest level in more than 40 years. This

general rule, the larger the urban centre, the

effect is caused by the declining value of primary

wider the range of products that are in demand

goods relative to manufactured goods over time

in terms of type, quality, and quantity. In Africa,

and a general oversupply to major markets.

the emerging middle class is demanding more

sophisticated goods, a demand that is being

Market concentration

promoted by the rise of supermarkets.

For the last 20 years, the number of buyers

trading on the international market has radically

Market liberalisation

shifted from very many local business traders to

This term refers to the process by which control

a few large international trading houses. For

of the marketplace is released or “liberated” from

major commodities such as wheat, maize,

the strict regulation or control of Governments.

soybean, coffee, maize, and vegetable oil, the

In many cases, State-led marketing led to

number of traders per commodity has fallen

massive internal debts, as Government regulated

dramatically to 5–10 major international trading

markets to meet their budgetary needs. Lack of

houses, such as ADM, Cargill, and Louis Drefuss

competition, weak business/marketing skills and

in the grain markets, or Sara Lee and Nestlé in

low efficiency led to a distortion of incentives,

the coffee markets. This loss in competition at

often producing low prices for farmer’s goods and

the trader level in the market chain has meant a

high prices for consumer’s goods. In some cases

significant shift in market power away from

this problem was coupled with high levels of

farmers to buyers. This loss of negotiating power

corruption. When Governments required

for farmers means they are increasingly locked

international support to offset serious debt, they

into a price structure dominated by

were asked to relinquish control of the market by

multinational buyers. The danger of this

financial institutions such as the International

situation is that the few buyers have the market

Monetary Fund. The Government, in all cases,

power to maintain low prices and establish

still provides a regulatory framework but the

cartels.

mechanics of the market is organised and

implemented by a host of private sector actors

Retailing and vertical integration

and companies. This has in most cases led to the

The fall in the number of international buyers is

emergence of a more competitive marketing

reflected in a similar effect for the retailer sector.

system, although in poor countries a truly

In developed nations, for the last 20 years, many

competitive entrepreneurial sector is yet to

hundreds of village shops have been superseded

emerge.

by a few national or now multi-national

supermarkets. For many sectors, supermarkets

Globalisation

are the dominant buyers and farmers are

This term is used to describe the recent impact of

required to meet their stringent quality controls

innovations in communications and transport

and price structures. Sometimes, companies

systems on trade and the increasing integration

along the supply chain merge so that they

of world markets. This process has encouraged

become integrated or “interlocked” organisations

nations to free up their economies and increase

that can grow, transport, process, package, and

their volume of trade, including agricultural

retail goods. This type of operation is efficient

products. Although increased economic

and can effectively lock out smaller growers from

liberalisation and openness has been proved to

the market.

lead to growth, for many developing countries,

19

A Market Facilitator’s Guide to Participatory Agroenterprise Development

Consumer concern for food safety

Information and communication

Increasing supplies of food into urban centres

technology

has led to situations of mass poisoning. In Kenya

The advent of computers and, particularly,

in 2004, more than 100 people died of aflatoxin

mobile phones is rapidly changing the ability of

poisoning after eating poorly stored maize. Beef

communities in rural areas to communicate and

carrying mad cow disease, white wine mixed with

gain new information. The mobile phone is

glycols, peanuts contaminated with alflatoxins,

considered to be the most applicable

coffee containing mycotoxins, and numerous

information and communication product and, in

other cases have either caused mass illness or

the future, as phones become more widely

deaths and have led to major new campaigns

available they will become an essential trading

and legal regulations to make food as safe as

tool. Already, in many countries, buyers insist

possible for the public. Such problems mean that

on their suppliers being contactable and, for

consumers want to be sure of the quality of the

sales of higher value goods, access to phone

goods they consume.

technology is fast becoming an essential element

of the marketing toolkit.

Industrialised nations have introduced stringent

food safety laws that enforce adherence to

Niche markets and fair trade

specific quality standards. Companies that fail to

As consumers become more sophisticated they

meet such standards are fined and the defective

can afford to pay a premium for exotic, novel, or

products destroyed. To sell food products in

specialty products. These new types of “lifestyle”

industrialised countries, suppliers must meet

products, that is, products that fulfil the needs

food safety requirements, and products are

of a very select consumer interest group, have

tested on departure and on arrival. Failure to

created a new market segment related to “niche”

meet standards leads to termination of contracts.

products. Specialty coffee, produced from a

The stringency of food safety laws, often

limited number of farms is an example of a

described under sanitary and phytosanitary

product that is in such scarce supply that it can

(SPS) requirements, is rapidly becoming a major

command a price many times higher than the

trade barrier for goods into developed nations.

mainstream coffee product. Similarly, some

Food products are now required to carry

consumers will only buy goods that are fairly

traceability tags to further ensure food safety. In

traded, and the charity organisation Oxfam has

most developing countries, food laws are seldom

championed the idea of “fair trade” products,

enforced but they are being developed and will

which pay farmers a fair price for a quality

eventually become an important issue for

product.

farmers selling goods on the market.

Biotechnology, new crops, and new

The growing importance of sustainability

markets for biofuels, biodegradables,

issues

biomedicines, and nutracueticals

Increased productivity can severely affect natural

Another emerging market is being created

resources. In the agricultural context, this can

around new types of organic products. These

mean overuse of inorganic chemicals and

include genetically modified organisms (GMOs),

pesticides. For farmers, this can mean that their

plant-based biomedicines, biofuels, plant

land becomes less productive and they need to

products with high vitamin or mineral content,

move onto virgin or more marginal land, thereby

such as vitamin-A-rich sweet potatoes and

accelerating environmental degradation.

iron-rich beans. Although GMOs suffer from

Consumers have reacted against this with a shift

some consumer rejection, their high production

towards demanding products that are produced

performance will probably mean that they will

organically or at least using “clean” production

find buyers and that the GMO market will grow.

systems. Consumers will also pay a considerable

premium for products that can show they were

The Marketing Context for Small

produced under environmentally friendly

Farmers

conditions. In the future, the use of sustainable

and environmentally friendly production systems

Despite their production potential, smallholder

is likely to become a more important issue.

farmers confront serious constraints in profiting

Already, the “organic” market is growing by 20%

from their resources. Communities need to

per annum.

devise evermore innovative ways of using their

20

Marketing Basics

labour, resources, and skills to take advantage of

associated with a new business option. When

new business opportunities. In many cases,

working with poor smallholder farmers it is

current trends will continue to marginalise

important to find a simple means of assessing

increasing numbers of small-scale rural farmers,

an appropriate level of risk that a farmer or

with particularly negative effects on those that

farmer’ group should take on when developing

are least organised and distant from markets. To

a new enterprise.

address these changes, rural communities need

to adopt strategies, including agricultural

Tools such as the Ansoff matrix (Figure 3) are

extensification, intensification, diversification,

used to categorise risk options, by comparing

and mixed on- and off-farm income streams.

types of products and markets. In this matrix,

They need to find ways to make their production

risk increases from 1 (low risk) to 4 (highest

more competitive, add value to primary goods,

risk). Market analysis based on demand and

and target higher value products into growth and

profitability often highlights higher risk

higher value markets.

options and enterprise groups need to be

aware of the risks and benefits from high profit

For a more detailed discussion of the changes

options.

that have taken place in Africa as a result of

agricultural marketing liberalisation and the

The market facilitator can use the Ansoff

implications of this for farmers who now have to

matrix to guide groups towards a sensible level

produce for the market rather than supplying

of risk based on their experience and financial

marketing boards, see also FAO’s Marketing

options. In this case, facilitators may advise

Extension Guide No. 1 “A Guide to Maize

newly formed farmer groups to select options

Marketing for Extension Officers”4 No. 2 in

that are based on market penetration with the

the Marketing Extension Guide series,

view that farmers should test new markets in a

“Understanding and Using Market Information”

stepwise manner starting with test plots and

this includes a discussion of factors affecting

market trials before engaging in larger scale

supply and demand.

supply.

Preparing for risk

For groups with more experience in marketing,

One of the more difficult tasks, when developing

higher risk, higher return strategies are likely

marketing strategies is to assess the level of risk

to be more attractive. To facilitate the

identification of market opportunities and

evaluate prospects for diversification, CIAT

developed a guide: Identifying and assessing

4. (for free copies e-mail AGS-Registry@fao.org).

market opportunities for small rural producers

(www.fao.org/ag/ags/subjects/en/agmarket/

understanding.html)

(Ostertag, 2006).

Existing products

New products

Existing markets

1. Market penetration ( lowest risk)

3. Product development

New markets

2. Market development

4. Diversification ( highest risk)

Figure 3. Using the Ansoff matrix for risk assessment.

21

A Market Facilitator’s Guide to Participatory Agroenterprise Development SECTION 3

Institutional Preparation and Planning

By the end of this section, the lead organisation

Social context

should have:

General information on the targeted area,

including its history, climate, population, social

• Made an initial survey of the area and

groups, and outlook.

potential partners.

• Identified a site for intervention, that is, a

Natural resources

“project area”.

Basic soils, water, specialisation in any crop,

livestock, natural resources, areas of

Time frame: 2 to 3 weeks.

outstanding beauty, specialist skills.

Rapid Reconnaissance Survey

Local production resources

As part of the planning process, the lead

Transport system, market infrastructure, farm

organisation, that is, the organisation that will

sizes.

support a market facilitator, should start out by

undertaking a rapid reconnaissance survey of

Social capital

the area in which they intend to work. This

Inventory of institutions and development

information will provide a better understanding

agencies working in the area and of what they

of where to start activities and how to link with

do; determination of their interest in learning

potential partners. The survey, which should

more or participating in the market-oriented

not take more than a week, should gather

work being planned; interviews with community

general information on the following areas:

groups to evaluate levels of social networking,

existence of groups for political organisation,

22

Institutional Preparation and Planning

savings, production, etc., with information on

Assessing Levels of “In-House” Skills

group size, numbers, age, strength, etc.

for Agroenterprise and Market

Facilitation

Business organisation

Interviews with larger traders to gain a basic

As agroenterprise is often a new area of work,

understanding of the major goods, products,

the lead organisation may benefit from first

and services traded in the area. Major

evaluating its own “in-house” skills and

challenges and opportunities, as viewed from

capacity for marketing and agroenterprise

the private sector. Interviews with

development. This information will be useful for

entrepreneurs who process goods, especially the

assessing current status and for making

larger entrepreneurs and traders who often have

decisions on the level of capacity building

a broader view of the market. Interviews with

required to achieve a desired output, and

leading service providers from the input

provide an idea of expected performance in the

supplies, micro-finance and banking sectors to

field. Clearly, an organisation with strengths in

assess investment processes and potential.

economics and marketing is more likely to

achieve more rapid results in agroenterprise

Growth commercial market

development than organisations with staff who

In addition to the project site survey, the lead

are skilled in agronomy and health.

agency should also consider the wider

marketing situation of the cluster of districts or

In evaluating in-house capacity, the lead service

country in which the project is being

provider should consider the following aspects:

established. This study should only take

3 to 5 days, start with a review of national

• The number of staff with time committed to

business statistics of the country to determine

agroenterprise activities.

key areas of income from the agricultural sector.

• Qualifications of staff, experience, and

Meeting with the agricultural managers of large

institutional rating, that is, management

agricultural development projects, agricultural

days, agricultural advisor days, field staff

banks and if possible holding short lunch type

days.

meetings with leading industrial processors and

• Level of training in participatory skills,

including (1) community mobilisation,

traders. These rapid interviews will enable the

(2) formation of farmer groups, (3) market

agency to gain an understanding of the principle

visits, (4) market analysis, (5) business

agro-industries in the country or major demand

planning, (6) savings and loans and/or

centres near to the intended project site and to

micro-finance, (7) agroenterprise

evaluate if these industries offer an potential

development, and (8) business development

market options. Linking into growing industrial

services.

markets can be a highly effective way of linking

•

farmers to market and mature industrial

Experience in the skills listed above, that is,

have these skills been put into practice? If

markets offer the possibility of access to stable

so, what were the results?

growth market opportunities and in some cases

•

contractual arrangements.

Access to training materials to assist in a

market facilitation activity.

In undertaking these areas of analysis, much of

Staff members should discuss these ideas and

this information is likely to be available from

perhaps complete the capacity analysis box

secondary data sources and other development

given in Appendix 2. A similar exercise can also

organisations and can be used as the basis on

be undertaken to evaluate other partners in an

which to identify like-minded partners to

objective manner. If the group being analysed

initiate a “working group”. At this stage, the

scores highly (e.g., more than 30), then they will

service provider should define the criteria for

have strong marketing and enterprise skills that

selecting enterprise groups (i.e., farmer groups

are well suited to rural business development.

who will develop new businesses) and for

However, if the score is less than 10, then the

selecting a defined area in which to implement

team may benefit from training.

the project.

Selecting Partner Organisations

Agroenterprise development is a complex task.

To link activities and actors along a market

chain in an effective manner requires careful

23

A Market Facilitator’s Guide to Participatory Agroenterprise Development gathering of relevant information as well as

• Does it provide communities with assets

skills in building relationships. It is unusual to

such as seeds, tools, loans, or livestock, or

have all the skills required within one

does it take a more facilitatory role in

organisation. Hence, success in agroenterprise

support of other tertiary partners?

development usually requires that organisations

• What are its entry and exit strategies?

find like-minded partners from the public and

private sectors to support the process at specific

In many cases, agroenterprise development will

points. Partners are also essential in scaling up

be a new area of activity for at least one of the

activities.

organisations and therefore the selection of

partners may not be based on their current level

When selecting partners, the initiating team,

of skills. The decision to set up a partnership

which may include partners from research,

may be based on their performance in the field,

education, or development, should address

their ability to resource new activities, the

some basic questions: (1) whether a prospective

interest of their staff in this new area, and also

organisation has the resources and interest to

their vision of how agroenterprises will support

support a “market facilitator”, (2) if the

their client communities.

organisation’s management is fully committed

to supporting the exercise, (3) whether partners

In some cases, a relationship may need to be

are aware that agroenterprise development is a

strengthened so that performance can be

long-term process linked to seasonal cycles,

monitored more effectively. For example, a

meaning that the process takes a minimum of

formal or informal “Memorandum of

6 months to implement, but usually requiring at

Understanding” should be prepared on how the

least three seasons—which can take up to

relationship will operate, with information on

36 months—to complete, and, finally, (4) if this

shared roles and responsibilities and any

time frame is agreeable, then does the institute

financial arrangements that are tied to

selected to support a market facilitator meet the

fieldwork.

following criteria:

Partners should discuss these are issues as the

• What new skills does this partner offer the

answers may influence how an agroenterprise

group?

development approach is planned and

• What are its objectives?

implemented. Future plans will be particularly

• What activities does the organisation

influenced by the level of investment available to

undertake to achieve these objectives?

conduct surveys and initiate new agroenterprise

• Does it have the financial and technical

projects with farmer groups. Likewise, a project

skills and/or resources required?

needs to know if, in the future, funds will be

• Does it work in the same or desired

available for partners to scale up from pilot

geographical area?

projects.

• Does it have experience in agroenterprise

activities?

Once the partners are selected, they then need

• Is it interested in or capable of a long-term

to select candidates for the role of “market

commitment to agroenterprise?

facilitator”. This person should be interested in

• Can it mobilise funds for activities in

the new role, be dynamic, have strong

agroenterprise development?

participatory skills and, if possible, have some

• Does it work with other agencies such as

background in business. In some cases, this

research or micro-finance?

may require hiring a new type of person to the

• Does it have staff trained in using

organisation.

participatory techniques?

Example of Partners

Other more specific issues include:

In three African reference sites, institutions that

•

have undertaken this activity in Africa with

Does the organisation work on a time-bound

project (e.g., 1 to 3 years) or on a longer-

CIAT’s Enabling Rural Innovation group

term basis?

include:

• Is its goal to empower a community with

skills, or to provide services to enable it to

Uganda

better access markets?

Catholic Relief Services, Gulu District;

Africa2000 Network, Tororo District; Africare,

24

Institutional Preparation and Planning

Box 1

An example partnership between CIAT and Africare, Kabale, Uganda

Why and how was the NGO Africare chosen to carry out agroenterprise development activities with CIAT?

CIAT’s research group has worked with Africare’s field and management staff for many years in Kabale District on participatory research on bean production. Over this long-term relationship, the two institutions had built trust, strong lines of communication, and a common vision of what they would like to see happen in their areas of operation.

The partnership began with limited interaction, with the two institutes operating small field trials. CIAT needed a development agency in the highlands of southwestern Uganda that could finance and provide logistic resources field staff, and could scale up successful ideas with other communities. The Africare team was seen as a potentially strong partner as they had well-trained staff on long-term contracts.

The two institutes have since built a good track record of working on common issues related to food security and farmer field experimentation. Linking Africare into a more market-oriented arrangement was a case of natural progression, with no need for additional memorandums.

The institutions work well on marketing and see this new area of intervention as building on previous activities and as supporting their vision of promoting food security and income-generating activities.

Kabale District (Box 1); National Agricultural

Evaluating Farmer Group

Research Organisation (NARO), Bulundi

Organisations

District; from the private sector; Uganda Grain

Traders Ltd.; Radioworks; and mobile phone

Although the focus of the agroenterprise

companies.

approach is the market chain, in many

situations considerable market facilitation will

Tanzania

be required to support producers or farmer

Traditional Irrigation and Environmental

groups. This is because farmers are often the

Development Organisation (TIP), Loshoto

weakest link in the supply chain. In our view it

District; Faida MaLi and Hai District Council

is unlikely that effective enterprises will be

and the Catholic Relief Services in Mwanza.

developed by working with individual poor

farmers, clearly individuals who have

Malawi

resources can and do establish successful

enterprises. For smallholder farmers, there is

Plan International, Kasungu District; District

considerable evidence to show that organising

Agricultural Research System.

farmers into groups is an effective way of

learning new ideas and becoming more

On a larger scale, the Catholic Relief Services

competitive through for example gaining from

have undertaken a regional shift towards

economies of scale.

agroenterprise development, with 9 countries

participating in an East African Learning

The market facilitator should however always

Alliance. The countries involved include:

verify that group work will be of benefit to the

Burundi, Eritrea, Ethiopia, Kenya, Madagascar,

farmers, as there are no absolute rules that

Rwanda, South Sudan, Tanzania, and Uganda,

farmers must be in groups.

as part of the agroenterprise learning alliance.

As with all communities there are many social

Host institutions may be governmental or non-

segments within any given society and farmer

governmental, agriculturally-based or more

have different levels of assets, skills and

broadly development-oriented, or focus on

competence. It is important that a market

production or business development services.

facilitator understands the capacity of farmers

working within a group to match appropriate

levels of risk with the farmer abilities. To assist

25

A Market Facilitator’s Guide to Participatory Agroenterprise Development the market facilitator in assessing farmer

Networking and Establishing Ground

group capacity, we have developed a short

Rules

checklist of criteria that will help in

determining competency and experience

Having identified partners, the next stage is to

(Appendix 3).

make clear agreements on how the process will

be conducted with particular respect to inputs,

The competency checklist is something that

assets, and messages given to the beneficiaries.

can be used by the market facilitator in a focus

group discussion with farmers. Or the

Level of intervention

checklist can be adapted and given to the

To maximise the benefits of agroenterprise

farmer group themselves for means of self

interventions, market facilitation should not be

evaluation.

confined to one group of farmers, one processor

or one trader for several years before being

Matching risk with farmer group

expanded into new areas. Instead, the goal

competency

should be to work within a market chain at a

The idea of matching the risk of certain

network level, testing the process with many

agroenterprises with farmer group competency

farmer groups, several processors and/or

aims to avoid a situation whereby farmers take

traders. In Uganda, CIAT is developing

on inappropriately high levels of risk from the

Africa2000 Network’s capacity for market

outset. The market facilitator can use simple

facilitation, with facilitators operating in eight

tools such as the Ansoff matrix (Section 2,

districts with more than 50 farmer groups and

Page 21) to alert the group to the level of risk.

many types of traders.

The group members should also be aware of

their exposure to risk based on specific

Scale can only be achieved from a reasonable

aspects of a business plan such as level of

starting number and therefore the initial level of

investment required, labour required, the

intervention must not be a restricting element of

types of buyer and the time to first payment or

a strategy which aims to introduce marketing

break even. The market facilitator should also

into the farming system. The market facilitator

ask the farmer groups to select which products

should operate at a level where impact is

they want to invest in based on their decisions

considered to be the most effective, while

of an acceptable level of exposure to risk.

providing tangible and concrete support to

farmer groups. For a selected market chain, the

Giving the final choice of which product to

market facilitator should start with a minimum

invest in, the farmers group enables certain

of five farmer groups and also focus on potential

segments of a community to come together and

service providers, and aim to scale up the

take on a particular market chain, the poorer

number of farmer groups after one season. At

group perhaps opting for a lower risk options

the end of 2 years, the facilitator should be

whereas farmers with more assets or greater

servicing at least 20 farmer groups, each

levels of marketing skills may want to work

comprising 20 to 30 farmers.

together on a more specialised, higher risk

options.

Planning for scale

Scaling up is an issue that the support

This self selecting approach to risk

organisation and market facilitator need to

management is attractive as it provides the

consider from the outset. A major reason for

opportunity to take the agroenterprise

establishing a working group is to prepare for

approach to a community, but then promotes

scaling up, and the lead organisation should

the idea of the agroenterprise groups being

identify partners who can disseminate

formed on a self-selection process.

successful interventions through their

networks. However, scaling up should start only

In this way the approach remains inclusive,

from an initial point of success. The lead

flexible and offers a democratic way of working

organisation can therefore realistically begin

with different segments of the poor within a

replicating the process more widely only when

less advantaged community, without

the market facilitator has undergone at least

attempting to evaluate wealth and herd people

one effective enterprise cycle (i.e., from

into class-based groups.

identifying a market to selling the product or

service). At the end of this first enterprise cycle,

the facilitator should then assess the interest

26

Institutional Preparation and Planning

and commitment of other like-minded service

hope to avoid any negative interventions. Some

providers in the project area to take up the

development agencies have considerable

approach. Hence, the lead institution needs to

resources that must be spent within a limited

appreciate that, in the early stages of the

period. Under such conditions, service providers

agroenterprise process; many partners may only

are greatly tempted to force-feed local

play an observer role.

communities with new assets and “pump up”

their ability to increase production and supply

Given that the pilot project is successful, the

local markets. This, however, can be

next stage in scaling up will be for the lead

counterproductive, unless sufficient funds are

service provider to apply the approach to more

also invested in developing adequate market

farmer groups within the project’s area. The

options.

scaling up process should either (1) encourage

more groups to sell a selected product into an

In today’s less interventionist environment,

identified market, thus achieving economies of

development organisations are increasingly

scale; or (2) empower many groups to diversify

investing fewer resources in direct inputs (e.g.,

into a wider range of products and markets.

seeds and tools) and emphasising facilitation.

The aim is to empower the local community to

Whatever the aim for scaling up, the lead

take a more proactive approach to their income-

organisation should investigate opportunities

earning abilities.

for networking so that other service providers

may gain skills in agroenterprise development

However, the ability of farmer groups to respond

and apply the methodology more widely. If the

to market signals will depend on the targeted

pilot project and initial learning occurs over 1 or

community’s position within the livelihood or

2 farming seasons in a year, then scaling up

“wellbeing” (wealth) spectrum. Some

should be implemented in the next 2 or 3 years.

communities, for example, are in extreme

With many successful projects, scaling up is

poverty and/or shock because of:

often not achieved because the implementing

group spends too long on the pilot stage. A

• Food scarcity through weather.

proactive approach to scaling up must therefore

• Calamity such as war, drought, or floods.

be adopted.

• Chronic political insecurity.

• Lack of income opportunities by virtue of

Our experience suggests that if the pilot study

remoteness from markets.

works well, then the lead institution should aim

• Traditional lifestyles that are only

to rapidly increase the number of farmer groups

intermittently cash-based.

by the second, and certainly the third

enterprise cycle, or farming season. Scaling up

In such cases, service providers should work

requires considerable effort and resources

with the local community and donor

invested in capacity building, which may mean

organisation to decide on asset building

training partners for 12 to 24 months. Training

approaches before embarking on a transition

is also best applied with incremental sessions

towards a marketing approach. However, the

on each skill in the agroenterprise process,

service provider should clearly maintain that

starting with pilot sites on existing products

the work’s goal is to build up sufficient local

and then progressing to full market-opportunity

assets and then quickly move into a more

studies, to developing new enterprise options,

market-led approach to avoid laying the

and strengthening local business support

foundation for continued dependency. Even in

services.

situations where farmers are food insecure,

markets can be highly resilient, usually

Client Support and Provision of

recovering effectiveness after most shocks. The

Physical and Financial Assets

service provider should therefore work with

communities, providing only the most essential

Rural development inevitably involves the

assets and looking for market options as soon

investment of resources into a specific

as they emerge. Long-term provision of free

community through direct investment, credit

assets leads to dependency and negative

schemes, or skills and/or technology transfer.

incentives for market development, thus

We hope that such investments will have long-

relegating farming communities to long-term

term benefits for the community and certainly

poverty.

27

A Market Facilitator’s Guide to Participatory Agroenterprise Development

No handouts

requirements through some form of payback

In most situations the best advice for a market

scheme. This may include discounting the credit

facilitation project is to adopt the strategy of

through cash, labour, or at least paying back the

no handouts. This makes the rules of

cost of seed with part of their harvest.

engagement clear and although the enterprise

development process may be slower compared

The principle of the agroenterprise development

with financially supported or subsidised

approach is that farmers enter a business

methods, it is also more likely to be sustainable.

agreement, becoming business partners, and

therefore cannot consider any credit given as a

Internal savings and loans

soft loan or potential gift.

In the past 5 years there has been a general

rethink regarding the use of credit in rural

We emphasise this principle because farmers will

development. Whereas non-governmental

adopt very different attitudes towards enterprise

organisations (NGOs) were highly supportive of

options when given a choice between free inputs

credit systems, problems associated with poor

and repayment schemes. In the free input or

rates of repayment, inability of clients to

heavily subsidised situation, ownership or

overcome churning5 and lack of sustainability of

application to a business process is generally

the credit institutions has encouraged several

weak. The incentive or implication is to reduce

NGOs to place more emphasis on group savings

responsibility and reward failure. In contrast,

schemes and also on developing group skills to

when incentives are placed on individual

internally loan their funds at profitable rates.

performance and assets and inputs are tied to

Simple savings methods such as merry-go-

group responsibility for repayment, the

rounds and crisis savings, starting with very low

implications are that greater individual effort

inputs are one way to inculcate the idea of

leads to higher reward, but that all group

savings. This approach is highly consistent with

members are accountable to each other. Peer

the agroenterprise approach as groups can start

pressure is a powerful community force that the

with a low investment business plan and as

service provider should use to guide the group in

group savings increase, so can the ambition of

working towards success.

the business plan. Profits from the group can be

re-invested into the group business or loaned,

Rules of engagement for credit

either within the group or to other clients outside

The use of credit requires financial skills and

of the group to increase the income earning

sound business management. Where possible,

capacity of the savings.

the service provider should enable farmers to

access financial credit through an experienced

Use of loans and credit

third-party financial agency such as a micro-

For many farmer groups, market opportunities

finance union. Service providers who are focused

are available but can only be accessed if “short-

on production and marketing should usually avoid

term” capital or material support is available. It

playing the role of credit agent because this

should be remembered that farmers should not

generally means the service is poor and

be encouraged to take free inputs if they are at

undermines the market for more specialised local

all capable of entering a business arrangement.

service providers.

It should also be noted that many agencies that

are not specialised in finance have a very poor

However, and unfortunately, in many remote rural

record of loan recovery.

areas, few specialised financial services exist, and

financial agencies are even fewer that will lend to

However, once a facilitator has identified that a

farmers who have no collateral assets. In this less-

critical investment is needed to access a

than-desirable situation, the lead service provider

particular market such as seed, fertilisers,

may need to provide a short-term credit facility. In

pesticides, packaging materials, or transport,

such circumstances, the service provider should

the service provider should develop a business

seek the advice of a local financial agency to

plan that will enable farmers to buy those

establish near-market conditions for loan rates

and to understand and where needed clarify the

ground rules and the responsibilities of the farmer

5. Churning is a term used to describe a situation

group being considered for a loan. The information

whereby money is cycled through a business with

in Box 2 describes the conditions stipulated for a

virtually no profit. Hence money circulates but when

farmer group in Uganda, where no micro-finance

costs of borrowing have been removed the return on

the investment hardly merits the effort put in.

was available to support the group.

28

Institutional Preparation and Planning

Box 2

How financial conditions affect planning

In Uganda, a service provider and farmer group developed a business plan to supply an identified market with 5 tonnes of beans. The initial enterprise plan, based on free inputs, included developing a group production plot, paying for all labor needs, and clearing previously unused land.

When the group was informed that the business would be supported through a loan, the farmers changed the plan entirely. Funds were borrowed only for essential capital items. The group production approach was replaced with farmers producing individually, and hired labour was replaced with family labour. The only collective action was for marketing. The simple change in incentives changed attitudes and group dynamics entirely as reality set in.

The service provider endeavored to find a finance agency to administer the loan and set an interest rate. A micro-finance agency advised that it did not loan to farmers who did not have title deeds for their land. The agency also informed the group that they only provided short-term loans, starting at US$5 (or local currency equivalent) for 1 or 2 months, with initial repayments starting after 10 days. This loan instrument was developed for petty trading. If a borrower was successful and credit worthy, then he or she could borrow up to $500, repayable within 18 months. Interest rates were 25% over 3 months, that is, 100% per annum.

On revising the implementation plan, instead of borrowing US$1500, the farmers wanted to borrow US$500

for one season, that is, 4 to 5 months. Inflation rate in the area was calculated as being about 10%. For the farmer group to understand how to calculate the rate of inflation, the calculation was based on the annual increase in price of a locally available industrial product, such as a bicycle. Loan conditions were therefore made as follows:

1. The initial capital sum would be given to the group only when they had set up a bank account.

2. The funds deposited would be the responsibility of the financial committee.

3. An interest rate of 20% was agreed on.

4. The loan would be used for one cropping cycle, that is, for a maximum of 6 months.

5. The funds would be used only for the expenditures agreed on in the business plan.

6. Group members would not conduct cash transactions.

7. Group members may apply for funds to buy inputs such as seed, fertilizers, and pesticides, or finance activities such weeding or harvesting. For physical assets, the requestor would be given the physical input to the value of the funds requested. For seed, farmers would be given seed, based on market prices. Labour would be provided through labour vouchers given to the requesting farmer, based on a daily or task-based rate. The labourer could redeem payment from the treasurer on completing the task set (e.g., preparing 0.5 acres of land for planting). The treasurer provides cash to the chairperson and/or deputy chair for purchases only in the presence of another committee member.

8. The group would meet regularly (weekly) to review payments made and compare notes on crop performance against the activities laid out in the business plan.

9. At sales, the group would sell collectively, with profits being shared according to the amount of produce the farmers contributed to the collective sale. Any costs would be subtracted from the resulting income before distribution to farmers.

10. The group requested two responsibility clauses:

• Farmers who defaulted on the loan would be identified but costs would be covered by the group.

• In the case of a general crop failure, the farmer group would not be obliged to sell their assets to pay for the loan.

Such conditions should be revised on a case-by-

incremental manner to help build financial

case situation. The purpose of the loan

skills within the group, encourage members to

approach, albeit subsidised, is to introduce the

keep records, develop group responsibility, and

concept of the cost of finance to farmers. Ideally,

prepare the group for future dealings with a

the level of the loan should be made in an

specialised financial agency.

29

A Market Facilitator’s Guide to Participatory Agroenterprise Development Information from service providers confirms that

a test plot to encourage them to compare their

repayment levels from farmer groups, especially

local varieties with the new variety from

those who have received free inputs, are low.

research. The farmers were not paid to do the

Where possible, therefore, loans should be

experiment, because their labour was

administered through a third party. Many local

considered as matching the grant. The risk or

micro-finance agencies are under funded and

enterprise fund is therefore used to share the

will discuss terms with an agricultural service

risk of introducing or testing an innovation.

provider who has funds to support farmers.

In Uganda: a grant was given to a local

Risk or enterprise funds

manufacturer to build a prototype cassava-

Enterprise development is inherently risky. In

processing machine for a farmer group setting

the business environment, failure occurs and

up a pilot site for cassava processing. The

the service provider should factor this

information gained at the pilot site was used to

probability into the planning process and in

verify and substantiate the ideas of the initial

some circumstances, may consider sharing the

business plan, which, if successful, could be

risks associated with it. For an enterprise group

replicated by other farmer groups.

who are learning new skills in developing a

business, they invest time and money into a

In Vietnam: farmer groups were given grants of new business without knowing if it will be

US$3 to $5 to cover costs in preparing a

profitable. To encourage more marginalised

business plan. The opportunity costs for local

farmer groups, or groups living in extreme

labour were set at about US$0.80 per day and

poverty, to embark on developing an

the loan, therefore, would cover the farmer’s

agroenterprise, the service provider may

time for about one week. In this case, the fund

consider sharing the cost of risk by providing

was used as an incentive for farmers to work on

“financially appropriate” grants to support

collecting information and developing their own

“activities” such as:

business plan.

1. Preparing a business plan.

The size of grants from a risk or enterprise fund

2. Setting up an association of enterprise

should be carefully considered in terms of cost

groups.

sharing and potential profit. At the most

3. Experimenting with a particular product,

common level, with small-scale enterprise

process, or livestock.

options, the risk fund would typically operate at

4. Training on critical points such as quality

a level of US$10 or local currency equivalent,

control for products, establishing a

increasing to levels of $200 to $300 with larger

packinghouse, and training in business

business options, and more often with higher

skills and book keeping.

value products. Sometimes, the level of

5. Pilot site development.

investment can increase as the scale of the

enterprise increases.

The idea of “financially appropriate” support can

be linked to daily wages when funding the

When the enterprise’s operations reach beyond

preparation of a business plan or the time to

a threshold level, for example, $500, the service

undertake a production-based experiment.

provider should opt for a more sophisticated

Examples of how such support has been given

approach whereby the risk investment fund is

include the following:

repaid, based on the enterprise’s profits. When

such a risk investment arrangement is being

In the Philippines: farmers were provided with used, then the lead service provider should

specialised plastic containers and labels to pack

hand its management to a third-party specialist

their high-value vegetable crops and tag them

financial agency, and guarantee the use of risk

for transport to the market. The tags were to

funds by that agency.

determine produce sourcing for both payment

and rapid source location if there were problems

Exit Strategies

with the product. In this case the costs of the

As with scaling up options, the lead

containers were discounted from profits, when

organisation should also make plans for the

the business was operational.

time it intends to invest with a community or

cluster of farmer groups. If the goal is to

In Tanzania: farmers were provided with seeds empower many communities with marketing

of a new variety of tomato and given fertiliser for

30

Institutional Preparation and Planning

skills, then the lead organisation will need to

working alongside their selected farmer groups.

make some decisions on the amount of time it

The lead service provider can then focus more

can dedicate to a typical farmer group.

on supporting local business development

services that will enhance the sales capacity of

Exit strategies can be time bound, for example,

selected market chains.

2 to 3 years of support to a given number of

farmer groups before withdrawing.

In years 8 to 10, several organisations,

including the instigating lead provider, can

Alternatively, the initial service provider will

work to strengthen networking across farmer

begin by spending years 1 to 2 with a select

groups in much the same way that micro-

number of farmer groups to build in-house

finance operations link groups of borrowing

capacity, adapt the process to local conditions,

agencies. A final area of intervention from the

and build up a group of interested partners.

service provider may at this point include local

and national policy advocacy (Table 2).

In years 3 to 5, the provider will step back from

frontline fieldwork and focus on market linkage

The time frames suggested in this model depend

and networking the agroenterprise development

on the capacity and abilities of farmer groups

approach through other service providers. At

and the strength of markets in being able to

this time, the provider can also shift its focus

support many farmer groups.

towards the capacity of local business support

services, giving particular attention to links

The service provider may also choose only to

between farmer groups and market information

apply learning skills and then exit. This process

and financial services.

would initially take one season to get farmers to

market and then an additional year to pass on

In years 6 to 7, the agroenterprise approach

the enterprise skills, that is, it would be a

scales up through third-party organisations

2-year process.

31

for

(Continued)

of

innovations

sales

agricultural

broad-based

associations

the

new

on

process

within

Focus

service provision such as

finance and market

information

Initiate work related to

policy analysis and

advocacy

Pay for services to support

growth in product sales

Link with or develop limited

company

commercial

8 to 10 years

•

•

•

•

Take on more specialised

role

sector

Continue

introducing

into the system

BDS

other

BDS

to

to

certain

and

local

provide

in

for

products

to

farmers

organisation

farmers

Evaluate

options

strengthening

Link

providers

Link

higher order

entrepreneurs

Initiate work on policy

analysis and reform

Link with other

farmer groups for

selected

Start process of

association building

Work with BDS

groups

Link to specialised

innovation partners

Work with local SPs

to scale up local

ability

successful

technologies

Specialise

technologies

social

processes

6 to 7 years

•

•

•

•

•

•

•

•

•

•

a

keeping

selected

successful

Time

group

record

within

providers

interest

provide

to

BDS

Focus on scaling up

through

partners

Provide training to other

partners through a

learning alliance process,

i.e., incremental learning

Initiate process of working

with

Farmers focus on new

products

Strengthen

for finance and monitoring

Experiment

market chain to improve

enterprise

Scale up process with new

farmer groups and their

partners

Introduce experiments to

accelerate innovation

Work with local service

providers to scale up local

ability

technologies

Work with higher order

traders and processors to

increase prospects of scaling

up and value aggregation

2 to 5 years

•

•

•

•

•

•

•

•

•

•

M&E

savings

programme

learning

Start

scheme

Introduce

process

Expand

enterprises

1 to 2 years

Establish a

monitoring and

evaluation

procedure

•

•

•

Enter

alliance

group

organise

enterprise

first

months

Gain in-house

competence

Initiate

interest

Farmers

into a marketing

group

Start

cycle with a pilot

project

Work with farmer groups and SPs to

identify new markets

Work on technology innovation to support

selected market chains

6

•

•

•

•

Observe

enterprise cycle

•

•

groups

Transitional exit strategy with a 5 to 10-year time frame.

service

Lead

provider

Farmer

Partners

Researchers

Table 2.

32

and

scouting

8 to 10 years

Specialised local SPs emerge

New markets develop, based on

market intelligence and

technology

application

link

to

sustain

to

processing

payment

Primary

pushed back to rural

areas

Identify new

processing

opportunities

with farmer-

processor groups

6 to 7 years

Develop

processes

local support services

•

•

a

Time

market-

with

level

new

players

Link

chain

successful farmer groups to

strengthen market links

Link with research to make

new technologies available

2 to 5 years

Work with farmer groups to

identify most critical services

linked with selected and

successful market chains

•

•

1 to 2 years

months 6

(Continued.)

order

partners

BDS

Higher

entrepreneurs

BDS = business development services; M&E = monitoring and evaluation; SP = service provider.

Table 2.

a.

33

A Market Facilitator’s Guide to Participatory Agroenterprise Development SECTION 4

Tools for Working with a Community

By the end of this section, the market facilitator

The Philosophy behind Community

should have:

Engagement

• A good understanding of the main

This approach to agroenterprise development

participatory tools required.

aims to empower local communities to use their

• Have trained interested partners in the use of

own skills and resources to identify market

these tools.

opportunities and develop new agroenterprises.

• Pilot tested unfamiliar tools.

To achieve this goal, participatory tools are used

in a learning-by-doing framework for learning

Working with the Community

together and for imparting knowledge to client

groups.

The agroenterprise development process

involves a series of steps to be undertaken in

The market facilitator should make it clear to

participation with farmer groups and other

the targeted community that the support given

partners. The process of holding joint meetings

for agroenterprise development will operate for a

and planning sessions builds trust and sets a

limited period, as is designed by the project

clear code of practice. The way the local

team. The market facilitator, as the name

development institute works with a community

suggests, will play a catalytic function and is

is a critical part of the process. The lead

not a supplier of goods and services.

institute and its partners must create a

common understanding and maintain a

The following text provides an outline of the

consistent message. As shown in Figure 1

types of participatory tools used to support

(Section 1, page 6), the first activities aim to

communities, together with examples of tool use

select a project area and community groups,

and the types of results expected from an

then analyse the participators’ and community

agroenterprise perspective.

assets, BUT, these activities should be done in a

participatory manner. The “market facilitator”

Gender Sensitivity and Cultural

must therefore be well prepared before starting

Values

to work with partners and the targeted

community.

In developing successful business options, key

social values of trust, honesty, group support,

34

Tools for Working with a Community

and responsibility should be shared and agreed

In Uganda, for example, the Local Community

on. Not only should the agroenterprise

Chairman6 is briefed about the intended activity development approach lead to skills in income

in his or her community and asked to call a

generation through building local enterprises, it

meeting of the residents. This type of meeting

should also seek to promote core values of

helps to establish a higher degree of acceptability

gender equity and social responsibility. In rural

for the future project within the community. Even

communities, women play an important role in

if only a subset of the community is directly

both family affairs and working on the farm.

involved from the outset, the community has been

However, their inputs are often undervalued;

informed. Some members may have had the

they are under represented in decision making,

opportunity to learn and others will actively seek

and often do not receive equity of benefits. The

involvement based on this initial meeting. Gaining

market facilitator should pay special attention

support from local leadership is an important first

to the values and needs of women’s groups and

step in community development, and the market

other vulnerable groups within a community

facilitator should make time to discuss ideas with

such as the youth and those living with HIV/

community members and take their advice as a

AIDS. In many localities, gender specialists can

first step towards building a relationship.

assist in working with communities.

Building confidence

Getting to Know the Community

First meetings are important. The “market

A major role of the “market facilitator” is to gain

facilitator” should use these opportunities to

a sound understanding of the clients within the

listen and learn about the communities in the

targeted area and build a trusting relationship.

project’s selected area, their composition and

This can be achieved by mobilising the

farming system. This information will help the

community and through dialogue. Typically,

facilitator and other supporting partners to gain

mobilisation starts with informing local leaders,

first-hand experience of the opportunities and

elders, or chiefs about the intended programme.

problems that the community faces.

Permission is sought and leaders are tasked to

inform and prepare the community for the first

6. Local Community Chairman: this basic

meetings.

administrative position represents a village of 50 to

150 households.

35

A Market Facilitator’s Guide to Participatory Agroenterprise Development Some farmers will be suspicious or sceptical of

• Always plan for the meeting to take longer

the facilitator’s motives and many will not fully

than anticipated, as many communities

participate in the early meetings. The “market

need time to gather, to resolve issues and

facilitator” therefore needs to “break the ice”, to

come to consensus.

help farmers feel more comfortable at meetings,

• Start meetings by introducing yourself and

get to know each other, understand their

your assistants. Explain what will be done

involvement in this process, and feel sufficiently

and why. Give the farmers time to introduce

at ease to share information. Some of the poorer

themselves. Set a time frame.

farmers in the community often prefer to keep

• If the exercises take the whole day, make

quiet and let the wealthier or more educated

sure that the farmers are provided with food,

farmers do all the talking. The visit of a new

either by paying the community to prepare

team often creates considerable expectations of

food or bringing soft drinks and bread,

free handouts, whether in cash or in kind. The

maize, or rice, depending on the locality.

facilitator needs to read these signs and find

Share this responsibility with the

ways to inform the group about what will be

community such that both sides pay for part

provided and, importantly, what will not be

of the process.

provided. By working with farmers in an open

• If many people come to the meetings, create

way, trust will be gained and much better

several smaller groups. These usually

participation achieved.

enhance participation. By working in

groups, you may also reduce time taken to

Participatory Tools for Community

conduct the meetings and ensure a lot of

Diagnosis and Market Planning

information is collected.

• Use methods that collect the most necessary

To get to know a community and gather

information needed for agroenterprise

information in a participatory manner, CIAT’s

development in the shortest amount of time.

Enabling Rural Innovation team uses the

Carefully select a minimum number of tools

following tools:

to gather information. Do not use these tools

a way of passing other people’s time and

• River code.

always see how information can be focused

• Community resource maps.

on market development.

• Seasonal crop calendars.

• Come to the meetings prepared. For most

• Ranking, scoring, and weighting.

exercises, you will need marker pens of

• Historical calendars.

different colours, flip chart paper, and tape.

• Client profiling.

If you want community representatives to

• Market flow mapping.

keep records, provide them with pens and

• Visioning.

note books.

• Market visits.

• Use “energisers” when a meeting becomes

• Participatory monitoring and evaluation

unproductive, especially, after 1 hour of

methods.

work or after lunch. These short exercises

get people onto their feet, get their blood

These tools can be used either alone or in

circulating more vigorously, and help

combination. The market facilitator should

refocus their attention. Make this fun!

decide which tools are best suited for the

prevailing conditions. The information gained

River code

through these tools should form the basis on

(Time required: 1 to 2 hours)

which to develop commonly agreed plans for

The river code is an activity used to explain to

developing agroenterprise options that will

the community the market facilitator’s role to

improve the community’s wellbeing.

empower and guide the community. The main

message is that the facilitator’s role is not to

Useful tips for the facilitator

burden people with assistance and leave them

• Some of these exercises take a lot of time, as

stranded in the middle of the river, but to be a

much as one half or a whole day. You must

guide. However, as the market facilitator will

be mindful of the farmers’ time and explain

not be there forever, the farmers need to learn

at the meeting’s outset how long it will take.

from him or her.

If the exercise coincides with crucial

community activities, the participation of

the entire community might be compromised.

36

Tools for Working with a Community

To conduct this exercise, the facilitator needs

cross the river but, by showing the second person

two pieces of rope or branches to represent the

where the next stone is located, the two manage

banks of a river, some paper to represent stones

to cross the river (Figure 4D).

(or draws large circles on the ground to

represent stepping stones) by which to cross the

On reaching the other side of the river they

river.

celebrate. The person who helped the farmer to

cross the river then waves goodbye and leaves the

The facilitator takes aside three members of the

play. The person who was shown the way returns

farmer group and gives instructions for a three-

back to the original side of the river.

act “role play”. The audience is told that the

rope or sticks are the river banks and that two

In the third act, the person who was successfully

people are trying to cross the river. They want to

shown how to cross the river takes a member of

find something better on the other side

the audience and shows him or her how to cross

(Figure 4A). The group acts out the play in mime

the river. The person does not hold hands with

to the rest of the group.

the member of the audience but leads him or her

to the edge and then shows where to step. The

In the first act, two people attempt to cross the

role play ends when the two people have finally

river. One person, representing a service

crossed.

provider tries to carry the other person (farmer)

across the river on his or her back, Figure 4A.

When the role play is over, the group reforms and

The service provider finds the task of carrying

the facilitator leads a discussion about what the

the man/woman across the river difficult. The

play represented. The story’s key element is that

carrier gets too tired to continue. He or she

the river is the challenge. In the agroenterprise

leaves the person being carried behind in the

context, the river is the work that has to be done

middle of the river and returns back to the

to find a new market opportunity. The first side of

original side of the river. The person who was

the “river” is where the community is now. The

being carried is abandoned to his or her fate,

other side of the “river” is where the community

receiving no more help (Figure 4B).

would like to be. To achieve their goal,

community members must cross the “river”.

In the second act, the task of crossing the river

is repeated with the same person representing

The play involves three characters, two are

the service provider, leading another person

farmers and one is the facilitator. In the first

(Figure 4C). In this second act, the leader does

scenario, the facilitator brings everything to the

not carry the other, instead holds his or her

farmer. In reality, this represents a service

hand and shows very clearly where the next

provider supplying the community with free

stone is positioned. The two people take time to

seeds, tools, fertiliser, credit, transport, and

A

B

Figures 4A and 4B. The River Code scene 1 “Bearing the load”.

37

A Market Facilitator’s Guide to Participatory Agroenterprise Development Figure 4C. River Code scene 2 “Let’s work together”.

Figure 4D. The River Code scene 3 “Crossing together”.

traders. However, after some time, the service

In the second instance, the service provider

provider gets tired of continuing, such as when a

empowers the farmer by guiding him or her

project ends. When this happens the farmer is

through the “river”, clearly showing the

left behind because he or she does not know how

“stepping stones” that the farmer needs to use to

to get to the other side. That is, the farmer was

get to the other side. This time the farmer is

being “carried” and when support was withdrawn

slower to cross but gets there by working with

he or she was unable to continue along the same

the service provider. At this point, the service

path.

provider leaves. However, the farmer has learned

how to cross the “river” and can now return to

38

Tools for Working with a Community

Figure 4E. The River Code scene 4 “Together we can succeed”.

where he or she was and, most importantly,

encouraged to contribute to the map, the

help others cross the “river”.

facilitator should not ask for each asset, but

allows the group to think about what they have

After the play, the market facilitator leads a

and so build up a picture of their assets.

discussion about what the play represented,

who did what, and how this relates to ideas on

If paper is not available, the map can be drawn

enterprise skills, learning, and community

on the ground, using various objects such as

empowerment. The facilitator emphasises the

stones, bricks, fruits, or other plant materials to

merits of learning by doing, compared with

show the community’s various landmarks and

supply-driven solutions that may lead to

resources. The facilitator should ask people what

dependency.

is most useful in terms of their marketing

activities and what people lack in terms of

Community resource maps

getting to the market. The facilitator should

(Time required: 2 to 3 hours)

ensure that no one dominates the map-drawing

This graphic tool is used with the community or

exercise. By the end of the exercise most members

village to develop a map, that is, a spatial

should have participated in drawing the map.

inventory, of its physical features and

resources. The exercise can be carried out with

If possible, a digital photo should be taken of this

a subset of the community or by the farmer

map as a record. Figure 5 shows a resource map

group with whom the market facilitator will be

which was developed for Tororo, Uganda.

working. The village (community) resource map

should be one of the first tools used because it

Seasonal calendars

opens up the community and ensures

(Time required: 2 to 3 hours)

participation.

Seasonal calendars are important tools for

getting to know farmers, the type of farming

The facilitator starts by asking farmers to draw

systems being used, the number of cropping

a map of their community or village, beginning

cycles that exist in the year, how they relate to

with boundaries. Then various features are

income and food security, and how farmers’ lives,

added such as houses, churches, schools,

and therefore labour, are organised throughout

medical clinics, roads, fields, crops, livestock,

the year. These tools can be used to highlight

water, and wetlands. The map is drawn on a flip

problems and major activities, and evaluate

chart. The farmers, men and women, are given

cropping options, ranking them from low-value to

markers to draw their assets. Every farmer is

high-value.

39

A Market Facilitator’s Guide to Participatory Agroenterprise Development Figure 5. Community resource map developed for Tororo Village, Uganda.

The facilitator may also want to use this tool to

Product ranking and scoring

determine trends in cropping, that is, to discover

(Time required: 2 to 3 hours)

when to introduce new crops or products and

This method is used with farmer groups to gain

the best time to test an enterprise option. For

an idea of what is produced by the community,

example, in the dry season, cropping is limited

how much is produced, and for what purpose.

and farmers maybe interested in testing a new

The facilitator should draw up separate tables for

short-cycle crop in the wetlands as an off-season

food crops, livestock, and cash crops. For each of

alternative. Labour is often available in the offthese tables, the farmers should draw up a list of season and this could be a good time for a pilot

the products they grow. The next task is to rank

project.

these products.

The facilitator can draw on a flip chart or on the

To find the rank order of the products within

ground, the months of the year from January to

each of these categories, the products can be

December and then ask the farmers to fill in the

weighted to explain their importance. Sometimes,

activities they carry out each month. The

a sample of the products being evaluated can be

farmers should indicate the months of the rainy

obtained to focus the discussion. Each farmer

and dry seasons, and provide supplementary

can then be asked to vote or put a stone next to

information on activities associated with

the most important product. Pictures can also be

problems such as when pests and diseases are

used so that farmers who cannot read well can

prevalent, when roads are impassable, or

participate fully.

markets are oversupplied. The facilitator should

attempt to understand the magnitude of these

Products can also be compared for different

opportunities and challenges throughout the

purposes such as (1) food security, (2) cash

year (Table 3).

income, (3) high value, (4) home nutrition, or

(5) women’s income/medicinal products. On

40

Famine

–

–

3

333

33

3

–

–

–

–

3

333

Poverty

3

–

–

333

33

33

3

–

–

–

33

33

Pyrethrum

(year 2)

Gap filling

Manuring

Planting

Manuring

Weeding

Spraying

Harvest

Harvest

Weeding

C

Pyrethrum

(year 1)

–

–

–

LC

L

Planting

Manuring

Manuring

–

Weeding

Harvest

Harvest

Drying

–

Labour

(pyrethrum)

333

3

33

333

33

33

3

333

33

33

3

333

a

Crop

C

C

Peas

Harvest

L

Planting

Harvest

L

Planting

C

Sorghum

Planting

Planting

Weeding

Weeding

–

–

Harvest

–

–

L

C

Cabbage

Harvest

Planting

Weeding

Spraying

Harvest

Planting

Weeding

Spraying

Harvest

L

Planting

Weeding

Spraying

Harvest

C

C

Beans

Harvest

L

Planting

Weeding

Weeding

Harvest

Harvest

L

Planting

Weeding

C

C

C

Irish potatoes

Weeding

L

Planting

Weeding

Spraying

Harvest

L

L

Planting

Spraying

Planting

Cropping calendar for various products and poverty indicators.

g u

ct

ov

ec

Month

Jan

Feb

March

April

May

June

July

A

Sept

O

N

D

LC = land clearing.

Table 3.

a.

41

A Market Facilitator’s Guide to Participatory Agroenterprise Development comparing products, the facilitator should make

sources over time. The facilitator should

it clear that the product with the most votes will

understand what has happened in the past.

be considered as the most important. Once the

For example, has the community undergone

facilitator has the results, he or she should

major shocks, natural or political? How did this

discuss them with farmers to confirm them and

affect the community? Has the community

be sure that all agree with the results.

benefited from a new infrastructure or an

innovation? How has the market changed over

Another method is to use pairwise ranking

the past 4 to 5 years? By learning how the

(Table 4). With this method, the farmers

community adapted to these changes, the

examine pairs of crops and indicate which is

facilitator will better understand the

more important than the other. Again

community’s strengths, opportunities, and

importance needs to be clarified so that people

attitudes to risk, and better evaluate changes

know what they are voting for.

related to community links, infrastructure,

market options, and innovation.

When conducting this exercise for pilot project

selection, make sure that this is discussed

As agriculture is based on natural resources,

beforehand and that the group understands

the facilitator should also understand what

why ranking is important. If this exercise is

changes have taken place in the resource base,

being done with farmer groups, other important

particularly in terms of quality. Have yields

information to be gathered includes:

dropped because of soil degradation and/or new

policies on land size holdings? Table 5 shows a

• How many people in the group produce the

historical calendar made for Mbuule Village,

products being discussed?

Tanzania.

• Market locations for this product.

• Market conditions (price, frequency of

Historical calendars help farmers see how they

supply, minimum lot size and quality

respond to change and the impact they have on

required).

their resource base. This can have a predictive

• Traders involved.

impact and the facilitator can guide the farmers

to interpret the pattern of events in their

If this information is being used to select an

history.

existing product for a pilot project, then the

facilitator should aim for a short-cycle product

To prepare historical calendars with marketing

that brings high income, has high market

and innovation events, a facilitator needs:

demand, and is produced by most of the farmer

group’s members.

• Paper and markers so that farmers prepare

a matrix, with years on the one hand and

Historical calendars with a focus on

significant events during each year on the

marketing

other.

(Time required: 2 to 3 hours)

• Timelines. The facilitator obtains one by

Historical calendars are important for giving a

asking the farmers how far back they can

picture of the situations farmers have

remember events that have happened in

experienced over the previous 5 to 10 years.

their village. People often remember

This exercise forms the basis of “visioning”,

particular events such as the inauguration

which is discussed below. Few activities start

of a new President or a World Soccer Cup.

from zero, as communities change over time and

The facilitator should use these events to set

many have received assistance from many

up timelines.

Table 4. Importance of crops for income within the group.

Maize

Beans

Rice

Chillies

Maize

Beans

Rice

Chillies

42

Tools for Working with a Community

Table 5. Historical calendar for Mbuule village, Tanzania.

Time

Event

Impact

1980

Road built by Chinese in 1982

Enabled us to get to nearby towns and sell our

beans to more traders

1985

Major famine in 1987, due to El Niño

Lost all livestock and received food aid

1990

New school opened in the village

All children went to school

Labour prices increased

1992

NGOs informed us about HIV/AIDS

We found many people were sick

1995

Coffee prices fell to low levels. In 1997 maize

Farmers pulled out coffee

prices were very good, but crops again failed

NGO’s introduced fruit trees

due to poor rain

Built more stores for grain

2000

Cameroon nearly won the world cup

First time we saw colour TV, started merry-go-

Started our farmer self-help group

round savings scheme to help with funeral rites.

Many people lost relatives to HIV/AIDS

2001

Catholic Relief Services started new projects

Seed fairs enabled partners to gain a range of new

on health and gender

varieties

2002

Micro-finance opened office in nearby town

We lost money in loan system because some

Drought caused first season crop failure

members defaulted. Lost livestock, no food aid

2003

ERI arrived and conducted a village mapping

Village group started experimentation with grains

exercise

and vegetables

2004

More people worked with vegetables as prices

Started to listen to market information services to

were good and started to work with “Ssalongo

learn more about markets

traders” to sell produce

SOURCE: ERI-CIAT’s Enabling Rural Innovation team.

• The farmers then recall major events that

This tool helps build up a picture of services that

may have taken place in each period. The

the community can access. The inventory can be

facilitator should make sure all are

done in the same way as the historical calendar

recorded. He or she should also ensure that

but, in this case, the facilitator should find out

elderly farmers are involved as they may

farmers’ views on the value and quality of

remember over a long period of time.

services being offered. This discussion should be

• To discuss with the farmers the main factors

used to study trends in service provision, how

that have changed their village and farming

these have changed, and how farmers perceive or

systems within the timeframe selected

approve of the changes being made. Are the

timeline and show how these factors may

services free or require payment? Which services

have changed their lives.

are missing? Who are the best service providers

• To encourage the farmers to discuss the

to link up with in any agroenterprise project?

historical calendar. This helps in

Table 6 shows an inventory of services received

understanding farmers’ decisions and even

by Ttaago Village, Tanzania.

enhances understanding of the community

or village.

Market mapping

(Time required: 1 day)

Evaluating service provision

Because the market facilitator’s role is to focus

(Time required: 1 to 2 hours)

efforts on agroenterprise options, an important

This tool is used to evaluate the availability of

participatory tool for evaluating market options

service provision in the project area, score their

is the market map. This tool is similar to the

value from the farmer’s perspective, and find

resource map but, in this case, provides an

out from farmers if business support services

opportunity for mapping a specific product’s

are available that should be developed to

place in the market chain. To make this relevant,

support the new agroenterprise project.

the facilitator should select the higher income

products that were determined in the product-

ranking exercise and use these as examples.

Market mapping is conducted in two stages:

43

A Market Facilitator’s Guide to Participatory Agroenterprise Development Table 6. Institutional inventory of services received by Ttaago village, Tanzania.

Stage 1: Farmers are asked to draw the market marketing map that extended only 5 km from

chain map for production, processing, storage,

the village. However, the market facilitator knew

and sales of a selected product to all its current

that these green grams were taken to the capital

market outlets. This map should provide

city of Nairobi, which is 200 km away and from

information on the product’s varieties, how and

there exported to India. To assist with filling in

where it is produced, the types of materials or

some of the gaps, a similar exercise was

equipment used for production (e.g., seeds,

conducted with a group of local traders, who

sprayers, or irrigation), methods of post harvest

could fill in more of the gaps in the market map

processing such as dehulling or grading,

for that commodity. The service provider also

storage, and transport to market. The map

took one or two farmers from the Embu farmer

MUST include prices, volumes, and how

group to visit a large wholesale market in

products are sold (such as in bowls or bags,

Nairobi to discover where the produce went from

collectively or by individuals). If possible, the

there.

group should also provide details of the people

to whom they sell, give distances to markets,

In most cases, however, produce is sold locally

and highlight major problems in the market

and the farmers and local traders can build

chain. Challenges to marketing may include

up a reliable map of the current situation

factors such as few traders, lack of storage, poor

(Figure 6).

roads at certain times of the year, lack of

market information, no access to credit, and low

Stage 2: The process is repeated with a farmer or volatile prices.

group but, this time, they write on the map how

they would like to see their market chain for a

In this exercise, farmers are often familiar with

selected product in the future. This enables

only a part of the entire market chain. For

farmers to start thinking what they want for

example, farmers in Embu District, Kenya,

their future, that is, to start “visioning”. This

produce green gram. They could provide a

could be described as setting the conditions on

44

Tools for Working with a Community

each side of the “river” in the “river code”. The

methods. The map on the desired future is a

market facilitator plays a critical role in making

vision of what farmers would like to achieve. It

sure that farmers take time to systematically

becomes the basis for the next stage in the

consider each step, paying attention to detail.

agroenterprise development process, which is to

The farmers start with the variety used and

build a common plan on how to improve

comment on each stage of the production-tomarketing opportunities.

sales chain to see what changes they would like

made. In the example described above, the

Visioning

farmers showed that they produced at the

(Time required: 1 day)

subsistence level, using a hand hoe as their

Visioning is a process used by the market

main tool. They produced a limited amount of

facilitator, partners and farmer groups to

groundnuts, lacked appropriate drying or storage

develop a joint plan of action that, after

facilities, and linked with intermediaries from

additional market studies, will lead to an

outside the village to sell their produce (Figure 7).

intervention plan. This process starts by looking

at where the farmer group is today and where it

In the map for the future, the Embu Farmers

would like to be in the future. This is the “river

Group showed the farmers working together.

code” in reality. The facilitator should work with

They have access to tractors to plow the land,

the farmers to systematically write down all the

and crops are planted in rows and later sprayed.

activities that must be in place for the farmers

The houses have roofs of iron sheeting and are

to get from where they are today to their desired

therefore more suitable for storage. The farmers

state. This type of planning can be either short

produce a lot of groundnuts, which are sold in

term or long term.

bags in large consignments. The farmers hire a

pick-up truck to take their goods to a range of

To learn more about “visioning”, the group can

more distant markets and to add value to the

start by looking at their resource map of the

crop.

village or community (Figure 5) and then

prepare a “desired” state of that village or

The map on existing conditions enables the

community. This activity will allow the group to

facilitator to understand the current situation

show what they would like to achieve over, for

and the problems associated with existing

instance, the next 10 years. It is a useful way of

Figure 6. Market map, existing groundnut marketing, Embu District, Kenya.

45

A Market Facilitator’s Guide to Participatory Agroenterprise Development Figure 7. Market map, desired marketing for groundnut in Embu.

finding out the group’s and/or community’s

constraints to achieving an established vision or

ambitions. The facilitator must be sensitive to the

goal. The facilitator works with the group to list

fact that different segments of the community

and prioritise constraints and then find ways to

may have different outlooks and aspirations.

address the most critical. In many cases, a

combination of appreciative inquiry and

If the time horizon is reduced to 5 years, the

constraint analysis proves the most effective.

group will need to prioritise issues and bring in a

greater degree of reality. Such a reduction may

Regardless of the approach taken, the group

suggest that they can achieve half or a quarter of

develops a list of activities to meet their vision.

what they would like in 10 years. The time frame

These activities can be systematically divided into

can then be reduced to 3 or 1 year. The group will

short, medium, and long-term issues. Visioning

then need to assess what they can achieve in

starts by listing the set of activities that need to

such a reduced time horizon. Each time the time

be changed to achieve success. Such activities

frame is reduced, a greater degree of reality and

include production, post harvest handling,

possibility enters the discussions. A facilitated

marketing, and business development services.

discussion can then help prioritise specific

activities that will work towards achieving a

Production

feasible and desired aim.

• Area of land to be planted.

• Tools to be used (diversify from hand hoes to

Another tool for helping with visioning is

animal traction or tractors).

“appreciative inquiry”. The facilitator starts by

• Agronomic practices to be changed (seed

focusing on what is working well in the

type, variety, planting density, weeding

community and how it can be strengthened. The

methods, fertiliser application, irrigation

group therefore builds on past successes rather

usage).

than trying to overcome an insurmountable list of

• Monitoring of fields, particularly for higher

problems. Appendix 4 summarises this well-

value enterprises.

documented process.

Note that the same can be done for livestock

For those who are more problem oriented, an

enterprises.

alternative approach is to list the major

46

Tools for Working with a Community

Post harvest handling

• Pre-production issues, related to market

• How to harvest, when and by whom?

information.

• Storage options and facilities.

• Production issues.

• Sorting, grading, packing, and labelling.

• Harvesting.

• Marketing.

These issues should focus on the identified

• Post-sales evaluation.

market opportunity and the level of detail,

depending on purchasing conditions, that are

The process of intervention planning is

given by the buyer.

discussed in more detail in Section 10.

Marketing

Evaluating the “Entrepreneurial

• How the group would like to market its

Spirit” or Finding the “Sparky

produce.

People”

• Transport, and delivery schedules.

• Payment terms (checks, need for a bank

Setting up new business ventures and keeping

account, signatories to the account).

them competitive requires more than just

• How the money shall be shared in the group.

following instructions. The types of people from

• Investment plans for the group and savings

the community who take on the market

mechanisms.

facilitator’s role and are included in the working

group and marketing teams should be people

Business development services

who have either experience in business or have

a certain aptitude and desire to undertake

• Which services are the most important.

business development. Our experience shows

• Which services need to be strengthened.

that not all development agents or production

• Should services be paid and, if so, how.

based researchers can make the move from

production or community support to working

The facilitator can then lead the group through

with markets. The right type of person must

a final process of making decisions on what can

therefore be selected or the “sparky people”

be achieved, including financial aspects, by

found. Whether people have an aptitude for

using local skills and resources and what can

marketing scenarios can be rapidly discovered

be achieved only with external support. This

by using some simple tests.

information can be further refined by providing

information on service providers who have the

Incentives (such as small amounts of cash) are

skills to assist with any given problem (Table 7).

needed in order to run these tests (which are

conducted as games). Where possible, the

As the market facilitator gains experience, the

facilitator should use cash or other attractive

visioning approach can be applied directly to a

prizes that will reward the successful

real-life enterprise situation such as “supplying

participants.

beans to an identified buyer”. In this case,

visioning starts by systematically recording the

Defining the “entrepreneurial spirit”

current situation, and includes the following

specific tasks:

The “entrepreneurial spirit” is somewhat

intangible; it involves doing things in new ways,

Table 7. Activity options to shift from today’s situation to a desired state.

Today, where

Short-term

Medium-term

Long-term

Where we

we are

activities

activities

activities

want to be

What can be achieved

with existing

resources?

What activities or

interventions require

external resources?

47

A Market Facilitator’s Guide to Participatory Agroenterprise Development innovative thinking, being creative, and having

question: “how do you make your first $10?”

determination and drive. But how can such

There are no further instructions given. The

qualities be recognised in service provider

time frame for this game is 10 to 15 minutes.

personnel and in communities? How can these

Observe how the group reacts to this test. The

characteristics be best harnessed to the cause

facilitator can answer questions from the group.

in hand?

Encourage them, but do not tell them that

money is hidden in the area, or give very

A dictionary definition of enterprise is a

obvious clues of its location. Did they find the

business, firm, organisation, or project,

money? To find the answer to the riddle, see

especially one requiring boldness, initiative, and

bottom of page on Appendix 7. After having

energy. The definition of spirit is the nonsolved the riddle, the group should discuss the physical aspect of a person concerned with

implications of the game, and why it is

profound thoughts and emotions such as

important to think about how to solve problems

attitude, character, and temperament. These

and do so quickly rather than wait for someone

ideas can be applied to a business, organisation,

to show them the way.

or movement, and the qualities do not

necessarily have to include the motive for profit.

Test 3: Being a successful risk manager

The aim of this game is find out why people

Three tests are given below for evaluating the

select leaders and then test the risk-taking

entrepreneurial and risk assessment qualities of

approach of their leader and his or her ability to

members within a group.

work with the team. This game can be played in

groups of 15 to 30 people. The facilitator should

Test 1: Identifying entrepreneurial

first divide the participants into groups of

characteristics

3 to 5 people. Within the small groups, the

The first test for the group is to ask them to

members should select a chief executive officer

name three world-famous entrepreneurs and

(CEO), someone who has the qualities and

then three from their area. Divide the group into

characteristics that were found in Test 1.

smaller groups of 3 to 5 people and ask them to

provide a list of 10 words that explain why these

To play the game, the teams should compete for

people were successful. Entrepreneurs can be

a prize and winner takes all. The prize could be

famous business people, artists, or spiritual or

a marketing book, or the team members could

ethical leaders. Having written up the lists, the

provide a minimum stake of their own money.

groups should re-convene and discuss the

In this case, each team member will provide

findings in a plenary session. Why were these

US$0.10 to $0.50 (or equivalent in local

words chosen and what do they imply. Does any

currency) as their entry stake. The CEOs bring

group member have these qualities? Could they

their group’s game stake to the facilitator who

develop them? What makes some people more

holds it for the winning team.

successful than others in business matters?

How can these types of skills be refined within

The CEOs are separated from their team and, if

the individual and within the group?

possible, provided with seats in front of the

group. They then receive the following

Test 2: Making your first $10

instructions:

This game aims to test the ability of group

members to “think outside the box”. For this

1. The CEOs will be asked a series of questions.

test, the facilitator will need to have participants

They can decide to choose questions from

or groups in a room or defined area in which he

different categories of $1000, $5000, and

or she has hidden a US$10 (or local currency

$10,000. The questions for this game can be

equivalent) note under an object in the room,

based on local general knowledge or based

such as under a table or chair, or behind a

on marketing questions.

curtain or board before the group arrives. The

2. Each correctly answered question will

facilitator can opt to leave some riddles or clues

receive a score to the value of the question

in the room or meeting area to help participants

answered. The CEO can then opt to pass or

find the money. The participants must not know

ask for another question.

where the money is hidden.

3. The CEOs will continue to answer questions

until either they pass or answer a question

To start the test, the facilitator should ask the

incorrectly. If the answer is incorrect, the

participants to sit down and then ask them a

value of the last question is deducted from

48

Tools for Working with a Community

the amount accumulated through correct

and see how well this fits in with the planned

answers. Hence, if the CEO starts with a

agroenterprise approach. He or she can then

score of 0 and answers two $1000 questions

build on the group’s current skills.

correctly, but answers a $5000 incorrectly,

the score for that round will be -$3000. If a

As a monitoring tool, the “blue bean”, or other

CEO passes, s/he keeps the money they

invented product, the question should be asked

have won up to that time.

again after the farmers have undergone some

4. The CEOs can ask for assistance from their

training on how to engage the market. If the

respective team members ONCE only in the

farmers have taken on the new skills, their

game.

response to such a question would include

5. Answers that are shouted out by team

questions such as Does the crop grow here?

members will receive a $5000 penalty fine at

Can you give us a sample so we can test it to

the facilitator’s discretion.

see if it grows under our conditions? What is the

6. The game is played for three rounds of

price of the blue bean in the market? Is this

questions. However, more rounds can be

price higher than the best bean market

added.

varieties? Is the bean being sold for a local or

7. At the end of the questioning, scores are

international market? Who is buying the

totalled and the team with the highest

product? Can you give us names of some buyers

points wins the prize.

so we can survey the market ourselves? Do you

have any information about the product, its

This session is concluded with a review of the

price trend, quality requirements, or market

CEOs’ performance. Did the CEOs adjust to the

trends? If we go into production, will this be a

risk of the questions? Did they work with their

contractual agreement? Will you provide any

team effectively? Did they have a sensible

additional inputs to assist in production? If the

strategy for using their team’s money? Would

market fails, can we eat this crop?

the CEO be re-elected by the team?

The facilitator should compare the group’s

“Blue Bean Test” for Baseline and

answers at the end of the process with those

Evaluating Behavioural Change

given at the beginning. If the group does not ask

To better understand a farmer group’s

these types of questions, that is, to test if a

knowledge about marketing approaches, a

product has market demand, the facilitator will

simple test can be applied to find out how they

know that they did not fully understand the

approach the idea of a new product. Do they

process and a new approach to capacity

systematically work with the market or do they

building is therefore needed.

simply follow instructions from a service

provider. The group is asked if it would be

If the farmers have a clear strategy for

interested in producing “blue beans”. A typical

investigating new market options, then the

response might be, “Yes, if you will buy them”,

training process has at least achieved its first

to which the facilitator may respond, “No

aim of transferring the inquiry process.

problem, I’ll take all you can grow”. For farmers

who do not have a systematic approach to

Summary

marketing, their response is often a very positive

All these tools can be used to generate a wide

yes, that they will start growing the beans

range of information. However, for the

tomorrow!

agroenterprise development process, specific

information should focus on that required to

However, they make this response even though

develop the desired enterprise option. A

they have never seen a blue bean, nor do they

summary list of the main participatory tools and

know if it grows in their area, or which market

their specific uses is provided in Table 8. For

they are targeting, or if alternative and better

further information on the use of participatory

market options exist. Where the group shows no

tools in the community setting, see ERI’s

clear approach to marketing, the facilitator has

Visioning Guide by Sanginga and Chitsike

to start from the beginning. In contrast, if the

(2005).

farmers do have a strategy in dealing with the

market, the facilitator should listen carefully

49

hours

o 3 hours

3 hours

minutes

t

day

to

hours

day

Time

1 to 2 hours

2 to 3 hours

2 to 3 hours

2

1

2 hours

2 to 3

2 hours

2

3

15

1

1 to 3 hours

at

e

y

to

what

explore

e to the

ene and

to

raining has

sc

out

evaluat

in demand

also

the

find

and

to

and

sets

products

phase

providers

exercise

availability

determine

this

service

skills

diagnosis

to

local

labour

trade

studied

used

list

is

sessions,

and

being

keeping

participatory

determine

worked,

to

method

opening

the

When to use

At

highlights the role of the lead organisation as a

facilitator

At the beginning of the participatory diagnosis so th

we gain an understanding of the asset situation

During participatory diagnosis and as a prelude

record

At the participatory diagnosis phase to select and

prioritise products for further market investigations

Use this tool to gain an understanding basic group

ideas and aspirations. Use this method also for detailed

planning of enterprise options

Having selected a product, this method is used to map

out the production and marketing links

At

has

their value to the community

Use

key gender issues

Use as a follow up to asset mapping, to determine social

networking

To verify specific assets, particularly those of us

enterprise

At the start of a working relationship, after t

taken place

This

and their buying conditions

During the training of trainers and with communit

groups

their perspective

assets and to verify information

community to show the physical

Why used

This is a role play used to indicate that the facilitators have come to assist the community in learning new skills, not in leading them into a process of dependency. See Annex 2

This graphic tool is used with the

features in the village and their resources

Work with farmers group to find out what they grow and when in the year, highlight seasonality and opportunities for pilot testing Work with farmers to find out who grows what, what is for food security, what is for income and who is growing these crops Process of community recognising where they are now and where they would like to be in 10 years, 5 years, 3 years and 1 year. Use this process to build a common plan of action, based on aspirations Work with farmers, traders and service providers if possible to work out how the community connects with the markets for specific products. Start with farmers, traders, processors

Work with community, men and women, to find out when major events happened in the community over the past 10 to 15 years, who has supported the community, what went well/what did not work. Gain an inventory of service providers that have worked or are working in the project area and innovations that have been successful

Typically used with men and women’s groups to determine who does what in the community on a daily basis

Conduct a rapid survey of the groups that already exist in the community, their size, purpose, longevity, success. Ensure that financial and trade issues are discussed

Used with key informants to assess

gathered in previous mapping sessions

When starting to work with a farmer’s group to assess

on how to engage markets. As a monitoring tool to assess whether a group has taken on new marketing ideas

The market facilitator takes representatives of the farmers group(s) to visit local markets to see what is in demand

Used to evaluate enterprise spirit in the groups. These tests can be applied to trainee market facilitators and community groups maps

crop

and

walks

Tool kit for participatory diagnosis and market mapping.

flow

Tool

code

activity

PRA

River

Community

resource

Seasonal

calendars

Ranking,

weighting

Visioning

Market

map

Historical

calendars

Daily

calendars

Group

evaluation

Community

transect

Blue bean

test

Market visits

Enterprise

games

Table 8.

50

THE PRACTICAL WORK

Blanca

52

Management and Partner Selection

SECTION 5

Management and Partner Selection

By the end of this section, the lead organisation

The type of network envisaged for this process is

should have completed the following tasks:

outlined in Figure 8.

• Set up a management process.

Management team

• Selected a site in which to provide

This team is charged with the overall design,

development services.

implementation, and monitoring of the project.

• Selected partners to work with.

As mentioned before, the lead organisation

provides the market facilitator. Sometimes, the

Time frame: 1 to 2 weeks.

management team may be a partnership

between a research and development agency.

Possible requirements

The team is responsible for making the following

Per diem costs for the facilitator if he or she is

types of decisions:

not from the area and in some cases

refreshments for community members.

• Selecting a project area or site of

intervention.

Management and Partners

• Initiating and convening a working group.

•

The agroenterprise development process is

Establishing criteria for selecting client

enterprise groups.

complex and one organisation is unlikely to

•

have all the skills necessary to implement it

Providing skills training, inputs,

investments, and other services.

successfully. The project will therefore need

•

partners and management. In our experience,

Duration of project implementation.

•

action requires three types of organisational

Scaling up approaches.

•

players:

Entry and exit strategies.

Working group

1. Management team.

2.

The “working group” provides a focal point

Working group (market survey team).

3.

where representatives of interested partners can

Enterprise groups.

53

A Market Facilitator’s Guide to Participatory Agroenterprise Development Specialists

Working Group

Facilitator of the process

Policy and implementation

Traders/

entrepreneur

Finance

Development agencies

Chamber of

commerce

Governmental extension

NGOs

agencies

Research

PA

BDS

BDS

FA

BDS

FA

FG

FG

FG

FG

FG

FG

FG

FG

FG

Farmer

FG

FG

FG

FG

groups

FG

FG

Figure 8. Partnerships and links in the working group.

FG = farmer group; FA = farmer association; BDS = business development services provider; NGO = non-governmental organisation; PA = partner agency; Working group = informal consortium of partners.

convene to design and assist in implementing

3. Ensure that these results support inter-

agroenterprise work plans. Its role is to promote

organisational or group processes.

improved working relationships between service

4. Lead the market survey team.

providers, local government, small farmers, and

5. Document monitoring and evaluation

traders who operate within a defined project

outputs.

area.

The working group will begin as a loose

The working group will also work with

association of partners with a common or

stakeholders to develop the rules of engagement

shared interest in improving their marketing

and establish the consortium’s goals. At an

skills and commercialisation of activities.

operational level, the group will provide

During the agroenterprise development process,

technical oversight, training, access to partners,

membership is unlikely to remain constant,

monitoring and evaluation, and a means for

with some members falling out because of lack

managing field activities. It will also support

of resources or change in focus. Other members

core members to scale up successful activities

will enter the group as the process gains

in the future. Its key tasks are to:

tangible results and some specialists may be

co-opted into the group. Specialised members

1. Schedule events and maintaining a focus on

may become more interested in joining or

goals.

playing an active role, once market chains are

2. Ensure that meaningful results are

operating.

generated.

54

Management and Partner Selection

Enterprise group

• Who owns cattle in the community?

This group comprises clients or business

• Which members in the community own the

partners. Typically, these are farmer groups, but

most land?

they could also be groups of traders, local

• Which members have access to or have their

entrepreneurs, or processors. At the farm level,

own transport?

the enterprise group should be an organised

• Who has access to mobile phones?

farmer group who will work alongside service

• Who travels most frequently to larger cities?

providers to implement specific agroenterprise

• Are there differences in where people access

projects in selected market chains. Within a

water, if so why?

given market chain, service providers can be

• Which members of the community have had

local entrepreneurs or businesses who aim to

the most years of schooling?

provide business development services (BDS).

• Who produces crops for distant markets?

Farmer groups and BDS providers are the basic

“units of change”, that is, these actors will drive

Identifying Leadership Qualities

the marketing process and catalyse change in

A critical aspect within the development of any

the delivery of goods to markets.

community is the presence of people with

leadership qualities. The term leadership has

If farmer groups are poorly organised, or simply

many meanings but, in this case, community

follow the instructions of service providers, the

leaders are those people who are looked up to

enterprise is likely to be unsustainable. An early

for guidance, support, and advice, whether

task of market facilitation is therefore to build

spiritual, financial, farming, or medical. These

capacity in the farmer group. For additional

people are often well respected and the market

information on group formation and ideas on

facilitator can save considerable time and

collective marketing, see Robbins et al. (2005),

energy if such people play key roles in the

Collective marketing for smallholder farmers.

agroenterprise development process. Because

people tend to copy those they admire, an

Additional Tools for Selecting

excellent way of scaling up within the

Enterprise or Farmer Groups

community is to help local leaders show the

Client and business partner profiling

way. The facilitator can discuss this idea with a

Communities are heterogeneous, comprising a

focus group, to find out who in the community

range of social “wealth” or “wellbeing” groups.

has these qualities. These people can then be

Understanding wealth rankings is important for

sought out and asked if they would assist the

processes such as agroenterprise development

market facilitator to develop the agroenterprise

where investment and risks are involved.

development process.

Evaluation of social wealth categories can be a

sensitive issue, so it needs to be handled with

Farmer Groups

thought. Some social groups, particularly those

There is growing consensus that if smallholder

with a steady income, can have very different

farmers in developing countries are to succeed

aspirations to less financially secure social

in the increasingly competitive marketplace they

groups. Typically, the wealthier people in the

need to be better organised. Over the past

community will have more assets, live on the

20 to 30 years, many different approaches have

best land, often have a better education, be

been attempted. Some of the successful

more interested in trying new ideas, and more

organisational structures include primary

prepared to take on new or riskier challenges

societies, self-help groups, and, more recently,

than poorer segments of the community.

savings and internal loans groups. All these

organisations are based on the principles of

If the facilitator feels that the community may

“collection action” or the co-operative

benefit from particular social groups working on

movement, which offers members the

different enterprise options, then he or she

advantages of economies of scale.

should carry out a wealth ranking analysis. This

is often best done with focus groups. Types of

Members of co-operatives gain considerable

questions to use with these groups can include

advantages in terms of accessing new

the following:

information, credit, low-cost inputs, and higher

55

A Market Facilitator’s Guide to Participatory Agroenterprise Development market prices. Unfortunately, for many farmers,

groups, a facilitator may find it easier to

the advantages of the co-operative approach

evaluate and work with groups already existing

have been outweighed by repeated financial

in the community. For more details of group

losses caused by widespread mismanagement of

formation and collective action, see Robbins et

capital funds by their executive committees.

al. (2005), Collective marketing for smallholder

Consequently, many farmers are now highly

farmers.

suspicious about joining co-operatives,

particularly those run by the government, which

Farmer or Product Clusters

have also been politically manipulated.

To support information flow, product

Despite the problems, most communities have

aggregation, and quality standards, a useful

some level of group organisation such as

strategy is to cluster farmers of the same

savings groups or rotating funds (“merry-go-

product in a geographic area. Thus, when one

rounds”), which help groups of friends save and

farmer group is supplying a market effectively,

pay for essential costs such as medical bills,

the facilitator should evaluate the opportunities

school fees, weddings, and burials. These types

for linking other farmer groups into the first

of groups are generally self-selected, have a

group and scaling up production. Using this

limited number of members—typically 10 to 30

mechanism, the facilitator can work directly

people—are from a similar social class, and

with one group and then support other groups

trust each other.

through demonstration and linkage with their

representatives. This process will enable the

These qualities of self-reliance and collective

farmers in one area to specialise and work

action are extremely useful in relation to

together in terms of innovating around a

enterprise development and collective marketing

product.

groups. Rather than attempt to set up new

56

SECTION 6

Project Site Selection and Evaluation

By the end of this section, the market facilitator

over a larger physical domain such as a

will have:

watershed or an agro-ecozone.

• Selected a site for intervention.

The working group should consider ways of

• Undertaken a participatory analysis of the delimiting the area in which the agroenterprise

site’s assets.

intervention will take place. Criteria for selecting

• Undertaken visioning with the community or an area include:

farmer group to develop an action plan.

• Defining the communities with which to

Time frame: 2 weeks.

work with and limiting the area to the zone

where they are found.

Before starting to work with a community, the

• The area where the partners are working.

initiating agency should decide on the physical

• Does the area allow for scaling up?

boundaries of the work area. This decision may

• The size of project area possible without

depend on the programme’s goals but, for many

compromising the quality of work.

organisations, the choice is based on their

• Where should the agroenterprise activities

current area of operation or a government or

start?

donor’s recommendations. The project’s area of

operation is often defined by a local political

Project Site Resource Assessment

area, a village or cluster of villages, or, in the

case of faith-based organisations, diocesan

Once the project area is decided on, the next

boundaries. Sometimes, a project may operate

step is to conduct a rapid resource assessment

57

A Market Facilitator’s Guide to Participatory Agroenterprise Development of the area. Because this is a participatory

economic assets available but it also provides a

process, this task should be done with selected

baseline at the outset of the process. The aim of

members of the working group. The diagnostic

this survey is to present an organised and

study should pay particular attention to the

concise report that lists and evaluates the most

assets available to the enterprise or farmer

outstanding aspects of the site or community

group, as this is the group who will be investing

and major market options and trends so that

time and resources. The facilitator should work

the facilitator and partners are equipped with

from the perspective of smallholder or local

valuable information to help plan new

entrepreneurial investments. To help with

enterprise options. Appendix 5 provides a

interviewing rural communities, several

suggested outline of a resource assessment

participatory tools, described in “Section 4:

report.

Tools for Working with a Community”, can be

used. Checklists for analysing the project area

Community Action Planning

and conducting community interviews are given

(Visioning)

in Tables 9 and 10.

The final section of the participatory report

This survey is not only useful for the working

should be a series of plans developed by the

group to itemise the major physical, social, and

community’s agroenterprise groups of what they

Table 9. Checklist for analysing a project site for agroenterprise development.

Assets

Issues to include

Physical

Geographic location (map)

Climate (focus on enterprise group’s locations)

Soil

Water resources

Roads, paths, trails

Vegetation

Social

Community inhabitants

Demography

Education levels

History

Shocks (environmental, political)

Economic

Major economic and business activities

Production capacity, specialisation

Predominant production and marketing systems

Commercial activities

Electrification

Market locations

Demand channels

Conservation issues and natural resources

Institutional Types of organisations in the area: farmer co-operatives, trade associations, finance banking and micro-finance, chambers of commerce

Governmental structures

Education access

NGOs and others operating in the area

History of intervention activities in the area

Innovation

Introduction of new crops, livestock, processed products

trends

Change from rain fed to irrigated production

Community social fabric

Banking options, increase in remittances

New business opportunities

Change in telecommunications, Internet, mobile phones

58

Project Site Selection and Evaluation

Table 10. Agroenterprise checklist at community level.

Information required

Tools used

Agricultural activities

• List food crops grown by group members

Brainstorming

• Relative importance of each?

Seasonal crop calendar

• List income from crops, livestock, and forest products currently sold Product ranking

• Relative importance of each?

Market mapping

• Where is each product sold?

Venn diagrams

• To whom is each product sold?

Ranking

• Volumes sold?

Historical timelines for innovation

• Who provides technical and other services?

Timelines

• How good are these services?

Resource mapping

• Any new crops fast becoming important to the area?

• Have any major buyers come or left the area?

Assets for comparative advantage

• What natural, human, social, physical, or other assets does the Brainstorming

community possess?

Resource maps

• Biodiversity, climate, soils

Focus groups

• Physical features: lakes, rivers, mountains

Key informant interviews

• Infrastructure, e.g., roads

• Know-how for producing specific goods, education, skills, value-adding options

• Social cohesion, community spirit

• Individual entrepreneurial flair

Innovation analysis

• What innovations have occurred in the last 5 to 10 years that have Brainstorming

had a major effect on business opportunities?

Resource maps

• What innovations have occurred but have not been accessible?

Focus groups

• What types of innovations are required by the community?

Key informant interviews

would like to achieve through agroenterprise

achievable. At each stage in the process, the

development. Community members should be

community should take into account their

encouraged to draw on the information they

assets, partners, and comparative advantages.

generated in the diagnosis to develop a joint

The community should also develop priorities

action plan to achieve their vision.

and plans for both food security and

agroenterprise options. When the facilitator is

The facilitator helps the farmers to first develop

working with several groups, the goals of the

a generic or idealised action plan from their

other groups should be included in the

visioning process. They are then led through a

discussion so that the farmer groups can start

series of iterative cycles in which the farmers

working on similar products to achieve greater

list their priorities and attempt to explore how

economies of scale.

they can realise their plans. The plan should

include a simple analysis of what can be

At this stage, the plan should not be exhaustive,

achieved with no external funding and what can

as the farmers will not receive additional

be achieved only with additional support or

information on product options. The main point

inputs. If additional inputs are needed, then the

of planning here is for the group to start making

group should indicate where these might come

decisions about their future activities and

from and how likely they are to be realised.

investments in a business-like fashion. The

facilitator should ensure equal participation of

By narrowing down the goal and time frame, the

men and women in this exercise. Emphasis on

facilitator should ensure that the actions

transparency and equity of inputs and outputs

proposed by the farmers are realistic and

is crucial for this type of work.

59

A Market Facilitator’s Guide to Participatory Agroenterprise Development

Organising the farmer or enterprise group

registration is a legal requirement; in others, it

Groups are established for many reasons, but

is considered useful, but not mandatory. Where

few are specifically established for business

possible, all groups should open a bank

development. Hence, in an early meeting with

account, to hold their savings and have regular

the market facilitator, a diagram or organogram

records of deposits and withdrawals.

of the group’s current organisation should be

drawn up. This session should include the

Forming Committees

roles and responsibilities of the key positions

Inevitably, the transition of an existing group,

(Table 11).

which may have originally been set up for self-

help, into a more business-like group is likely to

Constitution or membership rules and

demand greater commitment from its members

regulations

in terms of time and investment of land, labour,

Most groups have a simple set of rules that are

and finances, and developing new skills. Given

established at the outset. A savings group, for

the need for additional activities, groups should

example, may require its members to pay an

consider establishing new positions or

entrance fee and agree on the terms by which

committees to oversee more specialised

they save and make loans to members. As the

activities (Table 12).

group takes on financial liability for group

members, a simple set of rules should be in

The formation of any new committee should be

place for members to adhere to, with penalties

led by the community with the facilitator

for non-compliance.

assisting the process. As shown in Table 12, the

group will be managed by the executive

Registering groups and opening a bank

committee, which oversees the enterprise’s

account

activities, whereas specialist activities can be

In some countries, groups are only recognised

delegated to other group members. Where the

for support if they are registered with the local

current group does not possess these skills,

administration at some level. In some countries,

members may co-opt new members.

60

Project Site Selection and Evaluation

Table 11. Suggested organogram of posts within a farmer group.

Name

Role

Responsibility

Term of office

Chairperson To lead the group, resolve

To take major decisions,

1 year, renewable at annual

disputes, set out the plan

delegate activities, monitor

general meeting

progress

Treasurer

Financial officer, to report

To maintain all financial

1 year, renewable by vote of group

to chairperson and

records and conduct financial

members at annual general

members

transactions on behalf of the

meeting

group

Secretary

Record keeper

To take records of all meetings

1 year, renewable by vote of group

and key decisions of the group

members at annual general

meeting

Mobiliser

Group socialiser and

To maintain links between

1 year, renewable by vote of group

motivator

members, keep members

members at annual general

informed of new events and

meeting

time of next meetings

Monitoring

Progress monitoring

To develop a monitoring plan

1 year, renewable by vote of group

agent

and record progress against

members at annual general

milestones

meeting

Member

To implement the group plan

The importance of elected committees

also be put in place to spearhead the farmer

Committee members, when selected by the

participatory research for the selected

community, receive full co-operation and can

agroenterprise options. Box 3 describes the

focus on specific tasks. Committee members

committees belonging to the Kware Vegetable

assist group members by collecting information

Growers Group, Tanzania.

on specific issues such as market prices and

communicating this information to the

The community should seek to select committee

members. An experimentation committee could

members on a merit basis, using such criteria

61

A Market Facilitator’s Guide to Participatory Agroenterprise Development Table 12. An example of an organogram of posts within a farmer group.

Name of

Members

Role

Responsibility

Term of office

committee

Executive

Chairperson

Support day to day

Take major decisions,

1 year, renewable at

committee

Treasurer

activities of the

delegate activities,

annual general

Secretary

group

review progress

meeting

Marketing

Market officer

Collect and advise on

To conduct regular

1 year, renewable by

committee

Sales person

market information

market visits, collect

vote of group

Treasurer

key market data and

members at annual

Secretary

develop business

general meeting

options on behalf of

the group

Experimentation Researcher 1

Evaluate innovation

Undertake experimental

1 year, renewable by

committee

crops/livestock

options

options on behalf of the

vote of group

Researcher 2

group and report back

members at annual

M&E officer

on effectiveness of new

general meeting

technologies, methods

Monitoring

Chairperson

Monitor progress

Record progress against

1 year, renewable by

committee

Treasurer

across committees

milestones for marketing vote of group

Market officer

and innovation

members at annual

Researcher

general meeting

M&E officer

Box 3

Examples of committees in Kware Vegetable Growers Group,

Hai District, Tanzania

The Kware Vegetable Growers group has three committees:

1. Management Committee composed of a Chair person, Secretary, Treasurer and 2 ordinary members.

2. Experimentation committee comprising 4 members.

3. Monitoring and evaluation committee, having 3 members.

These committees were agreed upon by the entire group and meet regularly on behalf of the group to plan and implement activities. During overall group meetings that take place every Sunday, the management committee calls on the other committees to brief the group on status and progress. There are no incentives for the committees and individual involvement in the committees is borne out of the individual interests to support the group.

as experience, standing in the community,

that have no real role or if no-one is available to

holding of other positions, ability to read and

take on the activity. To avoid potential conflicts,

write, being a good speaker, and being respected

the process should be highly participatory and

for fairness. The group may benefit from not

selection of members should be open to all

electing political leaders. The group should avoid

interested persons. The effectiveness of the

forming large committees as these will rapidly

committees should be reviewed at least once per

lead to problems of co-ordination. Neither

year and committees should be discontinued if

should the group set up committees or positions

they are found not to be useful.

62

Project Site Selection and Evaluation

Visioning to Develop a Common Goal

be achieved with local and external resources

for the Future

(Table 13).

Following the analyses at the participatory

Outline of the project area assessment

community level, the market facilitator should

The market facilitator should write a

work with the partners within the working

15-to-20 page report on major findings,

group and representatives of the enterprise

challenges, and current plans (Appendix 5). The

groups to formulate a joint action plan. This

report should highlight the short, medium, and

action plan outlines key or common problems

long-term challenges and the activities that

and how the partners and enterprise groups can

farmer groups have planned to achieve their

embark on a series of activities to overcome

goals. The report with clear recommendations

them. This is related to what can be done in the

should then be circulated among the working

short, medium, and long-term and what can

groups and discussed with the enterprise group.

63

products

“On the other side of the river”

Where we want to be

Produce a range of higher value

crop/livestock

Find an alternative to coffee

Sell at least 10 tonnes of beans

to a known buyer

Select the best bananas for

market and sell to local hotels

Group well organised, with

functional committees for

marketing, credit, and

experimentation

Group linked with service

providers and other production

groups

Group maintains regular

production and financial records

to evaluate its own performance

other

with

marketing

links

Long-term

Seek

collective

groups

research

with

value

from

groups

higher

options

interests

advice

for

other

Medium-term

Gain

station on production

Plan

market

Register group, seek links

with

similar

to

“The stepping stones across the river”

Activities for getting where we want to go:

structure

of

group

benefits

Short-term

Undertake a market survey

for selected income products

Obtain seed of new varieties;

multiply seed of new varieties

Reorganise

accelerate

innovation

income

most

high-value

of

Visioning from current to a desired state, Katamata Group, Tanzania.

few

“On the side of the river”

Where we are today

Sell traditional products

Income from coffee is low

value,

options

Production

crops sold at low prices by

individuals

Partners not well organised

Group not organised for

business, no links to service

providers for input/output

markets

No experimentation done by

the community

No record keeping by the

group

No plans to use local assets

and organisations

Table 13.

64

Product Screening and Market Opportunity Identification SECTION 7

Product Screening and

Market Opportunity Identification

By the end of this section, the market facilitator

directly to “Section 9: Market Chain Analysis” or

and community should have:

Section 10: “Developing an Enterprise or

Intervention Action Plan”.

• Decided on a pilot site in which to market test

an existing product or demand-based process.

This section aims to help partners understand

• Designed a market opportunity survey.

market demand for specific products and

• Evaluated demand and buying conditions for

provide a means of comparing different types of

product options.

product options such as pineapples, beans, and

• Selected a product for additional market chain

pigs. Common evaluation criteria that are used

analysis.

are production requirements, marketing

requirements, and profitability. A significant

Time frame: 2 weeks.

aspect of this process is to also evaluate new

product options that may enable or encourage

This section describes a “screening process”,

farmers to diversify their products into higher

which is used to make an objective decision on

value options that can take advantage of growth

the product to select for market chain analysis

markets.

and agroenterprise development. If a product

has already been selected according to a pre-

Options for Product Screening

project design phase, stakeholder workshop, or

Before embarking on this next phase of the

macroeconomic decision, then the reader may go

work, some decisions must be made on:

65

A Market Facilitator’s Guide to Participatory Agroenterprise Development 1. The type of survey.

the market facilitator and 2 to 4 representatives

2. The survey’s scope.

from the working group, including, if possible,

3. The survey team’s composition.

one or more farmer representatives. Market

4. The level of participation.

teams of 2 or 3 are generally more effective than

groups of 5. If more people are involved, these

Methods for product surveying

should be separated into teams of 2 or 3 people.

Type of survey: Two main options exist for Each group should include one person who is

selecting survey types. Choosing the option or

familiar with market analysis. Market interviews

strategy to follow should be based on the

often touch on sensitive issues such as prices,

working group members’ experience and the

profits and sources of produce or finances. This

level of risk or innovation being sought by the

type of information is only shared with small

farmer group or investor. The market facilitator

teams. Interviews with traders should only

should help the partners make a decision.

include one trader and a maximum of two

interviewers.

Strategy 1: Selecting an existing product

(lower risk). This is for groups with limited

Level of participation: Where possible, service experience in marketing and agroenterprise

providers or farmers should be involved in all the

development. With this strategy, work

planning and implementation stages of the

focuses on evaluating demand, market

market survey, as this facilitates the transfer of

prospects, and services for existing

marketing skills. However, the level of

products in a localised area. The marketing

participation also needs to be practical. As a rule

strategy for this approach is called “market

of thumb, the level of participation of the

penetration”, and is an ideal approach to be

beneficiaries declines as the scale and

used as a pilot project. The time frame for

complexity of the study increases.

agroenterprise development based on this

strategy can be reduced to one season.

In the past, product screening and market

analysis (discussed below) were undertaken by a

Strategy 2: Identifying a new product

consultant or project staff member who would

(higher risk). This is for more experienced

find out what farmers and working group

market facilitators or more organised farmer

members wanted to develop into new

groups. With this strategy, work includes a

enterprises. The results would then be presented

more open product evaluation process, a

to and discussed with the working or farmer

more diverse range of products, and greater

groups for their final decision on the option to

emphasis on market demand. The key

select for further analysis and investment. This

question is whether demand for the product

consultant or project staff-led activity remains

is increasing, stagnant, or declining over the

valid, particularly if the project area under

previous 1 to 3 years. This marketing

analysis is large, if the products under

strategy is normally called “diversification”

consideration require specialist knowledge, or if

and the selection can include specific

the project has limited time or resource

products that are of interest to clients or

constraints. However, where possible, market

investors. The time frame for this process

survey work should be undertaken with a

may extend beyond one season.

manageable level of participation to prevent top–

down processes and to increase ownership of

Survey’s scope: Whichever strategy is chosen, results.

the size of this preliminary survey still needs to

be defined in terms of which type of products to

Importance of Community

investigate (high or low value), how many people

Participation

will be involved, how many markets will be

visited, and which types of markets the survey

Although farmers are familiar with markets, they

will examine. The decision on scope is usually

are not familiar with market surveys. For many,

based on the time and resources available.

their participation in a market survey will be

their first time to systematically evaluate buying

Selecting the marketing survey team: Based conditions for products in a market. Clearly, this

on the type of product and therefore the

type of work requires good communication and

complexity of the analysis, the working group

interpersonal skills, so farmer selection for this

should select participants for a joint marketing

task is important—they must be knowledgeable

team. Typically, marketing teams will comprise

and motivated. Where possible, a gender balance

66

Product Screening and Market Opportunity Identification in the chosen group should be maintained.

marketing prospects at selected market outlets.

Essentially, participation is important so

Usually, market screening focuses on local

partners can learn and repeat the exercise on

marketing outlets. It begins with a market

their own initiative at a later time.

mapping exercise that will enable the market

facilitator and marketing team to visualise the

Strategy 1: Screening “Existing”

types of market they need to survey for the

Products

selected products, as different types of products

may have different market outlets.

For groups who are conducting agroenterprise

development for the first time, starting with an

The team should also plan the logistics of getting

existing product is advisable. Decisions on

to the markets. In some cases, the market

which product to select can be based on:

facilitator may, before the survey, undertake a

rapid reconnaissance of the targeted markets to

• Findings from the project site resource

locate vendors selling the selected products and

survey.

so make arrangements for market visits

• Findings from stakeholder analysis.

(Figure 9).

• Focus groups with farmers.

• Macroeconomic analyses, including the

Survey protocol

project site.

As with all survey work, a standard series of steps

should be observed when interviewing informants.

The simplest way of reducing a list of preferred

product options to a manageable number for

1. Select and brief survey team members on

demand analysis is to choose products having

the purpose for the exercise.

the highest volume and value.

2. Plan the survey on the results needed and

link activities to a time frame.

•

If secondary information from the project

3. List survey sites to be visited.

site is separated into food security and

4. Plan number of interviews per site.

income-generation products, then the

5. Prepare a questionnaire or checklist.

marketing team can select the first 3 to 5

6. Pre-test the checklist in a local market

income-generating products for the client or

before undertaking the survey.

business partner groups.

7. Prepare an introduction as to why you are

•

A product can be selected according to a

doing the survey. Make sure that everyone

combination of information from the working

who is being interviewed understands your

group members and discussions with farmer

aims.

groups. When dealing with farmer groups,

8. Ask permission to undertake an interview

products can be selected according to the

from all managers and supervisors at the

following criteria:

location of the interview, whether at a

-

Products that are mainly produced for

market, hotel, or shop.

income.

9. If possible, arrange meetings before you

-

Products that are produced by most

arrive.

group members.

10. Be sure that the interviewee has time for the

-

Products that will attract investment

interview or re-arrange for a better time if

from farmers, service providers, or local

they are busy.

entrepreneurs to establish a new

11. Always show respect for an interviewee’s

enterprise.

time; do not take more than 20 to

30 minutes of their time.

The advantages of selecting an existing product

12. If interviewing in a market, stop questions

are twofold: (1) the working group or marketing

when the person being interviewed is dealing

team can start working on agroenterprise

with their customers.

options relatively quickly, and (2) farmers

13. Always thank them for their participation in

already know how to grow the product and can

the interview.

focus more on its marketing aspects.

An example questionnaire or checklist

Product market screening survey

The pre-screening survey aims to find out which

Having selected potential products, the

products are showing strong market demand and

marketing team should develop a plan and a

attractive business characteristics. The marketing

questionnaire to evaluate those products’

team needs to discover which product (or

67

A Market Facilitator’s Guide to Participatory Agroenterprise Development Preliminary: The survey team or farmer group selects some products for which they would like to collect market information. The first surveys will focus on existing products. New products may be investigated in a follow-up study at a later date.

The market facilitator reconnoiters the principal markets and selected market outlets for the products.

Basic information is collected for comparison with group data. Traders that the farmers may visit are informed about the visit and permission is sought.

The checklist or questionnaire for the market study is prepared by the farmers and facilitator. This is tested with some of the markets or retailers who have shown interest in being involved or within a nearby trading centre. This ensures free interaction with traders.

A program for the visits is prepared. Market survey groups are defined to study different products. The committee can divide responsibilities between those who will ask questions and those who will record the information. Both men and women should be selected for these tasks.

The market survey is conducted. The survey team or farmer group puts questions to traders, managers, or persons running the businesses. The market facilitator accompanies the team or group.

The facilitator brings the survey team or farmer group together to analyse the results of the market visit.

Results are tabulated according to a predetermined format. The information is organised to be communicated back to the working group or farmer group.

Those who participated in the market visit present the results of the market study to the rest of the working group or farmers in the community. Decisions are made as to which options should be further analysed.

Figure 9. Steps in arranging a market survey.

products) is (are) the best option and who are

• Can you estimate the quantity of product X

the potential buyers. The types of questions to

purchased by this market?

be answered in the pre-screening survey are:

• Who is the largest trader in product X?

• Who do you buy from? And where are they

• What is your name, telephone number, and

located?

contact address?

• What is your minimum purchase volume for

• Could you tell me if the market demand for

product X?

product X is growing, stagnant, or

• What is your frequency of purchase for

declining?

product X?

• Are there any times in the year when

• What is your main source of product X?

product X is scarce? If so, why?

• What price do you buy product X per unit?

• How do changes in the season affect prices?

• What are you currently selling product X?

• What are the prices differences according to

• What are your main marketing costs?

size or class?

• What are your terms of payment?

• If the price of product X is very high, what

• Would you be interested in buying from a

other products do people buy instead?

farmers’ group?

• What quantity of product X do you

purchase? And how often?

Results from the market visit

• How many other traders are there like you

Following the market visit, the market team

in the market?

should review and write a summary of the

information gathered. Figure 10 provides an

68

Product Screening and Market Opportunity Identification Figure 10. Results of a market survey conducted by farmers in Uganda.

example of information, where, in this “market

nearby market before the main study is

survey”, the farmers evaluated market prospects

carried out.

for beans, rice, tomatoes, onions, potatoes, and

• Days 2 and 3 will be spent in the markets,

fresh cassava.

gathering data.

• On Day 4, the market study’s results are

The information shown in Figure 10 is specific

prepared and synthesised.

to a trader who supplied a local school. The

• On Day 5, the findings of the market survey

report was organised to reflect the product,

are presented to the group members or

quantity purchased in numbers of bags,

wider community.

frequency of supply, source of product, price,

payment terms, and the trader’s interest in

Presenting the information: Having gathered dealing with a farmer group. This type of

information from the market, the data should be

summary should be completed for each market

discussed by the marketing team and written

outlet.

on a data summary sheet. This information will

be used as the basis for discussions with the

The time required for this exercise will depend

working group or farmer group on

on the number and distances between the

selecting the best product or enterprise

different market outlets. Typically, participatory

options (see “Section 8”).

market visits to evaluate 3 to 5 products will

take 4 or 5 days, that is:

Strategy 2: Surveying to Identify

Market Opportunities

• On Day 1, the market committee is

introduced to the concept of participatory

The survey to identify market opportunities

market research and how it is conducted.

seeks “new opportunities” for enterprise

The questionnaire or checklist is then

development. The focus in this approach is

prepared. The checklist should be tested in a

therefore on diversification, emphasising

market demand for new and higher value

69

A Market Facilitator’s Guide to Participatory Agroenterprise Development products rather than working with existing

In strategy 2, the list of locations to study may

options. A key question is whether demand for a

become longer as it will include more distant or

product is increasing, stagnant, or declining

specialised market outlets. This type of survey,

over the last 3 years.

therefore, requires careful planning and may

need additional support from experts in either

First, a survey team is formed. This should

marketing or specialised products.

include the market facilitator and selected

members of the working group or farmer group.

The next stage is for the market facilitator to

The survey team should begin by planning the

develop a questionnaire with the survey team.

survey’s scope, discussing with the working

This should be simple and easy to use

group and farmer group, the types of products

(Appendix 6). In this rapid method, the sample

to be evaluated, as this will determine which

size is not statistically measured but, as a rule of

sales outlets will be included in the survey. The

thumb, the survey should visit at least 3 to

farmer groups may have a particular interest in

5 sites within each type of sales outlet. The more

livestock, fruits, or a niche product such as

outlets there are within a type, the more samples

“organic coffee”, which considerations should be

should be taken. For example, kiosks are likely to

introduced into the survey’s planning and

be more numerous than small shops. The survey

questionnaire format.

team would therefore plan to visit more kiosks

than small shops to gain an idea of a product’s

Having established the study’s focus,

market demand. The group should also consider

preliminary market chains for the various

collecting more data if the information is highly

products should be drawn up to determine what

variable or to stop collecting when 2 or 3 sites

information is known, what information is

give similar information.

needed, which types of people should be

interviewed, and where the interviews should

Once the questionnaire has been finalised and

take place (Table 14). This session should end

pre-tested, the next step is for the survey team to

with a timetable and list of interviews to hold,

contact key informants at the market outlets and

questions to ask, and the names of the people to

conduct the survey. This exercise quantifies the

conduct the survey. The matrix in Table 14 will

relative demand for specific products and gathers

assist in this planning process.

information on buyers, changes in demand,

Table 14. Matrix format to plan which data to collect at which point of sale in the chain.

Products in

Products in

Products of interest

Estimated

Sample size

high demand

scarce supply

to the project or

number of

farmer groups

sites

Local market

Next largest

town market

Supermarket

Small shops

Local stores,

kiosks

Restaurants

Institutional

buyers

Processing

factory

70

Product Screening and Market Opportunity Identification product prices, volumes, and buying conditions.

found in FAO’s Marketing Extension Guide

The survey team can also use this opportunity

No. 3 “Market Research for Agro-processors”7.

to discuss selling options with traders and

Before any agro-processing venture is started,

retailers, and so initiate the process of building

or before an existing venture decides to expand

contacts in the market.

its product line, an understanding of the market

for the planned products is essential. Farmers

This exercise allows selected market committee

and rural processors need to be sure that they

members to find out for themselves the demand

can sell what they produce at prices that give

for products in nearby market outlets. The

them a good profit. They need to have a realistic

survey team will be able to identify the range of

idea of the quantities they can sell and be sure

agricultural products on sale, study the buying

that the facilities they build and the equipment

conditions and quantities purchased, and note

they buy are suitable for those quantities, being

market trends.

neither far too large nor too small. They need to

know where they can sell their products and

Market Survey Results

how best to distribute them to consumers. Last,

but not least, they need to be certain that the

This type of survey can generate information

raw materials, other ingredients and packaging

for “long lists” of options for enterprise

they require will be available when needed, at a

development, for example, more than

price that permits profitable processing and

30 products within a 2 to 3 day period. When

marketing.

the survey includes several additional categories

to be studied such as fruits or dairy products,

The Dynamic Nature of Markets

many options and market outlets exist for such

lists, such as supermarkets, which may have

As buying conditions in markets are constantly

20 to 30 products within one product line. The

changing according to season, trends, and many

survey team can collate its findings in the form

other factors, the working group or farmer

of a report (Appendix 7).

group must understand that single visits to

marketing outlets only provide a snapshot of the

The survey team should not feel overwhelmed by

market situation. To follow trends, the survey

the high numbers of potential products because

group or market committee member needs to

the next step is to use marketing filters to select

undertake further visits over the year to monitor

the best option for the target group.

changes. Farmers can follow up on more

localised market changes once they know how

Researching markets for processed

to conduct the market study.

products

For community groups planning to work on

processed products for sale to consumers, good

7. (www.fao.org/ag/ags/subjects/en/agmarket/

advice on market research techniques can be

research.html)

71

A Market Facilitator’s Guide to Participatory Agroenterprise Development SECTION 8

Selecting the Best Product or

Enterprise Option with the Clients

By the end of this section, the market facilitator

for agroenterprise development. To filter out the

and community should have worked with clients

less attractive options, the survey team uses the

on the following:

information they have collected and develops a

series of selection criteria (Figure 11). The

• Determining selection criteria.

summarised results are then presented to the

• Selecting the most viable option for the

wider group, who makes a final selection.

community.

• Developing a business plan.

Establishing Evaluation Criteria

• Developing an enterprise action plan.

Several criteria can be used to evaluate the

Time frame: 1 week.

agroenterprise options. These criteria should be

well defined and easily understood by group

At this stage, the facilitator has assisted the

members:

community to generate market information on

several products. Depending on the strategy

• Smallholders can easily produce the options.

used, the survey team will have gathered

• The options are attractive as a business

information on either (1) a limited number of

proposition.

existing products, or (2) a considerably larger

• The options would contribute to production

set of products that include traditional and

sustainability.

new options. Having generated this list of

potential options, the survey team, guided by

Because most farmers in rural communities are

the market facilitator, should now reduce the

smallholders, the options chosen must be easy

list to the most profitable and viable products

to implement or, if a new product is selected,

72

Selecting the Best Product or Enterprise Option with the Clients Filter 1: Obvious discard

Filter 2: Selection matrices

Filter 3: Farmer decisions

Criteria: Can be grown

Criteria: Production,

Criteria: Farmer or investor

in project area,

marketing, financial/and or

has casting vote on

investment limit

profitability

final selection

Final

selection of

Initial long

market

list of

opportunities

products

by farmers

Selection

Filter 1: Obvious discard

Filter 2: Selection matrices

Filter 3: Final selection

rates

Many options: 10–15

10–15 down to 3–5

3–5 down to 1–2 for

market chain analysis

Figure 11. Selecting market options according to three levels of selection or discard.

SOURCE: Adapted from Abele et al. (2004).

then the farmer groups should have access to

group or community meeting should be called to

sufficient technical service providers. Generally,

review the process of enterprise selection. At the

the option should have low technical

community level, all farmers should be invited

requirements, with the initial costs of production

and the meeting should be as participatory as

being affordable. Ideally, the option chosen

possible. Selection should be based on a three-

should be attractive, not too long-term, and

stage discard (i.e., product removal) process

provide a reasonable return. Farmers and less

(Figure 11).

experienced market facilitators should start this

process with a short-cycle product, so that they

• Discard 1: Obvious products that have little

can go through the process reasonable quickly

hope for success.

without losing interest of the actors involved.

• Discard 2: Removal of options based on

Contributing to production sustainability is also

production, marketing, and profitability data.

an important criterion because smallholder

• Discard 3: Final selection by most farmers.

farmers have little land and often farm on low-

fertility plots with limited inputs.

Discard option 1: Removing obviously

“no hope” products

Selecting the Most Viable

Any product option that the farmers or project is

Agroenterprises from a List of Options

not interested in is removed from the “long list”.

Such a “long list” will not occur where only

The market survey team, with the facilitator’s

“existing” products are studied, but only when

help, must write up the enterprise selection

the survey team generates option lists based on

information. Once this has been done, a working

market demand.

73

A Market Facilitator’s Guide to Participatory Agroenterprise Development Reasons for discarding an option include the

some enterprise options may be automatically

product being unable to grow in the area, being

disqualified because the area is unsuitable for

costly to grow, or being too risky to produce.

their production. For example, if rainfall

Examples of such products may include exotic

requirements are higher than the area’s rainfall

high-value fruits and vegetables, taboo

and irrigation is not possible, then those options

products, illegal products, products that require

should be discarded. The complexity of the

specialist skills, and very long-term products

matrix, and therefore of the information

such as hardwoods.

required, will be based on decisions made by the

survey team.

Discard option 2: Enterprise criteria

This series of options must be measured against

Marketing analysis: This information is critical indicators of business viability. The facilitator

because it gives the survey team and farmers an

and market survey team should take time to go

idea of the best enterprise options in terms of

through this information, so that the method is

selling the product. From this information,

understood and can be explained to other group

the survey team will gain a reasonable

members in a comprehensible and interesting

understanding of the risks involved and the level

manner. Selection criteria in this case focus on

of effort required to reach purchasing standards.

requirements for (1) production, (2) marketing,

This information focuses on demand status,

and (3) profitability, based on investment, as

prices offered for each product, minimum

follows:

quantities purchased, the means and terms of

payment, delivery conditions, and quality

Production analysis: For all options, the

requirements (Figure 13).

survey team and market facilitator should

determine what is required to produce them.

Profitability analysis (financial): The final Each product should be assessed, using a

evaluation provides a means of comparing the

common set of production requirements, for

profitability of different enterprises. This method

example, rainfall, soils, altitudes, inputs such

requires some mathematical skills and the

as fertilisers and pesticides, major pests and

facilitator should ensure that calculations are

diseases, and other potentially useful agronomic

done correctly. Based on the information

information (Figure 12). From this information,

gathered at the market, the analysis outlines the

Figure 12. An example of a production matrix.

74

Selecting the Best Product or Enterprise Option with the Clients Figure 13. An example of a marketing matrix.

costs involved in producing and bringing the

business options. If the farmers fail to come to a

product to market against the income that will

consensus in selecting a product, the facilitator

be received. The market facilitator should

can use several methods, listed below, to arrive

ensure that this analysis is done in the simplest

at an agreed choice. Other criteria that are

and yet most conclusive manner (Figure 14).

specific to farmers’ interests can also be

included to provide a common appreciation of

Gross margin analysis is a fairly simple way to

how a decision is being made and guide the

compare profitability of an enterprise across

final selection of a given product option for

different types of products. “Gross margin” is

agroenterprise development.

the final income after all production costs have

been subtracted from the sales income. The

• Weighting and giving scores to various

profitability of an enterprise is a very important

options.

selection criterion. In some cases, this exercise

• Using the one-man one-vote criterion.

must be undertaken over several years, as some

• Applying pairwise ranking to the products.

enterprises only show profit after 2 or 3 years.

These methods can help farmers make a

Discard option 3: Final enterprise

decision agreed on by all members. This

assessment by working or farmer group

exercise should be facilitated so that all present

The final selection of the most suitable product

feel satisfied with the outcome. Because of the

to develop into an enterprise should be

significance of this exercise, the facilitator

determined through dialogue between working

should ensure that it is done thoroughly and

and producer group members. The facilitator

that the farmers understand that a clear

can use either “product cards” or a “summary

decision is being made.

sheet” so that it is simpler, particularly for

farmers, to compare the enterprise options

Through this process, the working group or

against their constraints and opportunities.

farmer group will assess the different

enterprises and justify their preferences. Going

The marketing committee member should

through this exercise significantly improves the

present the information to members for

group’s understanding and assessment of the

discussion and the final selection of one or two

various enterprises.

options that will be developed further into new

75

A Market Facilitator’s Guide to Participatory Agroenterprise Development Figure 14. Profitability analysis: “gross margin” for beans in Uganda.

Why Learning these Skills Is

built, and they may use the exercise in

Important

subsequent studies to find a new enterprise

option. Box 4 gives an example from Tororo,

If the farmers properly understand this process

Uganda, and Table 15 gives a matrix of

of information gathering and selection, their

prioritised interventions and associated chain

confidence in enterprise development will be

actors.

76

Selecting the Best Product or Enterprise Option with the Clients Box 4

Case study: Enterprise selection by the Katamata Farmers Group,

Tororo, Uganda

Preparing for market visits

The market facilitator in this study was from the NGO, Africa2000 Network. Dates for market visits were agreed on by the committee, together with the facilitator, who wrote letters to several business men and women in the Tororo markets, requesting permission for the farmers to visit their enterprises. A date and time was agreed on for the visits. Before visiting, the farmers studied the market checklist and agreed on the questions to ask the business people. The committee was separated into two groups, both composed of women and men. Each group elected a leader to record the information gathered. Ten committee members chaired by Mr Alojo led the market study. The facilitator, joined by another from CIAT, accompanied them.

Feedback

The market study feedback session, led by the marketing committee, was attended by 26 members: 10 women and 16 men. After presenting the market information, the results were discussed. At the first level of selection, farmers arrived at a list of commodities that they could produce. This list included beans, groundnuts, tomatoes, kale, amaranth, green gram, and field peas.

As part of this process, farmers were guided through a gross margin analysis of two selected crop enterprises to determine their profitability. The analysis showed that beans had returns of 160,000 Ugandan shillings per hectare. In contrast, groundnuts had returns of up to 455,000 Ugandan shillings per hectare. Groundnuts and beans were selected as the most attractive enterprise options and an experimental plot was set up to evaluate the production from new varieties of these crops.

Selection criteria

Several selection criteria were considered, including market demand, price, production costs, availability of or access to improved varieties, availability of certified seed and other agricultural inputs, maturity period (preferably short), perishability, post harvest storage, pest and disease management, transport costs, and quality and/or amount of produce required by buyers. Groundnuts were noted as having two planting seasons whereas beans could have as many as three planting seasons, if planted at the correct intervals.

Table 15. A matrix of the final evaluation and selection of income-generating activities.

Product

Market demand

Technical and

Economic feasibility

Farmer organisation

environmental feasibility

exists

Beans

Pork

Pineapples

Scoring

High 6

Low 0

High 4

Strong 3

Medium 4

High 5

Average 2

Medium 2

Low 2

Op. cost 0

Weak 1

Non-existent 0

Availability of

Existence of local

Equity in distribution

Other criteria

Total score

service support

know-how about

of benefits in

for the product

crop/product

community

Scoring

Yes 2

Yes 1

No. of beneficiaries:

Degree of importance:

No 1

No 1

High 3

High 3

Intermediate 2

Intermediate 2

Low 1

Low 1

77

A Market Facilitator’s Guide to Participatory Agroenterprise Development SECTION 9

Market Chain Analysis

By the end of this section, the group should have:

for agroenterprise intervention. The information

gained through market chain analysis also

• Undertaken a rapid market chain study.

helps in identifying the best market chain to

• Written up a market chain report.

work on for a specific client and in locating key

• Reported findings back to the group.

market chain actors who will buy produce. The

knowledge obtained will play a critical role in

Time frame: 2 to 3 weeks per market chain,

designing, implementing, evaluating, and

depending on chain length and survey team

scaling up enterprises.

experience.

The method offered here relies on a combination

Introduction

of secondary data, a review of trends, and

primary data collected by interviewing market

Market chain analysis is the most complex

chain actors. With this information,

analytical stage in the agroenterprise process

opportunities and constraints can be evaluated.

and many fieldworkers find this task rather

Results are mainly descriptive and the analysis

daunting. This section provides a method that

does not require sophisticated econometric

can be used and adapted by non-specialists to

skills. However, when implementing a market

undertake a simple analysis, focusing on part of

chain analysis, the survey team should take

a selected market chain. The goal is to obtain a

into account the complexity of the sub-sectors

more detailed understanding of the actors,

under study, the time and resources available,

activities, costs, and opportunities related to the

and the capacity of the staff involved. Some sub-

flow of a particular product and associated

sectors may have a multiplicity of supply chains

services, starting with farmers and ending with

and products, as shown in Figure 15. This type

the targeted buyers and/or consumers. These

of survey will often benefit from or even require

issues need to be understood to identify critical

expert consultant support. The lead

constraints, opportunities, and the entry points

organisation should evaluate demand for this

78

Market Chain Analysis

Product 2

Product 2

Product 3

Int Export

Regional

Product 1

National

Product 1

District

Local

Market Types

Product Types

Figure 15. Idealised scheme of a sub-sector and its many market chains.

[Dotted lines refer to local links within a market channel; this is often the limit of work that can be done with farmer participation. The channel can be followed beyond a district to a national level and this maybe possible for farmers if they are going to the main capital city market, but as stated previously, as the analysis becomes more distant and complex the level of participation would logically decrease.]

type of service as this may be an area that can

A sector usually refers to all activities within the

be developed into a future business

mandate of a single Government Ministry, such

development service.

as agriculture, health and education; hence the

Ministry of Agriculture services the agricultural

As a rule, farmers would not lead this process

sector. A “sub-sector” is the term used to

and they are unlikely to ever undertake this sort

describe activities within part of a sector.

of analysis on a routine basis. The market

Therefore within agriculture, the term sub-

facilitator will therefore need to find partners

sector can be used to describe all the activities

with specific skills from research or other

within one part of the agricultural sector, such

development agencies. Farmer representatives

as the cereal sub-sector, fish sub-sector or

could be included in the survey team and

livestock sub-sector, etc. The term “sub-sector”

undertake specific parts of the analysis.

is also used to describe activities that relates to

However, involvement should be restricted to

only one particular commodity, such as the

specific opportunities identified, based on the

maize, rice, cassava, beef sub-sectors. The term

findings for the survey (e.g., small dotted lines)

sub-sector essentially describes the activities

(Figure 15).

and market channels, through which products

and services are delivered to buyers. Buyers

Sub-sectors and Market Chains

include traders, processors, wholesalers, and

retailers (Figure 16).

To help demystify some of the jargon used in

market analysis, some key terms and their

A product is the basic unit being traded. It is

meanings are briefly described below

usually categorised into one of three types:

(see also Glossary):

79

A Market Facilitator’s Guide to Participatory Agroenterprise Development Consumption

Retailing

Research

Trading

Transportation

Processing

Government policy regulation

Trading

Communications

Technical & business training & assistance

Post harvest

handling

Market information and intelligence

Production

Financial services

Production input supply

Figure 16. Links in the market chain and business support services.

• Primary product: This is the basic unit consumers, with a high-value or scarce

harvested from a farmer’s field, for example,

product. The opposite of the niche market is the

“maize cobs”.

commodity market, which deals in more

• Secondary products: These are sub-products generalised, bulk goods.

derived from maize cobs such as grain,

flour, and stover (maize stalks used as

These market outlets may have local, national,

fodder).

regional, and possibly export destinations. The

• Tertiary products: Further differentiation or links, based on the number of transactions that

processing of secondary products, including

occur between the farmer and final consumer is

starch, snack foods, processed animal feeds,

described as the market cha in. Figure 15 shows

and industrial products.

several products being supplied through

transaction points to several different types of

The more a product is subdivided or

markets, along individual market chains. The

differentiated, the more specialised are the

dotted and dashed line represents one market

markets and buying conditions.

chain or channel.

Distribution indicates the movement of products.

In the literature, market chains are

Primary produce from one or many farms is

synonymously referred to as production chains,

purchased by local or travelling traders, who

supply chains, market channels, or value

transport goods between markets. These

chains. At each stage in the market chain, the

traders, also called intermediaries, play the role

product changes hands through chain actors

of bulking farm produce, which is then sold

and, at each transaction, costs are incurred and

through a range of markets, including assembly

generally some form of value is added.

markets, wholesale markets, industrial buyers,

retail markets, supermarkets, restaurants, and

Value addition includes simple tasks such as

hotels. Niche markets are a relatively new

bulking, cleaning, grading, and bagging. Value

concept, describing a highly specialised type of

addition can also include moving a product

market that supplies a limited number of

nearer to a larger demand centre or town; and

80

Market Chain Analysis

numerous types of processing, packaging, and

participants at different stages of the market

promotional and marketing additions that

chain or sub-sector. This method is usually led

change the product and attract consumers.

by an experienced analyst, with support from

non-specialists, particularly when the study is

The value chain can also refer more specifically

extensive or sufficiently complex to require

to the addition of value or worth, as the product

expert knowledge. However, it can be applied to

progresses from the primary producer to the

less complex market chains or to parts of a

final consumer. This term is used for particular

market chain by researchers with less formal

market chains that have been systematically

training in economics and by local actors with

organised with the actors involved working

some degree of facilitation.

together to raise the efficiency and quality of

supply, that is, the chain itself. Improving

The interview approach provides the survey

market chain performance is the goal of many

team with an opportunity to gather primary

enterprise projects, and value chain concepts

information from several market chain actors,

are at the heart of sound agroenterprise

working on the product in question. The RMA is

processes.

a way of (1) gaining a view of how a commodity

sub-sector is organised, operates, and performs;

Market chains operate over different spatial

(2) identifying sub-sector constraints and

domains, and also supply different types of

opportunities; (3) identifying specific market

consumers. These consumer categories, which

chains that are most appropriate for a client

include rich, poor, young, old, ethnic, and

group or investor to compete in; and

industrial buyers, are referred to as segments.

(4) prescribing interventions in the organisation,

Each segment has specific demand

technology, and management of a specific part

requirements based on price and quality

of the sub-sector.

parameters. Marketing plans aim to match the

needs of these segments with a specific product.

Undertaking a sub-sector or market chain

analysis is a way of gaining insight into the

The performance or efficiency of a market chain

(1) operations of specific market channels while

is a result of how well the actors in the chain

focusing on their growth potential, (2) activities

are organised and also how well the chain is

and efficiency of actors along the chain,

supported by a range of business development

(3) business support services involved, and

services (BDS). Business services include

(4) policy and regulatory frameworks. With the

research entities, input suppliers,

information from the analysis, opportunities

communications organisations, transporters,

and constraints can be identified within specific

local administration, market information, and

market chains, and ways can be seen to

financial services. Market chain performance

improve a defined client’s capacity to compete

can often be increased more effectively by

more effectively. Sometimes, the survey will

improving or gaining access to BDS, rather than

identify several potential market chains that

assisting an individual or group of actors in a

should be prioritised according to market type

market chain. Market analysis therefore aims to

(local, national, and export). The analysis

assess both goods and services along the chain

should also identify the best points of leverage

and the relative strengths of market information

within a market chain by investing to improve

and/or signals.

market chain performance. Such leverage may

focus on technology, specific chain-actor

A Method for Rapid Market Analysis

performance, improving BDS, or changing

policies.

The rapid market appraisal (RMA) method

described below is based on that developed by

The basics steps in an RMA

Holtzman (2002). This method relies on semi-

structured informal interviews with key

The main steps of conducting an RMA of a

informants

commodity sub-sector are as follows:

8 and a minimum number of

1. Define the sub-sector or market chain to be

analysed, outlining critical constraints and

opportunities, and the need for study. Draw

8. A key informant is a person with expert knowledge of a sub-sector map and make decisions on the

a particular area, in this case a specific area of

information related to the market chain being

scope of the survey required.

studied.

81

A Market Facilitator’s Guide to Participatory Agroenterprise Development 2. Plan the basic survey overview; identify team

be analysed, using basic common sense and a

composition, and delegate roles and

systematic approach to data collection.

responsibilities. Link activities to time

frames and budget.

The market survey team for this exercise will

3. Conduct a focused review of relevant

include the market facilitator, a local service

literature. Collect and tabulate readily

provider, and a representative of development

available and relevant secondary data.

agencies from the working group. More than one

4. Based on findings from secondary data,

team can be used in the field, but as with

define key study areas, and make strategic

market visits, small teams are conducive to

decisions about where to allocate scarce

discussing sensitive information. Farmer

time and resources. Define issues, priorities,

representatives can sometimes be involved,

and questions for focused study. Review the

taking part in selected market visits, especially

budget and time frames.

where market chains are local. For market

5. Identify and interview knowledgeable

facilitators who have not undertaken this type

“observers9” of a sub-sector to obtain their

of work, an economist should be hired to help

views, opinions, and suggestions.

with the first survey. Such initial assistance

6. Identify, select, and conduct semi-

will enable the market facilitator and team to

structured informal interviews with “market

brainstorm and discuss the relevance of

actors10” in the sub-sector or market chain

information gained, and analyse and report

(define sample size, cross-check process).

on it.

7. Visit physical facilities (e.g., markets,

warehouses, transport, and cold storage

Defining the study’s scope is a critical decision

facilities) and observe performance of

in market chain analysis, because the process

marketing functions.

rapidly becomes more complex and costly with

8. Share and discuss findings, draft a report,

distance from the farm gate. The survey’s scope

and present it to clients and interested

can be defined by initially drawing a preliminary

stakeholders.

sub-sector or market chain map to permit

9. Revise the report, based on feedback, and

thinking through the different stages of a

propose the next steps:

market chain. The market facilitator should

• Recommend policy and regulatory

undertake this exercise with the survey team

reforms

members, focusing on the team’s understanding

• Develop innovations in technology,

of the market chain.

institutional arrangements, and

organisation or coordination of

The survey team may decide to limit the study

marketing functions (and a monitoring

to local markets or to conduct a market chain

plan)

analysis within the project’s geographic

• Further, focused, applied research

boundaries. If the group decides to extend their

understanding of the market chain, the

Defining the scope of a survey of a

facilitator should contact traders or transporters

sub-sector or market chain

to access more information on the chain and the

The planning of a market chain analysis should

various market outlets to prioritise visits to

take into account the complexity of the sub-

specific markets where a product is sold.

sectors under study, the time and resources

Brainstorming sessions with these “key

available, and the capacity of the staff involved.

informants” will provide the survey team with

As Figures 15 and 17 show, some sub-sectors

additional information on the chain and may

are characterised by a multiplicity of supply

introduce new ideas and areas for study into the

chains and products. Although some market

analysis.

chains will require expert assistance for

analysis, others are much less complex and can

In most cases, the market survey team may

have to travel outside the project area to follow

the product to its final market destinations, or

at least to the terminal markets within the

country. The market facilitator should work

9. Observers are knowledgeable about a market chain

with the survey team to write up these

but are not directly involved in the business

experiences. The survey, however, should start

operations of the market chain

with local situation to see what products and

10. Market actors are active members of the market

chain.

prices are available.

82

Market Chain Analysis

Figure 17. Market chains for local, domestic and international products.

FAO has recently published a Marketing

is usually available, often at market offices,

Extension Guide on Horticultural Marketing11.

chambers of commerce, and some governmental

This also provides useful advice on techniques

and research bodies.

for carrying out surveys of markets and market

traders and provides check lists of questions to

Identify key areas of research

be asked. The Guide also provides valuable

Although a survey needs to be broad enough to

advice on marketing development approaches

obtain a good overview of the market chain, it

that have been found to work well, and provides

cannot cover all topics in depth. The team needs

10 case studies of successful marketing

to prioritise areas of study and the methods for

extension.

examining these components. The time and

resources (e.g., number of analysts and

Review of relevant literature and

logistical support) allocated to the study will

analysing available secondary data

help limit the survey’s scope. The survey teams

One team member should review the literature

should be in small groups of 2 to 3 analysts

and analyse secondary data. Donor agencies,

working together.

business associations, local universities, or

research institutes are useful sources of

Interviewing key informants

information. Unfortunately, most marketing

Identifying and interviewing a small but

data in developing countries are not up-to-date

purposely selected sample of key informants in

and this needs to be factored into the review.

a commodity sub-sector is a critical element of

However, information such as prices trends,

an RMA. Small samples of informants need to

volumes traded, key market players, and firms

be chosen at each stage of the sub-sector or

market chain. Information given by interviewees

should be cross-checked against what they do,

how they behave, what analysts observe about

11. (www.fao.org/ag/ags/subjects/en/agmarket/

their operations, and what other key informants

extension.html)

83

A Market Facilitator’s Guide to Participatory Agroenterprise Development think about the constraints and opportunities

stage, an appropriate stopping point is where

they identify. Cross-checks are done by asking

the responses become consistent. The list of

similar questions with actors at different levels

potential types of key informants is large, as

of the market chain (this is a procedure referred

shown in Figure 18, but a market survey team

to as “mirroring”). Another technique is to

will choose those types most relevant to the

compare the responses from individuals or firms

inquiry.

at the same stage of the sub-sector or at

adjacent stages in a market chain. This type of

Key informants

cross-checking, based on several different

• Traders (brokers, itinerant traders,

market actors at one point in the chain, is a

wholesalers, retailers).

technique known as “triangulation”.

• Managers or production managers of

processing firms.

As a rule of thumb, a minimum of three to five

• Importers/exporters.

interviews of actors or firms are conducted at

• Institutional buyers (e.g., supermarket

each stage in the market chain. The degree of

chains, schools, hospitals, military).

heterogeneity of firms with respect to responses

• Shopkeepers, open market stall holders,

and specific characteristics will influence

kiosk vendors.

sample size. The more diverse the responses or

• NGOs, missionaries.

firms are at each stage with respect to product

• Extension agents.

throughput, degree of market linkage, product

• Managers of governmental agencies.

mix, management, technology, and geographic

• Farmer groups, farmers.

distribution, the larger the sample of informants

• University or agricultural researchers.

required. As the sample size gets larger at each

• Input producers and suppliers.

Figure 18. A checklist questionnaire and the key informants.

84

Market Chain Analysis

Semi-structured informal interview

are missing, a site visit can also help to

guidelines

estimate the scale of operations. For example,

A checklist should be prepared for use in

approximate wholesale market throughput for a

interviewing different types of key informants in

particular product can be estimated, based on

the commodity sub-sector (Appendix 8). This

observing a business day and asking different

should include important topics and subtopics

wholesale traders about their sales volumes and

to cover, or several series of sequenced

market activity at different periods of the year

questions designed for a probing, logical,

relative to that day.

stepwise inquiry. Using these guidelines helps

make the interviews more consistent,

Report writing

systematic, and focused. After each interview,

After completing the fieldwork, the team

the analyst should prepare a summary sheet of

members should meet and discuss their

most relevant information. These summary

preliminary findings before too much writing

sheets are particularly useful in discussions

has been completed. This useful exercise forces

during the survey and for preparing the final

team members to present tentative findings,

report (Appendix 9).

conclusions, and hypotheses to other team

members, who can challenge and debate them

Conducting on-site interviews

or simply get a better grasp of the bigger picture.

Interviews should be held at the place of

The team leader should lead the report’s

operation. Facilities should be visited to observe

preparation. An outline for writing the final

post harvest handling, sorting and grading,

report is given in Appendix 10. The summary

storage, transport, and transaction activities.

should be no more than 10 pages and be made

This is done to cross-check what sub-sector

available to clients, local administration, policy

participants say, with how they behave, and

advisors, and key stakeholders.

what are their usual practices. Where good data

85

A Market Facilitator’s Guide to Participatory Agroenterprise Development Presentations need to be rehearsed and should

locations, minimum quantities purchased,

take less than one hour. Care should be taken

standards of quality, frequency of supply,

against overwhelming the audience with details

payment conditions, willingness to enter

and technical digressions.

into sales discussions).

• Options to improve market chain

Using the Market Survey Results to

performance based on specific interventions,

Develop a Proactive Enterprise Plan

prioritised according to client needs.

• Opportunities for technology innovations

The RMA will collect a considerable amount of

that would provide value-added

information for a specific product, related to its

opportunities at specific points in the chain

market chain’s actors, efficiency, and

and also facilitate the sub-sector.

opportunities or constraints. The information

• Opportunities for organisational innovation,

should highlight growth potential of the product

for example, by forming farmer or trader

within the market chain and the efficiency or

associations.

access to business support services. All these

• Enterprise-level technical assistance that

data are extremely valuable for the next stage:

will increase competitiveness.

to develop the enterprise plan.

• Areas in which business support services

and facilities need to be improved such as

To begin planning for enterprise development,

market information, production and

the market survey should provide prioritised

marketing research, and extension to

information on options for specific chain actors

increase demand or reduce transaction costs

and service providers such as:

for client groups.

• Reform options for policies and regulations.

• Information on buyers, types of deals

available, and their buying conditions (price,

86

Developing an Enterprise or Intervention Action Plan

SECTION 10

Developing an Enterprise or

Intervention Action Plan

By the end of this section, the farmers and

Prioritising and sequencing interventions

service providers must have made a plan

The working group and service providers should

incorporating all of the necessary arrangements to

discuss and prioritise critical points in the

set up the selected enterprise or market linkage.

market chain (Figure 19). Based on this

analysis, the group needs to make decisions on

This includes organising factors of production,

how to sequence the interventions. This

post harvest handling, and marketing at the farm

planning process can be broken down into

level, and providing services at critical points in

steps related to market evaluation, pre-

the market chain.

production, production, post harvest and

marketing interventions as shown in Table 16.

Group members should share roles and

responsibilities, provide for investments and loan

As part of the planning process, interventions

repayment schemes, understand how to monitor

can be ordered into short, medium, and long-

progress, and know how to use profits or deal

term activities. This process can also be applied

with losses.

to research opportunities if there are no readily

available innovations to meet the critical points

Designing Action Plans for Selected

(Table 17).

Enterprise Interventions

Financial support

The first issue to evaluate from the market

survey information is the type of interventions

These activities then need to be budgeted. A

that could increase chain competitiveness. The

useful exercise is to determine what can be

roles of the actors associated with each specific

done now with existing sources of funding,

intervention should also be examined.

followed by determining what may be possible

with support from savings, or from partners,

and concluding with the resources that must

87

A Market Facilitator’s Guide to Participatory Agroenterprise Development Activities

Activities

Activities

1.1

2.1

3.1

1.2...

2.2...

3.2...

Where we

Where we

are now

Objective 1

Objective 2

Objective 3

want to be

Outputs

Outputs

Outputs

1.1

2.1

3.1

1.2...

2.2...

3.2...

Figure 19. Prioritising critical points in the market chain and activities to address them.

Table 16. An example list of prioritised interventions and associated chain actors.

Farmer group

Trader/

Government

Retailer/Processing

Entrepreneur

extension/NGO

factory

Market evaluation Making decisions on

Investigating

Confirming

Information on

what to sell

market options

production

product quality

requirements

required

Pre-production

• New variety

Supply of inputs

Experimenting with

• Arrangement of

new varieties

savings scheme

Production

Irrigation

Post harvest

Storage facilities

• Bulk sales of

Linking farmer

5 tonnes

groups with

• Access to milling contract buyer

machine

Market sales

Collective action

Contract with farmer

group for 50 tonnes

of produce

Table 17. Actions to be taken at specific points in the market chain.

Activity

Actions

Short

Medium

Long

Enterprise development

Marketing

Production

Post harvest

Processing

Business organisation

Research/Innovation

Marketing

Production

Post-harvest

Processing

Marketing

Business organisation

88

Developing an Enterprise or Intervention Action Plan

be raised through external sources to conduct a

simple BDS may even be provided by a group

prioritised activity (Table 18). With these

member.

planning schedules, the group will be able to

decide on where to invest funds or effort to

New contractual arrangements

reach the enterprise goals.

Similarly, access to better contractual situations

such as selling produce directly to a processor,

Group meetings

large or high-value buyer, or factory may also

This type of dialogue negotiation may need

provide farmer groups with significantly better

specific meetings to be set up between key

options than merely improving sales in local

market actors and farmer groups. To ensure

markets. Contract farming is becoming

that people’s time is well used, initial planning

increasingly important in developing countries

meetings can be held with particular groups of

and has many advantages in terms of input

actors along the market chain such as traders,

supply and access to more reliable markets.

processors, or farmers, before holding one

Often, contract farming is a less risky entry

meeting for all the chain actors.

point into higher value products.

Where supplying a business development

The role of the market facilitator and market

service (BDS) might provide the best return on

survey team will be to set up meetings for

investment for the market chain actors, the BDS

dialogue between the farmer group and

supplier should discuss the terms and

contractor, so that the farmers can sign a deal

conditions for payment with farmer groups or

that is suitable and achievable, and has

the opportunities for scaling up operations with

sufficient safety net clauses to accommodate

local service providers.

unexpected failures on both sides of the

arrangement. For example, for farmers, this

BDS interventions

may include the need for a crop failure clause,

The market facilitator and working group

which means that they do not have to pay back

members should “think outside the farm” when

input loans in subsequent seasons, when their

making a decision on the best place to

crops have failed due to lack of rains.

intervene. Often, one well-placed BDS may

support increased production from very many

Farm interventions

farmer groups. The costs of improving a service

Often, with improved BDS and better

at a higher stage in the market chain may also

contractual arrangements, new market

create considerable benefits for many farmer

opportunities will demand farmer groups to

groups in the project area. All too often,

become more competitive at the production

opportunities for BDS support are neglected as

level. Working group members will therefore

development agencies focus too heavily on

need to transform the information gathered

“being busy” on the farm.

through market visits or market chain analyses

into a business design that can be

The role of the market facilitator and market

systematically written into an action plan.

survey team will be to link BDS providers with

farmer groups so they can improve market

Detailed Enterprise Planning

access through these services. The “rules of the

Transforming marketing data into an action

game” may need to be defined, so that group

plan requires careful attention to detail. For

members, by virtue of being group members,

farmer groups, the members need to consider

can make gains in using a service. Sometimes,

all the sequential steps required from

Table 18. Financial requirements, sources and activity sequencing matrix.

Intervention financing

Time frame

Short

Medium

Long

Local resources

Local savings

Partner resources

External resources

89

A Market Facilitator’s Guide to Participatory Agroenterprise Development pre-production, through production, to post

To make this type of shift, more detailed

harvest handling, and finally to marketing the

planning is often required (see information in

product. The action plan also needs to take into

Table 20). In this case each section has been

account organisational issues within the group,

given further detail by linking activities with

investment issues, and how to overcome specific

names, dates, areas and very specific tasks for

technical issues through support from service

identified members of the group. This level of

providers.

planning and continuous follow-up is required

to ensure success, particularly in higher value

Visioning is an important tool in this process,

products.

which can be used by the facilitator to set the

boundaries of the exercise. As indicated in

When making calculations and assumptions for

“Section 4: Tools for Working with a

yield, time to harvest, rains, etc., the group

Community”, the group needs to consider where

should be very conservative in expectations.

they are today (i.e., now) and what they need to

Even if a scientist informs the group that the

achieve to meet market demands in terms of

yields of a new variety will be at least double the

price, quality, quantity, and timeliness.

production of local varieties, the group should

calculate according to data from on-farm

Once a plan has been outlined, the planning

experimentation, or take into account that on-

process should begin. This process will include

farm yields are typically 50% to 70% of that

activities at four levels, marketing, business

produced through research trials.

planning, production and post harvest.

The group should also factor in effects of regular

Marketing the produce is the most important day

problems that they experience such as rains

in the farming calendar. All the previous effort

being 2 weeks later or earlier than normal,

comes down to the value of the transaction, the

specific pests affecting yields, or some farmers

sale. The plans for this moment are therefore

who joined the plan dropping out. A general rule

critical. The group should decide how the sales

is to take 10% to 15% off any optimistic

deal will be done, how their collective

assumptions to avoid disappointment.

marketing12 will take place, and to have “total clarity” about how profits or losses will be shared

For post harvest handling, the group should

(Table 19).

plan for sorting, grading, packing, and in some

cases, storing the produce once it is harvested.

At the production stage, farmers need to list all

This planning should be done before harvesting.

requirements such as seeds, land, labour, and

Farmers should share roles and take on

capital, to meet the market needs. In Uganda,

responsibilities for each other. Excellent crop

farmers had the challenge of shifting from a

quality in the field can easily be lost through

single harvest of mixed potatoes that was sold at

poor post harvest handling. Particular attention

one time, to a new sequential system of

therefore needs to be given to ensure the crop is

producing 5 tonnes of a specified variety of

sold in its best condition. Transport to the

potatoes, every month throughout the year. To

market must be organised.

achieve this new market requirement, farmers

needed to make sure that, across their group,

At each stage—production, harvesting, and post

the correct quantities of seed potatoes were

harvest handling—the group should be clear

available to be planted by each farmer, and that

about costs and make sure that, as quality is

all the necessary agronomic practices were in

maintained, the costs incurred do not outweigh

place and verified. The farmers needed to identify

profits.

and prepare land, procure seed, organise

planting dates and regimes so that they could

The role of the market facilitator and survey

supply the market at the expected time. All of

team in this case is to guide the farmer group

these activities needed to be checked, verified,

through the development of the business plan

and summarised as a production calendar.

and to set up a monitoring process, so that the

group committee members can review progress

made. However, farmers and local

12. Please note: this Guide supports collective marketing entrepreneurs can become involved in these

it does not support collective production methods.

issues, if they see the benefits. In some

Farmers should produce the same product for a

countries, community members have been

specific market, but production should be based on

their land, using their skills and inputs.

elected to local administrative posts to help the

90

May 2003

(Continued)

th

2003

June 2003

ongoing

2004

th

May 2003 and

May 2003

June 2003

July 2003

July 2003

Sept–Nov 2003

Sept 2003 and

Oct 2003

th

June 2003

th

th

Dec 2003 and

0

th

th

th

th

Timing

nd 2

ongoing

Weekly from 5

and

Jan

10

nd 2

10-12

15

June–Oct

1

10

15

12

ongoing

10

nd 2

ongoing

UNSPPA

Africare,

NARO

Africare

Africare,

Africare

Africare,

nsible

respo

management

management,

management,

management

members,

members,

members,

management,

members

management,

Actors

NFG

NFG management, Africare,

UNSPPA

NFG

NFG

UNSPPA

NFG

NFG management

NFG management, Africare

NFG

CIAT

NFG

NFG

NARO

NFG members, Africare,

NARO

NFG

NFG

NFG

and

enterprise

potatoes

varieties

provision

.

future

the

a

of

and

potato

service

undersised

of

delivery

established

outcome

NAADS

credit

improved

for

management

to

to

rejects

production

to

transport costs, and regular supply

season

Expected

Low

Targets

production

Strengthen the sustainability of the

enterprise

Consolidation of the farmer–buyer

relationship

Access

bank account

Safe management of resources, access to

payments by Nando’s

Access

Effective

Continuous supply of potato

Fewer

Enhanced skills of members in ware

potato

Access

Sufficient seed to plant

To ensure quality production during the

dry

contract

ware

micro-

on

planting

varieties

members

implement

desired

and

group

Activities

Identify, contract, and organise

transport for potatoes to Kampala

Develop and maintain contact with

Nando’s purchasing department

Identify alternative market outlets

for ware potatoes and for rejects

Negotiation with Nando’s and

finalisation of the buying

Register group with local authorities

Open a bank account

Establish a group savings fund

Train leaders and group members

on enterprise management and

administration

Develop staggered

schedule

Adjust planting spacing practices to

produce larger potatoes

Train

potato management techniques

Arrange with NARO for research on

seed of identified varieties for

Nando’s

Multiply

Identify

irrigation on uplands

General action plan for Nyabyumba Farmers Group enterprise, Uganda Area of

intervention

Marketing

Business

organisation

Production

Table 19.

91

2003

July 2003

July 2003 and

July 2003 and

th

th 0

th

Timing

25

July

2

ongoing

20

ongoing

e

management

management

Actors responsibl

NFG

NFG

NFG members, Africare

NFG management, Africare,

CIAT

collective

for

outcome

sales

production

of

Expected

Bulked

marketing

Control

Members gain new skills in post harvest

handling

Effective management and growth of the

enterprise

up

Activities

Rent warehouse for potato storage

Purchase weighing scale

Train group members on sorting,

grading, and packing procedures

Establish a monitoring scheme to

support the enterprise’s start

(Continued.)

harvest

Area of

intervention

Post

handling

Monitoring

NAADS = National Agricultural Advisory Development Service.

NARO = National Agricultural Research Organisation of Uganda.

UNSPPA = Uganda National Seed Potato Producers Association.

Table 19.

a.

92

May 2003

on

th 5

and

2003

from

2003

May

2003,

th

2003

May 2003

July 2003

August 2003

Sept 2003 and

Sept 2003

May 2003

July

th

th

Dec 2003

5

th

th 5

Timing

nd 2

Weekly

and ongoing

th 5

5-10

July

visits to Kampala

15 July 2003

15

20

1

July 2003

Sept–Nov

12

ongoing

1

Oct

nd 2

K

for

Anthony

N,

K

M

responsible

Charles,

J

J

J

Geoffrey.....

Christopher,

Christopher,

Christopher,

B

Actors

monitoring

Charles

Anthony

Mary

Mary

Account Nigel B

Charles N, Anthony K

John P, Africare

Aran

Anjesi Geoffrey.....

Emalis

Aran

Anjesi

Samuel

Aran

Anjesi Geoffrey…..

Charles N, Dr Tony K,

Charles

Dr Tony K, Matt V,

Mary

Micheal P, Jane H

Josephine I, Mary Q

Dr Tony K, Samuel J

list

varieties

recipient

potato

potato

planting

year

of

seed

improved

on

production

to

during

stagger

season

Kampala

Expected outcome

Arrange for continuous supply at fixed

cost

Targets for delivery and future production

established

Find best prices of transport for potatoes

to

Fine tuning of business planning and

verification

Strengthen the sustainability of the

enterprise

Continuous supply of potato

Prepare list of all seed potato recipients

Based on seed potato recipient list

Based

Fewer rejects of undersised potatoes

Next

Enhanced skills of members in ware

potato

Access

Land preparation for second year seed

Sufficient seed to plant

To ensure quality production during the

dry

with

to

check

ware

micro-

buyer

contact

and

on

area

with

plan

schedule for

varieties

maintain

members

planting

implement

meeting

and

business

desired

seed

and

group

up

Activities

Arrange

negotiate contract price and volumes

Develop

Nando’s purchasing department

Survey for transport options to take

potatoes to Kampala

Develop

with local accountant

Identify alternative market outlets

for ware potatoes and for rejects

Plan to develop

staggered planting

Procure seeds for planting

Identify and prepare land

Plant initial 2 ha for initial

harvesting to supply first contract

as agreed

Experiment to adjust planting

spacing practices to produce larger

potatoes

Identify land, and supply seed for

send planting period

Train

potato management techniques

Arrange with NARO for research on

seed of identified varieties for

Nando’s

Set

Multiply

Identify

irrigation on uplands

Detailed “portion only” of action plan for the Nyabyumba Farmers Group, Uganda.

Detailed

activities

Marketing

Production

Table 20.

93

A Market Facilitator’s Guide to Participatory Agroenterprise Development community to access better resources from

reduction in the number of taxation points for a

Government.

product, the introduction of a new livestock

auction site, a change in quality standards, or

Business Checklist

removal of a regulation that is no longer

appropriate.

Having completed the enterprise plan, the

market facilitator should work with the

The role of the market facilitator and survey

marketing officer or main investor to review the

team will be to raise such issues with local

business targets, using a simple checklist. This

development agencies and administrators to

checklist enables the enterprise team to review

show the benefits of such changes for the

whether the target figures are well linked in

business community.

terms of marketing, production, and financing.

The team can also review management aspects

Adapting to Risk

and, once developed, this checklist will also be

used in monitoring and evaluation. Table 21

Sometimes, such action planning may reveal

shows that the level of review depends on the

major challenges that the group had not

timing of supply and value of the product, with

previously noticed. These need to be addressed

the number of reviews increasing with the value

and changes made in the plan. Or, where the

and regularity of supply.

group may not feel sufficiently confident to take

up the challenge, it should first do additional

Policy Interventions

testing of certain parts of the plan.

Based on the findings from the market survey,

Shifting to lower risk products

significant gains may be made through

relatively low investment changes in local policy

When a farmer group feels that the risks of

or regulatory reform. This type of work is best

producing a selected product are too large to

addressed by development agencies and such

take on, they can either reconsider it or drop it

changes are likely to be slow in coming to

in exchange for a less risky option on the list of

fruition. However, as with BDS, the impact of

identified market opportunities.

such changes may significantly outweigh an

Experimentation and innovation

on-farm intervention and may enable farmers to

access new markets that were previously

In other situations, the farmers may find it

inaccessible.

necessary to more thoroughly test a specific

variety in the following season and at several

Examples of this type of intervention may be a

sites to determine the best way of producing it

relaxation or adjustment in border tariffs, a

for the market. Even for livestock options,

94

Developing an Enterprise or Intervention Action Plan

Table 21. Business checklist to review enterprise plan.

Marketing

• Who is our buyer

• Sales targets

• Define the product

– What is quality class A B C

– What are the alternative markets

– Packaging

– Labelling of farm produce for traceability

• Price

– How will farmers/BDS be paid

– Promotion (what will attractive the buyer)

– Distribution (what is the logistics needs)

Production target

• Production target to match sales target

– Schedule of delivery (weekly, monthly)

– Production inputs needed

– Technology requirements

– Upgrading of production

– Needs in post harvest

Financial targets

• Capital requirements for production target

• What needs to be available for start up

• What is needed for operational

• Sources of capital

– Local

– External (grant CRS, loan, conditions)

Profitability

• Target profitability

• Financial evaluation compared with existing

• Sensitivity of the income and costs

– Where is the critical point

Management

• Who does what?

• How are they paid

• What are their incentives

Review process

• Review the system every 3 to 6 months

• Compare targets. Are they well linked

• What changes are needed

• More regular review process as the product

increases in value

additional experimentation may give the farmer

The introduction of experimentation into the

group the necessary confidence to invest more

marketing process is a vital part of catalysing

heavily in a specific enterprise. Being able to

innovation systems and all members in the

experiment is a particularly useful skill for a

market chain should be encouraged to try out

group to develop, especially if the aim is to build

new ideas as a means of developing more

a diversified product portfolio in the future.

competitive approaches to the market.

95

A Market Facilitator’s Guide to Participatory Agroenterprise Development

Business visits

activity by, for example, sharing the costs of a

In some cases, there are benefits from

test study, giving support to additional

organising a visit to another group or business

marketing work, or subsidising loan costs. This

to see how a particular product is being

type of arrangement is possible if an enterprise

produced and/or processed. This type of

risk fund is available and open to this type of

exchange visit is often very effective in

risk hedging process.

convincing people about the merits of new ideas.

Taking the Plunge

Pilot project

Once the action plan has been developed,

In a split decision case, where some farmers are

reviewed, and agreed on the only thing left to do

keen to proceed and others are unsure, the

is to implement the plan. The role of the market

group may decide to observe the potential

facilitator is nearly complete at this stage, but

success of a new enterprise with only a limited

the group may require additional “confidence

number of group members running it. This is a

building” support so that the plan is put into

normal business decision, to pre-test an idea to

practice. The market facilitator may, at this

make sure that all the parameters that were

stage, work out a schedule for visiting the group

“visioned” by the group can be verified as a live

during the growing or production season to see

enterprise, although on a small scale. This pilot

how the plan is progressing and to discuss any

testing or experimental stage is a strategy to

problems that the group has encountered. Box 5

minimise risks.

describes the design of an enterprise conducted

by the Nyabyumba Farmers Group, Kabale

Sharing risks

District, Uganda.

Sometimes, the market facilitator may want to

support farmer confidence in a particular

96

Developing an Enterprise or Intervention Action Plan

Box 5

Enterprise design with the Nyabyumba Farmers Group,

Kabale District, Uganda

The Nyabyumba Farmers Group was formed in 1998, with 40 members, to produce seed potatoes, the first

batch of which they received from Africare through the NARO1 research station. In 1999, the group became

part of a farmer’s field school, learning how to increase yields for both household use and the local seed market.

In 2003, the group found that the market for seed potato was dwindling because the market for ware potato

was limited. With support from PRAPACE2 and CIAT, the group set out to find new market opportunities for their potatoes and to develop a new business plan. From the market survey, Nando’s fast-food restaurant in Kampala was identified as a high-value buyer. Nando’s was 450 km from the farmers’ village and quality criteria were stringent.

Identifying critical points and constraints

Having established their current situation and desired future situation, the farmers identified critical points and the actions required to achieve their vision. The changes needed to successfully supply Nando’s included the following:

• Production: The cycle needed to shift from two seasons’ supply to a monthly supply of 10 to 15 tonnes of potatoes. Such a change meant new varieties, staggered planting times, different harvested tuber size, and quality control of tubers. To achieve this, the group needed buy micro-irrigation systems and receive considerable training from NARO and Africare.

• Post harvest handling: This had to be improved by hiring warehouse space, collecting produce for transport to the market, sorting, grading, packaging, and labeling produce so that payment could be made back to the correct farmer.

• Marketing: The farmers had to negotiate with transporters, maintain a relationship with the buyers, particularly Nando’s production manager. The group needed to buy a phone.

• Strengthening the group’s business organisation: The group needed to open a bank account, borrow money from their community, learn how to manage their finances, and maintain both savings and regular record keeping.

• Securing adequate service provision: The group required considerable technical assistance from input suppliers and research support.

Designing an action plan

On identifying the critical points just outlined, the farmers and their market facilitator held a workshop to define the activities to be undertaken, their sequence, and their implementation so that the desired outputs are achieved. The action plan established for starting up and consolidating the potato enterprise is shown in Tables 19 and 20.

1. NARO = National Agricultural Research Organisation of Uganda.

2. PRAPACE = French acronym for Regional Research Network for the Improvement of Potato and Sweet Potato in East and Central Africa.

97

A Market Facilitator’s Guide to Participatory Agroenterprise Development SECTION 11

Evaluating Progress and Scaling Up

This section completes the Guide on

These records are invaluable for the production

Agroenterprise development by offering

and marketing phases and for managing

suggestions on monitoring and evaluating the

financial transactions.

agroenterprise’s progress and planning for the

next enterprise.

The group should pay particular attention to

keeping weekly or fortnightly records of the

Monitoring and Evaluation

following issues:

Once an enterprise group starts its new

• Are the marketing, production, financial,

business venture, new activities or problems

and management targets well linked?

almost inevitably arise that must be addressed

• What changes are needed?

quickly and decisively. Perhaps some

• Financial transactions, particularly for

assumptions made in the plans did not work

inputs and sales, must be kept up-to-date

out as expected, or unexpected events occurred

and checked for accuracy.

that had positive or negative effects on

• Loan records should be monitored and

performance. To be able to address situations

borrowers should be informed regularly

quickly, the group must follow events closely

about amounts that are due. These must be

and meet regularly to discuss progress and

collected when produce is sold.

resolve problems that arise. The learning

• Records of production performance should

process is assisted enormously if the group has

be kept by the individual farmers.

a monitoring plan and keeps regular records for

• Notes on any problems encountered should

production, finances, and discussion points.

be discussed and addressed.

98

Evaluating Progress and Scaling Up

The value of these records will increase with

reality of profit margins, and failure, in financial

time. The records will also enable the group to

losses.

look back to see how their business is

progressing and how decisions were made.

After the group has made its sales, the market

Keeping records are valuable for not only

facilitator should work with the group to assess

monitoring change, but also for verifying credit

their expected level of profit against real income.

worthiness, retaining information on group

Groups who had not kept records on production

integrity issues, and recording the quality of

or finances will be severely hampered in their

services provided to the group.

ability to benefit from this session.

The market facilitator should also keep

Those groups who wisely keep records can go

systematic records. The level of records

through their finances (see Box 2, page 30) to

maintained by the market facilitator will depend

carefully calculate their gross margin. Whatever

on the number of farmer groups being

the result, the facilitator and group members

supported but, in each case, records should be

should discuss the key elements that led to

maintained in field books for each project area

success or failure. Problematic events are

and on a computer. All computer records should

sometimes beyond the farmers’ control, and all

be backed up (copied) in at least one other data

business transactions should be recognised as

storage medium.

coming with some degree of risk. Sometimes,

unexpected events may count in the farmers’

After the first cycle of market evaluations,

favour and profits maybe more than expected.

designing an enterprise, and piloting and

implementing the first action plan, farmers will

As well as comparing results from the enterprise

then sell. This is a crucial time for the group,

and their collective action, the farmers should

because it is only at this time that the value of

also discuss the performance of the enterprise

their efforts will be assessed by the marketplace.

option against the other products in their farm

Success at this stage is measured in the simple

mix. In some cases, the farmers could be

99

A Market Facilitator’s Guide to Participatory Agroenterprise Development encouraged to invest more land and labour in

The facilitator should be able to encourage

the joint marketing venture or enterprise, or

farmers to learn from their experiences and to

discuss the prospects of an alternative product.

take the process forward on their own initiative,

especially where the group needs

Planning the Next Enterprise

encouragement to evaluate new innovations

from a technological or organisational

For the farmers

perspective. The trust that a facilitator has built

Having digested the lessons from the first

should be used wisely in terms of introducing

enterprise cycle, the group should start to

new concepts in a systematic manner.

repeat the market planning and organisational

exercise, taking into account any changes that

The exit strategy

were a problem, or led to a lesser performance

As with all processes, a market facilitator can

than expected in the first round. Success in the

always do a great deal more to help farmers and

first enterprise should encourage the farmers to

to develop new business options and

increase their level of investment in, or area

refinements. However, time is our most precious

given to, the new enterprise.

commodity and the market facilitator should be

keenly aware that, as well as this current group,

Farmers appreciate the logic of “more risk, more

many other farmers will also benefit from such

profit” and therefore planning in the second

support. A facilitator whose group has gone

cycle should at least consider the evaluation of

through more than two cycles of success in the

new, higher value (or higher volume) market

marketplace should therefore be encouraged to

options. These new considerations can be

either exit or scale up. This is the essence of the

included in a market identification study as

“river code” (see “Section 4”).

described for Option 2 (see “Section 7”).

Furthermore, promising options that are not

Scaling up

well-known to the full group can be introduced

The speed at which a process can be scaled up

in an experimental phase, so that new

is determined by four key aspects: (1) past

opportunities can be developed for future

performance, (2) partners, (3) resources, and

application. Entering into a market-led cycle of

(4) numbers involved from the outset. Processes

experimentation, followed by implementation, is

should only be scaled up when there is

a major achievement in this exercise and

something tangible and positive to scale up. The

farmers should be encouraged to adopt this

market facilitator should try to scale up ideas

approach whenever possible.

and opportunities with partners who also

understand the process. Additional training at

People’s performance

this stage may be more profitable at the partner

The success of a project is often said to be 70%

level rather than with other farmer groups. The

dependent on the people who implement it and

resources the market facilitator has can

30% on everything else. The same is true when

therefore be directed to support partners, with

things fail. In addition to evaluating the

the increase depending on previous investment

performance of a crop or livestock option, the

in developing partnerships with like-minded

group should also review the performance of

people and organisations at the working group

group members, particularly the committee

stage.

members. Performance monitoring is a sensitive

issue, but it should be discussed constructively.

Scope of support and scaling up

The market facilitator should be sensitive to

A well-trained market facilitator could probably

problems in group dynamics and find ways of

work with 5 to 10 farmer groups, each

suggesting where changes may help.

consisting of 20 farmers, in the first year. If the

Next Steps for the Market Facilitator

process is successful and there is demand from

other farmer groups, then the market facilitator

Managing innovation

could add 5 more groups each season to achieve

The market facilitator’s role is clearly

a final number of 20 to 30 groups within

demanding, but it is also rewarding if the group

24 months. With more than 20 to 30 groups,

takes on new skills and benefits from them. A

the market facilitator may find that the “quality”

first measure of success in market

of capacity building is compromised and that

experimentation will build confidence in the

other strategies need to be developed to support

relationship between farmers and the facilitator,

additional groups. Such scaling up strategies

placing the facilitator in a highly catalytic role.

may include:

100

Evaluating Progress and Scaling Up

Using clusters: Building clusters of farmer cover. In this case, the use of short-cycle crops

groups who will focus on one commodity is one

may mean that up to 20 groups can undergo

way for the market facilitator to work in a

two enterprise cycles before direct support is

dedicated manner with a limited number of

withdrawn. This process may benefit from

groups. These lead groups agree to provide

simple tests to evaluate learning of skills.

market and production-based support to help

another 5 farmer groups. This approach rapidly

Information and communication

builds scale if the initial groups work on one

technologies support: In most countries,

product and then transfer the skills for this

farmers listen to radio and, in some countries;

product to other farmer groups in the vicinity.

they have access to mobile phones and/or

This approach may be advantageous as it will

Internet cafés or tele-centres. If these are

allow the cluster of groups to gain from larger

available, the market facilitator can use these

economies of scale in both input and output

media outlets to promote agroenterprise

markets. The marketing committee member of

development and provide information on how to

the initial groups will be responsible for

undertake this process through radio dramas or

focusing on market dynamics and trends,

talk shows. This approach may create demand

particularly supply constraints. The

by farmers and hopefully more partners. A radio

disadvantage of this approach is that the skills

campaign should be supported by a hard copy

learned by the secondary group may be less

“guide” so that interested service providers and

detailed and probably more production-based

members of a farmer group can read about

than the first group.

agroenterprise development and implement it

themselves.

Linking clusters to associations: Once

several farmer groups are working within a

In Uganda, the FOODNET marketing group

defined area or focusing on a particular

developed two 10 part series of radio

product, there may be advantages in linking

programmes to support marketing by

them with a larger apex group or association.

smallholders. The first series was entitled

The association will then represent them for

“marketing together” which is adapted from the

services and input supplies. Although higher

Collective marketing manual, written by

order structures have many advantages, based

Robbins et al. (2005). A second radio series was

on economies of scale and sharing of resources

developed, entitled “market to market”

and services, these can only be achieved if the

comprising ten, 15 minute episodes based on

producer groups and their associations have

scripts adapted from the work of Shepherd

sufficient volumes of product and a truly

(2000) on “Understanding and using market

democratic management that works for

information”. Several partners have also taken

association members.

FAO’s DVD video on marketing extension and

dubbed this with local languages for local

Working with partners: As mentioned in

viewing.

Section 1 (“Overview of the Participatory

Agroenterprise Development Approach”), a

Whatever the case, planning will be vital at this

major reason for establishing a working group is

stage, so that all team members are fully aware

to identify organisations working in the area

of how the process is implemented, of what

that have a common vision. Having identified

works well in this project area, and what does

these partners, the market facilitator can run a

not. The rest is down to hard work,

series of training courses to increase the

determination, and some luck. Enjoy!!

number of market facilitators in the area. In

this way, the partner organisations can identify

Monitoring the Rural Agroenterprise

their own farmer groups and thereafter develop

Development Project

cluster groups.

The final aspect of Agroenterprise development

Short-term support: To enable the market

is to evaluate the entire process. This evaluation

facilitator to cover larger areas within a project

should be conducted by a research group,

site, the agency should consider limiting group

working alongside the market facilitator and

support to two seasons before moving onto the

working group. The overall monitoring should

next batch of groups. This would enable the

draw lessons from the experience and compare

market facilitator to increase both the number

the level of progress with other approaches

of groups supported over 2 to 5 years and the

being undertaken in the project area and other

101

A Market Facilitator’s Guide to Participatory Agroenterprise Development areas. For this type of analysis to lead to useful

3. What type of product value or market type

conclusions, some form of comparative analysis

combinations work best with selected

framework must be developed. It should also

communities, using the CIAT approach,

answer fundamental questions on the

compared with other approaches being

effectiveness of market-led approaches for rural

implemented by other development

communities. Three areas should be analysed:

agencies? This activity may involve

process performance; equity, wealth, or

developing a matrix to assess process

enterprise transitions for beneficiaries; and

performance against product and market

institutional change.

type (Table 23).

4. Does agroenterprise development develop

Process performance

new market or business entrances,

1. To determine whether the agroenterprise

including farmer groups, BDS providers,

development is an effective mechanism for

and entrepreneurial links?

empowering resource-poor rural

5. What are the minimal/threshold resources

communities to link with markets?

and capacities needed to participate in

These findings will be based on how

community enterprise projects? How does

outcomes such as how much income was

capacity, levels of organisation, and

generated by the enterprise team through

competence affect process performance? The

the new business plan, what changes were

matrix in Table 24 may be used to evaluate

made in product and market types and how

the process’s performance and evaluate the

did social interactions and networking

effect these factors have on the market

change? Data should be collected to

facilitator’s ability to scale up activities.

evaluate levels of success across different

6. Does agroenterprise development facilitate

enterprise groups, and the simple

better working relationships across

evaluation tool in Table 22, may assist in

development agencies? And between public

collecting information on changes in

and private-sector agents? How does

horizontal linkages (i.e., within chain actors

agroenterprise development contribute to

such as farmer to farmer) and in vertical

changes in rural livelihood strategies? At the

linkages between chain actors.

community and administrative levels?

2. What was the level of community

participation and empowerment in the

Equity, wealth, or enterprise transitions

process of evaluating the market, designing

Which community members benefited most

the enterprise and monitoring the outcomes.

from the agroenterprise development process?

102

Evaluating Progress and Scaling Up

Table 22. Changes in horizontal and vertical linkages.

Give information on changes

Give information on type of buyer that

Volumes of

in group

you sold to in these years

sales in MT

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

Table 23. Product value market type assessment matrix.

Local market

District market

National market

Export market

Low value crop product

High value crop products

Livestock products

Processed products

Service provision

Table 24. Example of capacity framework for evaluation of process performance.

Increasing levels of farmer experience and organisation

Process

Individual

A farmer group not

Farmer group formally

FG’s formally linked

performance

farmers

linked to other groups

linked to other first order

to second order

groups (no second order

associations/

hierarchy)

co-operatives

No service

provider (SP)

SP with

production

skills only

SP with

production

and marketing

skills

Specialist

marketing SP’s

Direct Private

Sector

contracting

agents

103

A Market Facilitator’s Guide to Participatory Agroenterprise Development Does the agroenterprise approach improve the

Institutional change

livelihoods of particularly vulnerable groups

1. How can the agroenterprise approach be

such as women and the poorer social segment?

institutionalised?

2. How can decision support tools be

For this type of analysis, a typology of

integrated to develop improved market

beneficiary groups may be useful, and could be

linkage for farmers?

included in the baseline survey work. This type

3. What information and technical support do

of ranking could incorporate relationships

small-scale farmers need to make well-

between current activities and economic

informed decisions?

engagement with markets. The typology should

4. What enabling institutional and policy

include some form of wealth, asset, or market

arrangements (research–extension linkages)

access ranking, which will enable the project’s

are needed for a more productive and

staff to compare process performance across

market-orientated agriculture?

locations, enterprises, and partners. Transitions

could be shown as in Figure 20.

These are suggested evaluation approaches, and

the market facilitator and working group should

Does the agroenterprise approach stimulate

select the most appropriate area of questioning

innovation cycles and streams?

or adapt new questions to discover the value of

using the agroenterprise development approach.

Does the agroenterprise approach stimulate

greater investment in sustainable natural

resource management?

Safety net

Seeking

Asset

Business

Specialisation

Growth

most

economic

building

building

focus

focus

vulnerable

security

Low risk

Medium risk

Higher risk

strategies

strategies

strategies

Figure 20. Wealth or enterprise transitions for clients in agroenterprise development.

104

APPENDICES

Blanca

106

APPENDIX 1

Criteria for Selecting Communities

Because working in all potential communities may not

community and commit resources (human,

be possible, exploratory visits and community

financial, and physical)?

meetings will help identify communities that have

• Is there an active extension or development worker

potential for impact and for scaling up the process.

with sufficient motivation and skills to be a market

The following questions can be used for decision

facilitator? Or other person willing to learn new

making:

skills and tools?

•

•

Is there a real potential for working in this

Is there potential for empowering women and

community? (agro-ecological and socioeconomic

promoting gender equity?

conditions)

• Have farmers or partners expressed any demands?

• Do farmers see a good opportunity for investing

• What are the lead organisation’s research interests?

time and resources to resolve their problems?

What technologies can it offer? What are its

•

research issues?

Do farmers have issues that they consider

important enough to commit their time and

• What is the past history of communities working

resources?

with organisations and external institutions?

• How many farmers in the community and nearby

villages face the same issues?

Other criteria for selecting communities may include:

• Is the potential high for scaling up to include

• Access to the village, that is, if the road to the

nearby villages?

village is passable during all seasons.

• Are farmers already seeking solutions to their

• Availability of basic development work, for example,

problems?

agricultural activities already exist in the area that

• Do potential options and technologies exist that

can intensify farmers’ interest and willingness to do

can be offered to farmers and which may provide

development work.

substantial benefits?

• Motivation of extension worker responsible for the

• Are there active groups, local social organisations,

area, that is, this person should be hard-working

or farmers working together to seek solutions to

and have good relationships with farmers.

problems?

• The partner is willing to make an input in the

• Are there development organisations working in the

development work, that is, it should be able to meet

community, or any willing to work in the

some of the project’s expenses.

107

4

Overall

score

4

19

ΣXs

to

glue

chipping

production

market

local

to

local

)

Cassava

sell

factory

Cabbage

for

Potatoes for local

shopping centre

List the number of

enterprises that you

have supported in the

past

(3

•

•

•

(0)

X × 6

group

many

done

)

Cassava market chain

in local market

Cashew nut market

from farmer to port,

including all market

chain actors

List the number of

surveys for marketing

that you have completed

(2

•

•

(Various)

Have

surveys

X × 5

evaluated

)

List the number of market

visits you have facilitated

and

(2

Taken two groups of

farmers to local market and

linked farmers with traders

(0)

X × 4

Agroenterprise Personnel

for

established

farmer

)

List the number of

farmer groups you

have

(0

(3)

Three

groups

experimentation

X × 3

Assessing the Capacity and Competence of

you

skills

ranking

code

)

River

Pairwise

matrix

Venn diagrams

Market mapping

Visioning

List the number of

participatory

have

(5

•

•

•

•

•

(4)

All four stages of

appreciative inquiry

(dream, develop,

design, deliver) for

gender analysis

X × 2

2

a

of

score

PPENDIX

Names

team

members

Example

John

Michele

Total

Add 10 for management level; 5 for senior field technician; 3 for assistant.

A

a.

108

APPENDIX 3

Farmer Group Competence Checklist

1. Are farmers organised into a group or groups?

15. Are any of these services linked to marketing?

16. What types of records does the group keep?

If farmers are not organised into groups, the market

Production budgets, trader lists, etc.

facilitator should work with the community to

17. What types of marketing skills have been

determine how it could best organise itself in this way.

learned?

See Section 5 on organising farmer groups and see

18. Are these skills effective in increasing their

Robbins et al. (2005), Collective marketing for

incomes?

smallholder farmers.

Group marketing

If farmers are organised into groups

19. Does the group sell products collectively?

Or as individuals?

2. Why are the farmers organised into groups?

20. What types of products are being sold into the

3. If farmers are organised for production, would

market?

they be interested to work together in group

21. What quantities are being sold into the market?

marketing and business investment?

22. Who is the person who negotiates for the sales

4. Would the farmers want to re-group into

of their produce?

different types of groups based on the type of

23. Does the group have any contracts for supply to

product being produced, or the risk level of the

buyers?

enterprises identified?

24. What does the group do if they do not have

enough products to supply a contract?

For established groups

25. Are the levels of sales increasing?

5.

26. Are the levels of profit increasing?

Does the group have a name? If so, what is it?

6.

27. Is the group linked to any other groups?

How many members are in the group?

7.

28. Is the farmer group linked to a second order

Is the group expanding in numbers or

declining?

association?

8.

29. How many products does the group sell to the

For how long has the group been in existence?

9.

market?

Are the group members more or less of the same

wealth ranking?

30. Does the group have contractual arrangements

10.

for product sales?

Does the group have elected positions? Name

the posts.

11.

How formal is the farmer group

How often are the posts re-elected?

12. Do the group members feel that the elected

31. Does the group have a bank account?

members are doing a good job?

32. Does the group have an internal savings and/or

loans scheme?

Services received or given by the group

33. Does the group use credit?

13.

34. Does the group have a business plan?

What types of services does the group receive?

14.

35. Is the group registered with anyone?

Is the group linked to a full or part time service

provider?

109

A Market Facilitator’s Guide to Participatory Agroenterprise Development APPENDIX 4

A Summary Description of “Appreciative Inquiry”

Definitions and

• A strategy for intentional change that identifies the best of “what is” to pursue dreams and possibilities primary purpose

of “what could be”.

• A co-operative search for the strengths, passions, and life-giving forces that are found within every system and which hold the potential for inspired, positive change.

• A process of collaborative inquiry, based on interviews and affirmative questioning that collects and celebrates “good news stories” of an organisation, community, or system; these stories serve to enhance cultural identity, spirit, and vision.

Potential uses

• Vision development.

• Strategic planning.

• Community development.

• Evaluation.

Ideal conditions

Identified need or desire for:

for use

• Organisation or systems change.

• Positive, solution-focused, energising approaches.

Systems and situations possess:

• Commitment to change as an ongoing process, not as a one-time event.

• Leadership belief in the positive and affirmative process as a viable change driver.

Potential

• Change in basic orientation from problem-focused to possibility or solution-focused.

outcomes

• Established climate of continual learning and inquiry.

• Renewal of group energy, hope, motivation, and commitment

• Improved working relationships and conflict resolution.

• Focus on results.

Key principles

Four guiding principles:

and assumptions

• Every system works to some degree; seek the positive and appreciate the “best of what is”.

• Knowledge generated by inquiry should be applicable; look at what is possible and relevant.

• Systems are capable of improvement and can learn how to guide their own evolution; so, consider provocative challenges and bold dreams of “what might be”.

• The process and outcome of the inquiry are interrelated and inseparable; so, make the process collaborative.

About reality:

• Reality is created through language, thoughts, images, and beliefs about reality.

• The act of asking a question influences the system’s reality in some way, that is, questions are a form of intervention.

• The types of questions we ask determine the types of answers we receive, with “the seeds of change being implicit in the very first questions we ask”.

• We manifest what we focus on and we “grow toward what we persistently ask questions about”.

About problem-solving . . .:

• Appreciative inquiry (AI) is distinctly different from problem-solving; AI focuses on a desired future or outcome, built on the strengths and passions of the past and present.

• Problem-solving attempts to analyse deficits, identify root causes, then fix problems or correct errors; because it searches for problems, it finds them.

• AI does not ignore problems—it recognises them as a desire for something else, and works to identify and enhance the “something else”. AI asks the question “what would it look like if it weren’t a problem?”

Typical duration

Planning, inquiry, and interview phases: typically, 1 to 2 months.

Process: steps of

The process usually takes participants through the stages of the “4-I cycle”a: implementation

• Inquire: Appreciating and valuing the best of “what is”.

• Imagine: Envisioning “what might be”.

• Innovate: Designing “what should be”.

• Implement: Implementing “what will be”.

AI principles are adapted and customised to each individual situation. The full AI process typically includes:

• Selecting a focus area or topic(s) of interest.

• Conducting interviews designed to discover strengths, assets, unique attributes.

• Identifying patterns, themes, and/or possibilities.

• Creating bold statements of ideal possibilities (“provocative propositions”).

• Co-determining “what should be” (common ground on principles and priorities).

• Taking or sustaining action.

a. Also known as the “4-D cycle”: Discover, Dream, Design, Delivery.

110

APPENDIX 5

A Suggested Outline of a Project Site

Resource Assessment Report

Report

The outline of a report evaluating a project area is given below. Such a report should not exceed 30 pages. Only summary tables are given in the main text, with detailed supporting information, production data, lists of organisations and individuals, and background data placed in the appendices.

The analyst should focus on the project area and avoid collecting or analysing information for a general perspective, keeping in mind the types of information that will be useful in terms of agroenterprise options and would interest the types of clients envisaged for the project.

Executive summary

• Brief introduction to the project area.

• Assets of main interest in the project area for an agroenterprise.

• Short list of agroenterprise options.

• Agroenterprise options, prioritised by:

- Client type.

- Market type (local, national, regional, and international or export).

- Crop, livestock, or processing options.

• Investment opportunities.

• Experimental innovation opportunities.

• Critical constraints.

Introduction

• Rapid overview of the project area’s economic status

• Economic development prospects

• Summary of main economic activities by scale, value, and client types Rapid agroenterprise analysis

Review of the main enterprise or livelihood options followed in the project area: Scale

Value

Client type

Local

Low

Low income

National

Medium

Middle income

Regional

High

Higher income

Export

High

Investors

Asset analysis

Use categories only if relevant to the prioritised agroenterprise(s).

Physical

• Geographic outline of project area (map).

- Boundaries.

- Roads.

- Market towns.

- Market linkages.

- Agroenterprise locations.

• Climate (focus on agroenterprise group locations).

• Soil types.

• Water resources (rivers, boreholes, and access issues).

• Roads, paths, trails (indicate trends).

• Vegetation types (based on altitude).

111

A Market Facilitator’s Guide to Participatory Agroenterprise Development

Social

• Community members.

• Demography.

• Education levels.

• History.

• Shocks (environmental, political).

Economic

• Outstanding economic activities.

• Production capacity, specialisation.

• Predominant production and marketing systems.

• Main commercial activities in the project area.

• Main commercial activities of clients.

• Power sources, that is, level of electrification.

• Market locations.

• Demand channels.

• Conservation issues and natural resources.

Institutional

• Types of organisations in the area, for example, farmer co-operatives, trade associations, finance banking and micro-finance, and chambers of commerce (place lists in appendices).

• Governmental structures (provide administrative structure, evaluate strengths).

• NGOs and other development partners operating in the area (evaluate strengths and interest in joining a working group on specific commodities or entire process).

• Research partners and their interest in the project.

• History of intervention activities in the area: governmental, private sector (indicate trends of value to agroenterprise options).

• Information on past and current investment trends (who, what, where, and when).

Innovations

• List key innovations related to technology.

• Innovations related to communications.

• Innovations linked to production systems.

• Institutional innovations.

Conclusions

Recommendations for next steps

112

APPENDIX 6

An Example of a Questionnaire for

Identifying Market Opportunities

Section 1. Information on contact and interviewer

1. Person interviewed:

2. Market chain position:

3. Job/position:

4. Business name:

Phone number:

Address:

5. Interviewer(s):

Section 2. Strategy: Products showing good sales growth 6a. Compared with last year, how were the sales volumes of ( BEANS)

in your business?

greater

equal

less

6b. To what extent have things changed?

not much

to some degree

greatly

Do you know why things have changed?

7. Which types of beans are in highest demand?

a.

b.

c.

d.

Section 3. Beans

Red speckled

Red

White

Other

Price

Volume of sales

Quality

Source

Minimum purchase

Other

Would you be interested in buying beans from a farmer’s group?

yes

no

If yes, please state your terms of business

113

A Market Facilitator’s Guide to Participatory Agroenterprise Development APPENDIX 7

A Report Outline for the Market Opportunities

Identification Study

Planning process

• Forming the survey team.

• Information from initial farmer meeting to find out what crops or livestock the farmers are interested in.

• Outline of plan (focus on existing products or full diversification process).

- Strategy 1: Selecting existing crops with farmers (outline process is used).

- Strategy 2: Selecting “product strategies” in survey.

• Discussion on level of participation (scope of survey, number of participants, involvement in particular markets, e.g., local, national, or export).

• Survey questionnaire.

Results from survey

• Long list of options from the open market survey.

• Selection criteria used to discard options from the long list.

- Discard level 1 options.

- Discard level 2 options.

- Farmer criteria.

• Data for the production matrix.

• Data for the marketing matrix.

• Data for the financial matrix.

• Short list.

• Review of discussion with farmer groups.

• Selected products by farmer groups.

Discussion

• Review of final selection (reasons why).

• Next steps.

Answer to riddle on how to make your first $10. Get up and go and look for it!!

114

APPENDIX 8

Checklist for a Market Chain or

Sub-sector Analysis

Topic

Subtopics

Questions and/or comments

Personal

Name

For established firms, obtain a business card or mobile phone information

Physical address

number for future reference

Telephone

Type of business

Value addition

How does the respondent add value to the product, where is Physical functions

this in the market chain? Does he or she change its form

Experience

(processor), move it (transporter), store it (wholesaler), sell it (retailer), or consume it? Does vertical integration exist?

Demand

Quantity

• Quantity sold normally, e.g., per day, week

Type of buyer

• To whom do you sell?

Seasonality

• Do the volumes of sale change over time?

Variety

• Are there different varieties?

Consumer preferences

• If so, what is their respective demand or preference?

Price data

• What is the price variation as per differences in varieties?

• Do changes in prices occur over time?

• If so, why?

• Are there problems selling the products?

• If so, what are they?

Supply

Source by area

• Where are your supply areas (geographically)?

Source by type of person

• Who do you buy from?

Price

• Where do you buy from? (meeting point)

Quality

• At what price do you buy the product?

• Does the price change over time? If so, why? How?

• Do you have problems getting products? If so, what are they?

Quality

Perishability

• What is the quality of the product along the chain?

Post harvest issues

• What is the product’s shelf life?

Storage

Quantity

• How much do you usually store?

Time

• For how long?

Storage problems

• Do you have storage problems?

• Do you experience storage losses?

Marketing

Forms

• What are your marketing costs?

costs

Proportions

• What is their proportion?

Grading and

Grading incentive

• Do you grade or sort?

sorting

• Do better grades fetch higher prices?

Market

Sources

• Do you get market information, e.g., on prices?

information

Spatial arbitrage

• If so, who from and how?

• Is there a relationship between prices in different areas at given times?

(Continued)

115

A Market Facilitator’s Guide to Participatory Agroenterprise Development Appendix 8. (Continued.)

Topic

Subtopics

Questions and/or comments

Price formation

Market power

• Who determines the price?

• How is the price determined?

• If the firm or individual is a price taker, find out why Institutional and

Associations

• Do you belong to an association?

legal framework

• Are there any market regulations? If so, what are they and how do they affect your business?

Market structure

Competition

• Number of sellers

• Is there price competition?

• Is there non-price competition? If so, what for (e.g., interlocking markets)

Credit availability Sources and type

• Are there any credit institutions?

• Do you use them?

• What are their rates of interest?

116

groups

to

with

farmer

(anti-ripening

share

Keen to explore

opportunities

experiment

1-MCP

factor)

Keen to know how to

organise

effectively

Market

increasing

Interested in more

links with the Gulf

States

General remarks

•

•

•

•

fruit

to

and

into

fresh

and

visit

of

Ndizi’

steps

Return

explore interest in

research

control

‘Sukali

ripening

packaging of dried

products

Next

follow up

•

to

wilt

disease)

on

links

and

spread

Collaboration on

Fusarium

(Panama

Research for a

cure or prevention

of

Need to know how

to control ripening,

i.e., how to start,

stop, and restart

ripening

Research

temperature

control

packaging

Interest in

exploring

EU tastes

Potential

research

•

•

•

•

•

week

growing

per

is

and

situation

tonnes

Fresh—about

2

Sun-dried—

about 400 kg/

month

Volume

(problem is

irregular

insufficient

sunshine)

Volume could be

doubled if

overcome drying

problem

Current

Exports of ‘Sukali

Ndizi’:

•

•

•

•

and

to

and

variety

fruits

cream,

fresh

Ndizi’

ice

snacks

Export

sun-dried

‘Sukali

Germany

(Frankfurt)

Switzerland

Sun-dried

used in breakfast

cereal,

and

Relation to banana

•

•

An Example from a Banana Survey

and

A Summary Sheet for Market Interviews:

fruit

and

information

outside

Bugurari

Organic

vegetable

exporters

Own farm in

Luwero

62

growers in Rakai

and

Basic

•

•

9

Uganda.

director:

Khan

506666

PPENDIXA

Organisation and

key persons

Camp farms African

Organics,

P.O. Box 29078,

Kampala,

Managing

Shiv

077

117

A Market Facilitator’s Guide to Participatory Agroenterprise Development APPENDIX 10

An Outline for Writing Up a Market Chain Report

Introduction

• Market barriers (e.g., skills required, volumes being

•

sought, investment needs, costs of entry, taxation,

Setting the boundaries of the study or market

chain being analysed (partial or full).

collusion, intimidation, or high level of

competition).

• Economic development prospects for the selected

chain.

•

Supply analysis

Trade and competitiveness: recent changes,

performance, and market options.

• Analyse the supply chain including:

• Prioritised enterprise opportunities for the selected

- Production costs.

product according to:

- Margins down the supply chain (producer,

- Market channel (local, district, national,

assembler, trader, wholesaler, and retailer).

regional, or export).

- Assess possible changes that would overcome

- Scale of investment.

bottlenecks within the system.

- Client type.

• Principle constraints to producing this commodity.

• Costs of production.

Production issues

- Agronomic problems, e.g., disease, pesticides,

• Production zones.

seeds, and labour.

•

- Infrastructure.

Seasonality of production.

•

- Inputs, e.g., fertilisers, pesticides, seeds, and

Importance of the product to income, rural

livelihoods, and economic growth.

labour.

•

- Finance and credit.

Principle production and marketing constraints

limiting the sub-sector13.

- Technical skills of labour force.

• Medium and long-term market outlooks across the

• Quality control measures.

sub-sector for local, national, regional, and export

• Real and relative returns.

trade.

Market barriers

Demand analysis

• Marketing barriers (local, national, and regional).

• Size and growth rate of market for this commodity

or products.

• Finance.

•

• Price information.

Price trends, including recent, past, short or

medium-term, future (try to find trend data).

• Grades and standards, health certifications.

• Product type for which demand is growing or

• Market links.

where.

• Principal buyers of this product (segment showing

Institutional arrangements and policy constraints

most interest).

• Private-sector organisation and institutional set up

• Buying conditions.

along the production and marketing chain.

- Market requirements in this product area, what

• Local administration barriers.

customers or importers will pay for.

• Governmental barriers.

- Quality and health standards that must be met.

• Trade barriers.

- Processing and packaging requirements.

- Volume and delivery time requirements.

Regional comparison of comparative or

- Product differentiation needed to succeed in the

competitive advantages

market.

• Highlight most competitive areas and products.

• Chief competitors and the advantages they enjoy.

• Analyse the areas with a comparative advantage

that is being exploited and other areas that may

have comparative advantage but are not realising

this potential.

• Given that future R&D investment is limited,

suggest where specific types of investment would

13. See “Section 9” for a discussion of the terms

provide the most economic gain.

“market chain” and “sub-sector”.

• Evaluate research innovation options.

118

Appendices

The way forward: Production and market growth

Conclusions

strategies for the sub-sector

• Major findings for market size, trends, and

Development strategies for the sub-sector on a

opportunities by market type, that is, local,

national and regional advantage basis:

national, regional, and international.

• Give a clear view on growth markets and product

• Recommendations and steps for future

areas.

interventions.

• Provide a simple breakdown of market options

- Commercial enterprise development (based on

according to:

client investment capacity).

- Market type (local, district, national, and export).

- Research opportunities.

- Relate this information to client types.

- Development needs.

• Briefly analyse the priority requirements needed to

- Policy options.

enter these market opportunities (changes in

production, processing, quality control and

enhancement, product differentiation, technology,

Appendices

and investment).

Current structure of production

• Provide ideas on who could contribute to making

Volume of production

these enterprises happen, the respective roles and

Volumes sold in targeted markets

actions of private and public sectors (i.e., who

Number of farms or farmers involved in production

could do what?).

Principal inputs and supplies for production

• Short and long-term actions needed (balancing

poverty reduction and growth objectives).

Recent trends in the above and outlook

Priority areas of intervention to support enterprise

Current post harvest operations

options

Storage and processing

Areas where project support will have the greatest

Transport

impact on production and growth of selected

Principle actors in these activities

enterprises:

Technologies used for value-added processing and

• Capital and technological development.

products

• Improved planting material or product

Recent trends in the above and outlook

improvement.

• Processing and processing efficiency.

• Market information.

• Attracting additional investment and technology.

• Policy, legislative, and institutional support.

• Indicate costing, timing, phasing, and prioritisation of these proposals.

119

BLANCA 120

Glossary

Advertising

Benchmarking

Any form of marketing communication in the

The process of comparing the company’s

paid media.

products and processes to those of a

competitor or leading firm in other industries

Aflatoxins

to find ways to improve quality and

Natural by-products produced by the

performance.

Aspergillus flavus and related fungi.

Biodegradable products

Agent

Products made from biological materials that

A channel institution which represents one or

break down within a relatively short period of

more suppliers for a fee.

time when disposed of or left to degrade

under natural conditions. These products are

Agri-business

not considered harmful to the environment as

Involves the manufacture and distribution of

they break down into non-noxious products.

farm supplies, production operation on the

farm and the storage, processing, and

Biomedicines

distribution of farm commodities and items

Medicinal products produced from plants and

made from them.

animal products.

Agricultural extensification

Biotechnology

Using more land or animals to increase

New area of biological science pertaining to

agricultural output.

propagation, transformation and the

recombination of genetic materials that is

Agricultural intensification

conducted in controlled, sterile conditions.

Increased agricultural output from increased

This technology often uses sophisticated non-

productivity or yield per unit of land.

traditional methods for enabling genetic

propagation and genetic manipulation, is

Agroenterprise

used to produce genetically modified

A business or firm, typically small-scale in

organisms (GMO’s).

nature, often based in a rural location that

produces and sells agriculturally-based

Brand

products or services.

A name, term, sign, symbol, logo, phrase

intended to identify the goods or services of

Appellation

one seller to differentiate them from those of

System by which a product is legally

competitors. A recognised brand is one which

protected to support marketplace

has strong customer loyalty.

differentiation based on its place or origin or

method of processing.

Broker

A channel institution which puts a specific

Arbitrage

buyer(s) and seller(s) in contact with one

The simultaneous purchase and sale of a

another for one or more commodity(ies) or

commodity in two different markets to take

service(s) with a view to achieving a sale or

advantage of differences in prices of that

benefit.

commodity in the markets.

Budget

Asset

An amount of money set aside to cover the total

Items of money value owned by a business or

cost of a communication campaign or other

person, including such items as land,

marketing activity.

buildings, machinery, tools, etc.

Business Development Service (BDS)

Barter

Any business or business entity that offers

The direct exchange of goods and services

information and activities in the marketing

between two parties, often without cash

system that facilitates a second business

considerations.

thereby improving its operational and pricing

efficiency. In some cases the term BDS is used

to capture all of those business services other

than financial services, such as input supply,

processing, and advisory services.

121

A Market Facilitator’s Guide to Participatory Agroenterprise Development Capital

Demand

Productive resources (goods) that are available,

The quantity of products that the consumers

as a result of past human decisions, to produce

can buy.

other want-satisfying goods.

Differentiated product

Ceteris paribus

A product that has undergone some form of

Holding some variables constant, whilst letting

value addition to distinguish it from other

specific variables change.

similar products, through means such as

grading, sorting, packaging, branding, or

C.I.F.

specialised marketing, such that it attracts a

A contract of sale “cost, insurance freight” of

higher price and targets a more specialised

the documents of title, not the goods, whereby

market.

the buyer is under an obligation to pay against

the shipping documents irrespective of the

Discount

arrival of the goods.

A reduction in price on purchases during a

stated period of time.

Collective action

Term used to describe group activities, used to

Distribution channel

increase economies of scale.

An institution through which goods or services

are marketed giving time and place utilities to

Collusion

users.

Process through which traders artificially fix

prices above the price they would achieve in a

Dumping

situation of perfect competition.

The selling of goods or services in a buying

country at less than the production unit price

Commodity

in the selling country, or the difference between

Product for sale in the marketplace. Term

normal domestic price and the price at which

originally coined to differentiate products that

the product leaves the exporting country.

were essential, termed utilities, with new

products such as coffee and cocoa that was

Duty

considered to be exotic and desirable.

The actual custom duty based on an imported

Nowadays, commodities tend to be used for

good either on an ad valorem, or specification

products in high volume trading.

amount per unit or combination of these two.

Comparative advantage

Economic rent

One country enjoying a lower production ratio

Return in excess of opportunity cost, often

(input to outputs) than another country under

enabled through political protection.

total specialisation.

Effective market demand

Comparative analysis

When needs and desires are supported by the

Comparing the same set of statistics within a

ability to pay.

category of one country with another for the

purpose of estimating potential demand.

Elastic supply

A supply elasticity coefficient of more than one

Competition

indicates an elastic supply, the percentage

A product, organisation or individual, in either

increase in supply being greater than the

the same or another category, which can be

percentage increase in price.

directly substituted one for the other in

fulfilling the same needs or wants.

Entrepreneur

Person who organises resources to produce and

Competitive strategy

market goods and services.

The adoption of a specific target market and

marketing mix stance in the marketplace.

Exchange

The act of obtaining a desired object by offering

Co-operative

something in return.

A collection of organisations or individuals,

pooling their resources in order to gain

Exchange rate

commercial or non-commercial advantage in

The ratio of exchange of one currency to

buying, selling or processing goods and/or

another.

services.

Exporting

Customer satisfaction

The marketing of surplus goods produced in

The extent to which a product’s perceived

one country into another country.

performance matches a buyer’s expectation. If

the product’s performance falls short of

Firm

expectations the buyer is dissatisfied. If

A decision making business entity that uses

performance matches or exceeds expectations,

resources hired from households to produce

the buyer is satisfied or delighted.

goods and services for sale to households or

other consuming units.

122

Glossary

Fixed costs

Human need

These costs incurred for resources that do not

A state of deprivation that can be addressed or

change as output is increased or decreased.

reduced by a product.

F.O.B.

Human wants

A contract of sale “free on board” whereby the

The form that a human needs takes as shaped

seller undertakes to place the goods on board a

by culture and individual personality.

named ship at a named port and berth and

carry all charges up to delivery over the ships

Income elasticity measurements

rail.

A description of the relationship between the

demand for goods and changes in income.

Focus group

A small sample of typical consumers (or

Income elasticity of demand

interest group) under the direction of group

The responsiveness of quality purchased to a

leader who elicits their reaction to stimulus

1% change in income, ceteris paribus.

such as an advertisement, an idea, a question

or concept.

Income per capita

The market value of all goods and services

Foreign exchange

outputted by a country divided by the total

Facilities’ business across national boundaries,

number of residents of that country.

usually expressed in foreign currency bought or

sold on the foreign exchange market.

Inelastic supply

Products that have a supply elasticity between

Future option

zero and one the supply elasticity is considered

A legally binding contract to deliver/take

to be inelastic. The percentage change in

delivery on a specified date of a given quality

supply is less than the percentage change in

and quantity of a commodity at an agreed price.

price.

Gatekeepers

Inflation

People in the organisations buying centre, or

A condition where demand outstrips supply or

point in a market chain, who control the flow of

costs escalate, affecting an upward change in

information to others.

prices.

Global products

Information system

Products designed to meet global market

A system for gathering, analysing and reporting

segments.

data aimed at reducing uncertainty in business

decision making.

Globalisation

The integration of international transport,

Innovation

finance and communications systems and

An idea, service, product, or technology that

services to enable transnational trading of

has been developed and marketed to a

goods and services.

consumer who perceives it as novel or new. It is

a process of identifying creating and delivering

Gross domestic product (GDP)

new product or service values that did not exist

The value of all goods and services produced by

before in the marketplace.

a country’s domestic economy in one year.

Input markets

Gross marketing margin

Markets where inputs such as seeds, tools,

The sum of all marketing costs plus profits.

fertilisers, and agro-chemicals are sold. These

are generally sold through specialised dealers

Gross national product (GNP)

that only trade in input supplies.

The market value of all goods and services

outputted by residents of a country in one year

Interest

including income from aboard.

The charge made for borrowed money. The rate

at which we discount future economic goods.

Hedging

A mechanism to avoid the risk of a decline in

Interest rate

the future market of a commodity, usually by

The price of borrowed money.

entering into future markets.

Intermediaries

Horizontal integration

Distribution channel firms or persons, that

The combination of two of more enterprises or

help to find the customer or make sales to

firms operating at the same point in the market

them, including bulking agents, wholesaling,

chain.

retailers that buy and resell goods.

Human capital

International products

The educational investment that improves the

Goods or services seen as having extended

knowledge and productivity of people.

potential into other markets.

123

A Market Facilitator’s Guide to Participatory Agroenterprise Development Joint ventures

Market entry

An enterprise in which two or more investors

The way in which an organisation enters

share ownership and control over property

foreign markets either by direct or indirect

rights and operations.

export or production in a foreign country.

Key informants

Market holding price

Active and leading members of the market

The charging of a price at what the market can

chain.

bear in order to hold market share.

Key observers

Market information services (MIS)

People who are knowledgeable about a market

People, equipment and procedures to gather,

chain but are not directly involved in the

sort, analyse, evaluate and distribute needed,

business operations of the market chain.

timely and accurate information to marketing

decision makers.

Letter of credit

A method of international payment whereby the

Market mix

buyer instructs his own country bank to open a

The set of controllable tactical marketing

credit with the seller’s own country bank

variables including: product, price, place and

specifying the documents which the seller has

promotion, that a firm blends to produce the

to deliver to the bank for him/her to receive

response it wants in the target marketplace.

payment.

Market positioning

Levy

The adoption of a specific market stance,

A tax imposed by government, to meet a

leader, challenger, follower, flanker or adopter,

specific objective.

vis-a-vis competition.

Licensing

Market research

A method of foreign operation whereby an

The function that links the consumer,

organisation in one country agrees to permit a

customer and public to the marketer through

firm in another country to use the

information—information used to identify and

manufacturing, processing, trademark, know-

define market opportunities and problems, to

how or some other skill provided by the

generate, refine and evaluate marketing

licensor.

actions; to monitor marketing performance and

to improve the understanding of the marketing

Local products

process.

Goods or services seen only suitable in one

single market.

Market segment

A group of consumers who respond in a similar

Logo

way to a given set of marketing stimuli.

Symbol or emblem used to identify a specific

product and for marketing purposes to

Market segmentation

differentiate a specific product from similar

Dividing a market into distinct groups of buyers

items.

with different needs, characteristics or

behaviour, who might require separate

Mark of origin (appellation)

products or marketing mixes.

System by which producers and processors can

legally register their products such that no

Market speculation

other producers or processors can use this

A marketing strategy whereby buyers hold

name, title or logo, unless they produce the

stocks of a product in the hope that prices will

product within a legally recognised area or

increase so that they can maximise profits

territory and use specifically laid down methods

when they decide to sell. Physical speculation

of production and/or processing.

requires that a lot or amount of produce is

purchased and stored. There are costs

Market

associated with storage and for a speculation to

The set of all actual and potential buyers of a

be profitable, the final sales value must be

product or service.

more than the costs of storage.

Market chain

Market supply

Term used to describe the multiple market

The quantity of products that is offered for sale.

channels through which a product or service

moves until reaching the consumer.

Marketing

Planning, executing and controlling the

Market efficiency

conception, pricing, promotion and distribution

A comparison of the value of output to the

of ideas, goods and services in order to build

value of inputs used in the marketing process.

lasting, mutually profitable exchange

relationships satisfying individual and

organisational objectives.

124

Glossary

Marketing costs

Option

Agricultural marketing refers to the activities

A bilateral contract giving its holder the right,

involved in taking a product from the farm gate

but not the obligation to buy or sell a specified

and delivering it in the form, at the time and to

asset at a specific price, at or up to, a specific

the place that the buyer requires. Such costs

date. Type of financial instrument that gives

are therefore incurred through handling,

the holder the right to buy or sell future

transport, storage, processing, packaging,

contracts.

market fees, risk management, brokerage,

export handling and others.

Output markets

Markets where harvested products are sold—

Marketing process

these are the more traditional assembly,

The process of analysing market opportunities,

wholesale and retail markets.

selecting target markets, developing a

marketing mix and managing the marketing

Packaging

effort.

Activities involved designing and producing the

container or wrapper for a product.

Marketing strategy

The marketing logic by which the business unit

Patenting

hopes to achieve its marketing objectives.

Legal mechanism, used to protect products

from being copied by other entrepreneurs. The

Media

patent scheme usually lasts for a designated

Any paid for communication channel including

period of time, 10 years, after which time, the

television, radio, posters, etc.

scheme either elapses or the inventor or owner

provides evidence of innovation to renew the

Middleman

patent to protect the value of the given

Person who trades in goods, a buyer and seller

intellectual property.

of goods and services.

Penetration price

Mycotoxins

The charging of a low price in order to gain

Toxic or noxious chemicals produced by certain

volume sales conducted under conditions of

mychorrhiza that grow on food products that

little product uniqueness and elastic demand

have been harvested and stored in sub-optimal

patterns.

conditions.

Physical distribution

Net marketing margin

The act and functions of physically distributing

Excludes normal marketing costs, thereby

goods and services including the elements of

providing a measure of the profit realised. Net

transport, warehousing and order processing.

marketing margins may however also include

the remuneration of the trader or processor’s

Place

labour, in which case it is not an exact profit

All the company/firm activities that make the

indicator.

product or service available to the target

customer.

Niche marketing

Adapting a company’s offerings and products to

Price

more closely match the needs of one or more

The amount of money charged for a product or

sub-segments where there is often little

service, or the sum of the values that

competition.

consumers exchange for the benefits of having

or using a product or service.

Non-tariff barriers

Measures, public or private that cause

Price ceiling

intentionally traded goods or services to be

The maximum price which can be charged

allocated in such a way as to reduce potential

bearing in mind competition and what the

real world income.

market can bear.

Nutracueticals

Price elasticity of supply

Products that have medicinal/pharmaceutical

Defined as a measure of the percentage

and/or nutritional value, that are derived from

change in quantity supplied in response to a

plant or animal products. Examples include

percent change in price. A supply elasticity of

high iron producing beans, bananas that

0.4 for cotton in the short run means that the

contain insulin.

quantity supplied increases 0.4% for a 1%

increase in the price of cotton.

Opportunity cost

The value of other opportunities given up in

Price escalation

order to produce or consume any good.

The difference between the domestic price and

the target price in foreign markets due to the

application of duties, dealer margins and/or

other transaction costs.

125

A Market Facilitator’s Guide to Participatory Agroenterprise Development Price floor

Speculation

The minimum price which can be charged

The purchase or sale of title to goods or

bounded by product cost.

financial obligations in the expectation of

favourable price movements.

Primary data

That data which is collected and generated as

Standardisation

part of a survey. Unpublished data from

Same goods or services marketed in either

individuals or organisations.

product, distribution or advertising form,

unchanged in any country.

Product

Anything that can be offered to a market for

Strategic business unit

attention, acquisition, use of consumption that

A self contained grouping of organisations,

might satisfy a want or need. It includes

products or technologies which serve an

physical objects, services, persons, places,

identified market and competes with identified

organisations and ideas.

competitors.

Product strategy

Strategic plan

A set of decisions regarding alternatives to the

A plan that describes how a firm will adapt to

target market and the marketing mix given a

take advantage of opportunities in its

set of market conditions.

constantly changing environment, thereby

maintaining a strategic fit between the firms

Promotion

goals and capabilities and its changing market

Activities that communicate the product of

opportunities.

service and its merits to target consumers and

persuade them to buy. The offer of an

Sub-sector

inducement to purchase, over and above the

A part of a sector, which can mean, within

intrinsic value or price of a good or service.

agriculture that a sub-sector focuses on one

area, such as grains, fish, livestock, etc. or can

Quality

be more detailed to all that relates to one

The totality of features and characteristics of a

particular commodity, such as the maize, rice,

product or service that bear on its ability to

cassava, beef sub-sectors.

satisfy stated or implied needs.

Substitutes

Quota

Two different goods or resources between which

A specific imported amount imposed by one

a choice is made to satisfy human wants (or to

country on another, when once filled cannot be

produce a product).

exceeded within a given time. When a quota is

in force the price mechanism is not allowed to

Super Brand

operate.

A product that has world renowned reputation,

for providing customer satisfaction and delight,

Relationship marketing

e.g., the soft drink Coca-Cola, the Nike sports

The process of creating maintaining and

shoe.

enhancing strong value laden relationships

with customers and other stakeholders.

Tariff

An instrument of terms of access normally the

Retailer

imposition of a single or multiple excise rate on

A channel institution which acts as an

a imported good.

intermediary between other channel

institutions and the end-user and who usually

Traceability

breaks bulk, charging a margin for its services.

System by which a product is tagged, such that

it can be traced from source of origin to final

Secondary data

user. This process may become mandatory in

That data which already exists in other texts.

formalised food markets.

Published accessible data from a variety of

sources.

Trademark

Legally recognised name, symbol or title, which

Sector

can only be used for marketing purposes by the

Relates to the all activities under the mandate

originating or owning company.

of one government ministry, such agriculture,

health, education, justice.

Transaction

A trade between two parties that involves at

Services

least two things of value, agreed upon

Activities or benefits that are offered for sale.

conditions, a time agreement and a place of

agreement.

SMS

Short message service, text used to transfer

information via mobile phones.

126

Glossary

Transaction costs

Vertical integration

Transaction costs relate to the non-price costs

The linkage of firms (enterprises) in different

of making a commercial exchange. These are

stages of producing and/or marketing under

expenses incurred in finding someone to trade

the ownership of a single firm.

with, time spent negotiating a deal and the

costs involved in ensuring that contracts are

Wholesaler

honoured, all fall under the general category of

A channel institution which purchases and

transaction cost.

sells in bulk from either original suppliers and/

or other channel intermediaries, charging a

Value

margin for its services.

The consumer’s assessment of the product’s

overall capacity to satisfy his or her needs.

Value added

The contribution to final produce value by each

stage in the production, delivery and marketing

process. Also, includes transformation

processing of goods from primary to final state

offered to a consumer.

127

BLANCA 128

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ISBN 0-945356-36-6

Table of Contents

Preface

Acknowledgments

iii

14

Marketing for Extension Officers”4 No. 2 in