By Simon Pande
Agricultural production is a critical component of Zimbabwe’s National Development Strategy 1 which seeks to achieve an upper middle-class economy by 2030.
In this regard, the government has embarked on several programmes, which seeks to empower the rural populace, the majority of whom rely on agriculture production for their livelihoods, through enhanced production and productivity along their various value chains.
Various government initiatives have been tabled to assist small-scale farmers to scale up agricultural production like climate smart farming (Pfumvudza/Intwasa) and Presidential free input schemes, to mention just a few.
Despite all the concerted efforts by the government to develop and modernize agricultural production systems among small-scale farmers, market access remains a challenge to these farmers.
Like in most African countries and other less developed nations across the globe, small-scale farmers face a several challenges in marketing their agricultural products. Chief among these challenges are poor storage facilities and poor road infrastructure. Most small-scale farmers fall prey to middlemen who buy their produce at a song due to these challenges.
It is against this background that the Agricultural Marketing Authority (AMA) is working on cluster development among small-scale farmers to create co-ordinated and organised farmer producer organisations (FPO) that would eradicate the marketing pitfalls referred to earlier.
An FPO is a business entity comprised of primary producers, in this case small-scale farmers. This involves farmers coming together to form groups of people with a shared vision and objectives regarding choice of agricultural production systems to undertake and enterprises to pursue.
Naturally, as the old adage goes, there is power in numbers. The bargaining power of an FPO on the market is high as there is aggregation of produce by the farmers to meet the quantity requirements of various off-takers.
In an FPO, production is co-ordinated implying that the group makes decisions on the crop to grow or livestock enterprise to adopt. This decision will be informed by what is required on the market. This means, therefore, that market-led production is undertaken and hence a guaranteed market secured prior to production.
There are a lot of benefits derived from forming FPOs. These include:
- Collective management of resources;
- Collective purchases that can attract discounts from input suppliers;
- Reduction in cost of means of production; and
- Collective marketing improves bargaining power.
AMA is, therefore, raising awareness among farmers on these benefits and assisting in development of FPOs.
The concept of FPOs is well-entrenched on the Indian agricultural production landscape which is underpinned on transforming farming as a business. This model has scored a lot of positives for farmers in India.
In India, an FPO is a legal entity comprising of 20 or more farmers and registered with the Government of India through either the Cooperatives Act or Companies Act. The concept is almost similar to the village business unit what the Zimbabwe government is rolling out across the country.
The emergence of FPOs in India over the years emanated from the highly fragmented nature of farmland in that country. There has been a steady decline in farmland size for small-scale farmers in the past 20 years. On average, land size in India is 1.08 hectares per farmer. On the other hand, about 86% of the small-scale farmers occupy total land holdings in India.
This scenario of fragmentation of the land resource entailed diseconomies of scale and ultimately diminishing profitability of farming. These challenges led to the birth of the FPO model to enhance production and productivity of small-scale farmers.
The world’s largest dairy co-operative is found in India. Amul (Anand Milk Union Limited) Dairy Co-operative was borne out of the FPO model and is women-constituted co-operative. The co-operative was created in 1946 as a reaction to the exploitation of local milk producers by the dealers and agents of the main dairy companies of that time.
The aggregation of milk from the village level in the Amul case study shows how grassroots initiatives can lead to the birth of large conglomerates controlled and benefiting the primary producers.
The FPO model in India presents a desirable case study from where lessons can be drawn for Zimbabwe’s agriculture sector in transforming farming as a business.
If local farmers can adopt such production models, Zimbabwe will smush production targets as well as achieve food and nutrition security as espoused in the National Development Strategy 1.
Simon Pande is AMA horticulture and livestock expert
Word from the market is a column produced by the Agricultural Marketing Authority (AMA) to promote market driven production. Feedback cchiduku@ama.co.zw or WhatsApp +263781706212.
