For further information contact: CIAT

[<< previous theme] [next theme >>]

CIAT in Perspective 1999-2000
Anatomy of Impact

Linking Farmers to Markets

"Construction of the drying plant has been one of this
community's major achievements, and the changes
in the standard of living are obvious. The
association has improved the market
for cassava."

Alvaro Meza,
Cassava Farmer, Sucre Department, Colombia

Imagine living on a postage-stamp farm where you grow beans or cassava just to survive. In good years you sell a small surplus to a flighty local market. In bad years you not only go hungry but also can’t pay for new shoes or your child’s school fees. Such is the predicament of many small farmers throughout the tropics.

But they are not all doomed to abject semisubsistence. Today’s global economy influences all markets, from local to international, presenting small producers with both threats and opportunities. The challenge is to help these farmers connect with markets by intensifying and stabilizing their production, adding value to traditional crops, diversifying into new enterprises, and analyzing market opportunities. In addition to improving the well-being of rural people, these actions could provide them the means to invest in a greener agriculture. The following pages present examples of CIAT’s collaborative efforts to link farmers with markets, including impact assessments of past interventions. 

Preserving the cash potential of beans

For many small farmers, the first step toward better market links begins with higher, more stable production of staple foods for which there is growing demand among consumers. And the most cost-effective way for farmers to achieve this end is through improved crop varieties. By intensifying production, new varieties better enable poor farmers to feed their families, produce a surplus of quality food for the market, and perhaps even free up space for cultivation of other cash commodities. Moreover, by providing resistance to diseases and other stresses, new varieties can remove some of the uncertainty from farmers’ production, making the market orientation more manageable.

Few cases in CIAT’s history illustrate more vividly the impact potential of gene-based technology than the story of the bean golden mosaic virus (BGMV). Transmitted by whiteflies, BGMV disease turns leaves a brilliant yellow and distorts pods, resulting in undersized bean seeds. Rapid spread of the virus in Central America and Mexico, starting in the 1970s, was a devastating blow to bean farmers, particularly small producers.

To fully appreciate the threat to human livelihoods posed by BGMV, it’s important to understand the central role beans play in the region’s economies and people’s diets. When it comes to basic grains, beans are second only to maize in the area planted in Central America and are the number one source of farm income. Moreover, beans continue to be the "meat of the poor," providing roughly double the protein found in most cereals.

CIAT and its partner organizations responded quickly to the BGMV crisis by developing new virus-resistant varieties for Mesoamerica, beginning in the late 1970s. By 1996 about 40 percent of Central America’s bean area was planted to the improved varieties. In some badly hit areas, adoption has been double that. In Honduras, where the virus struck relatively late, the first BGMV-resistant variety, Dorado, was released in 1990, and several others soon followed.

Conventional economic analysis carried out by CIAT indicated that by 1998 the cumulative value of increased production from the new varieties was more than US$200 million (in 1990 dollars) for Central America. This far surpasses the costs of associated bean breeding research over the years. However, based on a more recent multidisciplinary study of impact in Honduras, CIAT agricultural economist Nancy Johnson believes this figure grossly underestimates the germplasm’s true positive impact.

Teasing out the value of disease resistance

When economists measure new germplasm’s impact, differences in crop yields between traditional and improved varieties, as recorded in farmers’ fields, often serve as their starting point. Economists also need to know the surface area planted to the different varieties each year as well as market prices. They can then calculate the cumulative monetary value of the extra production by farmers who plant the new varieties. It’s a straightforward way to value the direct flow of benefits into producers’ pockets and national economies due to production gains.

But when the main selling point of new varieties is disease resistance rather than higher yield, this type of analysis falters. It cannot capture a significant benefit—the value of production losses that farmers avoid by adopting the new varieties. As Johnson explains, "the appropriate comparison in these cases is between the observed yields of improved varieties and the yields we would have observed with traditional varieties under similar circumstances in the absence of improved varieties." Unfortunately farm-level data for the latter scenario, the so-called "counterfactual," simply do not exist.

A way around this problem, says Johnson, is to simulate the counterfactual. She and CIAT colleagues have developed a method for doing this, which they applied in a 1999 study of the impact of disease-resistant bean varieties in Honduras. While the technique teases out the value of loss avoidance, it also looks at the issue of equity—how poor producers benefit.

To factor in the probable effects of the virus on production, Johnson and her colleagues drew on a CIAT-developed computer tool that predicts the distribution of organisms in the wild. Called FloraMap, the tool is based on the assumption that the climate of those locations where an organism like BGMV has been collected in the past is a good indicator of the range of habitats in which it can survive or thrive.

FloraMap helped the researchers project the spatial distribution of BGMV incidence in bean-producing areas of Honduras. This information was then combined with yield data and actual bean prices for the traditional and resistant varieties. Researchers were thus able to estimate and compare the value of production under two scenarios—with improved varieties and without.

The simulation was applied to two bean-growing areas of Honduras. The results were dramatic. For virus-related crop damage of 90 percent, the average yield of traditional and resistant varieties combined was estimated to be nearly 60 percent higher than the yield farmers would have gotten had they planted only traditional, nonresistant varieties. With more conventional economic analysis, in which resistant and traditional variety yields are directly compared based on farm-level production data, the yield advantage of resistant varieties would show up as only 5 percent. Near the other end of the viral-incidence spectrum, when crop damage is only 25 percent, the two methods are almost in agreement. The conclusion is that, when viral incidence is moderate or high, the real economic benefits to farmers of planting resistant varieties can be substantially greater than what conventional analysis might indicate.

Going a step further, Johnson and colleagues exploited other CIAT work that mapped poverty levels in Honduras. Using a geographic information system, Johnson overlaid a poverty map of Honduras, a national bean production map, and a map of predicted viral incidence generated by FloraMap (which serves as an indicator of where farmers are more likely to adopt disease-resistant varieties). The overlaps between the data sets suggested that 40 percent of the total economic benefits from new varieties accrue to areas of significant poverty.

Kenya’s not-so-common beans

Besides being a major source of dietary protein, common beans are a major cash earner for small farmers in Africa. About
40 percent of the continent’s bean harvest, mainly dried beans, is marketed, generating US$226 million a year at the farm gate. The retail value is about double that.

Unfortunately, the road to a dynamic bean-marketing system in Africa is a rocky one, literally and figuratively. Getting beans to market means travelling long distances over rough roads and tracks. "If I’m a middleman, I won’t go into the interior because if it rains I won’t get my truck out," explains says John Ojiem of the Kenya Agricultural Research Institute (KARI), who is also a site coordinator for the CGIAR’s African Highlands Initiative, which is convened by the International Centre for Research in Agroforestry (ICRAF). Other key problems are storage losses due to weathering and pests and inefficient farm-level buying and retailing.

Even so, demand for beans continues to surge, as the region’s urban areas expand, and successful bean marketing and income generation will ultimately depend on farmers’ ability to grow surpluses. For that reason research has so far concentrated on increasing production, especially through better germplasm that raises yields and offers farmers an incentive to invest in maintaining soil fertility. The case of Kenya, a traditional bean producer and Africa’s largest consumer of the crop, illustrates both the challenges and potential for progress.

Bean yields in the country’s western region plummeted to crisis levels in 1993. The following year, 70 percent of farmers abandoned bush beans altogether during the long rains (March to August). Researchers found multiple causes of the problem—widespread root rots, declining soil fertility, and infestation by bean stem maggots. They then introduced farmers to root rot—resistant bush and climbing beans as well as soil improvement methods, such as the use of green manures that help the crop resist root rots. In 1996 all farmers who had received seed for testing were growing at least three varieties. The gross economic benefit of Kenya’s 1999 production gains from the new bean varieties has been estimated at US$5.4 million (1990 dollars).

Opiayo Morrison is among 300 farmers in Emuhaya District of western Kenya who are now experimenting with the new varieties and soil-improvement techniques. "In the past," says Morrison," you couldn’t get enough food, especially beans. Now I can easily sell 2 kilograms for 200 shillings" (or about US$3). Neighbor Joash Mukora tells a similar story. "After selling beans I can buy school uniforms for my two children and notebooks for school."

The climbers have been a welcome novelty in Kenya. Per unit area, they yield three times more than bush beans, and they resist root rot. They are of Mexican origin but were further developed by CIAT and collaborating scientists and farmers in Rwanda, where they helped as much as half of the country’s population make better use of scarce land and boost their incomes. The climbing beans have since spread not only to several areas of Kenya but also to Tanzania, Zambia, and other countries. A 1998 study in central Kenya found that 1,700 farmers were already growing these varieties and selling the seed to neighbors at premium prices.

Kenyan farmer Rhoda Inganza is a good example of how small producers are accelerating adoption of the new bean varieties. Having started with a small seed sample provided in 1994 by KARI bean breeder Reuben Otsyula, she is now a major local source of seed for other farmers. She has also been trained under the African Highlands Initiative to teach seed production methods. "Only yesterday I gave some seed away to four farmers, who in turn gave some to others," Inganza recently told visitors to her farm. "I know they’re able to reach a large number of people."

CIAT and its research partners in Africa recognize the need to link farmers to markets. In a recent review of the Pan-Africa Bean Research Alliance’s work, bean breeder Paul Kimani of the University of Nairobi identified various new food items now on the market—bean-based samosas, bean-and-tomato paste, and frozen snap beans, for example. "These products offer new outlets for bean producers and hopefully stable prices and production contracts. This is an area that deserves more attention. Linkages with private companies are critical in creating new markets and value-added products."

Building farmers’ assets in Southeast Asia

In many parts of the tropics, livestock are small farmers’ best bet for building assets and strengthening their toehold in markets. In upland areas of Southeast Asia, for example, livestock already provide more than 50 percent of farmers’ cash income as well as draught power.

Recent experience in Latin America has shown that improved tropical forages are an effective way to intensify market-oriented, small-scale livestock production. Now, a
5-year participatory R&D project led by CIAT has demonstrated their enormous potential for improving family welfare in the uplands of Southeast Asia. At least 1,400 mostly poor farm families in four countries of the region are now growing one or more forages, carefully selected from an array of 26 legume and grass species, to feed their livestock.

The resulting shift in farming practices cuts family labor requirements, makes manure more readily available to fertilize crops, and boosts animal health and weight gains, enabling farmers to get livestock to market more quickly. Environmental pressure on the land from grazing is also reduced, and some of the new forage options help prevent soil erosion.

Growing grass and legume crops is a welcome change for farmers in the dozens of communities that took part in the project at 19 sites in Indonesia, Laos, the Philippines, and Vietnam. They cultivate forages mostly on small "cut-and-carry" plots close to the farmhouse or fields, making it more convenient to feed cattle, buffaloes, sheep, goats, and other livestock. At some of the more advanced experimental sites, forages are also grown as contour hedgerows or as living fences along field boundaries.

In the past men, women, and even children spent many hours a day herding their animals. The search for scarce sources of natural vegetation for grazing required traveling many kilometers from home on foot or bicycle. While the new forage systems developed under the Forages for Smallholders Project (FSP) don’t entirely replace traditional grazing methods, they do introduce flexibility, convenience, and a measure of security into livestock rearing. Farmers conducting the on-farm experiments report that introducing forages has made for healthier and faster-growing animals.

The 5-year, US$3 million project, completed at the end of 1999, was a massive collaboration between farmers, local development professionals, and staff from CIAT and the Commonwealth Scientific and Industrial Research Organisation of Australia (CSIRO). The lion’s share of funding came from the Australian Agency for International Development (AusAid). Contributions were also made by participating country governments and the Australian Centre for International Agricultural Research (ACIAR).

FSP managers ascribe the project’s success—an adoption level nearly double their original target—to the presence of several distinct but interlocking ingredients of technology development. These are farmer participation, suitable forage varieties, local seed production and vegetative multiplication, technical expertise, and the creation of strong partnerships at the provincial and district levels.

Linking these elements together is a large training component, complete with printed materials, translated into multiple languages, on topics like participatory research methods, forage cultivation, and seed production. One key result has been the formation of a nucleus of national trainers who can instruct others in problem diagnosis and methods of farmer evaluation of improved forages. So far, these "graduates" have themselves trained 813 local staff in five countries.

The processes set in motion by this project—development of forage solutions on small farms and construction of a network of field workers skilled in participatory approaches—are gaining momentum. To build on early successes, the Asian Development Bank has provided CIAT with funds for continued work with smallholders in six countries. In addition, with substantial support from AusAid, the Center is undertaking a new 5-year project on forages and livestock systems in Laos.

As this work moves ahead, so will efforts to gauge its impact. With funding from ACIAR, researchers at CIAT and the University of Queensland recently developed a practical framework for monitoring and evaluation, using two FSP research sites as test cases. This framework is now being used to help bridge the knowledge gap between project outcomes as documented by researchers and their wider impact on the well-being of poor upland farmers, as the farmers see it.

New markets for cassava

A further option for connecting farmers with markets involves finding alternative uses and markets for not-so-fancy staple foods. Cassava, for instance, can be turned into starch for the food processing industry or dried and chipped for animal feed, in addition to being sold as fresh roots for human consumption.

CIAT’s first large-scale effort to pursue this avenue of market-oriented development with poor farmers began in 1981. The Integrated Cassava Research and Development (ICRD) project—conducted jointly by CIAT and the Colombian government’s Integrated Rural Development (DRI) Program—introduced new processing technology, an organizational model, and support services to farmers on Colombia’s North Coast.

Compared with other parts of Colombia, the North Coast is quite poor. At the beginning of the 1980s, the basic needs of about three-quarters of its inhabitants were judged "unsatisfied," and more than half the population was living in absolute poverty. Cassava was, and still is, critical to their survival. It’s one of the few crops that grows well in this semiarid region, giving farmers a small measure of food security.

The ICRD project’s hypothesis was that linking farmers to the animal feed market via cassava-drying agroenterprises would create a cascade of favorable events. It would set a price floor for fresh cassava and smooth price fluctuations, thus reducing economic risk and giving small farmers more bargaining power. As a result, cassava production would rise, initially through a larger planted area and eventually through adoption of better cassava germplasm. This, in turn, would create jobs, boost family incomes, foster social organization and community development, and reduce poverty.

The ICRD project, which officially ran until 1989, targeted small landholders and tenant farmers. It had three key phases, followed by a winding-down period during which institutional support declined and then ended in 1993. The research component, provided by CIAT and the Colombian Institute for Agricultural Research (ICA), was funded by the Canadian International Development Agency (CIDA).

By the time CIAT ended its research support, a total of 138 drying plants were in operation, most of them run by small-farmer cooperatives. Annual output had reached 35,000 tons, valued at US$6.2 million. About one-third of small-scale cassava farmers were selling to the dried-cassava agroindustry, and 15 percent belonged to a cooperative.

Then, the picture changed drastically. The Colombian government decided to open up its economy to international competition and to reduce its intervention in agriculture. As cheap imports of grain for animal feed became available, prices of dried and fresh cassava tumbled, bringing the cassava drying industry’s profit margin to almost zero. At the same time, government agricultural credit dried up. More than one-quarter of the drying plants had to shut down. Making matters worse, a wave of violence disrupted local farming communities, forcing eight cassava cooperatives to disband. By 1994 cassava production had dropped to 7,000 tons—a mere 20 percent of the previous year’s production.

Despite the political and economic shocks, 56 drying plants were still operating in 1999, when CIAT staff returned to the region to conduct an impact study of the ICRD project. Moreover, dry-cassava production had picked up once again, as a result of the recent devaluation of local currency, which made imported grain more expensive.

The impact analysis, led by CIAT agricultural economist Verónica Gottret, showed that the ICRD project did alleviate poverty in the target communities but indirectly. In effect, the emergence of cassava-drying cooperatives created a favorable economic and technological environment for poor farmers to expand the planted area and adopt modern varieties that yield better. This, in turn, boosted incomes.

The reduction of poverty is seen in two census-based indicators: unsatisfied basic needs and level of absolute poverty. The greater the proportion of cassava area planted to modern varieties in a given municipality, the greater the reduction in poverty. For example, a
10 percent increase in the cassava area under modern varieties reduced the proportion of households living in absolute poverty by 1.2 percent.

The study thus found the direct economic benefits of the cassava-drying enterprises to be small, about US$1.6 million for the 1984-91 period. However, the overall economic surplus—that is, from both cassava drying and enhanced production linked to adoption of new varieties—was estimated at US$18.6 million.

Gottret found that farmer cooperatives tended to emerge in communities with a low average farm size but where human and social capital (such as education, institutional support, and community organization) had already been developed to some extent. Conversely, she also found that the creation of cooperative cassava-drying agroenterprises through the ICRD project further stimulated social capital development.

"The project built local capacity to market crops and identify other economic opportunities," says Gottret. In communities that formed cassava-drying cooperatives, "people came together, organized themselves, and got into other enterprises, such as small shops that sell food and veterinary products."

Interviews with farmers confirmed the positive impact of the ICRD project, especially by providing more food, creating jobs, and stabilizing farmers’ incomes. "Before, we didn’t eat three meals per day," says Don Carlos, a cassava farmer and member of a cooperative in Sucre. "If we had breakfast, we didn’t have lunch. Things have improved. Now we have money to send the children to school and to buy shoes and socks. And we have enough to eat three meals too."

Prospecting for markets

Though staple crops still offer much market potential, farmers in the tropics clearly need to seize other opportunities as well. Fortunately for them, the developing world has something that industrialized nations crave—a wealth of tropical crops, especially exotic fruits, vegetables, flowers, herbs, spices, and aromatic and medicinal plants. In many of these countries, the popularity of specialty foods is on the rise, creating profitable niche markets. For example, in the USA and Europe, annual market growth for organically grown fruits, vegetables, and other products is estimated at more than 20 percent. Just as important, there is significant demand for some of these in the producer countries themselves.

"But traditional economic development models have had a bias toward the urban sector," says CIAT marketing specialist Carlos Ostertag. As a result, the needs of poor rural producers have often been ignored. At the same time, he says, rural development projects have typically lacked a business orientation. They’ve tended to concentrate on marketing what was already being produced, mainly traditional food staples, instead of prospecting for new products and processes to respond to consumer needs.

For several years, Ostertag and colleagues have been perfecting a way to help farmers maneuver out of that supply-driven economic backwater. Their efforts have led to a step-by-step method for identifying and assessing new market opportunities. "This tool for decision making is filling a vacuum," he says. "But we don’t have a utopian perspective. We don’t expect farmers to develop highly sophisticated projects. We’re very careful about suggesting radical changes, because most farmers are poor and, for them, change means risk."

The real aim, says the researcher, is to get small producers to adopt a market approach and move in the direction of adding value to current and alternative products. For example, in Colombia’s coffee zone farmers are being organized by producer associations, NGOs, and even a large fruit processing company to grow blackberries in addition to coffee and staples. While the farmers do not themselves produce the final fruit juice products, they add value to their harvest and sell it to industry. The fruit fetches a higher price than traditional crops like beans and makes farmers less economically dependent on such staples.

The market-assessment method is packaged as a training module, one of nine CIAT decision-support tools for natural resource management. A recurring exercise in the method is participatory analysis of how new production and marketing opportunities can conserve or improve natural resources. The rationale is that environmentally friendly production and processing are pillars of economically sustainable agroenterprises.

The tool’s main target audience is public and NGO professionals working in rural development and natural resource management. A secondary audience is university and college educators of such agents. While those trained in the method are intended to coordinate the actual market assessment, farmers make the key investment and production decisions. But the method is not designed to assist individual farmers who want to test the market feasibility of a specific new business idea. Rather, it is intended to help all small producers in a defined microregion.

CIAT designed the market assessment decision tool based mainly on its work with farmers in Colombia’s southwestern Cauca Department. However, the tool has since been applied in Honduras, Peru, and in the Colombian savannas. Besides those three countries, national staff have been trained (to serve as trainers themselves) in Ecuador, Kenya, and Nicaragua.

In Peru’s Pucallpa region, farmers used the CIAT method to opt for production of cocona, a tropical fruit that can be pressed into juice or used to flavor ice cream. Good market demand and the fruit’s short production cycle were among the motivating factors.

It makes little sense to concentrate on just a few staple crops when tropical countries have so much biodiversity, concludes Ostertag. In order for international research to increase its impact, "we must complement the traditional focus on major commodities by looking at multiple options. What we’ve created is a tool that helps decide which opportunities are priorities."

[<< previous theme] [next theme >>]