Research Paper Research Small farm commercialisation in Africa: Reviewing the issues Steve Wiggins, Gem Argwings-Kodhek, Jennifer Leavy & Colin Poulton September 2011 Tomato growers, Brong-Ahafo, Ghana Brong-Ahafo, growers, Tomato Cover photo: photo: Cover Research Paper 023 | April 2011 www.future-agricultures.org Acknowledgments Many thanks to the Thom Jayne of Michigan State University for detailed comments on previous drafts of this review. Nevertheless, the opinions and judgments in this paper, as well as any errors and omissions, are solely the responsibility of the authors. Abbreviations Eurep Euro-Retailer Produce Working Group GAP Good Agricultural practice protocol, Eurep HACCP Hazard Analysis and Critical Control Points KTDA Kenya Tea Development Authority kt Thousand tonnes LF Large farmer m Million SF Small farmer SPS Sanitary and Phytosanitary Standards Research Paper 023 | April 2011 ii Table of Contents Summary ..............................................................................................................................................................................................................................vi Introduction and framework ................................................................................................................................................... vi Process of commercialisation ................................................................................................................................................ vii Outcomes from commercialisation of small farms ........................................................................................................ vii Process of commercialisation ..................................................................................................................................viii Outcomes from commercialisation of small farms ........................................................................................................xii Policy ............................................................................................................................................................................................. xiv Conclusions .................................................................................................................................................... xvii 1. Introduction ................................................................................................................................................... 1 2. Smallholder commercialisation: the issues and debates ........................................................................... 2 2.1 Definitions.... ................................................................................................................................................................................................................................ 2 Production for Market ....................................................................................................................................................................... 2 Other dimensions ................................................................................................................................................................................4 Broader concepts: the non-farm rural economy ..........................................................................................................................6 2.2 Three competing perspectives on smallholder commercialisation .................................................................................................. 6 Differentiation and disappearance of the peasantry .................................................................................................................6 Peasant economy: a distinctive logic ............................................................................................................................................. 9 Neoliberal economics: the dominant contemporary perspective .........................................................................................10 Market failures in rural economies: a contemporary bone of contention ...........................................................................11 Summarising the perspectives ....................................................................................................................................................... 12 2.3 Question posed by commercialisation ................................................................................................................................................................ 12 Processes of small farmer commercialisation ............................................................................................................................14 Outcomes ............................................................................................................................................................................................14 Policy lessons and implications ......................................................................................................................................................17 3. Processes of commercialisation ................................................................................................................. 17 3.1 How do small farms commercialise and to what degree? ......................................................................................................................17 Limits to rapid change: land tenure and management of labour .........................................................................................18 Research Paper 023 | April 2011 iii www.future-agricultures.org To what extent do small farmers specialise as they commercialise? ..................................................................................... 20 Are there pathways for commercialisation? ................................................................................................................................. 21 3.2 What drives commercialisation of small farms? ............................................................................................................................................ 22 Prices and market access ................................................................................................................................................................. 22 Technology .......................................................................................................................................................................................... 25 Obstacles to commercialisation for small farms ................................................................................................................. 26 3.3 Which farmers are able to commercialise? ........................................................................................................................................................ 30 Land ....................................................................................................................................................................................................... 31 Capital and physical assets .............................................................................................................................................................. 33 Labour, knowledge and skills ........................................................................................................................................................ 34 Adoption and differentiation .........................................................................................................................................................34 3.4 How do commercialising small farms interact with larger-scale businesses in supply chains? ................................. 35 Decentralised, fragmented, competitive supply chains. ......................................................................................................... 36 Centralised, integrated supply chains that may also be monopolistic. .............................................................................. 36 4. Outcomes from commercialisation of small farms ................................................................................... 40 4.1 Benefits from commercialisation of small farms. .......................................................................................................................................... 40 Benefits across the rural economy through linkages ...............................................................................................................42 How much do small farmers benefit from commercialisation? A caution .........................................................................43 4.2 Potential drawbacks: food insecurity, inequality and increasing risks .......................................................................................... 44 Food insecurity and malnutrition ................................................................................................................................................... 44 What evidence is there on the overall nutritional impacts of commercialisation? .........................................................46 Inequality and social differentiation ............................................................................................................................................46 Gender differentiation