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Linking Fiji’s farmers to profitable markets (Part 2)

This is the second part of a two-part Blog based on recent experiences in Fiji with the formulation of the Fiji Agricultural Partnerships Project (FAPP)

In Fiji, as in the rest of the world, linking farmers to new markets is certainly not easy. Farmers and traders often distrust each other, but unless trust relations can be built up the two parties won’t be able to work together and Fiji will continue to be a major importer of products that it could well produce itself.

Understanding problems faced by farmers

What needs to be done to achieve this trust and develop mutually profitable markets? First, each party needs to understand the other. For a start, traders must understand the difficulties that farmers face in meeting quantity and quality requirements. These difficulties could include poor growing conditions, and problems with obtaining the right planting materials and other farm inputs. Farmers may also find it difficult to keep harvested produce in good condition while awaiting arrival of the trader’s transport. What can traders do to assist in these cases? Perhaps they could buy the inputs on behalf of the farmers and supply them under a kind of contract farming arrangement where the farmers pay for the inputs when they sell their produce. This would help address a common problem, that of insufficient rural credit. To improve post-harvest handling, the trader or traders could help to fund or help to find funding for construction of a small facility to keep the produce out of the sun and rain.

Developing trust to address these problems is essential

Traders are not going to make investments of this type if they don’t trust the farmers. They have had too many experiences of farmers promising to deliver products and then failing to do so. Often these failures have been for understandable reasons: there may have been a pest or disease outbreak; the weather may have been unsuitable; or farmers may have had important cultural obligations that they felt took precedence. On other occasions, however, farmers may just have not got round to doing the planting or, if the crop was grown, they may have decided to sell to someone else.

Farmers should understand that it is in their interests to honour their commitments. Traders have customers; hotels, supermarkets and, sometimes, export buyers. If they fail to deliver what these customers want the customers are going to look for other suppliers and, quite often, these will be farmers in Australia and New Zealand. If this happens, traders will be in no position to buy anything from Fiji’s farmers. And if the traders are lucky enough to find new customers they certainly won’t be going back to the same farmers who let them down previously!

How can trust be developed?

First, communication is essential. Farmers are often suspicious of traders because they compare the price they get with the selling price of the trader. Traders could meet with farmers to explain the costs they face, as these are often not appreciated by farmers. They should also explain the reasons why they need a regular supply of the right variety and quality. And they should pay when farmers deliver because delayed payment is probably the major complaint of farmers who supply to traders. But even with the best will in the world there will be occasions when farmers will be unable to supply what is required. By spreading out their purchases over a large number of farmers in different areas, traders can reduce, although not altogether avoid, the risk that they will have insufficient supply. They can also get early warning of potential problems by being in regular contact with the farming areas. One approach could be to appoint agents from among the farmers: these could monitor production and also schedule harvests and collection by the trader.

The FAPP project

Under the Fiji Agricultural Partnerships Project (FAPP) it is proposed to train farmers in the highlands on market-oriented production and business management. Crops to be covered are off-season vegetables, as well as roots and tubers and ginger. The project will also encourage farmers to work in groups to organise input supply (e.g. seedling production) and to schedule production to meet the needs of buyers. This approach has already borne fruit in part of the highlands, as a result of an NGO-implemented, IFAD-funded, Partnerships in High-Value Agriculture (PHVA) project. Meetings between buyers and farmers have been organised and some small-scale post-harvest infrastructure constructed. The FAPP project will also be working closely to support the capacity of small and medium enterprises to work with farmers more effectively, as well as assisting the Ministry of Agriculture to support such developments.

Comments
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Dear Andrew,
Thank you for the comments that you posted on part 1 and 2 of the blog. I totally agree with your comments. While the mission identified a number of alternative crop value chains, we did not closely analysed, a value chain that was already highly successful in the highlands which was marujuana. Fijis PM visited the highlands two weeks ago and made these comments in the newspaper.http://fijisun.com.fj/2015/01/17/pm-backs-drug-raids/. This showed that the marijuana value chain is extensive and sophisticated to be developed from smallholder farms right up to the retail level on the streets of Suva.While is it illegal, it proves that with the right incentives, all the actors in the value chain will come together and ensure that the value chain will work even from the highlands or remote places.

Posted on 1/26/15 3:06 AM.

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The FAPP design recognises the need for demand pull and potential profits to energize value chains in Fiji; supply push/production interventions targeting the marginal smallholders will not succeed alone. Fiji should be a net exporter of foodstuffs but, as Andrew points out, there are now significant financial and non-financial barriers to local producers supplying domestic markets. The agronomic potential of the more remote areas is not in dispute, but it will not be realized unless the structural weaknesses of markets are addressed.

Posted on 1/26/15 9:55 PM in reply to Sakiusa Tubuna.

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Good example of a technical paper that addresses some of the specifics of the Pacific Islands, but also contains general information on Value Chain Development applicable to other parts. Hope to see more of this work implemented in IFAD projects.

Posted on 1/27/15 5:40 PM.

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Dear Sakiusa,
Thanks to you and the others who made comments. It is unfortunate that studying drug chains is somewhat difficult because of the illegality of the products. But one drug, qat (khat), which is widely consumed in Yemen and in the Horn of Africa (the equivalent, perhaps, of kava in the Pacific) and is not illegal there, also has an extremely efficient value chain. The qat leaves have to reach consumers very quickly in order not to lose their potency and the quality of post-harvest handling is vital to keep the leaves fresh. I guess that the reason the whole system works well is in part due to the high value of the product being traded, providing a strong incentive for collaboration along the chain, as you point out in the context of marijuana in Fiji. So the question is: how can farmers growing legitimate crops in Fiji get the same incentives? I look forward to learning of the success of the new FAPP project in addressing this.
By the way, clicking on the link you provided did not work for me. This should work.
http://fijisun.com.fj/2015/01/17/pm-backs-drug-raids/


Andrew

Posted on 2/12/15 3:11 PM in reply to Sakiusa Tubuna.

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