Crop quality and infrastructure
As well as helping farmers to improve their yields we advise on quality and reducing post-harvest losses. This is critical because good quality commands a premium, while preventing wastage improve incomes.
In 2015, in addition to training 254,146 farmers in Good Agricultural Practices, we invested in 7 farmer resource centres, 12 warehouses, 40 drying floors and 310 solar driers which improve quality.
Getting to each farmer group is a trial in itself. Rajesh, who manages the Cotton operations in Côte d’Ivoire, estimates that he travels over 2,000 km every month to farmers and cooperatives. Given the large potholes in many of the roads (where there are roads), this is not a comfortable experience!
Under the OLC in 2015 we repaired 200 km of rural roads in Côte d’Ivoire, Mozambique, and India, improving the transportation of people and their wares. In Cameroon, the coffee team extended electricity to 1,000 villagers through a step-down transformer.
Wider political and economic factors
Currency depreciation, terrorism and weak governance all impact on our efforts to work with smallholders. We always put the safety of our teams first and this might mean moving them away from particular zones. Red tape and government indecision or lack of funds for planned projects, can make day to day operations challenging. The low oil price, for example, may mean good news for our logistics teams but for Nigeria it’s an important income stream that has been reduced.
Why we see a future for smallholders
Given all of these challenges, some stakeholders ask if it wouldn’t be easier to just grow our own crops or buy the farms from smallholders and turn them into plantations. Surely it would be more efficient they ask?
However, there are some clear business reasons as to why we see a future for the smallholder. Firstly, many smallholder crops are incredibly labour-intensive. Take cocoa, where the pods must be hand-picked, or cashew where the cashew apples are collected only once they fall to the ground. In the long-term, it is actually more efficient for the smallholders to manage their farms.
Secondly, even if a commercial farm can grow the crop, there has to be a threshold for how much land is realistic to produce the volumes: this is based on what the government is willing to give to a commercial farm; how much of the land is suitable for farming and how much land can be run cost-effectively by a commercial enterprise. It is also expensive to buy land.
In the vast majority of cases we believe in the power of the commercial farm assisting surrounding smallholders. This is the basis for our plantation outgrower programmes in Tanzania, Zambia, Gabon, Nigeria and Laos.
What we do envisage as a natural result of helping rural economies to thrive, will be some smallholders looking to change career and sell their farm to another smallholder. This will mean that smallholders themselves will get larger farms although this will be a very gradual process, particularly in Africa.
Image: driving in rural Cameroon in the rainy season.
Next section: Progress on Olam’s livelihoods goals