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irst Provocation Seminar
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; they argued that value-chain approaches often fragment collective action rather than
strengthening it. Yet collective action is needed now as much as ever, to
shape the rules of these changing markets and ensure their sustainability. As a solution, the debaters in this Provocation
explored ‘horizontal’ strategies. Unlike ‘vertical integration’, which seeks to link one group of producers upward through
the value chain to a buyer, such strategies would recognise the reality that the majority of producers are not formally
organised into marketing groups. Instruments to help unorganised farmers should raise the rewards or inclusiveness
of an entire sector, for example through competitiveness agreements or export levies.
4.2.2 Technology may redefine the roles of producer organisations
Along with greater demand in the countryside, information technology is allowing individual farmers to take more direct
action in markets. In East Africa, for example, farmers have begun using mobile phones to track market prices — closing
the information gap between farmers and traders — as well as to negotiate and even receive payments see Box 3.10.
Traditionally, producers’ organisations illed these roles. In effect, the cooperatives now have less to offer, unless they
adapt by developing new collective beneits.
Of course, technology can also serve farmer groups rather than making them obsolete. And this may change the
playing ield beyond formal organisations. In the Learning Network, Shenoy pointed to a simple example: an Indian
farmers’ self-help group that began using electronic scales after an NGO intervention connected them directly with
millers. The scales replaced inaccurate measuring tools that middlemen had notoriously used to cheat producers. To
remain competitive, local traders resorted to using electronic scales as well, so that farmers outside the organisation also
gained the beneit of improved measurement — without any effort to cut out the middleman.
4.2.3 Intermediaries may promote organisation, but not agency
When examining how small farmers interact with formal organisations, it is important consider who creates and
controls these groups, and what role there is for farmers’ agency to shape activities. Cooperatives in developing
countries were mostly created by governments, and were required to become members and to sell their produce
through the cooperative marketing organisation — an experience that left many suspicious of cooperatives
reviewed in Magnus and Piters 2010.
Leadership or patronage by an intermediary brings potential conlicts with small-scale producers’ agency. And such top-
down programmes may be costly. The Learning Network study from Natawidjaja in Indonesia describes how a
government push to create formal collectives led to rather large-scale failures. In the 1980s and 1990s, thousands
of Village Cooperatives received subsidised inputs and credit support. The policy resulted in trillions of rupiahs
hundreds of thousands of US dollars in unpaid loans and was abandoned in 1998. A similar policy in 2005 backed a
federation of farmer groups known as the Gapoktan. Again, support worth trillions of rupiahs has been absorbed into the
groups, and according to Natawidjaja there is no sign that farmers’ agency has been developed.
Since the 1980s, market liberalisation and withdrawal of the state have allowed new actors to occupy the space Murphy
2010. Today, some producers themselves are organising economic groups, but in many cases external forces ranging
from civil society organisations to private retail suppliers and other service providers are intervening to start new producer
organisations or re-engineer older ones. Sometimes traders set up producers’ organisations to aggregate and schedule
production, ensuring large and consistent volumes they can sell on to bigger buyers. Some groups are formed in
response to market demands, especially for certiication — like the Jatirogo organisation in central Java, which started
a cooperative to work with an organic sugar exporter who needed to source larger amounts of certiied product see
Box 3.8. Transnational businesses seeking supplies of food from the developing world may partner with NGOs who
can ensure that small farmers’ products are aggregated and comply with the company’s requirements; such ventures are
often ‘subsidised’, in effect, by international cooperation funds. Natawidjaja’s study of four farmers’ groups in
Indonesia typiied the overall experience within the Learning Network: only one of the four groups was initiated by
farmers and developed by internally building members’ skills and resources and expanding their market options, without
external inputs.
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Whether from government, civil society or the private sector, organisations initiated externally may have agendas that
do not mesh with small farmers’ constraints, needs and aspirations. Intermediaries may see organisation per se as an
instrument to achieve their objectives, and fail to consider whether this is supporting or limiting farmers’ agency.
Governments and NGOs who set out to support small- scale farmers are also at risk of creating dependency
rather than agency. Some small producers express distrust in government-aided cooperatives for just this reason:
they see the programmes as handouts intended to foster political loyalty, rather than truly promoting farmers’
interests. In the Learning Network, Rwakakamba reported this suspicion among maize producers in Busia, Uganda,
who also complained that local farmers’ associations were usually headed not by practising farmers but by retired
bureaucrats out of touch with smallholders’ interests. The local associations are members of the Uganda National
Farmers Federation, a politically oriented organisation that, Rwakakamba argues, is out of touch with small farmers and
their day to day business needs. An initiative supported by Dutch agency VECO is trying to bring a stronger business
focus to the Busia district farmer association. But the effort has an uncertain future, with VECO funding on a inite
timeline and many maize growers thriving on their own outside the association.
However, support institutions are becoming more sensitive to the need to build producers’ capacity and support their
agency rather than create dependency. Many programmes seek to add to participants’ skills in dealing with markets,
and they may design an exit strategy from the beginning of an intervention that envisions how farmers can take full
responsibility for their own organisations and their own destinies. As discussed in Section 4.1.2, a key next step for
forward-looking development institutions is to take care that the proliferation of support organisations and service
providers — and of individual value-chain initiatives — does not fragment collective action where it is most needed.
4.2.4 Organisations may not represent small producers’ interests
