Chris Barrett and Ade Freeman May 15, 2009 Nairobi, Kenya Synthesis of Recommendations From AGRA/ILRI Conference “Towards Priority Actions for Market Development for African Farmers” Chris Barrett and Ade Freeman May 15, 2009 Nairobi, Kenya

Priority actions: the policy maker’s perspective Address the food price dilemma Create synergies between agricultural production and markets Provide options that address the challenges of smallholders Commercial viability of smallholder agriculture given small farm sizes and land sub division Functioning of land and labour markets Identify options for governments in public private partnerships Priority actions must Meaningfully address these challenges Inform choices/policy decisions

Principles To Guide Priority Actions 1) Actively promote a culture of evidence-based decision- making by governments, donors, communities, NGOs, firms … everyone. 2) Improve coordination of interventions and their evaluation so as to generate more generalizable and directly comparable evidence on what works, what doesn’t, why and for whom. 3) Celebrate and encourage private sector initiative but equally recognize the critical role for government – to create appropriate enabling environment and crowd-in private investment via rule-based interventions .

Principles (continued) 4) Essential to promote and involve farmer organizations in identification, design and evaluation of interventions. 5) Pay careful attention to the essential differences between gross benefits and net benefits, and to the additionality and opportunity cost of using public or donor funds. 6) Exports to OECD countries are desirable and beneficial, but focus on far larger domestic and regional markets. 7) Shape modern value chains (supermarkets, etc.) where possible, but focus first on traditional channels, which remain the most important markets for some time.

Toward priority actions: what we know works What we know works based on hard empirical evidence. Developing efficient rural input markets Fertilizer and key inputs Agro-dealer networks Smart subsidies - provide affordable inputs; stimulate growth of rural enterprise Improving efficiency of agricultural value chains Market Information Systems Private standards and certification ICT based MIS for market dev, including use of mobile phones Improving integration of smallholders in value chains including through organizational innovations Farmer organization and collective action Service delivery hubs

Priority Actions for market development Focus investments to scale up “what works” for greater impacts Rigorously evaluate interventions and policy changes: identify what works/what does not work, why, and in what contexts Use lessons to inform strategy formulation and investment programming NEPAD/COMESA policy and advocacy processes CAADP Pillars – investment programming and country compacts Country strategies and investments Donor strategies and investments Private for-profit and not-for-profit actors Learn, document, and mainstream into policy processes and investment programming

Priority Actions: Policies 1) Reduce international (tariff and non-tariff) trade barriers. 2) Harmonize grades and standards within national and regional markets (for seed, other inputs, outputs). 3) Pay attention to the possible need for anti-trust actions where non-competitive behaviors exist. 4) Land and labour (education, health) policies must be right to facilitate smallholder productivity growth and market participation.

Priority Actions: Investments 1) Improve access to financial services (credit, insurance) for producers and market intermediaries, especially small-scale and women. But How .. Need to know more??? Many candidate instruments – village banks, warehouse receipts, index insurance, identity-based credentialing, venture capital for SMEs, etc. – evaluate best tool for the particular context. Need experimentation! 2) Extend, upgrade and maintain transport and power infrastructure to reduce commercial transactions costs and crowd-in private investment. 3) Build independent African food policy analysis capacity.

Priority Actions: Investments (continued) 4) Advance technical skills training, in post-harvest value addition activities, water management, new high-value products, food safety standards, etc. to better equip poor farmers and SMEs to increase and stabilize productivity and incomes. 5) Extend, upgrade and maintain town and urban marketing wholesaling infrastructure. 6) Facilitate rapid, broad roll-out of advanced ICT to improve information flow and to help resolve coordination problems in value chains. Essential to leveling the playing field.

Key areas of agreement Investment in infrastructure is high priority area of action Need to re-prioritize infrastructure investments taking into account Returns to infrastructure investment and comparative advantage eg Transport corridors and rural road networks that support trade around “bread basket” areas Value chain as useful framework for market development: focus on institutional arrangements and organizational innovations to improve efficiency and integrate smallholders Understanding the appropriate role for government Political economy Rule based How make model/process more efficient Actor linkages … need to address coordination failures at different levels Capacity building.

Thank you for your insights and for refining this synthesis of a rich discussion