Access to markets for quality products increases income and productivity for smallholder farmers
Recent research looking at smallholder maize farmers in Uganda suggests that improving smallholders’ access to markets where high-quality crops is rewarded and more generally linking farmers to value chains has a large potential.
IIES’ researchers Tessa Bold and Jakob Svensson have, together with former IIES student Selene Ghisolfi (LEAP, Bocconi University) and Frances Nsonzi (Makerere University), investigated the barriers and potential of quality upgrading among smallholder maize farmers in rural Uganda.
Smallholder farmers in low income countries produce and sell output of low quality. Low quality limits the price farmers can command and can help explain why the returns to smallholder farming are low. At the same time, many experts and policy makers argue that quality-upgrading is key to raising income and productivity, yet few farmers upgrade the quality of their produce. Why is this?
Through a series of experiments among smallholder maize farmers, the researchers do indeed confirm that the quality of maize is poor, but they also show that even after assisting the farmers to achieve higher quality produce, traders still pay the same price as they did for lower quality produce, thus the market for quality maize is effectively missing. By giving farmers access to a market for premium quality maize, combined with training on agricultural best-practices, they found a large increase in both farm productivity and income. Agricultural training alone, however, doesn’t seem to affect agricultural outcomes.
“It is important to note that constraints in demand limit rural income and productivity growth for these farmers,” according to Tessa Bold. “Access to a market for premium quality maize is essential”.