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RECOMMENDATIONS ON HOW SMALLHOLDER FARMERS COULD EFFECTIVELY MARKET THEIR COMMODITIES
The choice of where to market commodities is a very difficult task in this era of market liberalisation. Farmers, especially the smallholder farmers should be market oriented for them to choose a marketing channel that is profitably. Recommendations given below could help shape the smallholder farmers marketing strategies:
- The Zimbabwe Farmers Union (ZFU) should subscribe to be a member broker of ZIMACE. Since ZFU is there to represent the interests of smallholder farmers in all agricultural matters, if it is a member broker of ZIMACE, then smallholder farmers will market their commodities easily as it is the case with Large Scale Commercial farmers who are represented by the Commercial Farmer's Union which is a member Broker of ZIMACE.
- Smallholder farmers in all areas should be organised into marketing groups using the existing ZFU structures. Group marketing will ensure these farmers to meet the conditions of marketing their commodities through the Exchange.
- Those smallholder farmers with good storage structures should learn to store their commodities for later sale through ZIMACE. For example, during the 1996/97 marketing year, prices of maize on the Exchange increased from Z$1 200 in April 1996 to Z$1 630 in January 1997, giving a seasonal price rise of about 35%. The main purpose of storage, in addition to conserving supplies for family use later in the year, is to avoid having to sell at low prices usually prevailing just after harvest as practised by many smallholder producers. Despite there being some costs involved in storage of commodities, in the case of grain, recommendations are that a post-harvest price increase of 5-17% is needed to cover the storage costs, depending on its duration and the interest rate on borrowed finance.
- Smallholder farmers should participate in contract farming through ZIMACE. Contract farming is important as it offers a form of vertical co-ordination to the farmers. Vertical co-ordination contributes to the harmonisation between adjacent stages in the commodity marketing channel with respect to the quantity, quality, timing and location of supply and demand. The other advantages of contract farming is that it supplies technical and market information to the producers, thus transferring production technology to the producers as well as providing a more secure market outlet. Where contract farming is well managed, it results in significantly higher incomes for the producers. Despite the advantages associated with contract farming, smallholder farmers should be very careful when signing the contracts.
- Smallholder farmers should be trained in marketing strategies to tailor their decisions towards market-orientation. This training must be done at all the administrative levels of ZFU. If training is done to ZFU leadership only, there is a possibility of these leaders not communicating all the information to other farmers. It is a known fact that information is power and the situation with market information and knowledge is that more information and knowledge enhances transparency thus increasing competition.
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- All smallholder farmers should be concientised on the advantages of trading on the exchange. This could be done by holding workshops at all levels of the ZFU structure. The ZIMACE administrator and some member brokers could be invited to talk to the farmers on the advantages of trading on the Exchange. Discussions should dwell more on transport, pricing and payment as these are important factors which usually affect the farmers' decisions when selecting a marketing channel.
- Organisations and institutions, like Agritex and ZFU, dealing with agricultural matters should work towards having an effective agricultural market information system (AMIS). This is required for equity and efficiency as it improves the knowledge of both buyers and sellers. Market information and knowledge improves bargaining position for the farmers, create production incentives, stimulate competition among the traders and matches supply and demand. However, this information must be accurate and timely for it to be effective to the users.
The present market performance by smallholder farmers could be described as inefficient. The smallholder farmers lack knowledge on marketing and do not get enough marketing information As a result, the smallholder farmers are not benefiting from the market opportunities which arose from the liberalisation of the agricultural markets. These smallholder farmers have been disadvantages in all the eras which the country has gone through. Therefore, better avenues should be sought to put the smallholder farmer in a marketing environment which is better rewarding, thus leading to sustainable development. The analyses above shows that smallholder farmers can market maize, soyabean and wheat commodities profitably on the Exchange. Thus, the smallholder farmers must be concientised on marketing their commodities on new marketing channels, like, ZIMACE for them to realise what they actually deserve.
© Friedrich Ebert Stiftung
| technical support | net edition
fes-library | Januar 2002