Framework for linking smallholders to the market: a case study

Abstract

In Bangladesh, smallholder cultivation is the hallmark of agriculture where 96% of the farms are two hectares or less. In an age of market liberalization, globalization and expanding agribusiness, there is a danger that smallholder farmers will find difficulty in fully participating in the market economy. Most of the smallholder farmers operate only in local markets due to lack of connectivity to more lucrative markets. As a result, incentives remain weak, investments remain low and so does the level of technology adoption and productivity resulting into a low level equilibrium poverty trap. Access to guaranteed markets for produce and timely availability of production inputs is the remedy for smallholder farmers. A forward market linkage with supermarkets, agro-processing industries, exporters and retails can ensure smallholder farmer’s access to guaranteed markets for produce. On the other hand a backward market linkage with suppliers of production inputs can ensure timely availability of inputs. In this study an idea of a project is developed. This project will help smallholder farmers to form both backward and forward market linkage. The main purpose of this project will be to congregate individual smallholder farmers in few small business groups and integrate them in the modern supply chain. This project not will only link smallholder farmers to the market but also provide practical training on creation and maintenance of market linkages so that after the end of the project smallholder farmers can create and maintain market linkages by themselves. This project will serve smallholder farmers with post-harvest value addition, sales and marketing support, production and training assistance etc. For produce, the project will link smallholder farmers to agro-processing industries, supermarkets, small retails and exporters. For inputs, the project will link smallholder farmers directly to various input suppliers.