The supporting organization models for smallholder farmers’ transactions in Mozambique

Keyword: Supporting organization; smallholder farmers; NGO

This study aims to analyze supporting organization models that provide technical or other support for smallholder farmers to link them to processors/distributor, while reducing transaction costs. The supporting organizations can be the NGOs, governmental agencies, financial institutions, and private sector involved in supporting the smallholder farmers. The main question of this study is: What models do supporting organizations use to support programs for smallholder farmers in linking them to food, feed, and fuel markets? The focus will be on organizations that are part of organizational environment. These organizations are the facilitators for transactions between smallholder farmers and their buyers - processors/distributor. Because the organizations facilitate the transactions, they minimize the transaction costs. In this sense, the analysis of these organizations can be under the lens of transaction costs economics (TCE) (Zylbersztajn, 1995).

The motivation to focus on supporting organization models is because smallholder farmers, in general and in Mozambique as well, face problems with participation in supply chain due to high transaction costs, and the supporting organizations can reduce these costs. According to World Bank study (2006), one of the main development challenges in Africa is the delivery of agricultural services (marketing, input supply, financing and other support) to smallholder farmers. There are several problems related to smallholder farmers highlighted by Poulton et.al. (2010), such as the geographical dispersion of them, which results in difficulties for managers to monitor their production; limited access of financial loans; limited political voice, as a result of their low education, and limited economic power.

As it is difficult to access smallholder farmers individually due to low scale production, logistic problem, and so on, the solution hinted for these hindrances is the farmer organizations. These organizations are being asked to play an increasing role in supporting commercial agricultural development among smallholder farmers in Sub Saharan Africa (Chirwa et.al., 2005). However, before having the farmer organization, the supporting organization is required to organize the smallholder farmers, to form an organization, to instruct them, and to follow them up to the moment they can lead their organization. The supporting organizations have different background and different focus; then there are different supporting organization models.

This study is an exploratory research with primary data collection through semi-structured questionnaire. We will obtain the primary data through the direct questioning of responds and observation. The public targeted is no probabilistic and the selection will be focused on supporting organizations. First, we select the supporting organizations that are available to provide information and answer our questionnaire. Then, through these supporting organizations, we obtain information about others supporting organizations – snowball sampling. The method applied to analyze the data will be the case study with qualitative approach.

Our analysis is focused on supporting organization models that can facilitate smallholder farmers to be part of a farmer organization, such as association or cooperative or otherwise improve the transaction between smallholder farmers and industry/distributor. Assuming that not all models of organization are complete, we intend to assess different supporting organization models, which support smallholder farmers. There is not a single supporting organization model that is the best and would suit all smallholder farmers’ needs. The supporting organization models are not static either; changes are being made all the time to address certain constrains. Moreover, the supporting organization might be with the smallholder farmers for a certain period and they will lead the organization by themselves afterwards. Supporting organizations may play their role on behalf of the industry or from a farmer development perspective, often funded by donors.