Why smallholders lose out on organics

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Smallholder farmers can cash in on the growing organic crop market. However there are a host of factors that prevent them from successfully competing on the formal supply chain, say Mark Darroch and Tinashe Mushayanyama of KwaZulu-Natal University’s department of agricultural economics.

<br /> Smallholder farmers can cash in on the growing organic crop market. However there are a host of factors that prevent them from successfully competing on the formal supply chain, say Mark Darroch and Tinashe Mushayanyama of KwaZulu-Natal University&rsquo;s department of agricultural economics. <br /> <br /> They recently completed a study of the Ezemvelo Farmer&rsquo;s Organisation (EFO) &ndash; the first smallholder organisation to gain organic certification in South Africa. The EFO farmers sell amadumbe tubers, potatoes and sweet potatoes through a pack house agent who sells the produce to a national retail group. <br /> <br /> The group of 48 farmers is getting up to 40% more for its sweet potatoes this way. After interviewing the farmers the researchers compiled a list of constraints the farmers feel are interfering with their competitiveness. hese are: uncertain climate; a tractor not being available when needed; delays in payments by the pack house; a lack of cash and credit to finance inputs; a lack of manure, crop storage facilities, and telephones to negotiate sales; and a lack of information about alternative markets and consumer preferences for organic crops. <br /> <br /> The researchers suggest that the situation can be improved by: Looking at irrigation and water storage during the rainy season; Using tractor services; E nsuring written contracts are complete; Better coordinating crop-grading procedures and improving the traceability of each farmer&rsquo;s crop deliveries. <br /> <br /> The researchers say a lack of liquidity will remain a problem as the farmers operate on communal land. They cannot pledge this land as collateral for debt finance. The farmers also need more advice on how to improve their negotiating skills to better their bargaining power with the pack house. <br /> <br /> More information about consumer preferences and alternative markets would make the farmers more market-oriented and more knowledgeable about organic crop quality requirements. he retailer that buys the EFO&rsquo;s produce cited relatively high transport costs, production inflexibility on the part of the farmers and short crop shelf life as problems needing attention. &ndash; Roelof Bezuidenhout