P4P Purchase for Progress: Connecting Farmers to Markets
World Food Program (WFP)
Although the number of people suffering from hunger worldwide is declining1, there are not only strong regional inequalities but also categories of population more affected than others, a situation that might become powerful catalysts for an new world food crisis. In fact, among the 805 million people suffering from hunger throughout the world, over half of them are farmers.
If the world has to produce twice as much by 2050, and considering the importance of small-scale farmers in developing countries (LDCs), how can we initiate a strategy for including these essential players in the value chain of world food security? This is the task tackled by the “Production for Progress” (P4P) pilot program conducted by the World Food Program (WFP), whose latest report we are excerpting below2. In its five-year history, the Program has provided assistance to one billion small-scale farmers in 20 different nations by opening opportunities and making them more competitive. The initiative is based on the double lever represented by basic foods––grains, vegetables and prepared foods––and the technical expertise of partners to provide a better access to credit.
While improving market access is one thing, the key issue will then be to allow small-scale farmers to avoid price instability. Since agricultural market liberalization and the reduction of poverty and hunger are not going hand in hand, it is imperative to promote a global governance system based on the regulation of agricultural markets as a precondition to their development.
momagri Editorial Board
Smallholder farmers represent the majority of people living in absolute poverty, even though they produce most of the developing world’s food. Throughout the five year pilot (2008-2013) P4P reached more than 1 million farmers in 20 diverse countries.
P4P links WFP’s demand for staple food commodities, such as cereals and pulses, with the technical expertise of a wide range of partners. This collaboration provides smallholders with the skills and knowledge to improve their agricultural production, and an incentive to do so, as they have an assured market in which to sell their surplus crops. A variety of approaches have been used to respond to the unique opportunities and challenges in each P4P pilot country.
The benefits of P4P have spread far beyond the farmers themselves, to embrace governments and the private sector. By demonstrating the potential of smallholder friendly market development, P4P has encouraged important investments along agricultural value chains – including in financial services and credit, agricultural inputs and services, and quality control – increasing the gains for smallholder farmers. The P4P Story illustrates some of the ways in which governments, United Nations agencies and non-governmental organizations (NGOs) are now addressing smallholder-friendly market development. Above all, it begins to tell the story of lessons learned and challenges faced throughout the P4P pilot.
The face of rural poverty
Food production will have to double by 2050 to meet the demand of the world’s growing population. More crucially, this food must enter markets to ensure it isn’t wasted. For this to happen, major transformations of food systems are required at the global, national and sub-national levels. In many parts of the world, smallholder farmers dominate rural agricultural production.
Their potential roles in these essential transformations are widely recognized. However, smallholder farmers are confronted by substantial and deeply rooted challenges in reaching formal markets that can provide better prices for their crops. These farmers generally cultivate limited quantities of low-quality crops on small plots of land, using traditional farming techniques.
Most smallholders lack access to adequate storage facilities, causing them to lose large portions of their harvest to rot and mould. These challenges, coupled with the need for cash to meet daily needs, lead smallholder farmers to sell directly from the farm gate straight after harvest, when prices are low and yield little reward for the farmers’ efforts.
Plus, farmers frequently purchase more food than they sell. To generate higher incomes, smallholders need to achieve higher crop yields and sell larger surpluses. Without significant changes in these conditions, smallholder farmers will be unable to contribute to meeting the global food production and marketing challenges of the future. WFP has a unique perspective on this predicament. Many recipients of WFP’s food assistance are smallholder farming households, which are scattered across rural landscapes.
A promising model for the future
For decades, smallholder farmers found it difficult to compete in formal markets, despite extensive development efforts to increase agricultural production and improve crop quality. Without the assurance that their efforts would pay off, farmers remained unwilling to take risks in increasing their production. Using WFP’s procurement footprint to provide smallholder farmers with an assured market, P4P has demonstrated that investments in pro smallholder procurement, coupled with supply-side activities such as capacity building and input supply, can have a major positive effect on linking smallholder farmers to formal markets.
The power of P4P lies in its combination of providing smallholders with an assured formal market while improving their access to much-needed knowledge and resources. By purchasing a portion of its staple food needs from smallholder farmers, WFP can boost efforts by national governments, United Nations agencies and NGOs to improve smallholders’ agricultural production and marketing capacities. Linking smallholders with formal markets enables them to feed themselves better and empowers them in feeding their communities. The market opportunity offered by WFP is an incentive for smallholder farmers and their organizations to invest in agricultural productivity by using improved inputs and learning new skills. P4P-supported farmers’ organizations are thriving and finding new markets for their members’ produce. For many of the smallholders and farmers’ organizations involved in the P4P pilot, the benefits will last for years to come. However, further efforts are required to deepen and expand the lessons learned about the impact achieved in five years of piloting P4P.
1 The latest joint report by the FAO, IFAD and the WFP on the state of worldwide food insecurity (SOFI 2014) indicates that the number of people suffering from hunger is slowly declining: it is currently approximately 805 million people, a decline of over 200 million people since 1990-1992.
2 The complete text of the report is available from: http://publications.wfp.org/en/2015/P4Pthestory/