Empowering Smallholder Farmers in Markets

Smallholders produce the majority of the food globally, and are the important agricultural investors in the developing world

FREMONT CA: Bartaai is one of Kenya's millions of smallholder farmers who grows collard greens, cabbage, tomatoes and maize and is struggling to make a living from the crops. Her troubles, on the other hand, are becoming an opportunity for an increasing number of tech start-ups, who want to raise smallholder earnings while lowering food prices by assisting producers in reaching consumers.

Smallholders are always eager to sell their products, while Kenya’s retailers and wholesalers are frequently hesitant to source daily. Poor transportation, high bulking costs resulting in collecting small amounts from a large number of farmers, are significant obstacles. They are the major agricultural investors in the developing world, and they continue to produce the majority of the world's food. However, for the farmers in Kenya, reliability and predictability are the biggest problems.

Although Kenya has a fairly developed market for processed food, the formal sector — supermarkets and convenience stores — accounts for only four percent of the market for fresh produce. Instead, tens of thousands of small retailers and smallholders form a disaggregated supply chain, raising prices.

According to data from the US Department of Agriculture, Kenyans spend the highest amount of their household income on food, at around 45 percent on average, compared to less than seven percent in the US. Economic policy played an important part in Kenya’s agriculture market, Kenya's agricultural marketing boards assured that product was acquired and sold at the same price throughout the country, regardless of distance from metropolitan centers. However, during the structural adjustment era, from the 1980s onwards, when the IMF and World Bank made loans conditional on free-market reforms, the boards were disbanded.

Private sector selects marketplaces that make economic sense for them. They buy products in a 100-kilometer radius and sell them at the city market. The boards used to target all areas equally, making money in the same locations as private enterprises but then using it to subsidize the purchase of products from other countries. Agriculture is an extremely difficult sector to operate

in, and many of the people working in these start-ups do not have the necessary background or knowledge to launch an agribusiness. Smallholder farmers are brilliant entrepreneurs who understand what they require — if only founders listen to them.