Linking Small Farms to Markets: Reducing Transaction Costs and Enhancing Bargaining Power

The national agricultural research system in India is mainly focusing on exploring and providing solutions to large scale agricultural producers that comprise only 22% of the farming sector. Smallholder requires a completely different set of solutions compared to larger producers. Especially in rain-fed areas, these diverse production systems have varied and distinct challenges for which top-down research has rarely led to improvements. There is an absence of platforms for smallholders that facilitate collective action, policy advocacy as well as access to knowledge and inputs. Available platforms at district and state levels are dominated by large farmers and do not address smallholders’ issues. This gives limited space to smallholders for knowledge sharing to overcome context-specific development challenges.

Market access determines the income of small farm families and incentivizes the cultivation of diverse crops. Markets in rural areas are mostly unorganized with limited infrastructure to provide quality and specifications as per the requirements. Therefore, parallel to traditional markets, direct linkages with farms and alternative markets needs to be promoted to ensure cultivator consumer connectivity.

 “It is because of the joint efforts of Caritas India, MVSS and SAFBIN to made us aware on the key accountabilities of District farmer forum to guide our smallholder farmers collectives and ensure all required support to get better production and income”, shared by Gore Lal of Khushipura village, Madhya Pradesh.

Society market has been the primary source of income for the smallholder in Sagar district of Madhya Pradesh. Smallholders of the entire region are depended on the market located at Shahgarh block. The Smallholder Adaptive Farming and Biodiversity Network (SAFBIN) is operational in 10 most marginalised villages of the block considering 690 vulnerable small farm families as direct beneficiaries. Wheat and Black Gram are the two major staple crops covering 70% of their food and income expenses. With the initiative of SAFBIN program, 215 small farm families mainly of Other Backward Class, Scheduled Castes, Scheduled Tribes and General category received Rs. 42, 97, 563 from Government of India by selling the surplus produce 2232.5 quintals wheat at the Shahgarh, Society Market.

As Covid-19 crisis unfolds, disruptions in domestic food supply chains due to movement restrictions and lack of transportations, other shocks like natural disasters, locust attack affected the food production resulting in production as well as income which has created strong tensions and food security risk among the small farm communities. Looking to the situation, the district farmer forum (DDF) formed by SAFBIN took the initiative in consultation with smallholder farmers collective (SHFC) to collectivise the small farm produces from 215 smallholders and was brought to the Society Market.

“When we complete the weighing of the total quantity of wheat to be sold, we were informed that it will not be possible consider the quantity and they return the whole consignment and didn’t allocate the lot numbers. We were hopeless because many of us have borrowed money for the next season,” shared Bharat, an SHFC member of Beela Village shared.

Immediately, this was shared with the SHFC and District Farmers Forum (DFF) members. The DFF took this issue and shared with all relevant authorities i.e. the line department, Tahsildar and request to consider the small farm produces. Since they didn’t get clear guidance on the DFF, the farmers shared their concern in the Honorable Chief Minister’s Grievance Cell via the virtual platform (181). With constant follow up for more than 15 days, their request was considered. The entire consignment of 215 smallholders were procured by the same society market at Shahgarh.