• What type of support has more impact on small farmers’ productivity and income?
  • How can you provide this support cost-effectively to thousands of small holder farmers, and still make money as a company?
  • How do you make sure farmers whom you invest in, stay loyal to your organization and do not sell to competitors?
  • Do cooperatives protect and reward farmers better?

Then this report is for you.

By rigorously comparing the performance of 15 successful organizations worldwide, the study pins down 13 deep, if not counter-intuitive insights on creating more wealth along the value chain, running cost-efficient operations and sharing value back with farmers sustainably.

For instance, contrary to the belief that only larger farms can be attractive business partners, the study demonstrates that some companies manage to increase their margins significantly when they start working with smaller farmers, along with diversifying their supply sources – a long-term competitive advantage. Another chapter highlights how investing into farmers’ productivity, notably by transferring new technologies, can result in farmers’ doubling their net incomes in a year. Such investments seem to bring systematically more value to farmers than interventions that seek to redistribute wealth along the value chain (e.g., by removing linking farmers to markets, or providing higher prices to farmers). The study also explains why farmers show so little interest in buying insurances against adverse events, even though they are often coined as ‘extremely risk averse’. And it gives insights on how to ensure farmers get insured nevertheless. Lastly, the report details how to better execute smallholder farmers’ programs at lower costs. It closes by questioning the ability of cooperatives to bring more and better financial benefits to farmers.

You can find the report at Hystra Smallholder farmers report

This blog is a part of the October 2015 series on inclusive business portfolio learnings. For more opinion, analysis and studies click here.