Study on Smallholder Aggregation in Mozambique
Study to identify and recommend best practices and policy interventions for smallholder farmer aggregation in Mozambique (FAO commissioned)
Problems
In Mozambique, agro-food systems are complex and are changing rapidly. Their underperformance impacts on society at large as over 80% of the population is involved in agricultural activities. The low integration of smallholder farmers, who contribute 40% of gross national product, inhibits the shift of the agricultural and agribusiness sector to modern and dynamic marketplaces. Small-scale producers and farmers face several limiting factors that make them less attractive to work with in a modern agri-food system. These include low and inconsistent production volumes, limited planning skills and opportunities, limited capacity to upgrade and meet formal market requirements, high transaction costs and poor access to information, technology and finance. Multiple challenges must be tackled simultaneously to support sustainable food value chains.
Solutions
Farmer aggregation is a way to sustainably include smallholder farmers in value chains together with (small) rural food enterprises and other relevant value chain actors. Aggregation activities bring together goods and products to achieve economies of scale throughout the entire value chain. The rationale behind aggregation is that working together reduces the costs of accessing inputs and market outputs, market information, securing access to new technologies and practices, and entering high-value markets. Such clusters can increase the profits of farmers by improving their economies of scale, sharing knowledge and risks, and encouraging innovation.
To stimulate aggregation in Mozambique, Resilience conducted two studies, commissioned by the FAO, to:
- – Identify the critical success factors and necessary pre-conditions of aggregators
- – Identifying policy instruments supporting the enabling environment of aggregation schemes and recommend policies for selected cases of aggregation
Impact
Resilience identified successful aggregation schemes in Mozambique, based on six aggregators (cassava, lychee, maize, poultry and soya value chains) with different relationships to the producers. Using the LINK methodology, we analysed the value chains, business models, and how they are aligned to new business model principles for inclusive value chains. Based on this analysis, recommendations and best practices were formulated for (future) aggregators on how to further commercialise and develop their value chains with smallholders in a sustainable way.
Subsequently, we identified policy recommendations for the Mozambican government to enhance the enabling environment needed to sustainably aggregate agricultural products. Creating sustainable aggregation schemes in various value chains increases market security and the income of Mozambican farmers involved, thus improving their livelihood.
