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Promoting Inclusive Markets and Financial Systems

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Evidence-based Briefs for Inclusive Market Development

by on Mar 24, 2015  |  posted in Market Development  |  4 Comments

Fintrac’s Agriculture Knowledge Manager Adam Keatts discusses achieving and sustaining smallholder impact in inclusive, competitive agricultural markets.

mother and daughter are grading their tomato harvest What have you found to be a primary obstacle to smallholder market development?

In developing countries, one of the most common challenges we see is market coordination failure.

Basically, commercializing smallholder production requires a well-functioning feedback loop where incentives of local actors are aligned. This sounds a bit theoretical, so let me provide an example:

  • Input suppliers won’t invest in rural distribution or farmer training if there is no perceived demand for their products; but, farmers won’t consistently invest in improved inputs if they cannot maximize returns from the inputs they do buy.
  • Output buyers won’t invest in rural procurement or extension if the supply cannot meet their quality or quantity standards; but, farmers cannot meet output market standards without improved inputs, and farmers won’t invest in inputs if output market opportunities are limited.
  • Financial providers won’t extend credit if farmers are incapable of repayment; but, farmers cannot invest in new inputs without access to credit, and they cannot repay loans without access to output markets.

Drip Irrigation TrainingHow can project implementers overcome these challenges?

It can be quite the vicious cycle, but our experiences over the last 25 years have shown that a prerequisite for breaking the cycle is to achieve a critical mass of smallholder supply and demand that will attract private sector investment in new product and service delivery.

To achieve this critical mass, we have found that two significant variables are technology and local technical knowledge.

Technologies such as drip irrigation, hybrid seeds, crop protection, and improved livestock feeds for instance are seemingly simple, but truly transformational and widely underutilized. So, it’s a question of understanding why farmers adopt or fail to adopt a technology, and identifying who can efficiently, effectively transfer these technologies into the capable hands of smallholder farmers.

Practically, massive technical knowledge gaps still hinder both smallholder adoption and locally-led service delivery. Farmers need guidance in applying ‘new’ technologies, but an input provider may not have knowledge in installing and managing a drip irrigation system they sold; or a buyer’s agent may not have knowledge in good agricultural practices to extend to their suppliers.

When local technical knowledge is limited or non-existent, initial knowledge transfer from outside the system is often needed. Opponents suggest that direct training delivery will distort private market incentives, but our experiences indicate that this need not be the case. The key questions instead should be how to deliver the knowledge and resources lacking in local systems to the right actors in a way that enables local investments to continue product and service delivery profitably.

Critical Mass of SupplyHow do you now share these experiences and lessons?

We have always provided field-based training to staff and partners, but more recently we’ve also invested in developing Fintrac University, an e-learning platform through which we develop and share a wealth of practical, technical content.

One of the new initiatives I’m currently working on is a series of evidence-based briefing papers exploring field methodologies that contribute to sustainable smallholder benefits in agricultural markets.

“If you can’t measure it, you can’t manage it”. Quantitative, statistically significant data is crucial to understand project impact beyond anecdotal observations and to help inform management decisions in the field. So each of the briefs draw on field-based data measuring the scale and impact of the methodologies that contribute to competitive and inclusive market development.

While these papers are designed to contribute to our internal learning efforts – what works, where, and why – we are also interested in discussing best practices and learning from others, so we will make them available externally as well.


What might readers expect to see from the knowledge & learning brief series?

Each paper briefly examines the local context for field project implementation; profiles the field methodology employed; and presents data to quantify the smallholder commercialization process. Throughout the series, I return to questions such as:

  • How can a project stimulate tangible investment in smallholder markets from private sector input providers, financial providers, and output buyers?
  • Which technologies are the most impactful for smallholders, and what are the most efficient, effective tactics to transfer and increase adoption of those technologies?
  • How can a project practically facilitate change when local technical knowledge is absent?

What will be the specific topics of these briefing papers?

I’ve completed the first two briefs and they are ready to share. The first is a look at efficiently achieving smallholder scale and impact in Kenya, and the second examines smallholder input markets in Cambodia.

I’m currently conducting the research for two more, including a comparative analysis of smallholder finance in Zimbabwe and Tanzania, as well as a regression analysis to test the most impactful smallholder technologies in Honduras, Cambodia, and Tanzania. The latter piece is particularly exciting because it will help quantify expected farmer returns on investment across social and economic contexts.

We hope these briefs will leverage constructive dialogue in the larger development community about approaches to developing inclusive markets, and I’m very much looking forward to engaging in the discussion.

Adam Keatts is currently based in St. Thomas. He has lived and worked in 18 countries, with over 10 years’ experience designing, managing and monitoring sustainable agricultural development projects across Southeast Asia and Sub-Saharan Africa. 

Photo Credit: All photos courtesy of Fintrac.


Mary Morgan says:
Mar 03, 2015

Hi there Adam– This is a great post, you have really nicely illustrated feedback loops in Market Systems with your examples. I am curious as to how you use the case studies in your course. Do you organize discussions around them, or have quizzes to assess learning after reading, or is it there as a resource to access when the participatn wants to. Learning online has so many avenues to be explored- and FINTRAC seems to be ahead of the pack 🙂

Also sharing evidence based case studies is very useful for all of us, and very generous of FINTRAC. Where can the public access your evidence based case stuides as they become available?

Lynn Gwenzi says:
Apr 04, 2015

Hello Adam, thank you very much and congratulations on your achievements. I am in Zimbabwe and I have had a vast opportunity to work with shareholder farmer whose capacity was built by Intra and you have done an amazing job. I feel though that more could be done in terms of market linkages internationally. I am of the opinion that in the countries that Fintrac is active, information can be shared and produce can be sold across countries. there is still that gap as local buyers still have the upper hand in terms of paging the price which still leave the shareholder farmer despite all the hard work and risks taken, poor.

thank you


Adam Keatts says:
Apr 04, 2015

Hi Mary,
Many thanks for the kind comments — I’m really glad you found the post and resources useful. To answer your question – ‘all of the above’ — they are available as internal resources on a dedicated evidence-based learning section on Fintrac U; then our Corporate Learning team develops short quizzes, and facilitates discussion through an internal forum.

We also plan to publish the upcoming briefs on SEEP and AgriLinks, and we’ll be sure to share them through MaFI as well.


Celestina says:
May 05, 2015

Thank you for this information sharing opportunity
I look forward to learning more from the Fintrac University.
I love the evidence based approach which many development practicioners lack currently

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