Small farmers feed the world, but not their families
The International Fund for Agricultural Development (IFAD) estimates that there are 500 million smallholder farmers worldwide, producing about 80 percent of the food consumed in Asia and sub-Saharan Africa.
But the World Economic Forum (WEF) says these small farmers, who cultivate lands under two hectares, are the poorest in the world.
Because of this, children abandon the farms and seek work in the big cities.
WEF says this would result in two great dangers: food security and rising urban poverty.
It cited UN estimates that the global population would reach 9 billion by 2050 and consumer 60 percent more food.
Based on the experience of Kennemer Foods International and the Philippine government on the local cacao industry, five things are needed to reduce poverty among small farmers.
Comprehensive credit, guarantee and insurance policies.
The WEF says credit must be friendly to small farmers, who do not even have the collateral required by banks.
If the average coconut farmer in the Philippines earns approximately $450 a year from one hectare of land, his income is roughly $1.26 a day, which should support a household of 4-5 people.
Because of this, he cannot even afford to invest in his farm or buy better inputs, which means he could
not break free from the cycle of low farm productivity and low income.
He also has to deal with losses from natural calamities.
The answer of the Philippine government to this are; the Agricultural Guarantee Fund Pool, which guarantees up to 85 percent of the loan principal – allowing private sector lenders to collateralize loans through guarantee fees; and protection from the Philippine Crop Insurance Corporation.
Loans not just for working capital, but for farm establishment and rehabilitation
Loans should not be just for one harvest cycle because many smallholder farms are at least 50 years and need much upgrading.
High-quality (not free) planting materials, farm inputs and technical support.
High-quality planting materials and farm inputs are quite literally the ingredients for a good harvest, especially when combined with hands-on technical support from trained staff, who can teach farmers about the latest and best agronomic practices.
Availability of an assured market for all produce – not just the best.
It is difficult for a small farmer to immediately meet the high standards of multi-national buyers, but he needs a market to sell his produce.
Local entrepreneurs to drive implementation and connect the dots.
Local enterprises should work with the public sector to help the small farmers obtain new crops and modern farming practices.