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December 27th, 2018

A living income for small-scale farmers: Tackling unequal risks and market power

Published by Oxfam,

This paper (PDF) by Oxfam argues that closing the living income gap for small-scale farmer requires tackling the underlying imbalance in risk and market power that many of them face when engaging in global food value chains. The ability of small-scale farmers to earn a living income is critical to ensure their viability and economic success. The underlying imbalance is not accidental, but reinforced by structural barriers at the level of individual supply chains, commodity sectors, and public policy agendas. Disproportionate risk can represent a key deterrent for farmers to invest in their farms. Small-scale farmers are limited in their capacity to ensure predictable conditions and to buffer against potential shocks. Unequal market power is the second key barrier. The proliferation of global value chains has come with significant power asymmetries between global buyers and local farmers. Small-scale farmers could play a more active role in fulfilling their economic potential, by engaging in markets on more equal footing. Underlying these risk are structural barriers. At supply chain level, inequities in risk and power are manifested in the captive relationships between a large, fragmented group of farmers and a concentrated group of buyers. At commodity sector level, income prospects of farmers are significantly shaped by decision on commodity production an trade are made by powerful actors. At public policy level, imbalance between risk and market power faced by farmers is reinforced by a diverse set of policy areas ranging from land rights to access to inputs, market infrastructure, export policies, taxation and investment. Women face gender-specific income barriers. Entry point for overcoming these barriers exist. Four strategic shifts are recommended: from production to income as the benchmark for farmer-oriented support; from farmers’ participation in exports towards a holistic household-wide perspective; from resource-intensive interventions to exploring system-oriented strategies; from ‘creating’ to ‘contributing’ to change.

Curated from marketlinks.org