Main points in Chapter 4
ACTIVITIES TO HELP FARMERS INCREASE PROFITABILITY
INFORMATION NEEDED TO GIVE FARMERS RELIABLE ADVICE
The farming area;
GATHERING THAT INFORMATION
Using questionnaires and interviews to get information
from farmers and traders;
MARKETING EXTENSION TASKS
Working with farmers, your main marketing task should be to provide them with the necessary information and contacts to allow them to increase their earnings through better marketing.
This involves helping them to:
select profitable crops and improve production techniques;
improve sales and achieve better prices;
reduce costs and losses.
Crop selection and production techniques
You need to know which crops generate better profits and how production choices, such as variety, production timing and product quality, can affect the profitability of individual crops. To do this you must know the products produced in your area and how they are marketed.
This information can be gathered by talking to farmers and traders individually or by meeting with them as a group. Individual interviews make it easier to gather confidential commercial information. They also make it easier for less confident farmers and those with lower status to express their views. On the other hand, gathering information from a group of farmers (say from 5 to 15) is effective and also very useful in helping farmers to understand their own problems and opportunities.
In the majority of cases your work will involve you in finding ways of improving the marketing of existing products. However, there may be the opportunity for farmers to diversify into new products and you also need to be in a position to identify market opportunities for these.
It is essential for farmers to know where and how they will sell their products before they start to grow them.
Improve sales and achieve better prices
From speaking to farmers, you should be able to learn what they consider to be their main marketing problems and what ideas they have for solving those problems.
You can improve farmers' sales by working with them to improve their access to buyers and markets and by helping them to understand which products have expanding demand. You also need to know the expected prices for products and how prices change during the season. This will help farmers negotiate better prices by being better informed.
Improving sales and prices requires an understanding of the market. At a local level, this comes from talking to buyers, traders and transporters. Initially, you may be nervous about talking to business people. However, traders generally enjoy talking about their business and become very helpful if they feel this assistance will eventually lead to an increase in their turnover.
Carrying out market research in this way is a powerful tool for improving marketing. Once you start talking directly to the trade and understand how the market works, you can realize how valuable this information is to farmers and how much better equipped you are to help them.
With some support and help, farmers can also carry out their own market research (see Case study 2). Once they have been helped to start finding out about the market for themselves they gain confidence and quickly feel able to do the work on their own. A farmer group can select between four and six farmers to carry out market research. You can advise them on interviewing techniques, provide them with checklists of questions in their own language and let them observe you doing market research interviews.
Reducing costs and losses
You need to be aware of typical marketing costs (e.g. for transport and packaging) and work with farmers to reduce those costs, such as by encouraging them to share transport or buy inputs in bulk. Good post-harvest advice can help improve quality and reduce wastage - both factors affect profit (see Chapter 8).
Women farmers sharing transport in Zambia
INFORMATION NEEDED TO HELP FARMERS
The farming area
You need to find out the strengths and weaknesses of your area. This includes identifying:
major crops grown, when they are harvested (crop calendars could be developed, as illustrated in Figure 7) and their particular characteristics;
costs of producing these crops;
typical prices that farmers receive, how the prices change depending on buyer and time and what premiums for quality are given, if any;
farmers' skills and their problems;
businesses that transport, store, process and pack agricultural products;
relative importance of the different local markets and traders;
levels of existing trade and the possibility of growth;
leaders in the farming community;
assistance that farmers believe they require to help them market their products.
The purpose of gathering this information is for you to thoroughly familiarize yourself with both the problems and the opportunities of your area. It is very important to speak to farmers. In particular you must ensure that you meet medium- and small-scale farmers and not just large farmers. Farmers generally have a good understanding of their problems and are delighted to have an opportunity to talk. At this stage your role is to listen and learn. You should try to understand how they might react to new ideas and which farmers are likely to be most receptive to the idea of trying out new activities.
At the end of this information gathering you should have a clear idea of the crops, the marketing system, the individuals and the problems of the area. You should also have some idea of possible solutions that are worth investigating.
Market research requires two main activities: firstly, finding out about how the market works and, secondly, finding out what products the market demands.
Finding out about how the market works involves understanding:
the channels through which products pass;
who the important people and companies are;
how they do their business and who they currently buy from;
their interest in trading with farmers from your area;
who they sell to.
Finding out what products the market demands involves understanding:
Product specifications, varieties, colour, size, grade, quality and packing;
Prices, price patterns, variations according to season, quality and supply;
Supply, volumes, competing suppliers and seasonality;
Preferences of customers and consumers;
Opportunities for additional production to be marketed.
Interviews must be held with a cross-section of the farming community and with the small local businesses that are involved in agricultural marketing.
Gathering information about the market involves talking to the important businesses in the marketing chain, such as buyers who travel from farm to farm, transporters, other traders, wholesalers, processors, retailers, exporters and, less often, importers and even consumers. It should involve visiting local retail and assembly markets and, if applicable, major wholesale markets.
When interviewing traders and others it is essential to leave sensitive questions until you have the interviewee's confidence
Interviews should be carried out face-to-face but, when long distances are involved, telephone interviewing could be used if the people being interviewed are willing to cooperate over the phone.
Preparation and use of questionnaires
To help gather information in a systematic way and to ensure that all the important questions are asked, it is useful to have a questionnaire or, at least, a checklist of questions. Examples of questionnaires for farmers and for traders can be found in Annexes 1 and 2 at the end of this Guide. The following paragraphs briefly describe these questionnaires.
Farmer questionnaire. The first part covers questions to the farmer about the farm business and concentrates on gathering basic data needed. It asks such questions as how large the farm is, whether it has irrigation and what equipment the farmer has. It asks what major crops are grown, which ones are marketed and which are mainly for home consumption, Finally, it examines how the selling is normally done and asks what the farmer's major problems are.
The second part of the questionnaire concentrates on individual products, with questions on yields, costs, prices, packaging, transport and marketing arrangements. All of this is important information needed to build up knowledge about the crops and other agricultural products and to be able to calculate the costs and possible returns. It is not advisable to gather detailed production data on more than two products from each grower, as the process of data collecting can be very time consuming.
Trader questionnaire. The first part of the questionnaire in Annex 2 covers questions to the trader about his or her business. The second part covers the most important agricultural products traded by that trader. It is not advisable to gather detailed data on more than two products per trader.
Practice using the questionnaire
The most difficult part of carrying out an interview programme is the first interview. For example, you may feel nervous about talking directly to the private sector. It helps to have tested the questionnaire before starting the full interview programme. This will establish whether the wording of questions need to be changed and give you a chance to practice. Interviewing a small-scale farmer or a shopkeeper is a good way to start. It helps you to become comfortable with the process and to gain skills in interviewing.
Conducting the interviews
When interviewing a group of farmers it is important to be well organized. Normally it is necessary to visit or send a message in advance, at least a day before, to arrange for the farmers' group to meet you at a specific place and time. You should speak to the farmers as a group to:
explain the purpose of the survey;
ask the farmers to outline the main crops that they grow and the problems they are experiencing.
When the meeting is finished you should thank the group and ask them if there are any additional points that they want to make, especially farmers who have not previously spoken.
When interviewing agribusinesses, traders and retailers the process is similar except that they are generally contacted and spoken to individually. This interviewing process involves:
explaining at the beginning why gathering the information is important (i.e. future plans must be based on a clear understanding of the market) and that this should be to the long-term advantage of the person being interviewed;
explaining how much time it will take;
starting by making the interviewees comfortable, often by encouraging them to explain how they started and developed their business;
asking the non-controversial questions first;
keeping sensitive questions until towards the end of the interview;
sharing information to encourage the interviewees to exchange their knowledge. For example, you could tell them about the production potential of farmers in your area;
confirming the answer if there is any doubt as to what the person being interviewed means;
writing down as much as possible on the questionnaire form while the interviewee is talking;
thanking interviewees for their time, ideas and help;
writing up the questionnaire properly and reading it to ensure your full understanding of what was said;
interviewing a wide selection of farmers, traders and businessmen to be able to gather the ideas and opinions of a wide range of people.
Analysing the findings.
Interview findings should be written up, in note form, as soon as possible. Use a table to compile the quantitative data. Let the data and the interview findings build up a picture of the farming sector and the rural resources. This should cover:
the farm sizes and incomes;
the products they produce;
how farmers market their products;
the important local agribusinesses supplying inputs and those involved in crop marketing;
the differences in crops, markets and income between areas;
typical costs of production and incomes for the main crops;
farmers' problems, the solutions that they would like to see and the opportunities for developing the commercial aspects of their farming businesses.
For the major products that you ask questions about, you can learn:
typical volumes and values of product sold;
quality preference in terms of variety, appearance, size, taste, packing, grading;
post-harvest practices, shelf life, storage opportunities;
differences in demand according to time of year, day of the week and whether influenced by festivals such as Diwali, Christmas, Lunar New Year or Ramadan;
other competing suppliers, their quality, seasonality and price characteristics;
trends in consumer demand and opportunities for additional supplies;
typical prices and marketing costs.
As a result of conducting interviews you should have an understanding of the marketing chain and then be able to advise farmers on:
the different marketing channels for major products and their relative importance;
who the important businesses involved in agricultural marketing are and how/where they can be contacted;
the different companies that growers can work with, how they like to do business with farmers and their trading and business interests;
the likely costs of marketing, including transport, packaging, storage and commission charges;
prices and how and why they change.
It is essential for farmers to know where and how they will sell their products before they start to grow them.