Outsource agrifood service MSMEs support farmers in Africa and Asia

In the past several decades, outsource agricultural service MSMEs (micro, small, and medium enterprises) have developed in rural areas, small towns, and secondary cities. These MSMEs supply farmers a range of services and inputs: (1) pre-production, such as well and pond excavation, tree planting, soil preparation, and irrigation system installment; (2) production, such as seed and seedling provision, fertilizer and pesticides supply and application/spraying, pruning, weeding; (3) harvesting, sorting, threshing, packing; (4) logistics and marketing.

Sometimes these are called “one stop shops,” “rural business hubs”, “A-Z services”, or “custom machine services.” These can be fixed or mobile (moving over villages and farms and even provinces). Their services and inputs are typically demanded by farmers who: (1) lack physical assets; (2) lack technical or management skills; (3) lack social capital to get good deals on inputs or assets; (4) want to save time to beat the onset of rains or save time in general because of competing uses of their time like in off-farm employment; (5) and where the market demands specific quality or safety or environmental standards, want agents who can guide and shape their farm operations to meet strict standards; (6) provide services related to climate resilience and sustainability such as drainage tiles installation.

This session discussed the supply and demand of these services with examples from horticultural and grain (rice) farms, ranging from “commoditization” stage situation (like rice farming in Myanmar and China and vegetable farming in Ethiopia) where the main objectives are controlling costs and timing, to “product differentiation” stage situation (mango farming in Indonesia and eco-labeled vegetable farming in France) where the objectives include meeting quality, safety, and in the latter, environmental objectives. Policy implications are drawn.  

Speaker

• Thomas Reardon, Professor at Department of Agriculture, Food and Resource Economics, Michigan State University

Discussant

• Robert Bertram, Chief Scientist, Bureau for Resilience and Food Security, USAID

Moderator 

• Rob Vos, Director – Markets, Trade and Institutions Unit, IFPRI
  Lead – Rethinking Food Markets Initiative, CGIAR