Impact infographics

Farmer organisations can play a key role in the value chain, offering smallholders a stronger voice and better bargaining positions. To support these organisations in becoming reliable business partners in the value chain and effective representatives of their members, Rikolto assesses their capacities at the start of each new intervention from five different perspectives:

• business management skills (budget, accounting, balance sheets, business plan, etc.)
• group management skills (registration of members, governance structures, participation of women and youth, etc.)
• marketing skills (prospection skills, production cost accounting, market analysis and seizing new opportunities, post-harvest management, etc.)
• external relations (capacity to engage with sectorial bodies and with authorities)
• sustainability (natural resource management skills and mechanisms)

This scan forms the basis of a joint work plan, which addresses the most critical aspects for sustainable value chain development in that specific context. Progress is measured yearly and reflected in annual action plans with these partners.

How do our partner farmer organisations score on organisational capacities? (2016 versus 2014)

The most tangible parameter to determine whether someone’s living conditions have improved is income. Although this seems easy at first sight, calculating this involves many aspects. Indeed, farmers don’t receive a pay slip every month. Their income depends on how much they produce, the price at which they can sell their harvest and the costs incurred for production. It is important to mention here that we only measure income from the product chain in which these farmers cooperate with Rikolto. We do not include what they may earn with other crops or with a second profession, e.g. as a cab driver.

There have been some value chains in which farmers have witnessed a two-fold or even a three-fold increase in income. These increases can be the reward for investing in quality improvement and in successfully targeting markets with high returns, such as the speciality coffee markets (e.g. DR Congo and Indonesia) or safe vegetables (e.g. Vietnam), or for more efficient production practices (e.g. cocoa Indonesia). For value chains where we have been working for a longer period, increases may have been less marked in the 2014-2016 period, because some productivity or efficiency gains were achieved in the previous programme. Decreases have occurred in only two value chains, either because the farmer organisation was not able to support its members in better production practices and engaging with value chain actors (sesame in Senegal) or due to low demand in high-value markets (vegetables in Honduras).

How has the income of farmers evolved between the start and the end of our three-year programmes?

One of the key challenges for farmer organisations is to access the resources that can finance their business plans and improvements in production and processing capacities. Because they are often young organisations without a long financial track record, it is often hard to access traditional financing options such as conventional loans. Rikolto supports connecting farmer organisations to financial institutions (e.g. Root Capital) that have alternative financing portfolios and are open for investments with a higher degree of risk attached to them.

Progress in this context is measured against target values set for these interventions at the start of the programme, which does not necessarily reflect an absolute appreciation of their capacity to access finance. Significant improvements in this regard were achieved through the women’s savings groups in the rice value chain in Uganda (Difacos), for example, or by facilitating special loan conditions for cocoa and coffee cooperatives in Indonesia (Jantan, Sikka, Asnikom, Permata). However, achieving improvements in this area is not an easy feat, as the main decision power lies with actors outside Rikolto’s sphere of influence.

How much has access to finance changed for our partner farmer organisations? (2016 versus 2014)

Sustainability is at the heart of what we do as an organisation, and environmental sustainability is one important aspect in this regard. We want to minimize damage to natural resources, mitigate effects of climate change of smallholder farmers, and recover and preserve ecosystems in the different value chains. Performance in this area is measured according to commodity-specific set of practices in six main areas: biodiversity, water management, soil conservation, natural resource management, climate change and landscape management.

A key capacity of farmer organisations in the value chain is to weigh in on the trade relations between buyers and smallholder farmers. These relations can cover setting (long-term) agreements on volumes and prices, minimum quality standards, delivery schedules, etc.

How much have trade relations changed between farmer organisations and buyers? (2016 versus 2014)

Bringing the evidence up to the sector level is one way of leveraging the work carried out in a value chain. New business models or pro-smallholder policies are more easily enacted when you can show that they work in practice. This is how Rikolto encourages farmer organisations to take up their role in sectoral platforms or to advocate for better policies at the regulatory level.

Progress in this context is measured against target values set for these interventions at the start of the programme, which does not necessarily reflect an absolute appreciation of the overall policies in a specific sector.

Notable in this context was for example Rikolto’s contribution to the recognition of Nicaragua as a producer of fine-flavour cocoa and the position of the sectorial platform AMACACAO on international markets, or the facilitation of a new law on fair trade production with explicit attention to smallholders in Ecuador. Headway was made in the rice sector in eastern DR Congo as well, resulting in improved infrastructure and better quality seeds coming from multiplication programmes and seed nurseries.

How much have sector policies changed? (2016 versus 2014)