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Breaking down the barriers for African smallholder farmers

Story Food systems
Ethiopia -

In sub-Saharan Africa, smallholder farmers are the backbone of the fight against hunger and poverty. Without them, societies would crumble. Yet, market systems work against them. They push them into poverty. Over five years, ICCO (part of Cordaid) and Mastercard Foundation pushed hard to make markets work better for more than 200.000 farmers and their families. In this interview, Maurice Koppes, head of the STARS programme, explains how this was achieved and who was involved.

Strengthening African Rural Smallholders (STARS) is a recently concluded five-year programme (2017-2021) of ICCO (part of Cordaid) in partnership with Mastercard Foundation and ICCO Terrafina. In four countries – Senegal, Burkina Faso, Rwanda, and Ethiopia – it improved access to finance and markets for over 200.000 smallholder farmers.

Portrait of Maurice Koppes
Maurice Koppes, head of the STARS programme

Hand-in-hand with farmers and their cooperatives, microfinance institutions (MFIs), government representatives, commercial banks, input suppliers, and processors, STARS changed the way market- and value chains work. The core focus of all its activities and efforts: make smallholder farmers benefit more from the economies they are part of, and realize their full potential.

STARS programme manager Maurice Koppes has a long track record in microfinance, SME banking, and access to finance. Prior to his work for STARS, during which Addis Abeba was his base, he lived and worked in Kosovo, The Philippines, Ghana, and also Ethiopia.

Before we talk about STARS, can you say something about the importance of smallholder farmers in sub-Saharan Africa and the roles they play?

They represent up to 80% of the population of most African countries. And they feed most of the mouths. Even with the ongoing urbanisation and migration towards the cities, they will remain the majority in the near future.

As populations continue to grow, thanks to better health care, decreasing child mortality, and other factors, pressure on land is rising. This makes farming even more challenging than it already is and at the same time more important, as there are more mouths to feed.

Macro-economically, in countries where STARS was implemented, smallholder farmers contribute substantially to the GNP. A lot, if not most of, the export consists of primary, unprocessed goods, such as crops. Micro-economically, they are the ones who keep local markets alive. Even more basically, farmers produce the food and supply the markets in the world’s most food-insecure places. They are the frontline defenders of a number of sustainable development goals, notably SDG 2 (zero hunger).

Info graphic showing the key numbers from the STARS programme e.g. over 338,000 clients received an agri-loan, of which 54% were female
Overview of STARS results: KPIs per pillar

Just like in Europe a few decades ago, farming in countries like Burkina Faso and Ethiopia seems to lose its appeal to young generations. What are the main challenges farmers are coping with, often pushing them to quit farming and find their luck elsewhere?

There are many. Obviously, there’s climate change, causing extreme weather conditions, especially around the equator. Droughts and floods are increasing, becoming more intense, and more unpredictable.

Two farmers with red gloves smile at the camera during the sesame harvest
Sesame farmer Soungalo Traoré (on the right), in Sidi, Burkina Faso.

There’s the lack of access to finance that prevents farmers from growing their way out of poverty. Financial institutions, most of them, are not interested in investing in smallholder farmers. For them, it’s another world, a gap not worth bridging. Most loan officers cannot be pushed to venture into the world of rural farming, let alone invest in it. Due to this lack of investment (also of big donor organisations) small farmers lose out on the chance to grow and modernise, and thus, to make farming more attractive to younger generations.

You mention climate change. Is that something that was integrated into the design of the STARS programme?

It wasn’t. The setup was to focus on access to finance, market system changes, and to promote gender balance. But five years of STARS and working with thousands of farmers has given us a wealth of information and experience that is extremely valuable in addressing climate change. We are now capitalising on that by starting programmes that help farmers deal better with droughts and floods.

“Marriage, education for your kids, urgent medical treatment, all that is impossible if you don’t have at least some savings.”

In Senegal for example, we are working with farmers cooperatives to create shared and jointly maintained solar-powered irrigation systems. Also in Rwanda, we are looking for ways to promote inter-cropping – growing trees in farmland areas – as a way to counter floods. Traditionally, farming starts by cutting wood and clearing land. This approach turns it around: it starts with trees. They hold and protect the soil, its nutrients, and the crops during extreme rainfall.

What are the typical barriers of farmers in equatorial Africa?

There’s the volatility of income and with it the insecurity. Of course, volatility is inherent to farming and the farming cycles. In good years, crops can yield a good income. But the market system can work against the farmer even in good years. Big yields cause price drops. In bad years there can be too little to generate even a basic income.

The lack of market access and access to finance keeps farmers from dealing with insecurity and volatility and creating the financial buffers needed to get on with their lives. Marriage, education for your kids, urgent medical treatment, all that is impossible if you don’t have at least some savings.

A pepper farmer crouches amid his crop and smiles at the camera
Pepper farmer who participated in the STARS programme in Ethiopia. Image: Gregório Cunha

Crises are constantly looming. Climate change and the growing unpredictability and severity of rain and drought. Plant diseases. Armed conflicts push people away from their homesteads, land, and herds. Smallholder farmers and their communities live and work without a safety net.

How did STARS support them in addressing these barriers and challenges?

STARS’ aim was to break three barriers. By partnering with 22 MFIs and developing innovative and tailor-made financial products for smallholder farmers we improved access to finance for 350.000 farmers. This allowed them, amongst others, to improve their input supply and their stocks of good-quality seeds. For smallholder farmers, this is of capital importance. It gives them a head start. We gave farmer cooperatives the opportunities, through training, to improve their management and business skills.  We organised best-practice training on selected crops.

“Typically, if farmers manage to access a loan at all, they are given a standard group loan, which boils down to 100 or 200 USD per person. Not enough to plant a crop.”

And finally, STARS helped to break down the knowledge barrier. Too often, important data and knowledge sources are inaccessible to smallholder farmers. STARS teams – in the four countries STARS worked with over 1500 professionals – actively developed and disseminated data sources and learning products for smallholder farmers.

With this combination of tailor-made finance, training, and access to knowledge, over 350.000 farmers strengthened their position in eight major value chains, from malt barley to potatoes and maize.

STARS’ approach was ‘to make markets work for the poor’. What do you mean by that?

It means we wanted to make the change as sustainable as possible. Instead of giving a fish or a fishing rod, we asked more fundamental questions. Why is this person not able to buy a fishing rod? Why is she or he not able to secure an income and do what she or he is good at? Is it a lack of money, or a lack of knowledge? Aren’t the tools available? Why is the market not working for her or him?

Now, smallholder farmers need to access several markets. Access to working capital loans. Access to inputs, like good quality seeds and fertiliser at the right time. There’s the market that defines how produce is sold and distributed, with government regulations, skimming and scamming middlemen, and other actors who want to earn money at the expense of the farmer. Sometimes there’s a huge demand for a certain crop, like malt barley in Ethiopia, but farmers can’t grow the right variety at the right quality. Sometimes they do produce a good crop, but they can’t find anyone to sell it to and crops go to waste.

In all these markets, farmers with relatively little land and little means are kept out of the higher game. STARS supported them in their struggle to enter that game and to have a decent livelihood, just like you and me.

Can you give some examples?

We have documented results and highlights in a range of publications, among them a 34-page overview [available for download below]. I’ll discuss a few.

We developed crop-specific loan products with Microfinance Institutions. Typically, if farmers manage to access a loan at all, they are given a standard group loan, which boils down to 100 or 200 USD per person. Not enough to plant a crop. STARS developed the Agricultural Credit Assessment Tool, used by the loan officers of the MFIs we worked with. The loan amounts and the repayment conditions were crop-specific so that farmers could buy all the inputs they needed to grow a sellable crop.

Farmer working the land under a bright and cloudy sky
Pepper farmer working his land in Ethiopia. Image: Gregório Cunha

The only way to make personalised and tailor-made loan assessments and disbursements efficient is by automating the process. Compared to standardised group loans, this comes with a lot more data about the farms, the crops, the value chains, and even the weather conditions. All that needs to be collected, stored, analysed, and updated. In the STARS programme, hundreds of loan officers were trained and equipped to do that. Data were gathered and uploaded on mobile devices in rural outskirts and stored in the cloud in the bigger cities with internet access.

It is the first step in making this kind of large-scale access to finance initiative more data-driven, more transparent, and more efficient. You want to rule out human error. Like loan officers giving loans simply because person x or y is a cousin. You want more people to have access to loans that improve their livelihood.

Did COVID-19 complicate disbursement and repayment?

Not massively. Repayment of loans was bad globally and specifically in urban settings. Our rural loan portfolios did much better, simply because farmers were less impacted by lockdowns and restrictions.

Can you give an example of a particular value chain in one of the countries?

Take the potato farmers in Ethiopia. Many of them stopped harvesting crops because it wasn’t worth it. Middlemen control the market and pay a ridiculously low price.

Two people working the Shea butter mixture
Processing shea nuts in Reo, Burkina Faso.

STARS teams brokered an agreement between potato farmer cooperatives and a big potato chips company in Ethiopia, Senselet. Harvests were aggregated, fair prices were agreed upon, and in the end, both the farmers and the company fared better after that. We cut out the middlemen.

It sounds fair, but also tricky. Middlemen can be very powerful.

Sure, sometimes they operate like the mafia. They fight back and do everything to keep a grip on ‘their farmers’ and their share of the market. But then, who said pursuing a social mission is easy? It isn’t. If you work on behalf of smallholder farmers, big commercial interests are at play. Politics and power struggles can turn against you. That can be tense, whether it’s in the potato value chain in Ethiopia or the sesame value chain in Burkina Faso.

To stand strong in that arena, smallholder farmers join forces and organize themselves into cooperatives. The power of numbers helps them to stand their ground. And to use their resources more efficiently. That’s why we only worked with cooperatives. Also, paying the staff you work with decently is important. It helps to keep corruption at bay.

STARS was implemented in 4 different countries. Totally different realities, presumably?

Of course, in terms of government regulations, of the way markets work. But also in how free and in what way farmers can organize themselves. In Francophone Africa, for example, the concept of rural cooperatives resounds well. In Ethiopia, cooperatives tend to be an extension of the government.

During the 5 years of STARS, between 2017 and mid-2021, and in the areas where we worked, the armed conflict was not such in the four countries that it impeded implementation. But in Burkina Faso and Ethiopia, especially towards the end of the programme, there was more instability and conflict than in Senegal or Rwanda.

“Especially in Rwanda, Burkina Faso, and Senegal, the gender balance improved in the decision-making structures of farmers we worked with.”

Some level of stability and security and a functioning legal system is needed to farm, grow, and invest. The situation in Burkina and Ethiopia proved to be less stable, making the struggle for a decent livelihood even harder.

You said that STARS took a gender approach in supporting smallholder farmers. Why was that and how did you do that?

All over the world, in smallholder farming, women do most of the work. More particularly, they perform the most labour-intensive and hardest tasks. Like threshing. While at the same carrying the triple burden of raising kids, running households, and making money on the side.

Yet, most decision-makers in farmer organisations, like cooperatives, are men. Women are kept out. The gender imbalance, and with it the injustice and the lack of transparency and democracy, is staggering. Not only within cooperatives. Women are equally overlooked by government bodies and financial institutions.

Bank notes exchanging hands
Disbursement of an agri-loan in Sidi, Burkina Faso.

All four STARS countries rank high on the gender inequality index. Making a gender approach even more important. It starts by discussing, with farmers, why this imbalance is not okay. On top of the injustice, it is also counter-productive and inefficient. Access to finance, land, seeds, and knowledge is even more limited to female farmers than to men. As a result, women-led households produce 20 to 30% less than their male counterparts in Sub-Saharan Africa.

Especially in Rwanda, Burkina Faso, and Senegal, the gender balance improved in the decision-making structures of the farmers we worked with. And 54% of the farmers who received a STARS agri-loan were women. Allowing them to grow their produce and their business, and strengthen their position.

Last question. The STARS programme has ended. Will we continue to support smallholder farmers in Senegal, Rwanda, Burkina Faso, and Ethiopia?

We are exploring future collaboration possibilities with Mastercard Foundation in Rwanda and Senegal. With IFAD we will further support and strengthen farmer cooperatives. In many ways, these collaborations, and possibly others, are a continuation of the STARS heritage.

To conclude, the STARS programme may have ended. But all this was about sustainable, lasting change and changing the way markets work. Not about giving a fish or a fishing rod. In that sense, STARS will continue in the works and doings of 350.000 farmers across equatorial Africa.

All farmers that appear in the pictures participated in the STARS programme.

Cover image: Alphonsine, onion farmer in Rwanda who participated in the STARS programme.