Hurdles in the Last Mile
Over the past 15 months, the Leveraging Economic Opportunities (LEO) project has researched nearly two dozen case studies of projects across 14 countries that have successfully increased smallholder technology adoption at scale. As might be expected, the crops, farmer profiles, and country environments varied widely across these cases. As a result, most findings were context-dependent. Even so, lessons have emerged concerning typical constraints to technology adoption, and the strengths and limitations of the various means of addressing them. One of the objectives of this research is to build a framework that will guide future projects aimed at increasing smallholder technology adoption at scale. This begins with a checklist of constraints we can confidently say projects will likely need to address if they are to succeed.
One thing our research confirmed is that the most universal barriers to technology adoption are “last mile” challenges. In other words, selling inputs to or sourcing commodity from smallholders is the most expensive and challenging over the final links in the value chain that reach back to resource-constrained and geographically-dispersed farmers. “Last mile” issues in rural markets are well-known, but our research shows that there are really two separate challenges at play:
- Transportation cost to smallholders, driven by the distance and quality of roads as well as the available modes of transport; and
- Input supplier and crop buyer knowledge of the quantity and location of demand for inputs or supply of crops, respectively.
All successful case studies found some way to tackle both of these problems. In Zambia, the USAID/PROFIT project worked with input suppliers to establish networks of village-based agents. These agents provided technical information to farmers. They collected seed and other input orders, which they relayed to the input suppliers, solving the knowledge problem. They also arranged for multiple farmers to pick up inputs at one location, reducing transportation constraints.
The USAID/Ghana ADVANCE project, by contrast, helped emerging commercial farmers provide services and inputs on credit to smallholders and act as crop aggregators. More traditionally, several projects supported outgrower schemes, with large-scale buyers providing inputs and buying the crops from smallholders in order to address both knowledge and transportation constraints.
While each of these cases was successful in its context, the location and capacity of the coordinating actor had significant implications. Actors such as large-scale buyers or input supply companies that were distant from the smallholder farmer often had the resources and capacity to continually engage with large numbers of smallholder farmers, even in the face of market shifts or other emerging constraints. However, they also typically had multiple, competing investment opportunities. This meant they were not always willing to remain engaged with hard-to-reach-smallholders, but rather switched to larger suppliers and customers. At the other end of the spectrum, local actors, such as emerging commercial farmers or farmer associations, typically had a high degree of commitment to source from or sell to smallholder farmers. However, they lacked the capacity to deal with constraints as they occurred.
Project designers and implementers must consider and address potential trade-offs between the need for sustainable access to inputs and markets and the need to be inclusive of smaller, more marginalized farmers.
To find out more information on additional constraints, strategic approaches, and lessons learned from our research, check out these video interviews on models to scale input supply and market access for smallholder farmers. “Scaling Impact: Extending Input Delivery to Smallholder Farmers at Scale” is the first in a series of two papers that details learning from the project’s case studies. The second part, “Scaling Impact: Improving Smallholder Farmers’ Beneficial Access to Output Markets,” has just been published. Enjoy!