Buyer-Centered Market Linkages
When demand leads supply, small businesses increase profits
By understanding the buyer's needs in terms of quality, quantity, price, and timing, smallholder farmers can build a business plan for their production. iDE facilitates the communication between these market actors, providing technical assistance and business training that strengthens and helps build a mutual, sustainable relationship as well as building their resilience to future shocks and stresses.
For example, the Kishorganj Bangladesh Farm Business Advisor (FBA) network developed a relationship with potato exporter Agrotech BD, who provided specifications on the grade and amount of potatoes they were interested in purchasing as well as post-harvest training on grading and sorting. In the following harvest, the 14 FBAs aggregated 225 tons of potato for export; on average each FBA aggregated 4-6 trucks of potations from their producers. Based on the success of the first year, the Kishorganj network planned to increase their potato production to supply Agrotech BD by working with three surrounding FBA networks to aggregate and supply their potatoes as well.
iDE's role in advocating for smallholder farmers—elevating their voices with commercial and institutional buyers—helps create a win-win situation. When these multiple, small suppliers are able to deliver a reliable and consistent product, the marketplace embraces and expands to include their efforts. iDE works with buyers, producers, and other market actors in the supply chain to ensure their access to improved technologies and management practices so they can increase their financial and business capacity, ability to use market and climate information, and implement risk-reducing actions to improve resilience for everyone.
Shifting from a production strategy (i.e., what can I grow?) to a buyer-led approach (i.e., what do my customers want to buy?) helps smallholder farmers understand how their agricultural activity can be viewed as a business. For many rural farmers, this is a sea-change from a sustenance-only level of production to a sustainable, income-generating enterprise. They also learn how to use new techniques and technologies to grow these new products and how to produced them out of season for higher prices. Coupled with iDE's "Farming as a Family Business Approach," which teaches farm households how to value the labor and other contributions from each individual family member, the buyer-centered market linkage creates a generational transformation similar to the way agriculture developed in England and the United States in the early 20th century.