"Establish an equitable relationship between smallholder's
and the agro-industry"
By Nikolaus
Schultze
When I started in Rome as coordinator for the newly defined Private
Sector & Capital Markets operations at the International Fund for
Agricultural Development (IFAD), my immediate main challenge was to
reverse some common views. Statements such as "the relationship between
the private sector and development agencies has been one of suspicion
at best, and often outright hostility" (Financial Times, 22 July 1999)
were not very encouraging, to say the least. Let me say from the outset
that our partnership with the Syngenta-agribusiness dispelled any doubts
I may have harbored in this regard.
IFAD provides loans to some 114 member governments for projects promoting
economic opportunities for rural dwellers. We regard our target clients
- smallholder's- as private sector actors themselves. They are not -
again contrary to common perception - looking for mere charity or aid.
Like any businessman or businesswoman, they look for opportunities,
which obviously are best pursued in well-functioning markets; these
unfortunately rarely exist in the remote areas where we intervene. Instead,
these areas are characterized by market failures, with farmers actually
lacking access to key assets such as agricultural inputs and relevant
services, or even to markets to sell their produce.
At IFAD, we consider that poverty eradication cannot be disconnected
from fostering rural economic growth. We therefore place the smallholder
at the very center of a rural value chain, with potential linkages to
resources, which are "owned" by the agro-industry. IFAD's challenge
therefore is to help establish an equitable relationship between smallholder's
and the agro-industry.
This was particularly the case in Mali, where farmers
in our project areas lacked access to seeds adapted
to local conditions and to seed treatment packages that
can enhance otherwise low millet crop yields. Through
our contacts with the Syngenta Foundation for Sustainable
Agriculture, which co-finances research and development
activities at the Cinzana Agricultural Station in Mali,
we could convince the Syngenta-agribusiness to participate
in our program. This led us to engage in a public private
partnership that has proved fruitful for all partners
and stakeholders involved: Syngenta-agribusiness, the
Syngenta Foundation for Sustainable Agriculture, IFAD,
and ultimately the smallholders the Fund supports through
its projects.
In practical terms, this meant identifying common objectives and eventually
jointly developing the basis for a commercially operated inputs and
services channel. Thus we have put in place distribution hubs that actually
supply the smallholders with seed treatment packages at lower price.
Furthermore, the idea is to provide income opportunities to young rural
people by becoming small entrepreneurs and selling the packages in the
villages. It is intended to enlarge the supply offer to other products
such as seeds, fertilizers, or small farming tools beyond the strongly
demanded Syngenta product that served as initial point of entry.
This goal required a constructive and smooth working relationship
between Syngenta-agribusiness, the Foundation, our institution, and
the target groups concretely involving many working sessions in Rome,
Basle, Bamako, and our project area in San. We are proud to see that
these efforts are finally bearing fruit. Last year, these channels -
while still in their infancy - already helped some 1,500 farmers get
access to millet seed treatment packages on a commercial basis, allowing
them to increase their crop yields by approximately 30%. This might
look like a small achievement, yet considering local conditions this
will have had a direct impact on more than 10,000 persons whose livelihoods
depend on these farmers.
At IFAD, we subscribe to Kofi Annan's words: "Let us choose to reconcile
creative forces of private entrepreneurship with the needs of the disadvantaged
and the requirement of future generations" and believe this collaboration
falls within the spirit of the Secretary-General's Global Compact. We
are looking forward to pursuing - and I daresay intensifying - our collaboration
with Syngenta-agribusiness and the Syngenta Foundation for Sustainable
Agriculture.
Nikolaus
Schultze was then coordinator of the Private Sector
& Capital Markets operations at the United Nations
International Fund for Agricultural Development. He
is now Head of Strategy at the Syngenta Foundation for
Sustainable Agriculture.
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