It takes two to trade

Understanding and improving farmer-firm relations in Africa

Publication by Centre for Development Innovation (CDI), KIT Royal Tropical Institute and AgriProFocus 

Sub-Saharan Africa is the world’s fastest changing region. The population is growing quickly, and people are moving into the cities even faster. With so many more mouths to feed, the size of the market and the traded volumes will grow. As more people live in urban centres, value chains will become longer and more complex. Additional opportunities arise from market segmentation and increasing demand for high-value food products. For Africa’s farmers and agribusiness entrepreneurs this means big changes and, for those that can take advantage of these changes, big opportunities.

The challenge is to grasp these opportunities. Farmers can harness market opportunities by increasing production volumes and adhering to more stringent food safety and quality standards. Agribusiness firms can tap business opportunities by providing food products to growing cities and developing higher value products through processing, packaging and branding.

It is not enough, however, for farmers and firms to act independently: to supply markets that are further away and more demanding, farmers and firms need to work together. Farmers need firms as market outlets and as sources of market information. Firms need farmers to secure sufficient and timely supply of primary products and to comply with increasingly stringent food safety and quality standards. Farmers and firms will increasingly need to become interdependent, take joint responsibility for the end product in order to supply rapidly changing agrifood value chains in sub-Saharan Africa.

This book aims to increase understanding about and improve the business relationships between farmers and firms: farmer–firm relations. The book is based on the expectation that direct commercial relations between supplying farmers and buying firms will be far more important in the near future than they are at present. At the same time, the book responds to the observation that smooth relations between farmers and firms can be difficult to establish and sustain. Even though farmers and firms are increasingly motivated to work together, the relations between them are often far from optimal because of different perspectives, understanding and interests.

In the heart of the book, Chapter 4, an action-oriented facilitation tool is presented, which is called “It takes two to trade” or “2-2 Trade” for short. The tool can be used to facilitate understanding, assessment and improvement of existing farmer–firm relations. We invite all actors as well as (action) researchers, facilitators, coaches and all other interested individuals and organisations to apply 2-2 Trade to their farmer–firm relations or case studies. The 2-2 Trade tool is practical, flexible, participatory and easy to use. It is open to anyone to use for free and can be applied to any farmer–firm relation in the world.

The full book can be downloaded here.