Increasing Access to Markets

Even if farmers and other value chain actors can increase their productivity and acquire the inputs they need, the creation and distribution of value will still be constrained if they have limited access to markets. It might seem that increasingly wealthy urban populations and increased demand for food would be a natural way that poor farmers in low-income countries could enhance their livelihoods, but there are often major challenges for smallholder farmers to connect to growing sources of demand. Processors of agricultural inputs, on the other hand, although already connected to growing and wealthier urban markets, often face constraints in securing inputs from farmers at the volumes and quality they need. Some of the challenges that processors face include efficiently sourcing enough inputs from farmers that are free of contaminants or spoilage, weak infrastructure (such as roads and electricity networks), and limited farmer knowledge (on productivity enhancing agricultural techniques, for example). Farmers also suffer from a lack of knowledge and face limited information about market prices and opportunities that would allow price signals to make markets more efficient. Farmers are also often disbursed throughout rural areas, which increases transaction costs with buyers (see Box 7.1).