Farmer Marketing Associations (FMAs)
The methodology used captures the best practice of the past 12 years in Tanzania and elsewhere in East Africa of farmer organisation. This involves the base groups of Volunteer Savings and Lending Groups (VSLGs) aggregating to form Farmer Marketing Associations (FMAs) with the members of the VSLGs owning and managing the FMAs. This methodology builds farmer ownership in a farmer owned business model which is sustainable with support from other farmer-friendly supportive services like the seed supply chain, the certified seed and seed registration service, the market broker business model and the knowledge of the research sector. This is a real innovation and with good training over time the farmers are gaining strength and confidence to work together, benefit collectively and sustain their collective marketing over time. FMAs have learned how to collectively market their produce and through experience, 30% of the farmers who market through the FMA are members and a further 70% are non-member farmers, who are “pulled” into collectively market their produce through the FMA.
The reason for this is that prices are fairer and the FMAs buy over a weigh scale rather than by volume that is the normal practice of middlemen, by which individual farmers lose upto 20% of their produce due to deliberate errors in estimating weights by middlemen. Therefore, the “pull” of 70% of small farmers to sell through FMAs is a testimony to their success compared to the traditional system of middlemen marketing as individuals. Collective marketing also allows a fairer and more transparent marketing access to lucrative markets that favour farmers. Traditionally, market chains are controlled by large Exporter/Wholesalers, who set prices and often act in cartels and take a large percentage of the profits in these chains on which most small farmers depend for their livelihoods. Consequently, the present marketing systems keep small farmers perpetually poor. Kilimo Markets is actively developing alternative marketing channels to the present cartel of Exporter/Wholesalers so that farmers may have alternative prices and more competition raises the prices of commodities. In this aspect, Kilimo Markets is facilitating these alternative marketing channels for the FMAs by working with market brokers in Tanzania and Kenya.