Market Oriented Extension Service

1. Market Oriented Extension Service Berhanu Gebremedhin, Scientist, ILRI

3. Three key elements in market oriented agriculture • Improved technology and practices • Information/Knowledge • Skills

4. Commercial transformation of smallholder agriculture • Commercial transformation of agriculture in Ethiopia • Market oriented agriculture? • Market orientation in production planning • Market participation in output markets • Why commercial transformation? • Better income and wealth accumulation

5. Commercial transformation • Commercial transformation requires extension service include: • Promotion of improved technologies and practices • Advising and supporting farmers to produce profitable market oriented commodities • Facilitating market linkages • Provision of market information • Building marketing and agribusiness capacity of farmers • Facilitating organization of farmers to conduct collective marketing

6. The production-oriented extension • Historical emphasis on food security through own production • Extension: technology and production oriented • Lack of awareness about market-oriented extension • Lack of capacity to provide market-oriented extension(MOE) • Training of DAs and SMSs oriented towards production technologies and productivity • Marketing, agribusiness, farm planning and management, market oriented extension methods mainly missing. • Mid career program good start

7. From Production-oriented to Market-oriented extension • Shift towards commercialization implies attention to: • market-oriented production planning • Input and output marketing support services • Hence, commercial transformation requires expanded mandate of the extension service • aim is to support to rural households and their enterprises to earn better income • Need to combine technology promotion and productivity enhancement with market support

8. Promoting Market Oriented extension • Raise awareness about the importance of MOE and • Build the capacity to provide MOE service • Enhance understanding of front-line workers about market-oriented production, agricultural marketing and value chains • Equip extension agents with tools and methods of market-oriented extension

9. What is market-oriented extension? • Total effort of extension service to: • Advise and support farmers to plan and produce profitable commodities using appropriate technologies and practices • Build marketing capacity of producers • Collect and communicate market-related information • Identify profitable markets and buyers • Link farmers to buyers • Facilitate and support collective marketing

10. Key Principles of market-oriented extension • Business principle • Commodity development approach • Based on value chain framework • Bottom-up and participatory

11. Roles of the market-oriented extension agent • Facilitator of identification of profitable commodities • Promoter of agricultural technologies • Supporter and advisor of business plan development • Facilitator of linkages with input suppliers, credit providers, transporters, processors, and output buyers

12. Role (2) • Builder of marketing capacity • Collector, processor and disseminator of market information • Repository of technical and market related information • Facilitator and supporter of collective marketing • Facilitator of market infrastructure development and market service development

13. Facilitating the supply of market information • Market information: • All the information about the buying and selling of agricultural products • More than just information on prices and quantities • Market information service: • The function of collecting and processing market data systematically and continuously, and of making it available to market participants in a form relevant to their decision-making. • Market information becomes more important in distant markets and as market orientation of farmers increases

14. Identifying market opportunities • Fundamental considerations: • Current and future size of the market • Current and predicted profitability of the market

15. Types of market opportunities • Exiting products, existing markets • Existing products, new markets • New products, existing market • New products, new markets • Niche marketing • Organic marketing • Diversifying export markets • Brand promotion • Encouraging local consumption • Adding value

16. Facilitating collective marketing • Common marketing problems faced by smallholders • Low volume of supply and high per unit marketing cost • Quality and standard problem • Storage problem • Transportation problem • Low marketing skills • Little prior contact with buyers • Low bargaining power • Inadequate market information

17. Advantages of collective marketing • Economies of scale • Maintaining product supply • Improving product quality • Maintain existing markets • Develop new markets

18. Activities in collective marketing • Identification of markets • Identification of quality attributes • Ensuring produce quality standards • Developing market infrastructure • Perform marketing functions

19. Organizing farmers for collective marketing • Formal collective marketing • Informal collective marketing

20. Key considerations to avoid collective marketing failure • Right to supply • Quality assurance • Side-selling • Profit sharing arrangements

21. THANK YOU!