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Farmer Association, Seizing Market Opportunity, Augments Income Significantly
In 1998, six men and six women farmers in Ribaue district of Nampula
province-already benefiting from USAID-financed agricultural extension
services-joined together to purchase a treadle pump that would provide
the reliable water they needed to expand vegetable production. By 1999
they had paid for the pump. In 2000, a local agribusiness sought out
this small association and offered to provide it with planting seed
on credit and with a contract-including quality-based price incentives-to
buy all the paprika the association members produced. This was the first
time an agribusiness had ever contracted with small-scale farmers in
Nampula to pay a future price in dollars, and pricing based on quality
was a new concept for these farmers. Therefore, the contract had to
be meticulously explained as well as negotiated. The association members,
making good use of the improved techniques they were learning through
the extension services, planted their nursery beds with paprika seed
and irrigated them with their treadle pump, then transplanted the seedlings
to a two-hectare field they had cleared and prepared. The association
also bought fertilizer and applied it to the crop. In June 2001 the
harvest began, and in July association members delivered 774.5 kilos
of paprika to their customer. They were pleasantly surprised to learn
that exchange rate changes over the months had worked in their favor,
increasing the per-kilo price by almost 25% over what they expected.
The association's net return was $457, or $38 for each of the 12 members.
In a rural district where annual per capita income is only $51, this
is a tremendous income benefit for the members' families. Other benefits
accruing to the members-successfully negotiating and fulfilling a contract,
learning to produce quality product to get the best price-are incalculable.
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