Survey on preferred supplier base mechanism for smallholder farmers/cooperatives to derive better access to government market

Abstract

In this dissertation, a review of smallholder farmers’ patterns of engagement was undertaken to enable them to benefit from government’s procurement system. The South African Government’s drive to empower smallholder farmers through preferentially facilitated access to procurement opportunities should be concomitantly matched with the smallholder capacity to deliver. However, there has been little information from literature to examine the smallholder farmers’ proclivity or predisposition towards aggregation or specific patterns of engagement as a means to enhance their capacity or whether they would prefer to remain independent from any form of organisation or aggregation. For a smallholder farmer to belong to a group is both critical and challenging. It is critical because it involves individual farmers who produce in small volumes, but aggregate for higher volume output, collectivising to provide demand-driven services, to gain bargaining power and cost saving. It is challenging because in most instances, smallholder farmers are dispersed, they operate in remote areas and have limited capacity.

In order to contribute to the knowledge gap in this regard, the study was undertaken, based on a stratified simple random selection of the smallholder farmers in the district of Thabo Mofutsanyane. The results indicate that despite the perceived benefits of belonging to a group, about half of the smallholder farmers who had been surveyed would prefer to remain independent from any form of aggregation or farmer group. This means that the results are an antithesis to the common literature opinion on farmer grouping or aggregation. This also may be an indication of the real life experience of smallholder farmers in South Africa either with interpersonal relationships in the group setting or never having been challenged regarding commitment, premium pricing offers and volume purchase agreements, which all may require pooled resources and access to services and information. On the other hand, it may be that these smallholder farmers would subscribe to coming together for collective benefit, but currently do not have a formal governance structure or group account. The results provide an alert that while government considers group operations such as cooperatives as a potential mechanism to deepen empowerment, it remains a challenge to properly entrench such notion for collective group operations beyond the means of the smallholder farmers’ to access resources.