iCRA expert bite #16: Overcoming trust challenges when doing business with small-scale farmers
When doing business with smallholder farmers, there are some common challenges entrepreneurs and agribusinesses face. During iCRA’s 40th anniversary conference Gbenga Idowu led a workshop entitled “Overcoming Trust Challenges when Buying from Smallholders” in collaboration with his of experts to discuss those challenges. Together the experts and participants innovated solutions to build trust and create strong, win-win business relationships with smallholder farmers.
Here are eight top tips for fostering fruitful business relationships with smallholder farmers:
1. Prioritise your partnership
Treat farmers as your business partners. When you buy their produce, you are doing business together. Farmers are not your beneficiaries or recipients of a favour.
2. Don’t rush – building trust takes time
Be patient. Farmers might not be used to doing business in the same way as you. In the early stages of your collaboration and always, be tolerant and lenient – you are ‘partners in progress’.
3. Communicate with transparency and vulnerability
Be generous in sharing information and be clear about your interests. You should be clear about the volumes, quality, delivery time and payment arrangements you both want. Allow farmers to test you and be the first to show that you are a trustworthy partner.
4. Step into the farmers’ shoes and look for win-win situations
Listen to farmers, show you understand their challenges and interests and be supportive. Supporting smallholder farmers means taking risks. You might provide pre-finance for input or services that will enhance their productivity. You might buy all grades of their produce and find alternative markets for part of the produce that doesn’t meet your requirements.
Success for farmers might look like higher yields, lower costs and higher quality. Supporting their success will increase your success as a buyer when you achieve more competitive quality and prices together.
5. Seeing is believing
Demonstrate the benefits of new methods and services to farmers before expecting them to adopt what you consider ‘best practice’. For example, pilot more effective weighing instruments or quality testing methods with them.
6. Show the numbers
What are the costs and benefits for farmers who work with you? Don’t simply promise them a higher income – show farmers specific figures to back it up! You can also show them the costs and benefits associated with increasing the quality of their produce, producing higher volumes. Show the value of choosing to do business with you, compared to competitors.
7. You may need ‘middle-men’
Local aggregators are often seen as unnecessary ‘middle-men’ who ‘cheat’ to earn a margin. But with soft-skills training they can support you and the farmers you buy from. By acting as a coach or facilitator, aggregators add value by making farmers more accessible to buyers so that transactions become easier!
8. Take an iCRA course to enhance your own trust-building skills
Communication, facilitation, listening, negotiation and other essential trust-building competencies are often overlooked when building business partnerships. Trust is both an art and a science. Through training, coaching and practice, you can become better at building trustful business relationships with smallholder farmers! In iCRA’s course ‘Making Agribusiness Work‘ you will practice all of these essential skills – join us!
Missed out on Gbenga’s workshop? You can follow along by watching the recorded session!