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I believe that John is raising the central issue regarding smallholder production of higher value crops. I would like to focus on two aspects, namely, exports or domestic and commercial viability. From my experience, it is possible for smallholders to target either or both export and domestic markets. It of course depends on market opportunity. The domestic market for higher value crops depends on developments in the economy. If consumers are getting more prosperous they may be tempted to upgrade what they are eating in quality or range. That has nutritional implications. With globalisation of tastes, the richer consumers all want a larger range of produce. Items for which their particular locality is not well known. New varieties of rice, bread, processed foods, juices, fruits and vegetables are obvious examples. They also want these for as much of the year as possible instead of just eating in season. The question of quality is both objective and appearance. I read recently that even Prince Charles' farm can only sell 30% of its organic carrots to supermarkets because of appearance. Supermarkets may start off by being flexible on appearance depending on what form of consumption is required but sooner or latter things have to be uniform in size, colour and taste. And of course it all has to be fresher. In much of South East Asia, retail is moving in that direction and this offers opportunities for upgrading post harvest handling as well as research and farm practice. They require integrated systems. Longer seasons, popular varieties, handled with care usually using cold storage or controlled environment. Retail prices are higher and returns for those who make the investments good. However, the same domestic market opportunities are not available for all countries. In smaller poorer countries only a trickle of sales may be going through supermarkets. Some may be selling small quantities at high prices. From my experience, supermarkets in Sri Lanka or Cambodia are very poor imitations of their northern cousins. Even larger countries such as India, Bangladesh and Pakistan may until recently have very modest supermarket sales. Moreover, institutional buyers, such as hotels and restaurants catering to tourists may be happy to put up with low cost pick of what is available from wholesale markets. The demand for higher quality produce may be severely limited even if it has great growth potential. The latter is what is exciting attention at present. There are also good export opportunities. The markets in Singapore, KL, Bangkok and Hong Kong have developed to a considerable extent and China is drawing attention. These markets want all year round supply of good quality larger range of produce. That offers an opportunity to potential suppliers within the region as well as traditional markets in Europe, America and Middle East. It is possible to set up export oriented higher value production and handling to supply these markets even though it does use more air freight. But if India supplies apples to Singapore, Middle East and even Pakistan maybe instead of the apples coming from USA or New Zealand, well organised freight should be beneficial for the environment. Countries with viable access to export markets can indeed develop production that is specifically targeted although what is not exported will have to be sold on local markets. Cambodia, Laos and Vietnam are centrally located to supply some of the largest potential markets in the world. A crucial question that John raises is as to who benefits. When we talk of higher value produce, exports and contract farming, it is assumed that this will benefit farmers and it can. But contract farming is normally geared for processing and must pay less for fresh produce than the retail fresh market. The contractor may help raise production and that does benefit farmers but the lion's share will go to contractors. Similarly, selling mangos to a MNC in Mindanao, Philippines does give excellent returns to farmers provided they have a good arrangement with the wholesaler (and they do at present) who is giving planting material, extension and collecting the mangos. It all depends on the system and what it pays farmers. For development purposes, unless attention is paid to the entire system going back again to research, planting material, inputs, credit, extension, post harvest and most of all prices, aid may end up being wasted or go into the hands of traders rather than poor farmers. Now it may be good to help the traders since they may pay farmers a bit better but when my tax money is being used for aid I would like to target what the small farmer gets in cash. Unfortunately, I find very few donors, planners and Ministries do pay attention to all this and that is a large part of the reason why almost nothing gets through. John cites fair trade as one way to ensure equitable returns and I like the idea but only if care is taken to structure it so that the farmer gets more and not just who organises the whole thing. It is never automatic and often not even monitored. Best wishes, Vinay Chand, 230, Finchley Road, London NW3 6DJ, UK Tel: 44-20-7794 5977 Fax: 44-20-7431 5715 <address removed><mailto:<address removed>>
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