Nancy Ader, a Ugandan single mother with three children, dreamed that her sesame crops would one day bring her prosperity: money to buy more land to cultivate, to pay her kids’ school fees, even to buy a new home.
The global sesame market was consistently strong and stable and should have guaranteed steady income to Nancy and other farmers. But a maze of hurdles left Uganda’s smallholder sesame farmers like Nancy struggling simply to survive.
Typically, smallholder sesame farmers in Uganda struggle with the high cost of transporting their crops from rural farms to markets. Farmers often don’t have access to the latest agricultural techniques and innovations to improve production and distribution -- information and equipment that larger operations had no problem getting. And smallholder farmers like Nancy usually don’t have the clout to bargain for good prices, leaving them even worse off.
Where large farms can capitalize on best practices, smallholder farmers can barely afford land, basic tools and seeds. Large farms and distributors benefit from the economics of scale to keep their transportation costs down. Hurdles like these can trap smallholder farmers in an unstable, profitless cycle, despite their hard work and desirable crop.
Smallholder farms make up 85 percent of the world’s farms, and yet are among the world’s poorest people. There is both great need and great potential in these farmers.
For years, aid agencies in Uganda distributed seeds and tools directly to smallholder farmers to combat food insecurity, especially when displacement and political instability during decades of civil violence meant many families couldn’t farm at full capacity. The handouts sustained the farmers’ market presence, but when the conflict subsided, most organizations pulled out and took their seeds and tools with them.
The loss of traditional aid highlighted the failures of the market, and gave Mercy Corps the opportunity to repair it--to benefit smallholder farmers. Boosting the market would ensure these farmers would earn higher income far into the future, and without aid.
In 2011, Mercy Corps launched a new program that turned the old method of direct aid on its head. The organization focused on building incentives to realign the activities of large market players--like big agriculture, lawmakers and media outlets--with the interests of smallholder farmers.
For instance, Nancy and other sesame farmers must have fully plowed land to coax a bumper crop. Mercy Corps encouraged local tillage service providers hire agents to spur demand. The agents would have an incentive to educate their farm customers about improved tillage practices, like removing tree stumps before the tractor or ox arrived to plow, because the agents were paid by how much of their customer’s land was ready to plant at the start of the season. One northern Uganda tillage business grew from two tractors to three using agents.
Mercy Corps also partnered with the Gulu Agricultural Development Co. to engage Nancy and other sesame farmers in “open contracts.” These contracts guarantee that Nancy’s crops will be purchased, but she is free to choose among buyers, creating a new culture of price competition.
Other critical connections that Mercy Corps made with financial institutions, agro-input suppliers and buyers established a vibrant agricultural market for about 150,000 farmers.
Stimulated by strong demand and healthy competition, the market price rose and sesame prices jump to $1.92 per kilogram from $1.04, benefiting both the farmers and the sesame value chain.
With entrepreneurial foresight, Nancy had rented three extra acres of land for her sesame crop. By the end of the season, she had made $1,600 USD--more than three times the average annual income in Uganda.
Word spread quickly. The Gulu Agricultural Development Co. worked with 2,131 farmers in 2012, then exploded to 12,837 farmers in 2014, most with small plots of land less than a few acres. Thanks to modern agricultural practices, sesame production has grown from a single annual harvest to two harvests, doubling the earning potential for farmers.
Mercy Corps creates more of a partnership than a typical aid program, Nancy told Mercy Corps staff. And that’s the point. Farmers increase the land they can cultivate, have more access to formal saving and loan programs, and in many cases, double their income. All without a single handout, she said.
The partnership helped make Nancy’s dreams come true. She was able to pay for her children’s school fees, increased her acreage and invested in oxen to plough her land. And now, after years of living with her parents, she has plans to build a new home for her children.