FORMING AND MANAGING PRODUCER GROUPS

Where horticultural producers are small and scattered over a large area, provision of services to each one individually is uneconomic. Communication, monitoring and quality control are also difficult.

If the smallholders form groups, the problem of scale can be overcome and the following objectives can be more easily achieved:

• economies of scale in provision of services, supply of inputs and collection of crop;
• easier two-way communication of information;
• more effective provision of training;
• easier negotiations on price;
• joint collateral for loan security;
• peer group pressure for loan repayments;
• easier monitoring of performance and quality control.
  

The appropriate size of group and the method of forming groups, electing leaders and establishing management systems is specific to the task to be undertaken and to the society in which the group is formed. In general, it can be said that:

• smaller groups hold together better than larger ones, so the group should be no larger than is necessary for achieving the desired objectives;
• the choice of which group a smallholder belongs to should as far as possible be voluntary, though membership of a group is often a precondition for receiving services and growing the crop;
• election of group leaders and design of management systems should be transparent and democratic;
• the finances of the group should be professionally and transparently managed: suspicion of financial malpractice is the most common cause of break-up of producer groups;
• facilitation and mediation by an impartial intermediary can be helpful in resolving disputes and linking groups to other advisory services.