New Report Highlights Challenges Facing Farmers and Small Businesses in Developing Countries One Year Into Pandemic
TechnoServe’s COVID-19 Impact Report traces impacts over past year, reveals looming threat to agricultural livelihoods and food security.
Today, international nonprofit TechnoServe released the COVID-19 Impact Report: Rebuilding Global Livelihoods. Drawing upon a series of surveys TechnoServe carried out over the past year, as well as insights from the organization’s teams working on the ground, the report analyzes the challenges facing farmers and entrepreneurs and presents practical solutions to overcome them.
TechnoServe works on approximately 100 projects across 28 countries, giving it a frontline view of the disruptions that the pandemic caused to value chains and local economies across Latin America, Africa, and South Asia, as well as how these challenges impacted the lives of farmers and entrepreneurs. The new report provides insights into three crucial sectors in emerging markets: commercial agriculture, food processing, and small business.
The report yields a number of important findings:
- Underinvestment on farms threatens harvests, food security, and livelihoods
- Surveys of approximately 700 smallholder farmers across 10 countries revealed that many responded to the economic challenges and uncertainties of the pandemic by cutting back on their investments in their farms
- The reduction in the amount spent on seedlings, fertilizer, and other inputs has had profound impacts on agricultural productivity
- While 15% of farmers reported in July that they were harvesting smaller quantities than usual, that share had jumped to 34% by November, when the effects of underinvestment were felt more fully
- This risks trapping farmers in a cycle of smaller harvests, lower earnings, and reduced investment
- Small businesses face a continued credit crunch
- Nearly one entrepreneur in five still reported disruptions to their access to finance in January 2021
- While entrepreneurs in developing countries have seen significant improvement in their access to markets and supplies since the worst of the crisis, they continue to struggle to find the cash they need to run their businesses or make needed investments
- Banks and other lenders are reluctant to extend potentially risky loans, and government aid to small businesses is typically less generous and widely available than that offered in North America and Europe.
- Digital technology is playing a key role in efficiently disbursing loans and grants to entrepreneurs; training is particularly important in accompanying these disbursements
- Coffee provides an economic lifeline for farming families
- While coffee farmers have battled low global prices for the past several years, their sales of the crop were well-insulated from the impacts of COVID-19
- In July 2020, surveys of 1,290 coffee growers in East Africa found that while a quarter of respondents lost income related to off-farm jobs or the sale of other crops, just 10% were earning lower coffee incomes
- This highlights the importance of ensuring farmers still have access to agronomy training, markets, and inputs amid the pandemic to keep this economic lifeline open
The report outlines several strategies for responding to this emerging crisis within each sector and presents broad recommendations around:
- Expanding access to digital infrastructure and tools
- Improving women’s resilience to economic shocks
- Strengthening agricultural supply chains
- Improving small business adaptability
“Over the past year, the hardworking women and men we serve have adapted and responded to the crisis in extraordinary ways, and we’ve worked to do the same at TechnoServe,” said William Warshauer, the organization’s CEO and president. “We’re proud to share this report, which highlights not just the challenges of the pandemic and how we’ve sought to help our clients overcome them, but more importantly, the vital work that lies ahead.”
Photo courtesy of kabita Darlami.