Name-Brand Products: Boon or Bust for Farmers and Consumers?

Should I buy packaged goods, or bulk? Generic or name brand? The questions long-faced by consumers at pharmacies and grocery stores are now being asked at farmers’ markets in the developing world as wholesalers and merchants try to profit with brand-name, glossy-packaged agricultural products. So the question IFPRI researchers are asking is: How does the branding trend affect farmers and consumers?

Makhana
Source: Flickr (Leslie Seaton)
In Branding and Agricultural Value Chains in Developing Countries: Insights from Bihar (India), authors Bart MintenK.M. Singh, and Rajib Sutradhar investigate the fairly recent emergence of branding for makhana, a popular aquatic crop almost exclusively produced in the largely low-income state of Bihar, India.

The study relies heavily on primary survey results conducted on the ground with consumer households and wholesale merchants. The surveys clearly show that consumers prefer purchasing the branded products, even though the loose makhana is 21 percent cheaper. Glossy packaging that touts “export-quality grade” makhana, or claims to be “approved” by the Research Center for Makhana, gives buyers a sense of guaranteed quality and generates customer loyalty.

But inside the glossy packages lies a different story.

It turns out, there is no such thing as an “export-quality grade,” because no publicly or privately enforced grades of any kind exist. Further, the Research Center for Makhana does not conduct quality approval tests for any makhana producers or branding companies. In fact, when interviewed, wholesaler merchants explained that they preferred to package their own bags so they could mix the low-quality makhana they would normally have difficulty selling with higher-quality product.

What’s more, Minten and his co-authors found no evidence that the higher prices were trickling down to farmers because merchants pocket all extra profits. The only hint of farmer benefit came from Shakti Sudha Industries, a large-scale branding company that claimed to have implemented a procurement system to directly benefit farmers by offering minimum price guarantees, cheap credit access, and transportation reimbursement, but the researchers discovered that the model had “fallen apart.”

Policymakers can step in, according to the authors, to protect farmers and consumers from the ill effects of unscrupulous branding. For example, they can create an independent consumer protection body that enforces certification for all branding to prevent misleading or false marketing claims. Policymakers can also take measures to create a stable market environment by protecting property rights, building infrastructure, and extending education to rural households. More stability would spur private investors to develop relationships with farmers that could better ensure timeliness, quality, food safety, and traceability of agricultural products.

For the full story, download a copy of Branding and Agricultural Value Chains in Developing Countries: Insights from Bihar (India).

New South Asia research program promotes regional cooperation to fight undernutrition

Despite rapid economic growth in South Asia, its rates of child undernutrition remain the highest in the world, with nearly half of children stunted or underweight. Progress to reduce these rates is extremely slow. Ironically, most people in the region make their living from farming, which researchers say, offers great potential for improving nutrition.

Clinic in Afghanistan
A 5-month old baby gets a check-up in a clinic in Afghanistan. Source: Graham Crouch / World Bank
An ambitious new research program of the Leveraging Agriculture for Nutrition in South Asia (LANSA), consortium, which includes IFPRI, aims to tap this potential. The six-year program, funded by the UK government, will examine and make recommendations for agriculture- and food-related interventions to improve agriculture for nutrition.

“The aim of LANSA is to tackle undernutrition in South Asia through an innovative evidence-based and gender-sensitive marriage of nutrition and agriculture,” explained Professor M.S. Swaminathan, chair of LANSA’s Consortium Advisory Group, and renowned for his leading role in India’s Green Revolution.

The program will first examine existing agriculture policies and activities, looking at India, Pakistan, Bangladesh, and Afghanistan. It will then propose new initiatives to link agriculture and nutrition in the region, working closely with key decisionmakers to ensure the research meets their needs. The goal is to promote cooperation throughout the region, given the trans-border nature of many of the region’s food- and nutrition-related issues. According to LANSA CEO Prakash Shetty, the program plans to build on existing regional partnerships and networks, to “emerge as a powerful regional hub.”

The LANSA consortium is led by the M S Swaminathan Research Foundation in India. Partners include BRAC (Bangladesh), the Collective for Social Science Research (Pakistan), the Institute of Development Studies (UK), the International Food Policy Research Institute (USA), and the Leverhulme Centre for Integrative Research on Agriculture and Health (UK).

Branded Products in Developing Countries: Insights from Bihar

Asian food markets are rapidly changing. Packed and branded products have begun filling the shelves of local stores leading IFPRI researchers to ask: How does branding affect farmers and consumers?

Makhana plant
Source: Flickr (koizumi)
Branding and Agricultural Value Chains in Developing Countries: Insights from Bihar, a case study of the makhana market in the low-income state of Bihar, India, reveals that consumers prefer purchasing branded products, but false claims on packaging abound and farmers receive little direct benefit from branded products. This highlights a lack of consumer protection and quality control.

Policymakers can step in, according to the authors, to create independent certification mechanisms and spur backward linkages to farmers by assuring appropriate market conditions for investment.

Download the full report: Branding and Agricultural Value Chains in Developing Countries: Insights from Bihar (India).

Innovations in Agriculture: Agribusiness Investment in India

Global demand for food and the levelling off of crop productivity intensifies the need for agricultural innovations. Increasingly, India’s private agribusinesses are meeting that need, funding research and development (R&D) that’s resulted in farm machinery, pesticide, and biotechnology advancements.

Researchers in greenhouse
Source: Flickr (IRRI Images)
Keeping in mind the private sector’s success, the authors of Innovation and Research by Private Agribusiness in India, aim to strengthen future research by supplying India’s policymakers with quantifiable data and analyses on the:

  • Factors influencing the expansion of agribusiness spending
  • Impacts on production, poverty, health, and the environment
  • Amounts private companies are investing in R&D

Covered in the report are some of private sector’s gains in productivity and efficiency, like:

  • Cotton hybrids that now dominate the cotton seed market
  • Efficient micro-irrigation systems
  • Inexpensive small- and medium-sized tractors
  • Low-cost ways of producing generic pesticides

Download the full report: Innovation and Research by Private Agribusiness in India

Extending Information to Farmers: Case Studies in India

Understanding how farmers adopt new information is vital to successful extension programs. Yet delivery of local information to farmers in a reliable, timely manner remains a challenge. Any attempt to reform agricultural extension systems needs to start with a full understanding of farmers' information needs, as well as how that need is currently being met by extension and advisory services.

Farmers meeting
Focus group discussions with farmers. Source: Dr. Suresh Babu, IFPRI
To help guide extension and other farmer education programs, Farmers’ Information Needs and Search Behaviorsa case study of rice farmers in the southern Indian state of Tamil Naduaddresses these key questions:

  • What information do farmers in this district need?
  • How and where do they search for information?
  • What factors determine their search behavior?
  • How much are they willing to pay for information?

A second discussion paper, The Relevance of Content in Information and Communication Technology (ICT) Initiatives in Indian Agriculture, looks at how these six ICT projects deliver information to farmers:

  • Reuters Market Light (RML)
  • IFFCO (Indian Farmers Fertilizer Co-operative Limited) Kisan Sanchar Limited (IKSL)
  • Lifelines
  • Digital Green
  • e-Sagu
  • aAqua (Almost All Questions Answered)

These projects have all made an effort to reduce the expert-farmer gap by making content relevant, accessible, and reliable using local experts and farmers’ preferred communication channels. However, further improvements could be made through increasing user feedback, direct involvement of farmers, and ensuring open access to information stored within databases.

Download the full reports:

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