Towards self-sustaining and market-oriented producer organizations
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The middle class in many developing countries and regions is expected to continue its rapid growth, driven by improved economic policy and governance. Coupled with more business-friendly policies, population growth and rapid urbanization (McKinsey Global Institute, 2011), this sustained increase in consumer demand and spending means that today’s markets offer better opportunities for farmers, including small farmers. However, smallholders struggle to keep up with new market demands for larger vo lumes, consistency of supply and higher quality, finding themselves at a disadvantage because of their high transaction costs and low bargaining power. FAO has been working with a range of POs at the federation and district levels across the Africa, Caribbean and Pacific (ACP)3 regions, to develop institutional mechanisms that improve smallholders’ equitable participation in value chains. Key outcomes of this work have been the identification of critical success factors for strengthening sm allholder organizational models and policy recommendations that promote self-sustaining and market-oriented producer organizations.