Investments in this strategy aim to increase farmer access to and effective use of quality inputs like seeds, fertilizers, livestock, and equipment, thereby supporting higher, more profitable, and more sustainable production. The sections below include an overview of the strategy for achieving desired goals, supporting evidence, core metrics that help measure performance toward goals, and a curated list of resources to support collecting, reporting on, and using data for decision-making.

What

Dimensions of Impact: WHAT

Investors interested in deploying this strategy should consider the scale of the addressable problem, what positive outcomes might be, and how important the change would be to the people (or planet) experiencing it.

Key questions in this dimension include:

What is the problem the investment is trying to address? For the people experiencing the problem, how important is this change?

High-quality or improved inputs—including seeds, fertilizers, and equipment—are often inaccessible to smallholder farmers, whether due to high costs or limited market access. Smallholders will be increasingly important to meet increasing global demand for food—especially for certified food. Without access to quality inputs, smallholders often cannot produce optimal crop quality or quantity. Improved access to quality inputs can support productivity and sales in the following ways:

  • Increasing access to and uptake of new, more nutritious, more resilient varieties of seed can increase crop yields and quality, leading in turn to better household nutrition and increased food security.
  • Increasing access to and uptake of more resilient or higher-producing livestock can similarly lead to better household nutrition and increased food security.
  • Allowing smallholders to diversify their product offerings to include more resilient, more complementary crops may reduce risk.
  • Increasing farmers’ ability to employ equipment such as tractors, harvest machinery, and drip-irrigation systems increases their efficiency and production.
  • Increasing access to and appropriate use of fertilizers can increase production and crop resilience.
  • Increasing quality of products also increases pricing and access to more favorable markets, increasing farmer incomes and reducing upstream risk for buyers and other actors in the value chain.

What is the scale of the problem?

With approximately 450 million farms worldwide, most (if not all) could likely benefit from certain higher-quality inputs. However, while some data points are clear—for example, 95% of seeds are sold informally and most therefore unlikely reach standard quality— limited data are available on the scale of the input quality gap writ broad.

Who

Dimensions of Impact: WHO

Investors interested in deploying this strategy should consider whom they want to target, as almost every strategy has a host of potential beneficiaries. While some investors may target women of color living in a particular rural area, others may set targets more broadly, e.g., women. Investors interested in targeting particular populations should focus on strategies that have been shown to benefit those populations.

Key questions in this dimension include:

Who/What is helped through this strategy?

Low-Income, Farm-Dependent Households: Over two billion of the world’s poorest individuals live in households that depend on agriculture for income and nutrition (1). Low-income smallholders—farmers cultivating fewer than two hectares—lack the credit needed to purchase and implement higher-quality inputs, which can dramatically improve their yields.

Households Relying on Smallholder Farms for Food: Low-quality inputs often lead to low-quality products, which can negatively affect populations relying on food from these farms. Improved inputs often lead to produced food that is more plentiful and more nutritious.

Rural Communities: Rural communities often have less access to high-quality inputs than larger markets. Increasing rural access to these inputs allows these more remote communities to strengthen their agronomic practices, potentially increasing yields, income, and community wellbeing.

Natural Resources: Smallholders manage 80% of the farmland in sub-Saharan Africa and Asia (2). With low input quality, smallholders often resort to short-term solutions—slash-and-burn agriculture, intensive monoculture, and illegal logging—that degrade the natural resources and ecosystems they cultivate. Improving input quality can reduce reliance on such methods, improving farmers’ ability to sustainably manage the ecosystems around them.

What are the geographic attributes of those who benefit?

Most of the world’s 450 million smallholder farmers live in Asia, with smaller numbers in Africa, Latin America, and the Middle East and North Africa, and most are in rural locations, though some are also peri-urban or urban (1).

Contribution

Dimensions of Impact: CONTRIBUTION

Investors considering investing in a company or portfolio aligned with this strategy should consider whether the effect they want to have compares to what is likely to happen anyway. Is the investment's contribution ‘likely better’ or ‘likely worse’ than what is likely to occur anyway across What, How much and Who?

Key questions in this dimension include:

Is the investment’s contribution ‘likely better’ or ‘likely worse’ than what is likely to occur anyway across What, How Much and Who?

An investment targeting quality inputs will likely make a greater contribution if the inputs are accompanied by support services, like trainings or technical assistance. For this strategy, increasing access to and uptake of quality inputs for beneficiaries not typically reached by existing markets would likely make an investment’s impact better than what would occur without it. The extent to which this strategy can improve input quality depends on the investee business and the product they are bringing to market.

How Much

Dimensions of Impact: HOW MUCH

Investors deploying capital into investments aligned with this strategy should think about how significant the investment's effect might be. What is likely to be the change's breadth, depth, and duration?

Key questions in this dimension include:

How many can receive the outcome through this strategy?

Of approximately 450 million smallholder farms worldwide, most rely on sub-optimal inputs of one type or another. While specific numbers of possible beneficiaries are difficult to find—because of both lacking data and many possible inputs fitting within this strategy—most smallholders would likely benefit from some type of higher quality inputs.

How much change can beneficiaries experience through this strategy?

Improved access to quality inputs can increase yields, incomes, and general wellbeing through access to high-quality, drought-resistant plant varietals (ideally accompanied by financing to facilitate purchase and technical assistance to improve agronomic methods), equipment, and other supportive products (3). The amount of change that beneficiaries derive from this strategy depends on the product delivered and the extent to which it effectively meets smallholders’ production needs, but examples of outcomes aligned with this strategy include:

  • A comprehensive literature review showed that updated storage methods reduce food waste from 50–60% to 1–2% (4).
  • A study in South Africa associated adoption of pest-resistant Bt cotton with increased earnings per season of as much as USD 65 per hectare (5).
  • An evaluation of bean farming in Rwanda found an estimated 179–203% return on investment from fertilizer use (6).

Illustrative Investment

Hoa Binh Corporation (HBC) produces, assembles, and distributes various power generators, agricultural machinery, and other equipment essential to powering Vietnam’s population and modernizing its farms (7). HBC provides Vietnamese farmers with Japanese-made Kubota rice harvesters, which are more affordable than other top-of-the-line models while being more reliable than lesser-known models available on the market. HBC’s fast, efficient harvesters have enabled farmers to cut their costs by approximately 30% and reduce harvest losses by approximately 50%.

Draw on Evidence

This mapped evidence shows what outcomes and impacts this strategy can have, based on academic and field research.

NESTA: 2
Nigeria PrOpCom Project Completion Report

UK Aid. Nigeria PrOpCom Project Completion Report. 2011.

NESTA: 1
Catalyzing Smallholder Agricultural Finance

Carroll, T., A. Stern, D. Zook, R. Funes, A. Rastegar, and Y. Lien. “Catalyzing Smallholder Agricultural Finance (Sept. 2012). Dalberg Global Development Advisors.” (2012).

NESTA: 2
Comparison of three modes of increasing benefits to farmers within agroforestry tree products market chains in Cameroon

Charly, Facheux, Amos Gyau, Diane Russell, Divine Foundjem-Tita, Charlie Mbosso, Steven Franzel, and Zac Tchoundjeu. “Comparison of three modes of improving benefits to farmers within agroforestry product market chains in Cameroon.” African Journal of Agricultural Research 7, no. 15 (2012): 2336-2343.

NESTA: 1
Input Subsidies to Improve Smallholder Maize Productivity in Malawi: Toward an African Green Revolution

Denning, Glenn, Patrick Kabambe, Pedro Sanchez, Alia Malik, Rafael Flor, Rebbie Harawa, Phelire Nkhoma et al. “Input subsidies to improve smallholder maize productivity in Malawi: Toward an African Green Revolution.” PLoS biology 7, no. 1 (2009): e1000023.

NESTA: 3
Comprehensive Impact Report

One Acre Fund. “Comprehensive Impact Report.” September 2016.

NESTA: 2
Samarth - Nepal Market Development Programme (NMDP) Annual Results Report Year 4

Nepal Market Development Programme (NMDP). ““Samarth – Nepal Market Development Programme (NMDP) annual results report year 2.”“ 2014.

NESTA: 3
Diversification and Its Impact on Smallholders: Evidence from a Study on Vegetable Production

Joshi, P. K., Laxmi Joshi, and Pratap S. Birthal. “Diversification and its impact on smallholders: Evidence from a study on vegetable production.” Agricultural Economics Research Review 19, no. 2 (2006): 219-236.

NESTA: 2
Alliances KK synthesis report of the first phase

Alliances KK. Synthesis Report of the First Phase: September 2011-September 2013.

NESTA: 1
Agricultural Productivity and Poverty Reduction: Linkages and Pathways

Schneider. K and M. K. Gugerty (2011). Agricultural Productivity and Poverty Reduction: Linkages and Pathways. The Evans school Review, Vol. 1(1): 56-74.

NESTA: 2
Education and lasting access to fertiliser: how Nigerian smallholders and businesses are prospering together

Springfield Centre. “Education and lasting access to fertiliser: how Nigerian smallholders and businesses are prospering together.” 2014.

NESTA: 1
The Effects of Training, Innovation and New Technology on African Smallholder Farmers' Wealth and Food Security: A Systematic Review

Stewart, Ruth, Laurenz Langer, Natalie Rebelo Da Silva, Evans Muchiri, Hazel Zaranyika, Yvonne Erasmus, Nicola Randall et al. “The Effects of Training, Innovation and New Technology on African Smallholder Farmers’ Wealth and Food Security: A Systematic Review.” Campbell Systematic Reviews 11, no. 16 (2015).

NESTA: 3
Impact of Information and Communication Technology-Based Market Information Services on Smallholder Farm Input Use and Productivity: The Case of Kenya

Ogutu, Sylvester Ochieng, Julius Juma Okello, and David Jakinda Otieno. “Impact of information and communication technology-based market information services on smallholder farm input use and productivity: The case of Kenya.” World Development 64 (2014): 311-321.

NESTA: 1
Working with Smallholders: A Handbook for Firms Building Sustainable Supply Chains

International Finance Corporation. (2013). Working with Smallholders: A Handbook for Firms Building Sustainable Supply Chains

NESTA: 1
Value chains, agricultural markets and food security

Food and Agriculture Organization of the United Nations (FAO). “Value chains, agricultural markets and food security.“The State of the Agricultural Commodity Markets In Depth, 2015-2016.

NESTA: 2
PROFIT Zambia Impact Assessment

DAI. “PROFIT Zambia Impact Assessment.” 2010.

NESTA: 1
Productivity and Profitability of Organic Farming Systems in East Africa

Ton, Peter. “Productivity and profitability of organic farming systems in East Africa.” (2013).

NESTA: 2
The economic impact of genetically modified cotton on South African smallholders: Yield, profit and health effects

Bennett, Richard, Stephen Morse, and Yousouf Ismael. “The economic impact of genetically modified cotton on South African smallholders: Yield, profit and health effects.” The Journal of Development Studies 42, no. 4 (2006): 662-677.

NESTA: 1
Enhancing the role of smallholder farmers in achieving sustainable food and nutrition security

Dioula, Bader Mahaman, Hélène Deret, Julien Morel, E. Vachat, and V. Kiaya. “Enhancing the role of smallholder farmers in achieving sustainable food and nutrition security.” Food and Agriculture Organization (2013).

NESTA: 3
Flood-tolerant rice reduces yield variability and raises expected yield, differentially benefitting socially disadvantaged groups

Dar, Manzoor, Alain de Janvry, Kyle Emerick, David Raitzer, and Elisabeth Sadoulet. 2013. “Flood-tolerant rice reduces yield variability and raises expected yield, differentially benefitting socially disadvantaged groups.” Scientific Reports 3, Article number 3315

NESTA: 2
Understanding systemic change in the vegetable seed market: A qualitative assessment

Action for Enterprise and FHI 360. “Understanding systemic change in the vegetable seed market: A qualitative assessment.” 2014.

NESTA: 3
Subsidies and the Persistence of Technology Adoption: Field Experimental Evidence from Mozambique

Carter, Michael R., Rachid Laajaj, and Dean Yang. Subsidies and the persistence of technology adoption: Field experimental evidence from Mozambique. No. w20465. National Bureau of Economic Research, 2014.

NESTA: 1
Genetically Modified Crops, Corporate Pricing Strategies, and Farmers' Adoption: The Case of Bt Cotton in Argentina

Qaim, Matin, and Alain De Janvry. “Genetically modified crops, corporate pricing strategies, and farmers’ adoption: the case of Bt cotton in Argentina.” American Journal of Agricultural Economics85, no. 4 (2003): 814-828.

NESTA: 2
Improving Agricultural Production and Productivity of Smallholder Farmers through Increased Access to Improved Planting Materials: Evidence from the Southwest Region of Cameroon

Besong, Manfred T. “Improving agricultural production and productivity of smallholders farmers through increased access to improved planting materials: Evidence from South West Region, Cameroon.” In Proceedings of the International Food Policy Research Institute (IFPRI) International conference on Increasing Agricultural Productivity and Enhancing Food Security in Africa: New Challenges and Opportunities, Africa Hall, UNECA, Addis Ababa, Ethiopia. 2011.

NESTA: 2
Can GM-Technologies Help the Poor? The Impact of Bt Cotton in Makhathini Flats, KwaZulu-Natal

Thirtle, Colin, Lindie Beyers, Yousouf Ismael, and Jenifer Piesse. “Can GM-technologies help the poor? The impact of Bt cotton in Makhathini Flats, KwaZulu-Natal.” World development 31, no. 4 (2003): 717-732.

NESTA: 2
Making tractor markets work for the poor in Nigeria

PrOpCom. “Making tractor markets work for the poor in Nigeria.” 2011.

NESTA: 2
Farm-Level Economic Impact of Biotechnology: Smallholder Bt Cotton Farmers in South Africa

Ismael, Yousouf, Richard Bennett, and Stephen Morse. “Farm-level economic impact of biotechnology: Smallholder Bt cotton farmers in South Africa.” Outlook on Agriculture 31, no. 2 (2002): 107-111.

NESTA: 2
Solar-powered drip irrigation enhances food security in the Sudano–Sahel

Burney, Jennifer, Lennart Woltering, Marshall Burke, Rosamond Naylor, and Dov Pasternak. “Solar-powered drip irrigation enhances food security in the Sudano–Sahel.” Proceedings of the National Academy of Sciences 107, no. 5 (2010): 1848-1853.

NESTA: 1
Smallholder agriculture’s contribution to better nutrition

Wiggins, Steve, and Sharada Keats. “Smallholder agriculture’s contribution to better nutrition.” ODI, London (2013).

NESTA: 2
Food Security: A Collaboration Worth Its Weight in Grain

Samberg, Leah H. “Food security: A collaboration worth its weight in grain.” Nature 537, no. 7622 (2016): 624-625.

Each resource is assigned a rating of rigor according to the NESTA Standards of Evidence.

Define Metrics

Core Metrics

This starter set of core metrics — chosen from the IRIS catalog with the input of impact investors who work in this area — indicate performance toward objectives within this strategy. They can help with setting targets, tracking performance, and managing toward success.

Additional Metrics

While the above core metrics provide a starter set of measurements that can show outcomes of a portfolio targeted toward this goal, the additional metrics below — or others from the IRIS catalog — can provide more nuance and depth to understanding your impact.