February 29, 2012

Niche Product Markets: A Silver Bullet for Agrobiodiversity Conservation?

By Adam G. Drucker, Senior Economist
Bioversity International, Rome, Italy

Only around 30 plants account for more than 85% of global crop production. The majority of the planet’s food comes from a very small number of crops: out of approximately 380,000 plant species known to exist, fewer than 20% are eaten, and only about 150 are domesticated for farming. Despite providing a key input into the agricultural development process and forming a cornerstone of global food security, agricultural biodiversity is being lost at an unprecedented rate. Even the crop genetic diversity within many species has become very narrow.

Why is this happening? Causes of such loss include socio-economic factors leading to shifts from diversified agricultural systems towards specialized production systems, where “improved” species, varieties and breeds can outperform local ones and consequently replace them. While the underlying development process has benefited many, this specialization may be going too far. A mixture of private goods (e.g. related to farm production of food and fodder) and public goods (such as improved resilience at the landscape level) arise from the maintenance of agrobiodiversity. But public goods are often not reflected in market values. This results in a type of market failure leading to less than socially desirable levels of such diversity being maintained. Such failures also provide a strong justification for creating incentives for the conservation and sustainable use of agrobiodiversity.

Niche product market development can provide incentives to farmers to conserve threatened crop genetic resources. It has been shown that niche product market development can facilitate the conservation through sustainable use of “neglected and underutilized” or traditional crop species/varieties by enhancing the values of the genetic resources. However, the potential to use such an approach as part of a strategic national agro-biodiversity conservation and use programme remains to be established.

In order for such niche product market development interventions to effectively contribute to such a strategic national programme, a number of challenges need to be considered. These include:

a) Crop varieties/species with market potential and those that are a priority for conservation might not align. In fact, niche product market development interventions may focus on a portfolio of high market potential traditional crop species that are either unthreatened or only locally threatened.

b) Initial investment costs can be high and long-term success rates low

c) Market development may be so successful that it displaces other priority crop species/varieties (e.g. minor millets in India).

It is in this context that the recently developed payment for agrobiodiversity conservation services (PACS) incentive schemes could potentially overcome some of these challenges. Such schemes have the potential to promote the cost-effective maintenance of threatened crop varieties while accounting for social equity considerations. A complementary PACS scheme would focus on priority threatened species/varieties and evaluate the market potential of less mainstream crop varieties through farmer experimentation.

One example, finger millet, is an important dryland crop valued for its grain and straw and known for its resilience and ability to produce on marginal lands. It is also nutritious, being a balanced protein source with high levels of calcium, iron and dietary fibre. These features provide an opportunity to demonstrate how the sustainable use of agrobiodiversity can be promoted through the development and promotion of nutritious products that result from such diversity. A recent project carried out in Karnataka State, India aimed at enhancing the incomes of finger millet farmers through increased productivity and value chain development. Crop management interventions, such as identifying better performing varieties and building farmer capacities in quality seed production and conservation activities, resulted in increases in yields of 30-35%, showing that traditional crops can indeed respond well to improved management.

Women farmers’ “self help groups” (SHGs) were empowered, leading to improved leadership skills and self-esteem, through capacity building in such value added activities as product preparation, quality control, labeling and marketing. Products were first commercialized during farmers’ fairs and festivals, before increasing demand led also to sales in the retail outlets, general stores and health care centers of nearby Chintamani town under the Shrinidhi Balaji and Seekal brand names established by the SHGs.

While it seems that the integration of market development initiatives and PACS schemes could result in an environmentally and financially sustainable solution, the framework for an integrated analysis remains to be developed. Moreover, successful niche product market development hinges on answering important economic and ecological questions, in terms of aligning conservation goals at the scale necessary for market efficiency and ecosystem service provision. Even where it can be shown that the improved and augmented use of agrobiodiversity can act as an instrument for development, it is important to realize that a stand-alone niche product market development strategy is unlikely to provide a silver bullet capable of simultaneously resolving conservation, rural livelihood, social equity and long-term funding issues.

4 Comments

  • Julien Custot - FAO
    February 29, 2012 at 3:14am

    Dear Adam,
    Many thanks for your article.
    You are focusing on national policies and strategic programmes. Connecting producers and consumers may be more effective at the local level. Do you think it’s possible to have more local projects and get the support of local authorities?
    Sincerely,
    Julien
    Julien Custot – facilitator of the FAO “Food for the Cities” initiative

  • Adam Drucker
    March 5, 2012 at 4:35am

    Dear Julien,

    Thank you for your comment. I believe that exploring niche product development and PACS scheme complementarity raises issues at both the national policy/strategic level, as well as at the more local level including as a result of the creation of opportunities for farmers to evaluate the market potential of less mainstream crop varieties through low risk experimentation.

    Given that local level (and not just national/international level) market development may be adequate for conservation and sustainable use purposes, bringing local consumers and producers together is indeed likely to be important. Indeed, given that many cultural and culinary traits of local species/varieites are highly valued at local levels, local level approaches are likely to form a key part of the overall strategy.

    Furthermore, as PACS rewards may be paid in-kind and at a group level (as opposed to individual cash payments), there are futher opportunities to involve municipalities and other local actors in supporting PACS schemes. For example, it has been suggested that the “presupuestos participativos” (participatory funding) that Peruvian municipalities allocate to communities could be used as one source of support for PACS schemes.

    Sincerely,

    Adam Drucker

  • Tadelle
    March 7, 2012 at 1:49am

    Dear Adam,
    Thank you very much for your article which addresses an important area which needs more thinking and commitment from all actors including government bodies. What is important is to show susses stories as a prof of concept so that investment comes in to this novel cause.

    Further more what important is creating awareness at different levels!

    Regards,
    Tadelle

  • Jady
    March 27, 2012 at 9:22pm

    Dear Adam,

    A great article to get more thought around pragmatic approaches to agrobiodiversity conservation.

    I hadn’t heard of PACS but am interested in introducing this concept into our ‘heritage livelihoods’ approach with communities living in Angkor World Heritage site in Cambodia. It is taking some time for all stakeholders to appreciate the opportunities using niche ‘heritage’ marketing but hopefully we are headed in the right direction.

    Perhaps not a silver bullet but definitely some good ammo!

    Thanks for sharing.

    Regards,

    Jady