Farmer Value Creation vs Crop Type

Key Messages

In which types of crops – cash or food crops – can businesses create more value for farmers? Our data does not give an answer to this question: there is no clear difference in either the mean or median farmer value created values, the spread is large within both cash and food crops, more rigorous analytical methods do not find a clear relationship, and our qualitative insights likewise don’t provide strong insights. In short, while we see differences in the service delivery cost per farmer (analysis) and the direct cost recovery from services (analysis) between cash and food crops, FarmFit data does not show a clear pattern when it comes to farmer value creation.

Importantly, this does not mean that such a pattern does not exist, merely that our data does not currently allow us to find it.  

As a result, this page only shows the highlights of the analyses but does not dive into depth. Read on below for more detail

Understanding how crop type relates to farmer value creation

Understanding whether more value is (or can be) created for farmers in food or cash crops is, on the face of it, a highly relevant question, especially for investors, donors and support organizations that can choose on which types of value chains to focus their efforts. However, FarmFit data currently does not show there is a clear difference or pattern distinguishing farmer value creation between different crop types. 

Read more on how we define crop type

The charts above suggest there might be a small difference when looking at the median, but this difference is minor and the spread of results within each of the two categories is large. Our more rigorous machine learning methods confirm that there is no strong relationship between crop type and farmer value creation; rather, even the small differences that we observe are likely due to other drivers. 

Strong and credible explanations of the relationship between crop type and farmer famer value created also don’t emerge from our qualitative data. 

Importantly, this doesn’t mean that there is no relationship, but rather that our data does not suggest there is a strong relationship yet. As a result, this page does not provide any implications, nor does it detail opportunities for further research. As we collect and analyze more data, this may change and we also invite input from other organizations if they observe a strong relationship here

Link to other outcomes

When looking at the relationship between crop type and the other two outcomes analyzed in the Insights Hub, we find that:

• For Service Delivery Cost per Farmer, local off-takers invest significantly more than global off-takers, due both to more incentives to invest in farmers and lower efficiencies. Click here for more details 

• For Direct Cost Recovery, the results mirror those of service delivery cost: in addition to investing more on a per-farmer basis, local off-takers recover a significantly higher proportion of their costs by charging farmers. A large number of global off-takers, in fact, does not charge farmers at all for services provided. Specialized service providers, unsurprisingly, show the highest direct cost recovery, which is unsurprising as their business models rely on direct cost recovery to be viable. Click here for more.