Making market linkages for honey and beeswax
"Small businesses build big economies". Current thinking in development is very much focused at developing commercial opportunity. For small producers to become linked to distant and large volume markets they need to be connected to a working and efficient supply chain. Once honey sales move from local to distant markets, links between producers and consumers are typically made through honey consolidators and co-operatives.
A supply chain comprises many different participants and the links between them and if any link is weak or broken this will affect every other participant in the supply chain. For example the link between a supermarket and a packer may be strong, but if the link between the beekeeper and the consolidator is weak then the packer will not have enough honey. It is well known that some links in the chain are harder to develop and maintain than others. One of the most challenging links to address is the link between the small scale beekeeper and a consolidator. The reason why this link is challenging is because small scale beekeepers are scattered, in remote areas and each beekeeper harvests only a small volume of honey. This makes it expensive to consolidate the honey - and yet consolidation is essential to access distant and large volume markets. Consolidation itself must happen at a minimum scale (or volume) or else it is not cost effective.
Overcoming the challenge of consolidation is often easiest to achieve by developing geographical clusters of producers. This structure can help remote farmers to link into larger supply chains. Transparency, trust and co-operation are essential to the success of organised marketing and transaction costs need to be kept low if a supply chain is to be profitable and sustainable.
Understanding the whole supply chain is important for any participant who wishes to expand production and trade. Lack of information about buyers and sellers, their needs and their constraints is a major reason why small scale producers find it hard to benefit from commercial trade opportunities.
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