Understanding market, state and community institutions in the development of smallholder vegetable enterprises in north-west Namibia

Abstract

Agricultural value chains can be affected by the failure of market, state and community institutions either separately or jointly. This failure coincides with the social, economic, political and environmental factors in which farmers operate. The objective of this study is to assess the main challenges based on the interrelationship of the market, community and state institutions in the development of the vegetable industry in north-west Namibia. I used a transaction cost approach to assess vegetable enterprise development in the Smallholder Green Scheme Irrigation Project and among smallholder irrigation farmers in north-western Namibia. The results reveal that one of the challenges in the vegetable value chain is information asymmetry, which is an incentive for administrators (politicians or elites), traditional leaders, farmers and other market actors to behave opportunistically to benefit from government projects. Smallholder vegetable producers in the study area also bring with them their socio-cultural beliefs, values and norms when participating in agricultural projects, which makes it difficult for them to accept certain agricultural practices that would improve their productivity. However, there is a continued problem of access to input and output markets for farmers owing to high transaction costs. Policies to support smallholder farmers should focus on multiple transactions that combine the market, state and community institutions.