Aquaculture farmer organizations and cluster management: concepts and experiences

3.5.1 Independent commercial service providers
Many market services are provided by independent commercial service providers. 
For example, transport services are usually provided by commercial businesses and 
financial services are usually provided by commercial banks. NGOs and government 
agencies can often help to link FOs to commercial service providers. For example, 
NaCSA in India has helped to link farmer societies to hatcheries that were willing to 
implement a “contract hatchery system” developed by NaCSA, thus linking farmers 
to quality control services in the form of hatchery seed testing facilities to ensure feed 
was not diseased and met high-quality standards. 
3.5.2 Market actors
Different actors in the market chain (e.g. input suppliers, farmers, processors and 
retailers) can provide services for their suppliers and/or customers as part of other 
business transactions. When services are provided in this indirect way, they are called 
“embedded services”. For example, the Samroiyod Cooperative receives feed and seed 
on credit from their feed supplier and hatchery. In this case, credit is the service that is 
embedded in the cooperative’s input supply contracts with private companies.
3.5.3 Government market services
Government ministries such as ministries of agriculture or commerce often provide 
important market services such as training, extension and market information services. 
If countries wish to promote collective action and FO development as a strategy to 
achieve market access for small-scale farmers, they must also promote the provision of 
market services. This is because in many remote and poor areas, which have thin markets 
and are characteristic of where small-scale farmers in developing countries live, there 
is little incentive for private-sector provision of essential marketing services because 
of the high transaction costs associated with doing so. In these cases, the government 
must intervene to either facilitate the development of those services that are critical 
for small-scale farmers and markets to develop or to provide those services themselves 
(especially services that have public good elements and will not always be provided by 
the private sector, such as extension and market information services). An example of 
government service provision for small-scale farmers can be found in Thailand, which 
was the first shrimp-producing country to establish both environmentally sustainable 
and product quality/safety guidelines to enable shrimp farmers to access the European 
Union (EU) and other markets. Shrimp farmers receive production advice, training, 
monitoring and certification services from government extension officers in order to 
meet these minimum standards and help them to increase their market access.