CNFA/RUMARK 2009 FANRPN REGIONAL POLICY DIALOGUE AND AGM

1. CNFA/RUMARK2009 FANRPN REGIONAL POLICY DIALOGUE AND AGM By George J. Magai Country Director - CNFA Managing Director - RUMARK 31 AUG – 04 SEPT 2009

2. CNFA AGRODEALER STRENGTHENING PROGRAM COUNTRIES INTRODUCTION:

3. AGRODEALER STRENGTHENING PROGRAM COUNTRIES • Mozambique • Nigeria • Tanzania • Angola • Niger • Senegal • Ghana • Kenya • Malawi • Mali • Burkina Faso • Uganda

4. Quick Facts • CNFA establishes local marketing trusts that facilitate private sector participation and investment in the agrodealer programs • Through these programs the local trusts have established strong private sector networks which include: • Over 6000 locally owned Agrodealers with annual input sales of over $100 million • Over 80 National and International Agricultural Supply Companies • Over 30 National and International Financial Institutions • Working with our partners we have been able to directly benefit the lives of over 2.5 million small-holder farmers

5. Low use of farm inputs by smallholders Low yields Smallholder farmers lack access to farm inputs and services Smallholder farmers lack information and knowledge about the farm inputs. Inputs and other services are expensive Smallholder farmers do not have adequate information and access to markets for agricultural products Question How do we increase the use of farm inputs and services? - Sustainably? - Cost effectively? - At scale? Key Problems & Questions

6. CNFA’s Development Hypothesis(the Premier Agrodealer developer) • Farmers will increase use of inputs and services if they are readily accessible and affordable. • Agrodealers ( rural stockists) in farming communities need strengthening as the last link in the commercial input marketing chain. • Input supply companies & financial agencies need incentives & support to work with rural agrodealers. • Private sector is responsible & most suited to deliver inputs to farmers. • Private sector- based approach • Strengthen and build sustainable linkages between enterprises in the input and output marketing systems- suppliers, buyers (large/institutional), agrodealers & farmers. • Promote market-based policy interventions • Result: increased flow of inputs into rural communities.

7. Voucher Voucher Financial Institutions MFI Smallholder Farmers Smallholder Farmers Cash, Voucher Cash, Voucher Inputs & Inputs & or Credit or Credit Knowledge Knowledge Inputs on Credit Inputs on Credit Input Supply Companies Input Supply Companies Regional Wholesalers & Distributors & Commercial Commercial Rural Agrodealers Rural Agrodealers Relationships Relationships Financial Organizations Financial Institutions Credit Guarantees Credit Guarantees Loans for inputs Loans for inputs Demonstration Plots, Field Days, & Exhibitions Demonstration Plots, Field Days, & Exhibitions Rural Based agrodealer Association/farmer groupsFormation Business Mgt Training Business Mgt Training Commercial Trainers Training on Regulations Training on Regulations Public Agencies Public Agencies Product Training Product Training Supply Companies Community Mobilizers The CNFA Inputs Model

8. Training, Linkages, Financial Support & Services Demand Creation & Technical support Training Financial Services OUTPUT MARKET FACILITY MANAGED BY AGRODEALERS OR OTHER ENTERPRENEURS Inputs and Advisory Services Buyers to market Output Quantity & Quality Produce Technical & Management Services Output Marketing Info & Promotion Inputs and Advisory Services The CNFA Output Marketing Model CNFA/RUMARK OUTPUT BUYERS, PROCESSORS AND CONSUMERS IN RURAL AREAS RURAL SMALLHOLDER FARMERS AGRODEALERS

9. Institutional Arrangement MAJOR OUTPUT Information on use of outputs and demand creation Players E.g. RAB Processors, WFP,Mulli, ACE platform FINANCIAL ORGANIZATIONS Loans for Inputs E.g. MRFC, FMB, OIBM, First Merchant Bank RURAL AGRODEALER PUBLIC AGENCIES Smallholder FARMERS Training on Regulations E.g PCB, MoA, AITA, STAM Product Knowledge Inputs on Credit, Training & Demos on Products SUPPLY COMPANIES DEVT. PARTNERS E.g AGRA,MoA&FS, USAID E.g Fertilizer (optichem), Seeds(MONSANTO, SeedCo) and Chemicals (C&M, FO) Business Management Training COMMERCIAL TRAINERS

10. Focus on Agrodealers & Farmers Access to Finance: Capacity Building: • Training in product knowledge, use, safety • Company demos of products, technologies • Public Sector training on regulations • Business training from independent trainers • Training on output marketing Agrodealers • Trade credit from supply companies for inputs • Working capital loans for inputs from Financial Organizations • Assistance to establish output marketing enterprises Informationon Inputs & Use Exposure to products and technologies Outputs sold to agrodealers Smallholder Farmer Smallholder Farmer

11. STRENGTHS: 1) Business Skills Training Training in business management of agrodealers has improved their businesses. Over 1,400 agrodealers trained and certified to-date.

12. STRENGTHS: 2) Technical Training Product Knowledge Training in collaboration with Pesticides Control Board (PCB), Input supply companies and research org. has improved knowledge on Inputs

13. STRENGTHS: 3) Demand Creation Demand Creation have: • Facilitated companies and Agrodealers to conduct field demonstrations & field days in rural areas • Facilitated agricultural Inputs exhibitions in rural areas • Promoted increase of use of Inputs and reduced travel distances for smallholder farmers, and reduced transaction costs for companies • Increased coverage through newsletters, newspaper, radios

14. STRENGTHS:4) Financial Services Financial Services • Utilization of Credit Guarantee Fund to financial institutions and input supply companies to offer credit to agrodealers • Support capacity building of Financial Institutions to develop new financial products appropriate for rural entrepreneurs

15. Project Activities4) Financial Services cont. • AGRA through RUMARK has a guarantee arrangement with MRFC through which the institution gives advances credit to farmers to procure inputs. • RUMARK certified agrodealers have received $218,666 (K30,766,306) in loans from MRFC and other institutions

16. STRENGTHS: 5) Output Marketing • Train agrodealers on bulking and aggregation of grains • Support agrodealers to establish output marketing enterprises

17. STRENGTHS: 6) Matching Investment • Matching Investment facility has been used to support: • Output Marketing grain bulking and aggregation initiatives by agrodealers • Establish Agrodealers in rural markets

18. STRENGTHS: 7) Advocacy Facilitated the formation (and training) of agrodealer associations that will promote the interests of agrodealers and by extension to farmers.

19. WEAKNESSES/CHALLENGES/GAPS • Implementing program activities through partner organizations highly depends on their goodwill; • Isolation of agrodealers in the ISP weakens their business growth; • Logistics to move both inputs and outputs are a major constraint

20. WEAKNESSES/CHALLENGES/GAPS • Agrodealer business takes long time to grow and extremely fragile in poor economic and climatic conditions • BDS is not yet commercialized – no providers; • Weak/limited capacity (technical) of Commercial Trainers to effectively deliver BDS;

21. The Ideal Agrodealer • Farm Service Centres • Inputs supplies • Output market – aggregation points (sorting, grading, storage) • Information provision for markets and prices – e.g ACE - /MACE/GTPA • Tractor hire • Extension services - Soil testing, spraying services (herbicides, etc), basic technical information • Processing Centres – value addition

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