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In this Issue: Matching Investment Worth Kshs. 14.8 Million Set to Strengthen Agrodealers’ Output Marketing Capabilities Agrodealer Uses Demonstration Plot to Increase Awareness and Generate Demand for Inputs CNFA/AGMARK Farm Inputs Exhibition Facilitates Food Security for a Family of Eleven

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slide1

In this Issue:

  • Matching Investment Worth Kshs. 14.8 Million Set to Strengthen Agrodealers’ Output Marketing Capabilities
  • Agrodealer Uses Demonstration Plot to Increase Awareness and Generate Demand for Inputs
  • CNFA/AGMARK Farm Inputs Exhibition Facilitates Food Security for a Family of Eleven
  • Local Indigenous Seed Company that Specializes in African Crops for Arid and Semi-arid Areas
  • Improving Lives Through Empowering Smallholder Farmers Economically
cnfa agmark project activities
CNFA/AGMARK Project Activities

AGMARK – the Agricultural Market Development Trust is a Kenyan not-for-profit organization affiliated with CNFA INC, a global NGO based in Washington DC, USA. AGMARK”S overall objective is to improve farmer incomes and productivities by increasing smallholder access to improved agricultural inputs and better production practices through the strengthening of a rural agrodealer network.

CNFA/AGMARK focuses on the commercial private sector provision of goods and services for reasons of long term sustainability and also links actors in the farm input supply chain to public sector services.

In June 2007, CNFA/AGMARK started implementing the Kenya Agrodealer Strengthening Program (KASP), a 3 year program funded by the Alliance for a Green Revolution in Africa (AGRA) in 32 districts in Western, Nyanza, Eastern, Central, Coast and Rift Valley provinces.

Generating demand for crop and livestock inputs and services, and increasing awareness and knowledge of farmers through demand creation activities like field days, demonstrations, exhibitions and agricultural shows.

Developing agrodealer output marketing capabilities through integration of input and output distribution systems.

Surveying and mapping all districts in the project areas and creating a database of agrodealers and their characteristics for purposes of tracking program progress and identifying program partners.

Utilizing a credit guarantee facility to expand the accessibility of agrodealers and smallholder farmers to credit.

Facilitating farmers to form Farm Inputs Savings and Loan (FISL) groups for the purpose of saving for the purchase of agricultural inputs.

Increasing the knowledge of agrodealers through technical training in characteristics, use, benefits and quality control of farm inputs.

Strengthening the business management capacity of agrodealers through business management training course.

Using Information Communication Technology to improve overall input and output marketing system by facilitating information to agrodealers, input suppliers and financial institutions.

Facilitating the formation of a sustainable agrodealers’ association and advancing agricultural policy advocacy.

Improving delivery of inputs, services and information about agricultural inputs to smallholder farmers.

editor s note

Word from the Country Director

Editor’s Note

With more than half of the population in the developing

world facing food shortage, Governments, Foundations

and non-governmental organizations (NGOs) are

challenged to design initiatives to address the fact

that, in Africa, per capita food production has

declined over the past 20 years. Since a large

proportion of the Africa population is rural and

depends on agriculture for their livelihoods, it is

essential to intensify efforts to increase agricultural

productivity.

New initiatives are driven by the knowledge that

increasing agricultural productivity, though better

functioning of rural input markets leads to increased

food security, higher incomes and quality of life for the rural poor.

It is against this background that we at CNFA/AGMARK, believe that one of the keys to improving productivity is to increase the use of modern agricultural inputs – fertilizers, seeds, crop protection chemicals - especially since it is not possible to increase production by planting on new land. Population growth in African countries increasingly means smallholders must intensify production and produce for the market. However, great challenges exist ranging from poor farming methods, inaccessibility to farm inputs and high cost of farm inputs.

According to CNFA/AGMARK, one of the ways to increase rural incomes is to strengthen and expand the private sector input distribution network and to bring more inputs and services provided by input suppliers to farmers. This is done by linking agrodealers – enterprise that sell inputs – with suppliers and increasing their technical and business capacity. And with the realization that the majority of the world’s poor are farmers, it is the believe of CNFA/AGMARK that combating world poverty means helping those people expand from subsistence agriculture to commercial activities.

This sixth edition of the KASP newsletter brings you information on how CNFA/AGMARK is focused on dealing with commercial activity, locally defined needs, and leveraged investment in fostering the economic empowerment of smallholder farmers and enterprises all along the food value chain, thereby increasing their agricultural productivity and household incomes.

James Mutonyi

Country Director,

CNFA/AGMARK.

Dear reader,

Welcome to the sixth edition of the CNFA/AGMARK quarterly

newsletter. Once again, we are glad to share with you

achievements, success stories and challenges of the

CNFA/AGMARK project activities.

In this edition you will find out about the matching investment facility

which CNFA/AGMARK is rolling out that is set to strengthen

agrodealers’ output marketing capabilities, and essentially link

farmers to high value market chains.

This newsletter also brings you success stories of how

CNFA/AGMARK has facilitated food security for a family of

eleven; an agrodealer who has used a demonstration plot behind his

agrovet shop to increase awareness and generate demand for farm

Inputs. We also tell you how a local indigenous company that

specializes in developing and providing high quality seeds of

improved suitable dry land crop varieties to farmers in low and

medium altitude arid and semi-arid lands (ASAL) areas is set to

revolutionize agricultural activities in Eastern Kenya, and much more.

I also take this opportunity to express our gratitude to all those who

emailed or called in to congratulate us on our previous newsletter.

And as usual, we welcome your comments, questions and views

concerning issues dealt with in this edition.

Have a nice reading.

Douglas Waudo

Communications and Media Relations

CNFA/AGMARK.

slide4

Mr. James Mutonyi (left), CNFA/AGMARK Country Director hands over the keys of the sales van to Mr. Timothy Ongoro, a CNFA/AGMARK certified agrodealer cum wholesaler/distributor, who is also the proprietor of Farmchoice Agrovet in Kisumu on July 2008. The van was purchased with the CNFA/AGMARK matching investment fund is intended to supply and deliver inputs to agrodealers within a radius of approximately 300Kms from Kisumu City. This is intended to facilitate easy accessibility and affordability of inputs to rural-based agrodealers as well as smallholder farmers.

Matching Investment Worth Kshs 14.8 Million Set to Strengthen Agrodealers’ Output Marketing Capabilities

The lack of access to start-up capital continues to be a major constraint preventing well trained agrodealers and entrepreneurs who have been certified by CNFA/AGMARK from establishing full service, well-inventoried agrodealership, hence the need for matching investments.

And in order to achieve its objective of improving farmer incomes and productivity by increasing smallholder

access to improved inputs and better production

practices through the establishment and strengthening of a rural agrodealer network, CNFA/AGMARK has sought ways of utilizing matching investments as a key

intervention tool.

Ideally, the use of matching investment is intended to trade, commercialize informal businesses; buy-down the cost of modern technology and enhance effectiveness of the business, and improve access to supplier credit and innovations to allow more effective leveraging of microfinance and commercial lending.

Among other entities, the grant investment will also be used to support output marketing activities proposed by agrodealers, entrepreneurs and existing enterprises and provide a means of expanding new or established input supply businesses and providing rural farmers access to an expanding and lucrative cash market for their farm

outputs.

The average grant size is $7,500 with a minimum grant size of $1,000 and maximum of $15,000, though exceptions will be considered on a case by case basis. Competitive applicants must demonstrate commercial viability, and in the case of agrodealers start-ups be located in an economically disadvantaged areas.

It should also be noted that priority is given to projects that benefit large numbers of farmers and/or create a significant numbers of sustainable jobs. Also special consideration is given to enterprises owned or managed by women or which are positioned to benefit large numbers of women. In addition, its important to note that only those applications originating from and proposing investment of funds within districts in which CNFA/AGMARK is currently active will be considered.

Therefore, with the objective of strengthening the output marketing function of agrodealers, allowing them to serve as a market for their smallholder farmers, and to further link these farmers to higher value market chains and to stimulate investment and commercialize informal businesses, CNFA/AGMARK has since early this year approved various entities of the matching investment worth USD 228,533 (Kshs 14.8 million).

slide5

Mr. Tom Ongandah, a wholesaler agrodealer in Kisumu admiring his computer and printer which he got through the matching investment facility. The computer has an internet connection which will enable him respond to orders placed by agrodealers on the internet platform through sending of an SMS (Short Message Service).

CNFA/AGMARK in collaboration with VOXIVA, a US-based technology firm has launched a pilot project in Western Kenya aimed at facilitating agrodealers order for inputs (stock) using their mobile phones through the SMS system. The SMS is captured on an integrated computer platform that is accessible to all suppliers of agricultural inputs, who then respond to the bids.

CNFA/AGMARK has also been working closely with other development partners in utilizing matching investments as a key intervention tool in output marketing and strengthening agrodealers’ capacity. The development partners include:

  • Ritz Consultants – They are involved in market opportunity analysis to explore agricultural market opportunities.
  • TSBF/CIAT – Currently involved in the soil fertility management initiative in Western Kenya, a pilot program involving 42 CNFA/AGMARK certified agrodealers.
  • Farm Concern Ltd – Involved in analyzing market hub and value chain opportunities to enhance commercial orientation of farming communities. Sixty CNFA/AGMARK certified agrodealers are engaged in the program.

It’s the objective of CNFA/AGMARK that through the utilization of the matching investment, agrodealers – who also serve as a vital function in linking farmers back to cash markets for farm produce – and entrepreneurs and existing enterprises will be able to build and strengthen their agrodealership capacity, thereby improving farmer access to inputs and lucrative cash market for farm outputs.

Note: For more information about the matching investment, i.e. eligibility and application process, contact your nearest CNFA/AGMARK office.

To date, the approved investment have facilitated agrodealers in:

  • Buying sunflower oil press – Many local farmers produce sunflower seeds (as well as other grains) which can then be pressed for home use and add value for sale.
  • Setting-up milk collection and cooling centers – Milk collection centers are crucial for collecting larger volumes of raw milk and storing in sanitary, temperature controlled facilities in rural and isolated areas.
  • Milling and marketing cereal – Many local farmers produce maize (as well as other grains) which can be milled for home use and add value for sale.
  • Bulking and marketing fresh produce – Much produce is shipped to the market without sorting, grading, cleaning or proper packing. As a result local produce is often not able to penetrate the higher value distribution channels.
  • Expanding distributorship reach through purchase of a sales van – This enables the agrodealer serves as a wholesale distributor to local rural-based agrodealers, besides easy supply and delivery of inputs to farmers.
  • Increasing distributorship capacity through Information Technology initiatives like purchases of computers, printers and internet linkages – This is intended to improve overall input and output marketing system by facilitating information to agrodealers, input suppliers and financial institutions.
  • Offering Artificial Insemination services (A.I.) – Empowering agrodealers trained as veterinary clinical officers purchase A.I. kits, or enable those interested to be trained.
kasp services and benefits

Dr. Rajiv Shah, (left) Director, Agricultural Development with the Bill and Melinda Gates Foundation, and Dr. Namanga Ngongi (wearing cap), AGRA President interacting with the proprietors of Farmwise Store, Mr. John Mburu (right) and his wife, Abserah Wacera (second right) during the field visit at Saba Saba shopping centre, Murang’a South district, Central Province on August 11th 2008.

Dr. Rajiv was in the country to assess the impact of the AGRA funding, as well as assess the strengthening of the agrodealer network in accessing farm inputs from input suppliers.

Mr. Mburu is a certified agrodealer and has attended several technical trainings in product knowledge. Besides that, he also participates in demand creation activities facilitated by CNFA/AGMARK, which as a result has seen his number of customers, as well as his product sales increasing substantially.

1.

2.

3.

(1.) Tumaini General Agrovet which retails all types of agricultural farm inputs is situated in Embu District, and Dr. Peter Kariuki and his wife Anne Ruguru are the proprietors who manage it on full basis. Dr. Kariuki, a veterinary officer is a CNFA/AGMARK certified agrodealer, has also attended several CNFA/AGMARK facilitated technical trainings in product knowledge, besides extensively participating in demand creation activities like exhibitions, field days and demonstrations. Last year he was involved in the National Accelerated Agricultural Inputs Access Programme (NAAIAP) a Ministry of Agriculture subsidy voucher program whereby he supplied close to 500 farmers with improved maize seed and fertilizer, essentially pocketing a gross profit of close to Kshs. 3 million (USD 45,455).

In fact, it is through this initiative that he managed to buy a lorry (2.) which he uses to transport inputs (stocks) from input suppliers, and supplies them to rural-based smallholders. Dr. Kariuki admits that through the support and interventions from CNFA/AGMARK, he is now able to carry out extension/outreach programmes with farmers, besides providing market information to farmers, which as a result increased his product sales by over 40%. (3.) Mrs. Kariuki being interviewed by journalists from Reuters in July this year. The journalists were on a media visit of CNFA/AGMARK activities in the region, profiling the day-to-day life of a smallholder farmer in the backdrop of the prevailing food crisis in the world. The story will be aired on Reuters’ Africa Journal programme soon.

KASP Services and Benefits
agrodealer uses demonstration plot to increase awareness and generate demand for farm inputs
Agrodealer Uses Demonstration Plot to Increase Awareness and Generate Demand for Farm Inputs

Though his collaboration with CNFA/AGMARK is relatively new, Mr. Said is nonetheless determined, as he puts it, “ to fully take advantage of CNFA/AGMARK’s support and intervention to help farmers in Kaloleni to increase their agricultural

productivity and household incomes, and improve their quality of life through the use of improved farm inputs and modern agricultural technologies”.

In April this year, through the CNFA/AGMARK linkage, Mr. Said set up a demonstration plot behind his agrovet for six maize varieties by Kenya Seed Company. “The demonstration plot which became the talk of the area, has been very instrumental in generating demand for farm inputs, and generally increase awareness and knowledge of smallholder farmers about the farm inputs, which has translated in increase in our sales” says Halima Abdalla, Mr. Said’s wife.

In early June this year, CNFA/AGMARK worked with Mr. Said to host a field day on his demonstration plot where over 500 smallholder farmers attended. The farmers were exposed to various improved maize seeds varieties suitable for the region, and other agricultural techniques and technologies provided by the Kenya Seed Company, crop protection companies and the Ministry of Agriculture.

“I am grateful to

CNFA/AGMARK

for facilitating the

field day, and more

importantly for their

involvement in

mobilization of farmers. I got the opportunity of interacting with farmers and I am sure I did buildl relationships and linkages essential for my business,” added Said, whose agrovet business has grown from a working capital of $758 (Kshs. 50,000) to the current turnover of $ 12,121 (Kshs. 800,000).

And in order to improve smallholder access to improved inputs and services, Mr. Said is planning in a few month’s time to open another agrovet shop in the area, and has already applied for the matching grant facility from

CNFA/AGMARK. On the other hand, he is planning to sponsor his three employees to be trained in Business Management Course.

CNFA/AGMARK, as one of its demand creation activities, facilitates input supply companies and agrodealers to conduct on-farm demonstration plots, whose aim is to show the farmer what, how, when, and why the agro-input products are used with the purpose of increasing awareness and knowledge, and generating demand for farm inputs.

Mr. Said Khamis, aged 46 years is the proprietor of Mkapuni Agrovet located in Kaloleni District, Coast Province, which started in 2001 and retails all types of agricultural inputs. Early this year he and his wife underwent the Business Management training course facilitated by CNFA/AGMARK.

He reveals that the course has changed the way he manages his business, and perhaps more significantly saved him from needing to hire an accountant since he is now able to keep records, manage stocks and all aspects of the business without any help.

“For me the course was an invaluable asset that addressed all aspects of basic business management and I would encourage any business person intending to excel in their enterprises to undergo the training” says a joyful Mr. Said.

“The demo plot which became the talk of the area, has been very instrumental in generating demand for farm inputs…… ..which has translated in increase in our sales”.

A maize demonstration plot behind Mr. Said’s Mkapuni Agrovet in Kaloleni District, Coast Province. Inset: Mr. Said inspecting the demo plot, and a placard displaying details about the maize variety, date of planting, seeds rate, spacing, maturity period and yield potential. This information is useful to the farmers in terms of empowering them with information and education about characteristics, use and benefits of improved yield-enhancing agricultural inputs.

cnfa agmark farm inputs exhibition facilitates food security for a family of eleven

Small pack, BIG RESULT !

Mama Florence during the interview at her farm. Due to her exemplary efforts in embracing the modern agricultural techniques and technologies by practicing farming as a business, she has become a well known farmer role model in her community. As a matter of fact, her story was recently featured by one of the leading TV stations in Kenya.

CNFA/AGMARK Farm Inputs Exhibition Facilitates Food Security for a Family of Eleven

Florence Nadzua, a smallholder farmer in Msabaha, Malindi District in Coast Province spoke to Douglas Waudo on how she has directly benefited from the CNFA/AGMARK support and intervention.

Briefly tell us about yourself.

My name is Florence Nadzua, aged 56 years old and a mother of nine children. I am married to Mr. Reuben Karisa, a retired harbour supervisor, Mombasa Port. I studied up to high school level, got married afterwards and I have been a smallholder farmer for the last 30 or so years on our 17 acre of land, mostly practicing subsistence farming.

What was farming like for you for the last 30 years?

Farming was close to just survival for the fittest, where I used to practice basically for subsistence purposes. This did not guarantee food security, because the yields I used to get were not sufficient for the family, hence I had to buy food to counter the deficit.

But you had 17 acres of land, how come you were still buying food for your family?

The biggest problem I had as I found out later through the demand creation activities of CNFA/AGMARK was that I never used to use yield-enhancing farm inputs like improved maize seeds and fertilizer. I used to recycle the maize I had harvested the previous season to plant. Also I never used to use fertilizer either for planting or top-dressing. Evidently, the result of this was that I used to get hardly two bags of maize from one acre.

The only crop I used to grow was mostly maize and cowpeas.

Otherwise, I used to buy all the horticultural commodities like

tomatoes, cabbages, onions and the like from the local market.

kales, cabbage, spinach, indigenous vegetables and onions from Seminis which I planted on an eighth of an acre. I also bought the Uwezo products from Syngenta like Ortiva, Score and Karate, which are crop protection chemicals against fungicides and insecticides. In addition, I purchased EasyGrow range of products from Osho Chemicals.

In fact, due to the linkages I got in the exhibition, the sales representatives of the two companies have been visiting my farm and offering extension services and recommending the crop protection chemicals to be applied.

At the moment I have already identified a ready market for my produce in Malindi Town, and I am approximating to get over Kshs. 100,000 from the first harvest. And having used improved maize seeds and fertilizer, both for planting and top dressing, I expect to harvest at least 15 bags of maize from one acre. And with this kind of harvest, I can confidently say that I am now guaranteed of food security for my family and an increase in my household income.

You mentioned CNFA/AGMARK’s demand creation

activities, how have they changed your way of practicing

agriculture?

After hearing advertisements on radio about the upcoming

farm inputs exhibition facilitated by CNFA/AGMARK in

collaboration with the Ministries of Agriculture and Livestock

Production, I reluctantly decided to attend one of them on

March 11th 2008 at Madunguni Market, and what I learnt there

basically changed my life.

How so?

For starters, it was my first time ever to attend an agricultural

exhibition where there were so many input supply companies

participating. Secondly, while going through the stands of each

company and learning about the characteristics, usage, quality

control and benefits of various farm inputs, I finally discovered

how to improve my produce by using yield-enhancing inputs.

Equally important, I was linked to Coast Farmers Agrovet, a

CNFA/AGMARK certified agrodealer where I could easily access

farm inputs and extension services. In addition, I learnt

different techniques and technologies from various farmer

groups on how to ensure food security through value addition.

Besides the knowledge and information

about farm inputs, what other benefits

did you get?

During the exhibition, I bought a few packets

of horticultural seeds like tomatoes, carrots,

kasp services and benefits1

A farmer in Mrabani Irrigation Scheme in Taveta District, Coast Province irrigates his crops in July this year. CNFA/AGMARK has been instrumental in improving the delivery of inputs, services and information about the farm inputs to smallholder farmers in the region through activities such as field days, exhibitions and demonstrations. At the same time, through the matching investment facility, CNFA/AGMARK intends to link these farmers to higher market value chains thereby addressing the issue of output marketing.

“My name is Peter Kivuti, and I am a smallholder farmer in Nembure Division, Embu District. For a long time, I have been practicing traditional farming, until late last year when I attended the CNFA/AGMARK facilitated exhibition and field day and got a chance to learn about the use and benefits of farm inputs.

And with nothing to lose, I decided to put into practice what I had learnt, and I am glad to say that last season after using improved maize seeds and fertilizer, I got 15 bags of maize from one acre, right from 3 bags previously. Furthermore, I have learnt to practice integrated agriculture, as well as farming as a business. And as a result I now grow cassava, potatoes, beans, bananas, avocados, mangoes and horticulture. I also practice bee-keeping, besides dairy farming.

I am happy because food security is guaranteed for my family, and in fact through farming I am able to comfortably pay for school fees for my children, and increase my household incomes.

Through CNFA/AGMARK we have now been able to form a group of around 54 farmers, and have even opened a cereal bank to store and market our produce”.

KASP Services and Benefits

Agrodealers following proceedings during their graduation ceremony in Wote Town, Makueni District in Eastern Province on August 8th 2008. Sixteen agrodealers were certified after being trained in Business Management course. The training is meant to strengthen the business management capacity of agrodealers.

local indigenous seed company that specializes in african crops for arid and semi arid areas
Local Indigenous Seed Company that Specializes in African Crops for Arid and Semi-arid Areas

“Since we started participating in the CNFA/AGMARK facilitated demand creation activities, we have seen our sales improving significantly, more agrodealers stocking our products and awareness created in the region,” says Mr. Joseph Masila, the Marketing Executive of DSL. “In fact, we believe with more support from CNFA/AGMARK we are determined to change the agricultural sector in Eastern Kenya”.

Currently DSL is developing three maize varieties in collaboration with the Kenya Agricultural Research Institute (KARI) to be released next year. In addition, the company plans to establish a 500 million seed bank within the next two years, spread the market to cover all districts in Eastern Kenya while expanding in other arid parts of Kenya. DSL is also planning to work closely with both the national and international research institutions to acquire and market improved crop seeds that are more high yielding, drought and disease tolerant.

“We at Dryland Seed Ltd believe in the establishment and implementation of home grown solutions to home felt problems”, concludes Mr. Ngila.

The agricultural sector in Eastern Kenya has for a long time been stagnating or is deteriorating. This is due to the fact that most part of it is arid or semi-arid, with unreliable or inadequate rainfall pattern.

This erratic rainfall pattern has threatened food security, and input supply companies and other agricultural service providers have largely neglected the region.

However, all this is now slowly changing for the better with the entrance of Dryland Seed Ltd (DSL), a local indigenous company that specializes in developing and providing high quality seeds of improved suitable dryland crop varieties to farmers in low and medium altitude arid and semi-arid lands (ASAL) areas of Kenya.

“Dryland Seed Ltd was registered in 2004 by Kenya Plant Health Inspectorate Services (KEPHIS) as a seed merchant. We are located in Machakos town, and are involved in multiplying our seeds using farmers in dryland areas in Eastern Kenya.” says Mr. Ngila Kimotho, the Director of DSL. “We are the only seed company with physical presence in the dryland areas”, adds Mr. Ngila.

The seed company, whose core business is

to contract smallholder farmer groups to

multiply seeds, undertake seed processing,

and marketing and distribution is involved

in developing different crop varieties for

dryland areas in Kenya ranging from maize,

beans, cowpeas, pigeon peas, sorghum,

pearl millet, and green grams.

Since early this year, CNFA/AGMARK has

been collaborating with DSL through

facilitating demand creation activities

like field days, exhibitions, demonstrations

and agricultural shows. These acts to

create awareness about their various

products, in terms of educating

and increasing information and

knowledge of farmers about the

characteristics, use, benefits and

quality control of the farm inputs.

On the other hand, CNFA/AGMARK

has also been instrumental in creating

linkages between the seed company

and agrodealers, farmers and public

regulatory agencies.

Farmers listening to Mr. Joseph Masila, Marketing Executive of the Dryland Seed Limited during the CNFA/AGMARK facilitated farm inputs exhibition at Kikima Location, Mbooni District in Eastern Province on August 7th 2008. Inset: A packet of maize seed processed by Dryland Seed. The series of exhibitions was strategically planned just before the commencement of the long rains in the region, was meant to increase farmers’ knowledge and generate demand of farm inputs.

improving lives through empowering smallholder farmers economically

1.

2.

3.

Improving Lives Through Empowering Smallholder Farmers Economically

The biggest problems facing smallholder farmers in Kenya is lack of adequate funds during the planting season to purchase agricultural inputs, particularly fertilizers and improved seed. Without the use of improved seed and fertilizer, yields are very low leading to a situation of food deficiency and increased poverty.

The irony is that this farmers do not lack finances. Most smallholder farmers have different sources of income from on-farm and off-farm activities. These incomes are relatively small and are earned throughout the year. What the farmers lack is a facility where they could save these incomes and use the savings at a later date. As a result, farmers are unable to accumulate these savings and end up lacking funds for the purchase of inputs during the planting season.

Most rural smallholder farmers in Kenya do not have access to formal financial institutions yet most of them are engaged in income generating activities. Financial institutions have not been responsive to the financial needs of smallholder farmers. Most smallholder farmers therefore rely on informal arrangements to meet their financial needs.

It is against this backdrop that in 2005 - 2006 CNFA/AGMARK launched a pilot project whose aim was to facilitate farmers to form Farm Inputs and Savings Loan groups (FISL), with the purpose of encouraging farmers to save for the purchase of agricultural inputs.

To date, there are 431 FISL groups in 13 districts with a membership of 6,685 smallholder farmers, and a total savings of over Kshs. 1.9 million (USD 28,788).

As an effective and efficient way of ensuring that the money saved does not end up being used by the members on matters not agricultural, CNFA/AGMARK has assisted the farmers to design a system, where the groups have the option of either depositing their daily/weekly or monthly savings with a certified agrodealer, opening a group bank account or loaning the money amongst themselves which is then repaid with an interest.

And in order to ensure the success of FISL, and for purposes of sustainability, CNFA/AGMARK has trained Community Mobilizers, whose responsibilities are to co-ordinate the groups and update CNFA/AGMARK on a monthly basis on the progress, challenges and problems facing the groups. The Community Mobilizers also train the groups on savings and credit methodologies and basic agricultural practices.

1. Members of the Nyamseda FISL group in Siaya District watching a FISL documentary prepared by CNFA/AGMARK on August 29th 2008. The use of audio-visual presentation is one of the effective ways of encouraging farmers to save for the purpose of purchasing inputs, besides creating awareness and generating demand for inputs. 2. Members of the Anyiko FISL group in Ugunja redeeming their savings in form of inputs early last year. The success of the Anyiko group has transformed it into a role model by which it is being used as a case study by CNFA/AGMARK in rolling out the project in other parts of the country. 3. Mr. Johm Obwar, a member of the Anyiko FISL group proudly showing his maize. By using farm inputs he has been able to increase his harvest from barely a bag to 14 bags of maize an acre. Through the FISL initiative, hence improved productivity most farmers are now guaranteed of food security and improved household income.

slide12

Agricultural Market

Development Trust

AGMARK

CNFA Inc.

AGMARK - KENYA

CNFA/AGMARK-KENYA – Nairobi Office

P.O. Box 14184, 00800,

Ojijo Plaza, Suite C3, Plums Lane,

(Off Ojijo Road next to Plums Hotel),

Westlands, Nairobi .

Tel: + 254 (020) 3740268/319

Fax: + 254 (020) 3740343

E-mail: cnfa@cnfakenya.org

Website:www.cnfa.org

CNFA/AGMARK-KENYA – Kisumu Office

Milimani Area, Baring Drive,

Off Awuor Otiende Road

P.O. Box 2326 – 40100

Kisumu, Kenya.

Tel: + 254 (057) 2023151/2020243

Fax: + 254 (057) 2020242

CNFA/AGMARK-KENYA – Embu Office

Mugo & Gatugo Building

Opposite Post Office

P.O. Box 2349 – 60100

Embu, Kenya.

Tel: + 254 (068) 31705/6

Fax: +254 (068) 30706

CNFA/AGMARK-KENYA – Malindi Office

Malindi Complex, Ground Floor,

Along Malindi - Mombasa Highway

P.O. Box 1888 - 80200

Malindi, Kenya.

Tel: + 254 (042) 20492 / 20496

Fax:+254 (042) 20496

WRITING/EDITING/DESIGN Douglas Waudo - PRINTING ChrisomAgencies

Harnessing the Power of the Private Sector