Agro-dealership: a market-based solution to improve access to agricultural inputs

The 'Graduation with Resilience to Achieve Sustainable Development' project in Ethiopia adopted an agro-dealership model to improve access of Productive Safety Net Programme (PSNP) households to agricultural inputs. And SNV is advocating for national scaling of the model.

Agro-dealership is a market-based solution to increase access of Productive Safety Net Programme (PSNP) households to agricultural inputs.

Smallholder farmers in general and PSNP households in particular have limited access to and low use of agricultural inputs due to dispersed lifestyle, huge logistics to respond to their demand in terms of diversity of inputs, timing of supply, size of packages and technical advices.

Meeting these requirements with an affordable price is beyond the capacity of key actors of the existing input supply system – unions and cooperatives. This government-cooperative relay input supply system focuses only on distributing few types of inputs such as fertiliser and improved seeds of major crops.

Most of the agricultural inputs demanded by PSNP households such as livestock feed and feed enhancement minerals, vegetable seeds, farm tools, agro chemicals, etc. are not locally available and only better off farmers able to travel to major towns and cities can access them.

SNV trained interested local-based traders like Chemere Sisay on technical and business skills; coached in developing business plan and facilitated backward linkage with major input suppliers and forward linkage with model farmers and Village Economic and Social Association (VESA) groups. To further strengthen their capacity eth project provided financial support (innovative subsidy) to renovate and equip shops with tools such as plastic bag sealer and sensitive balance.

Chemere Sisay, a Diploma holder in Animal Production from Dilla University, became an agro-dealer in 2015. Before he reached into a decision to join the world of business, he served Agri Service Ethiopia – one of the GRAD partners - in a capacity of community facilitator.

When the project announced for competent agro-dealers, Chemere who is well-informed on the duties and responsibilities of the task holder applied for the position.

Investing ETB 50,000 (USD 2272) he started his retail shop. The shop serves as a centre for retailing agricultural inputs, displaying new products and providing information on agricultural inputs. In this shop smallholder farmers easily access vegetable seeds, organic fertilisers, Prudent Improved Crop Storage (PICS bag), chicken and cattle feed as well as other important agricultural inputs.

Yohannes Bayero, a customer of Chemere Agro-dealer Shop, recalls the time when he desperately wished to have a potential to buy and utilise agricultural inputs that the government and/or the unions/cooperatives distributed in bulk. In the agro-dealer shop, he is able to buy a kilo or a half-a-kilo of chicken and other types of feed, a gram of seed or a litre of molasses for his cattle.

“I used to be a safety net programme beneficiary. I formally requested the government to graduate me from the programme. After I joined this project, I engaged in shot fattening and poultry” said Yohannes.

In addition to the inputs, Yohannes gets information and knowledge on the preparation of improved feed for his cattle. He also takes copies of brochures that Chemere collects from the various capacity enhancement sessions like multi-stakeholder meetings and Business-to-Business forum.

“Most of my customers are PSNP [Productive Safety Net Programme] beneficiaries. I know that they cannot afford bulk purchase. Assessing their demand, I started packing and selling in retail and showing my clients on how to prepare improved feed. It helped me in creating and increasing demand” said Chemere.

To sustain their contribution SNV assisted agro-dealers in preparing a five year marketing plan. Chemere planned to address the needs of 13,227 beneficiaries and engage in additional business within five years. His reputation has brought him trust from the government. In partnership with Mareko Woreda Bureau of Agriculture, he is distributing emergency seed.

“The agro-dealership scheme has improved access to inputs for Productive Safety Net Programme beneficiaries. Nine-month records of Chemere reveal more than 3000 transactions. Our monitoring data also reveals an increase in the use of inputs by target households” said Nega Mekonnen, Marketing Advisor, SNV Ethiopia.

According to this data sale of concentrated feed increased from 187 to 1738 qt. while agricultural tools sales increased from 6 to 2067 in the last quarter. Most of the beneficiaries are GRAD households. Chemer’s data also reveals that he has provided agricultural input to 68% GRAD and 32% non-GRAD households in the same period.

Dagne Menan, PSNP IV technical advisor at the Ministry of Agriculture and Natural Resources, said that “agro-dealership model is a very important tool to improve access of PSNP households to agricultural inputs that would have been promoted by HABP. Its successor PSNP IV should have to scale it up nationally.”

Dagne added that SNV and the Ministry will work together to properly document lessons learnt and inform policy makers.

The increase in transaction has positive result on the life of Chemere. The improved income enabled him to join Ekube (a local fund raising and saving system formed by trusted, close and voluntary people). He pays ETB 1500 (USD 66.18) per week. This in turn has helped him to enhance his fattening business. He has sold 20 shots and has 11 more. With all this money he is planning to buy chopper before October.

“In the near future, I will establish mobile feed chopping business and provide maize stalk chopping services to farmers to improve palatability and preservation for dry season. Steam of maize is reach in nutrients than wheat barn if timely chopped and preserved properly” said Chemere. He added that this is a new business designed as part of his five year expansion plan preparation that SNV.

The Graduation with Resilience to Achieve Sustainable Development project invested ETB 2.7 million (USD 122,700) to establish and engage 32 agro-dealers in sixteen woredas of Amhara, Oromia, SNNP and Tigray regions. It organised training on technical and business skill in three rounds and facilitated linkage of agro-dealers with more than eleven major input suppliers. This support enabled agro dealers mobilise ETB 5.3 million (USD 241,000) and distributed diverse inputs to more than 30,000 clients of which 48% are PSNP households.