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

CNFA AGRODEALER STRENGTHENING PROGRAM COUNTRIES INTRODUCTION:

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

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 든 Working with our partners we have been able to directly benefit the lives of over 2.5 million small-holder farmers

Key Problems & Questions 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

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 approachPrivate 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.

The CNFA Inputs Model

The CNFA Output Marketing Model OUTPUT MARKET FACILITY MANAGED BY AGRODEALERS OR OTHER ENTERPRENEURS Training, Linkages, Financial Support & Services Training Financial Services Demand Creation & Technical support Inputs and Advisory Services Buyers to market Quantity & Quality Produce Output Inputs and Advisory Services Technical & Management Services Output Marketing Info & Promotion

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

Focus on Agrodealers & Farmers 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 Access to Finance: Agrodealers Smallholder Farmer Smallholder Farmer Information on Inputs & Use Exposure to products and technologies Trade credit from supply companies for inputs Working capital loans for inputs from Financial Organizations Assistance to establish output marketing enterprises Capacity Building: Outputs sold to agrodealers

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

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

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

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

Project Activities 4) Financial Services cont. AGRA through RUMARK has a guarantee arrangement with MRFC through which the institution gives advances credit to farmers to procure inputs.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 institutionsRUMARK certified agrodealers have received $218,666 (K30,766,306) in loans from MRFC and other institutions

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

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

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

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

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;

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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