Joseph mwangangi.

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Joseph mwangangi.

  1. 1. Commercial Opportunities for Agri-Inputs: The Agrodealer Enterprise.
  2. 2. The Agrodealer Business Opportunity: Outline of the Presentation 1. Defining the Agrodealer Business Opportunity. 2. Agrodealer’s Strategic Role/Position. 3. A permanent feature in African Agriculture?. 4. Enhancing Smallholder competitiveness 5. Key Elements of the Agrodealer Business. 6. Factor Underlying Agrodealer Dev. Success.
  3. 3. Agrodealer Business Opportunity Defined: The Market Smallholder Farming Community The Product/Service Ag. production inputs / technologies Location Rural based in proximity to farmers Capital Low start-up of about $2,000 Ownership Entrepreneur owner most effective Supplies Upstream Input supply companies Financier Critical for Working Capital needs Risk Factor High due to dependence on rain
  4. 4. Smallholders Agrodealers Processors Marketing Consumption Inputs Supply Cos. Transportation Product Information and Safe Use Credit Linkages Transportation Technology Linkages Policy Dialogue Extension / Agronomic Training Production input supply Market Links Agrodealer Strategic Link along the Value Chain:
  5. 5. The Agrodealer and Smallholder Inputs Planned Smallholder Production Small Rural Enterprise “Agrodealer” Inputs Supply Chain: • Availing Quality Inputs, • Establishing demo plots, • Organizing field days, • Passing Ext. Messages. • New Technologies •Availing credit to farmers Outputs Value Chain: •Market specifications; •Aggregation; •Quality Assurance; •Warehousing; •Transportation. •Forward contracting; Value Chain Drivers I N P U T S O U T P U T S Output
  6. 6. AGMARK Agrodealer Support Program Building Agrodealer Capacity to Serve Farmers Financial Services for Agrodealers and Farmers Advancing Agricultural Policy Advocacy Access to Output Markets •Business Management Training and Mentoring support •Technical Training in agronomics, product knowledge, etc. •Demand Creation through field days, demos, exhibitions •Training in Output Marketing Capacity •Sustainable Associations of Agrodealers; •Public Private Partnerships and Forums; •Voucher Program Assessments/design; • Development of Smallholder Production Clusters; • Capacity to aggregate and link into competitive value chains. •Guarantee Facility for Increased Access to Credit; •Matching Grants for Startups, Output Marketing, etc; •Agricultural Lending Trainings and Linkages •Farm Input Savings and Loan
  7. 7. The Agrodealer: A Permanent Feature of Africa’s Agriculture? 1. Agriculture remains the mainstay economic activity for most African economies; 2. 80% of Africa’s agriculture is smallholder and rural based; 3. Population growth and land policies encourage smallholdings in Africa;
  8. 8. The Agrodealer: A Permanent Feature of Africa’s Agriculture? 4. Smallholder based production is generally uncompetitive, => uncompetitive Value Chains! 5. The future of Agrodealer Business Opportunity dependent on the future of smallholder production in Africa. 6. Shift towards Trade favors more efficient value chains, NEED to enhance smallholder efficiency.
  9. 9. The Agrodealer: Enhancing Smallholder Competitiveness 1. Agrodealers enhance smallholder access to yield- enhancing inputs and technologies. 2. Agrodealers provide extension support as a “bundled service” through demand creation activities. 3. Agrodealers increase productivity per unit of investment, e.g. 3 bags/acre to 18 bag/acre in Chwele in Bungoma-Kenya.
  10. 10. The Agrodealer: Enhancing Smallholder Competitiveness 1. Agrodealers make it feasible for Input Supply companies to access the “smallholder mass market.” 2. Agrodealers are viable “market access agents” for smallholder farmers. 3. Agrodealers do enhance efficiencies along the value chain, hence overall competitiveness.
  11. 11. The Agrodealer: Challenges and Downside 1. Vulnerable to government / NGOs interference in the functioning of inputs and output markets; 2. Lead time and investment necessary before farmers adopt new technologies = barrier to entry 3. Agrodealerships skewed in favor of higher potential areas;
  12. 12. The Agrodealer: Key to Successful Agrodealer Enterprise 1. The Entrepreneur Profile: passion, education, age, ability to network, risk management, responsiveness; 2. Enterprise Environment: location, pop. density, product range, farmer loyalty, 3. Value Chain Relationships: Farmers, input supply companies, MOA, distributors, dev. agencies.
  13. 13. On-Going Agrodealer Programs AGRA: AGMARK implemented 3 year AGRA funded Agrodealer Strengthening program supporting 2,500 agrodealers in Kenya. COMRAP: IFDC and AGMARK are implementing COMRAP- an Agrodealer Development sub-component of COMESA-ACTESA in 8 countries. IFDC and AGMARK are implementing the project through Host Partner Organizations in each of the 8 countries.
  14. 14. Joseph N. Mwangangi Regional Director, Agricultural Markets Development Trust AGMARK jnyamai@africaonline.co.ke; jmwangangi@agmarkkenya.org

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