These are action situation cards to be used in conjunction with the facilitators notes for Module 2.

1. Module 2 Session 1
Actor Situation Cards for Mapping and Working/Not Working
For Facilitators:
Prepare one set of the actor name cards for the mapping
exercise and one set with the situation information for the
working/not working exercise.
See Module 2 Facilitator Notes for further instructions.
Module 2 Session 1: Actor Situation Cards
1

2. Importer of
Long-Grain
White Rice

3. You import large volumes of long-grain white rice for the urban market primarily
from Southeast Asia. The urban market for long-grain white rice of consistent
quality in terms of color, grain size, and percentage of breakage has been
growing quickly. Even with the high transport costs you are not having trouble
selling all you import. You sell primarily to retailers that sell through fixed stores
(as opposed to open-air markets). You are now starting to import lower-quality
long-grain white rice with less uniformity and more broken grains to push further
into the peri-urban and even rural consumer markets.
Your rice importing business has grown substantially over the last five years and
you currently import around 100,000MT or about a 25% of the imported rice.
You are one of three large importers in the country. You cater mostly to urban
consumers, who buy three times the amount of rice compared to rural
consumers, who grow about 60% of their own consumption. (It is difficult to
know the exact figures as the government does not maintain quality statistics on
production and consumption.)So while you are bringing in lower-quality imported
rice to move further into rural consumer markets, you see continued growth in
rice sales to urban lower middle and upper middle class consumers. You are
interested in local rice production, but since you already serve a growing urban
market through reliable suppliers, you see no real business reason to invest in
local production, given all the risks and uncertainties.

4. Local Rice
Trader

5. You buy directly from the very few commercial millers that can mill paddy into
short-grain white rice at a reasonable quality. You have difficulty buying white
rice of consistent quality, but you can typically sell all that you buy from the
millers. Even though you could sell more, you tend not to talk with your suppliers
(either millers or farmers) at the start of the season about how much they are
planting, nor at harvest about their actual yields when you need to negotiate the
purchase.
While you see the opportunities in the rice trade, taking advantage of them would
require developing your own network of small-scale paddy farmers.Your
experience with small-scale farmers has been they are hesitant to invest or apply
new growing practices that are necessary to get the yields and quality needed to
compete against imported rice. They are unreliable in that they may or may not
sell to you even if you have an agreement with them. You have even heard that
they often do not supply rice to their buyers even when the buyer provides the
inputs. On the other hand, you have seen a growing number of emerging
commercial small-scale farmers who try to adapt improved practices to meet
commercial requirements.You would be interested in more links to those types of
farmers, but you are not going to invest a lot of your own resources at this point.

6. Local Paddy
Trader

7. You buy paddy from small-scale farmers. You focus on quantity over quality as you know
small-scale paddy farmers do not use high-quality seeds or invest much in inputs. You also
trade in other crops, so you see little value in helping small-scale paddy farmers, although
you will provide some informal finance for personal or input purchasing reasons. Since you
have cash most of the year, you are confident that farmers will sell to you, repay your loan
and ask for help from you again. You buy both paddy and hand-milled rice. The paddy you
buy is toll milled (milled for a fee) at one of few smaller millers in the area. Quality is
typically not good, with a lot of stones and high levels of variation. Given these
uncertainties from year to year, it is important for you to maximize returns from each
transaction—even if it means you have to wield your power to force the farmer to take a
lower price.
You often cooperate with a few other traders in the area to make sure prices are low
enough to make good money. For the most part the other traders agree and follow through
on the agreement to keep prices to farmers lower. The farmers are often aware of what
prices farmers receive in other parts of the country. However, sincethey do not manage
their cash very well from a business perspective,they are typically desperate to sell at
harvest time and will accept your low price. You also use your available cash to provide
informal finance to small farmers for their social/personal use. Farmers rely heavily on their
family and extended networks, but that requires them to support family members. As a
result, farmers—especially those who are known to be better farmers—are often called
upon to cover funeral, wedding and other costs for their extended families. They frequently
come to you to ask for a loan against future crops sales. You are happy to provide the loan,
as you can charge interest that is very high (in the form of a low price or extra bags of
paddy delivered). The farmers are aware that they pay you a high price for such financial
services, but they seem fine with it given they need such service almost every year.

8. Large-Scale
Rice Miller

9. You supply rice to two types of consumers: 1) those that prefer higher quality and 2)
consumers who prefer lower prices. Your equipment can produce high-quality rice that
could compete with imported rice, but there are very few commercial farmers (with more
than 50 hectares) growing enough high-quality paddy. There are a small number of
emerging commercial farmers (with 10 to 50 hectares), but still not enough to utilize your
equipment at more than 40 to 50% capacity. You have trouble obtaining consistent quality,
but you can still sell all that you buy. Even though you could sell more and you have a lot of
excess capacity, you tend not to work with your farmer suppliers to increase yields or
increase land under cultivation. In some seasons, you have had trouble managing your
working capital and failed to buy what was available for lack of cash.
The poor banking environment is a real problem for growing your business. You are
confident you can compete with imported rice, but only if you have more finance. You have
even thought of increasing your milling capacity, but bank finance is too expensive and too
hard to get. You previously had a loan for purchasing crop, but there was not enough
quality crop so you used the money for something else. In the end the loan was so
expensive that you did not pay it back. Even though that loan was a problem, having
another more affordable loan now would allow you to really grow your business. Another
issue is the production – and therefore your supply– ofhigh-quality paddy. The seeds are
not easy to get. You could import them directly and provide them to your farmers. You face
this quandary: you need to reach out to small farmers to expand volumes but you also
know they have a history of unreliability. You have seen a growing number of emerging
smallholders that seem more reliable, but they are small in numbers, so the volumes
required would mean shifting practices of many small farmers. You realize that small-scale
farmers would need partners like you to upgrade paddy production, but you would prefer to
work through a paddy trader for dealing with small-scale farmers. You just do not want to
take on that task. You think you could find some reliable traders, but then again securing a
loan is the key starting point.

10. SME Agro-Input
Dealer

11. You are a very small agro-input dealer who buys a few chemicals, tools, and fertilizers to
resell in the rural areas near your shop. Your shop is small and you have very limited
money, so you can buy only a small amount of inventory at a time. This is a problem since
you need to recover your transport costs from that small amount of inventory. You try to
provide advice when farmers ask, but you are unsure of exactly how to use some of the
products that you sell. You do not keep records or track where your customers come from.
You generally have an idea of what your customers want, but some products are not worth
keeping in stock. For example, fertilizer is too risky because of the government program to
subsidize it, which typically means SME agricultural input dealers like you lose out because
you are not connected with the right people. You are also unable to sell quality seeds as
the seed law makes it very hard for you to source from the quasi-government monopoly
that supplies better seeds. You have made no attempt to bundle other services (like
spraying or tilling) with the sale of your products because you believe the risks far outweigh
the benefits to your business.
Essentially you are a trader, buying and selling agricultural inputs and small equipment.
You have minimal capacity or resources to develop more in-depth services for your
customers and if you found another product to trade, that would be your priority over adding
service to your sales. If you could become more closely linked with or even directly work for
your main input supplier, you could provide more knowledge and even services like
spraying. Moving tiny lots of inventory is expensive and makes you an unreliable source
for your customers. At the same time, the larger suppliers are not actively moving out into
the rural areas, so many of your customers have no other convenient option—if they did not
buy from you, they would have to travel 30 or more kilometers to buy inputs.

12. Large Input
Supply Firm

13. You are a larger retailer/wholesaler of a range of agriculture products (chemicals, seeds,
tools, small equipment). You sell through your own network of retail stores as well as to
other retailers. You are interested in expanding sales to smallholders in rural areas, but you
have not tried many new promotional or marketing efforts except for a bit of radio
advertising. The main issues you see in expanding the smallholder market are farmer
know-how, government and donor policies to subsidize inputs to farmers, and the distance
to your customers. Despite these challenges, you see an opportunity to expand sales by
targeting the small but growing emerging commercial farmer segment of paddy producers.
You know you cannot afford to serve this segment by opening more stores or offering
credit—contrary to the view held my many experts in the field. Bank finance is expensive if
you could get it, which does not seem possible based on the few meetings you had with
bankers. You have heard of the ideas to increase sales through community agents or
representatives at local markets, but you have not tried these ideas. You have also noticed
the growth of informal spraying services and see this as a possible opportunity to sell more
crop protection products, but you are concerned about appropriate application and safe
handling, especially if the sprayer ruins a farmer’s field and you or your product get blamed.
A real issue for you is the government’s control of the seed industry resulting in only one
variety for white rice that is not bad, but has not been improved for years. You are sure that
the seed from imported rice is much better.

14. Small-Scale
Paddy Farmer

15. You farm about 1 hectare(ha) using traditional methods and have gotten yields around
2.5MT/ha from your upland rice field. You have family and friends who plant lowland rice
and get higher yields of around 3.5MT/ha. But they work much harder, and traders often
take advantage of their need to sell during harvest time. You try to manage your cash
better, but you just cannot refuse a family member in need if you have cash in your pocket.
You wish you had options to use available cash—like buying next year’s inputs during
harvest time—but none are available to you. Traders seem to know when you run out of
cash and use that against you during negotiations. You have learned about better farm and
cash management practices in training courses given by various donor programs. They
make sense but you are discouraged by very real risks in putting them into practice: the
social risk of postponing or limiting some responsibilities in order shift resources to your rice
field and the economic risk in terms of the uncertainty and distrust with other actors with
whom you will have to relate (agro-dealers, traders, etc).
You would like to make more money from your paddy production and you know new
investments are needed, but given your social responsibilities, the investments are
expensive and risky. You can get inputs from a local SME dealer, but she has only a few
things and they are expensive.Often she can’t even tell me how to use the products. You
usually prefer to travel the 30 km to the next closest input shop, but they are busy during
planting season and uninterested to provide much advice. You have heard that some
farmers hire sprayers to apply pesticides and you have even heard that they can spray
directly on your crop to kill weeds. It seems like these services are hard to find and would
be expensive. At the same time, you are interested to learn more about spraying, but not
sure where to find good information. You have a mobile phone on which you can get pricing
information, but your priority is often getting paid quickly for your crop. So you often do take
a lower price than you know is paid elsewhere. To compensate for the way traders take
advantage of your desperate cash position, sometimes you add some stones and other
stuff to increase the weight.

16. Small-Scale
Emerging
Commercial
Paddy Farmer

17. You have the problems of both the commercial farmer and the smallholder farmer in that
you do not have the resources to import your own seed or your own equipment directly. As
a result, you have to use the best seed available locally and access the equipment you
need second-hand or through service providers. As is also the case for commercial
farmers, the bank loans are very expensive and the terms would make it very difficult for
you to repay. Even with these issues, you are still able to achieve reasonable yields of 4 to
5MT/ha for non-irrigated, but mostly mechanized paddy production. You would really like to
expand as well as move to irrigated rice production, but you would like to do soon contract
with a buyer. Building a link with a reliable buyer that could work with you to grow your
production would be ideal, but you are unsure how to develop such a relationship.
Paddy production has provided you with increasing income over the past few years, but
you are hitting limitations on moving to the next level. Bank finance is very hard for you
since banks want collateral you don’t have. At the same time there are few equipment
dealers and even fewer viable second-hand equipment options, so equipment is
expensive—especially if you factor in your time and travel to investigate options. On the
market side, there seems to be a lot of demand for quality paddy, but millers and traders
rarely engage you in a way that leads to a more reliable market. Their cash flow and
negotiating tactics always result in substantial uncertainty. If you could improve the market
side of your business, you would consider organizing nearby small farmers to help them
improve their production and sales for a small fee or commission. At some point, if you
remain limited in your ability to grow your paddy farm, you may need to move to another
crop that has fewer obstacles to growth.

18. Tractor Service
Provider

19. You own a tractor that you received from a special program run by the last government.
You had family in the regional government, so they helped link you to the program. The
tractor was imported from China and works pretty well, but spare parts are very hard to
find. You have a town mechanic who has helped keep your tractor running most of the
time. You own/operate the only tractor in the region, and there are no places to purchase
tractors nearby. There are a few equipment outlets in the capital city but they are not
organized for people like you to go in and buy equipment. Bank finance is not an option as
it is expensive, or at least that is what you understand. More importantly, bank staff do not
provide any assistance or support in helping you access a loan.
The first priority for your tractor service is your family and friends. Once you are finished
with them, you can sell your services primarily to the larger farmers in the area. Because
there are few tractors, you get many requests for your service and you see a real
opportunity to expand your business ifyou could get another tractor. You price your
serviceby hectare. You know this price covers the cost of petrol and a bit for you or the
driver, but you are thinking you might need to also factor in spare parts and maintenance
costs when pricing. You think that a small price increase would not matter too much to
demand given the pretty big jumps in yields from your services—sometimes as much as
20%.
You are concerned that if a part breaks and is not available or cannot be creatively fixed,
which is likely, it would be months before you could get the tractor up and running again.
You are also aware that there is a good chance that some parts might not be possible to
import at a reasonable price. The opportunity to grow your business is there, but many key
elements (equipment, spare parts, financing) are missing or not working well for you to take
advantage of the opportunity.

20. Ministry Of
Agriculture
Official

21. You are in charge of a government program designed to bring farmers together on a single
piece of land so that they can get services such as tillage,tractor maintenance and repair.
You have met with some international experts that have questioned the wisdom of a
government program that sell inputs and buys crop from farmers in competition with private
sector entities. You are not too concerned because this program because it is good politics
and good for the smallholders to have a sure market at a good price. Still, it is unclear even
to you how to pay for this scheme since you are aware that paying above market prices for
paddy in the past has resulted in large losses for government programs. Your program is
also linked to a program providing tractors at preferential financing rates to regional
constituents whowill provide services to these organized farms. You are not directly
involved in that program, but know that without mechanization, the value of bringing
farmers together on a single large piece of land is less valuable.
You are well placed in the Ministry and you realize that this position can get you even
further in your political career. Given that the private sector seems unable or unwilling to
engage small farmers, the government had to do something. Your first pilot resulted in
some problems in buying the crop because funding was not secured in time. But you did
get 100 tractors to constituents in the regions at deep discounts and with very good (well
below market) interest rates. The tractors went to important and very influential regional
party members that the Government could trust to deliver the services. With this program
and the fertilizer subsidy program, the farmers should have no problems generating a good
return on their crop. You have not organized the funding to grow this program, although you
have stated targets to substantially increase the program over the next two years. In recent
meetings with private sector processors, you were surprised by their very negative
response: ―this programs hurts our business‖, they said. You chose to ignore their concerns
because it is commonly known in your circles that most processors exploit small farmers.

22. Rural Bank
Manager

23. You manage a small rural bank. The bank has minimal capital requirements and limited
ability to take on risk in technical areas where the bank has capacity or experience like
direct financing of agricultural production. Most of your loans are salary or trading loans.
These loans turn over quickly, rarely default, and provide the bank a very good return. You
realize that banks like yours should be trying to lend to the agricultural sector, but not at the
expense of the bank’s viability. With that said, if you could get assistance to lend to the
agricultural sector—and especially in rice, the primary farmed crop in your area—you would
be more than supportive. Your views have hardened a bit on the dangers of agriculture
lending because you know that a donor project in a different part of the country pushed a
few banks to get into agricultural lending with very poor consequences for the banks.
Beyond the substantial risks of agricultural lending, you have never thought farmers fully
understood the requirement to pay back loans. You think that is partially because of various
government programs that lent to farmers and never sanctioned farmers for failure to
repay. You also know of a few donor programs that have not required farmers to repay
loans at all. A good repayment culture needs to be fostered before you would be
comfortable lending to farmers. If someone else took on most of the risk then you would
consider providing a few agriculture loans.
Beyond the risk of lending, you would need to substantially improve the skills of your staff
to understand and price risk in agriculture and to adapt the products to meet agricultural
client needs. At present, the only loan products you have are inappropriate for them
because the terms do not match agricultural cycles. Collateral requirements are also a
problem since very few farmers or even agricultural traders have enough acceptable
collateral. You have heard of lending to processors or input firms who then on-lend to
farmers, but you have not had any clients like that enter your bank. You will have to be
more aggressive in marketing your services via SMS technology or radio. You think the key
for any marketing will be to lead with education, as financial literacy is limited in your area.

24. Credit Officer
from a Large
Bank

25. You work for a large bank in the capital city.Your bank does well buying treasury bills,
providing salary loans, lending to traders, and on occasion lending to larger corporate
clients. You have had a few large agriculture-related firms come inseeking loans. These
firms are current bank customers and have collateral, so theoretically they meet the basic
requirements to get a loan. However you are still concerned about repayment. For you
collateral is critical because business is inherently risky and you need to assurance that the
bank will get its money back. Agriculture has additional risks,at this point you do not see the
purpose of even talking to an agricultural business or farmer.Your bank probably would not
lend to a farmer unless someone else took on all the risk. It is really the responsibility of the
government or maybe donors to deal with farmers, since they are poor.
For your bank to change its practices, you would need to see consistent trends in growth in
the agricultural sector. Local rice in particular seems to be losing market share to imported
rice. If the rice sector began to compete more effectively, then as a bank you would need to
organize specific capacity to deal with agricultural clients. The priorities in upgrading your
capacity would include credit analysis skills, products, marketing/public education
campaigns, monitoring systems, and collection processes.

26. Spray Service
Provider

27. You have backpack sprayers with which you and your brother spray all your
family fields. In the last few years, some neighbors have paid you to spray their
fields, and that provided a little extra money. You have actually started thinking
about whether you could turn spraying into a real business, as you have seen in
a nearby town. You know how to apply a specific pesticide that is commonly
used in the region, but you have heard that others work better. You have also
heard about herbicides that could be very useful to your family and others in the
community. Chemicals are dangerous, and you have seen a friend misuse a
chemical and do a lot of damage to the crop and even burn himself. It would be
important to learn more about safely using these chemicals if you really want to
move forward with the idea of making a business from spraying. Maybe you
could talk with the input firm that you buy your chemicals from, but you are
unsure how to talk to them about the idea.

28. Agricultural
Extension
Officer

29. You are an agricultural extension officer in an area that produces a lot of rice—
mostly local rice from multiple varieties at very low yields. You have a good
understanding of what farmers need to change: better seeds and better on-farm
practices including starting with transplanting, planting in rows and field
maintenance. However, you have no transport resources and you have to cover
more than a thousand farmers. You are also not very happy that you get paid
inconsistently. One time last year you did not get paid for three months. Given
the low and inconsistent pay, you often take side jobs with donors and on
occasion input firms and aggregators. These opportunities, though well paid, are
few and far between. One time, you did go on a regional radio station to talk
about rice, and that worked well, but you have not gone back.