This GEMS4 document summarizes the project’s Intervention for Linking Smallholder Rice Farmers to Commercial Mills using the Agro-support service provision. The intervention demonstrates how using the private sector to provide extension and financial support services to farmers can improve the farmer and processor linkage and create a win-win business and income growth impact.

1. GEMS4 INTERVENTION
SUMMARY
AGRO-SUPPORT SERVICE PROVISION
This GEMS4 document summarizes the project’s Intervention for Linking
Smallholder Rice Farmers to Commercial Mills using the Agro-support
service provision. The intervention demonstrates how using the private
sector to provide extension and financial support services to farmers can
improve the farmer and processor linkage and create a win-win business
and income growth impact.
GEMS4 Project Funded by the World Bank and DFID, the aim of the Growth and Employment in States (GEMS) suite of
projects was to increase growth, income and employment, especially for poor men and women: this by improving
competitiveness in strategically important Nigerian sectors in selected states and nationally. Wholly-funded by DFID, the
target of the GEMS4 project component was Nigeria’s wholesale and retail sector.
As in other target markets, GEMS4 used the Making Markets Work Better for the Poor (M4P) approach targeting
sustainable improvements in market outcomes by altering the incentives that the market as a system provides to
participants. It addressed major government and market failures in the system thus bringing about systemic change.
Improving the incomes of the poor, especially women and youth, is an explicit goal of M4P programmes. The GEMS4
project component was implemented over 5.5 years (2012-17).
RICE SECTOR and AGRO SERVICES
CONTEXT...
While Nigeria is the largest rice producer in West Africa,
it is also the second largest importer of rice in the world
with nearly half of domestic demand for rice met by
importation (3 million MT). Even going back 20 years,
about half of domestic demand has been met by local
production, currently at approximately 3.8 million
metric tons per annum. For the same period, the
demand for rice in Nigeria has been on a steady rise,
mainly because of changing consumer preferences and
it is predicted to rise at a rate of 4.5% per annum.
Consequently, a major constraint for the rice millers is
the lack of consistent, reliable supply of quality paddy.
Most commercial mills operated below their capacity
and preferred to import semi-finished rice (brown rice)
than process the poor quality local paddy. The mills
often require a large investment to develop a reliable
supply and most mills currently run a ‘mixed ad-hoc’
model of supply. This has resulted in varying quality of
paddy which has affected the quality of milled rice
down the chain.
Key Constraints Addressed:
A major constraint for the rice millers is the lack of
consistent, reliable supply of quality paddy and often
the mills require large investment to develop a reliable
supply. Most mills currently run a ‘mixed ad-hoc’ model
of supply, resulting in varying quality of paddy which
affects the quality of milled rice down the chain.
Building upon the success of the linking farmers to
UMZA mill GEMS4 developed a more sustainable,
market led solution to farmers’ coordination, linkage,
access to appropriate inputs, skills training and finance,
that would result to better yield, quality, increase
incomes and create new jobs.
Rice farm in Auyo
WHAT GEMS4 DID...
Prepared by GEMS4, the DFID-Funded Project Supporting the Nigerian Wholesale and Retail Sector Implemented by Coffey
International Development | December 2017

2. GEMS4 INTERVENTION
SUMMARY
AGRO-SUPPORT SERVICE PROVISION
To address the identified constraints, GEMS4 developed a private
sector led support service provision model and identified partners
who were willing to adopt the model.
The programme also facilitated partnerships between the support
service providers and other players in the value chain
GEMS 4 provided support to the partners for
mobilisation and start up in form of grants to
commence the service provision
INTERVENTION SEQUENCING...
• Identify the constraints
• Develop the intervention concept note
• Identify and engage with willing partners
• Agree a support mechanism
• Facilitating partnerships with processors, input providers and other key value chain players
• Technical Support to service providers
• Monitoring and Evaluation
ABOVE from LEFT: (1) Mechanical threshing of rice, (2) Farmers Business School Training, (3) Input distribution by GSAV to farmers (4) Manual
threshing and winnowing of rice in Jigawa state.
IMPACT... KEY LESSONS...
• Over 8,000 farmers with access to integrated
agro services - Jigawa, Kano and Kaduna)
• 50% increase in farmers’ yield
• 54% premium pricing for Babban Gona farmers
• Increase in demand for the farmers’ produce
• Over 300 jobs created
• 10% women beneficiaries
• Community leaders are KEY stakeholders to any
farmer engagement
• Aggregators remain major actors in the system due to
social ties and relationships
• Commercial mills are willing to pay a premium price
for good quality paddy
• Innovative payments systems, which benefit both
farmers and millers are required to improve the
system
SUSTAINABILITY and EXIT...
• Following success of the pilot, GEMS4 has carried out dissemination in three states (Jigawa, Kano, and Kaduna) to
present the model to potential agribusiness stakeholders and major off-takers for replication in other value chains.
There are plans to also share this with the Federal Ministry of Agriculture and CBN with the aim of modifying the
anchor borrowers scheme to make provision for private sector participation in the scheme. Adoption of this by the
government agencies could provide access to hundreds of thousands of poor farmers in Nigeria. Similarly, GEMS4
is planning closing dissemination sometimes to wider stakeholder audiences. Also, GEMS4 is working with Dalberg
International Development to package and promote agro-services investment including specific company match-
making.
Prepared by GEMS4, the DFID-Funded Project Supporting the Nigerian Wholesale and Retail Sector Implemented by Coffey
International Development | December 2017

3. GEMS4 INTERVENTION
SUMMARY
AGRO-SUPPORT SERVICE PROVISION
PUBLIC and PRIVATE SECTOR OPPORTUNITIES...
Private Sector Investment in Business Opportunities such as:
• Private Sector Investment in Business Opportunities
• Investment in transport and logistics for movement of produce to processing plant;
• Investment in rice milling plants;
• Investment in out-grower schemes for farmers;
• Post-harvest services
• Investment in small agricultural machineries
• Provision of storage facilities
Public Sector Development Investment Opportunities in such as: Regularly updating cluster mapping information;
• Provision and upgrading of selective market infrastructure (e.g. irrigation, roads, market centres);
• Creating an enabling environment for private sector-driven agricultural growth (e.g. policy, public-private economic
growth initiatives);
• Extension services for farmers and small traders; coordination, especially information sharing.
For further information, please contact Kasia Michno at Coffey
International Development: Katarzyna.Michno@coffey.com
Prepared by GEMS4, the DFID-Funded Project Supporting the Nigerian Wholesale and Retail Sector Implemented by Coffey
International Development | December 2017