IFDC

AIARD Annual Conference 2011 Agro-Dealer Development:

Developing and Emerging Markets

by

John Allgood - IFDC

IFDC

Raw Material Supplier

Basic Manufacturer

Broker/Importer

Wholesaler Dealer Farmer

Agriculture Input Market Value Chain (Fertilizer)

Agro-Input Dealers provide the final value chain link with farmers.

The volume of products handled by agro-dealers is very high. In 2009, farmers worldwide used 162 million mt of plant nutrients or ~425 million mt of fertilizers.

IFDC

Key Functions of Agro-Dealers

Product Supply—Timely, Quality, Package Size

Promotion/Education—Advisory Services on Proper Use, Safety Issues, Post-Harvest

Pricing—Price Determination Physical Distribution—Transportation, Storage

Macro-Environmental Factors—Government Policy, Literacy Rates, etc.—Influence the role of Dealers

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International Fertilizer Price Trends

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Agro-Dealers’ Influence on Fertilizer Prices at the Farm Level Is Low

Source: IFDC 2000

IFDCThe IFDC Approach to agro-dealer development is within

the overall organizational philosophy on agriculture development which encompasses two basic premises:

Improved use of agricultural inputs such as fertilizers, high-quality seed and crop protection products is necessary (+ water) to sustainable improvement in agricultural productivity per unit of land.

Efficiency in resource utilization can be maximized by employing and market-oriented approach to development.

GOAL: To foster the development of agro-dealers so that they may effectively service farmers’ immediate and long-term agricultural input needs.

Increased agricultural productivity/improved economic returns to farmers from input use.

Long-term economic gains to farmers.

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Key Factors in Design of Interventions

Program Goal/Objective Dealer Development Is a Major Component Dealer Development Is Primary Dealer Development Is Complimentary

Situation Analysis Stage of Development of Agro-Input Markets Marketing Environment: Macro and Micro Role of Public/Private Sector Stakeholder Interest

Resource Availability Funds Program Duration Opportunity to Leverage Resources

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Some Examples of Dealer “Shops”

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Uganda Dealer

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Nigeria Dealer

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Afghan Dealer

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Bangladesh Dealer

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Key Focal Areas and Intervention Activities

Technical Knowledge Transfer

Business Acumen Development

Business Linkage Development

Strengthening Support Systems

Create the Opportunity for Systemic, Market-Led Development

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Technical Knowledge Transfer

Improve Dealer’s Knowledge and Understanding of Agricultural Input ProductsField performance characteristicsSafe use, handling, storageProper application = best performance & + economic returnsProblem analysis

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Technical Knowledge Transfer (Continued)

Capacity Building Interventions:Classroom-type trainingCollaborative field demonstrations and field days“One-on-one” technical support

Promotion Support to Build DemandDemonstrationPoint-of-purchase materialsPromotional giveawaysTrade shows/agricultural fairs

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IFDC-Agri-Input Dealer Training in Malawi

IFDC

IFDC

Business Acumen Development

Strategy: Improve dealer’s knowledge and skills for business management Management Marketing – planning Finance and accounting – Recordkeeping and

understanding total cost of “doing” business Credit management

Capacity Building Interventions Classroom-type training Direct technical assistance Provide resource materials – handbooks, wall

hangings, technical, leaflets

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Business Linkage Development

Strategy: Develop and strengthen business relationships along the value chain Logistics planning Market information Technology introduction Credit opportunities

Capacity Building Interventions Classroom-type training/workshops Study tours/trade missions Agricultural fairs Public-private partnerships Trade/market intelligence bulletins

IFDC

IFDC

Strengthening Support Systems

Strategy: Improve the public and private support systems that impact dealer performanceSystems That Impact Dealer Performance

Technology introduction Market information Policy (policy advocacy) Education Credit

Intervention Policy analysis – Constraint identification/recommended reforms Associations Training trainers Credit

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Farmers Training

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Monitoring and Evaluation

Ideally, each intervention should include an M&E component to assess:Progress in Achievement of Performance Targets

Training Programs Completed Dealer Handbooks Developed/Disseminated Wall Hangings Prepared Disseminated

Progress In Achievement of Results Number of New Dealers Established Improved Advisory Services for Farmers Geographic Extension of Dealer Networks to Remote Areas

Impact Increased Competitiveness Increased Sales

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Key Lessons Learned

Understand the challenge – “One approach serves all” philosophy doesn’t work

Emphasize stakeholder participation – public sector, NGOs, PPPs

Direct, one-on-one assistance and group participation with hands-on interaction are particularly effective in agro-dealer training

Continuity and direction of support are crucial

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“…agriculture is our wisest pursuit, because it will, in the end,

contribute most to real health, good morals and happiness.”

Letter from

Thomas Jefferson to George Washington - 1787

IFDC

Thank YouThank You