Helping smallholder farmers get better yields
“I am really satisfied when I see farmers get good yields using the inputs I sell to them,” says Sirpato Otiso, an agro-dealer who supplies agricultural inputs including vegetable seeds, animal feed, and simple agricultural tools to farmers in the Sidama Zone of southern Ethiopia. Sirpato was one of the 32 agro-dealers GRAD established so that farmers can access high quality inputs close to home and at an affordable cost. He’s been selling in his community for the past five years and, eighteen months after the project closed, his business is continuing to earn a profit.
Most poor farmers in Ethiopia can’t access the improved seeds, tools, and fertilizers they need. Shops that do sell agricultural inputs are usually located in cities or large towns and target large-scale commercial farmers. They also sell in quantities beyond the needs or budgets of small-holder farmers. GRAD introduced the agro-dealership model to overcome those problems. The model’s success comes from building market systems, rather than simply giving inputs to farmers. GRAD worked with community members like Sirpato, people with some business experience and an interest in expanding into agricultural input sales.
Through GRAD, Sirpato and the other new agro-dealers got training in business skills, like assessing market demand. They also got technical training so they could show customers how to use the inputs they supply. They then prepared business plan applications and received grants from the project to renovate, expand and equip their shops. GRAD also set up business-to-business meetings and exchange visits to help shop owners connect to a variety of input suppliers. In this case, GRAD took Sirpato to the nearby cities of Hawassa and Shashemene to meet input suppliers; he still goes to those cities to buy animal feed in bulk to supply local demand.
For Sirpato, the most important aspect of the GRAD training was learning the importance of providing high quality materials, so that his customers see a benefit. Sirapato said, “For me, being in business goes beyond profit. The most important thing is when I witness farmers get a better harvest because of the inputs I sell them. Once they get a good yield, they come to my shop again and again.”
GRAD helped Sirpato assess market demand and he is stocking what farmers in his area need. His client base has expanded to more than 3,000, including both GRAD and non-GRAD households. Sirpato promotes his business by handing out business cards, working with the local agriculture office for referrals, and talking to farmers on market days. New customers come to his shop all the time, especially on market days. One innovation Sirpato has brought to the model is to sell inputs to some farmers on credit. “I trust my customers and understand the shortages they sometimes encounter. I am also confident that the quality of the inputs I supply to them will help them improve production, so I know that if I sell on credit they will be able to pay me back.”
Sirpato’s net profit of about 1,000 birr ($36) a month is more than he was earning before GRAD but much less than some other agro-dealers are earning. His profits are often constrained because of supply chain problems. Sirpato says, “For the last ten months, I haven’t been able to buy the cabbage seed that farmers like best. I checked the nearby big cities—Hawassa and Shashemene—but could not find any to buy. That is why my income went down. But I’m still selling a lot of animal feed”. The income from his agro-dealership shop complements his income from his own farm and an apiculture shop he owns. The income from these three livelihood options allows Sirpato to buy food and clothes for his family and pay for his children to go to school. It also gives him options to fall back on if there is a crisis.
GRAD helped support entrepreneurs who are already active in their community to create, expand and/or diversify their businesses. The project anchored its training content and supply chains in existing markets, so that the agro-dealers could keep growing even without additional training or support from the project. It also helped them with grants to renovate their infrastructure and jump-start their marketing strategies to bring in customers. Once they got started, the training and market connections help agro-dealers like Sirpato have thriving, sustainable businesses that continue serving some of the poorest farmers in Ethiopia.