Demonstration Farms – who should pay?

So back in March I wrote that “… the farmer’s success is tightly coupled to my success as an input dealer”. A great assertion, but in April I had a number of interactions with input dealers that started to reveal why this is more challenging in practice.

Current bad situation: A common characterization of the agri-inputs sector in Ghana is that it’s a series of trader relationships. Each person in the supply chain buys the product, adds their costs and their margins and sells at a slightly higher cost. There’s not much thought about farmer usage and the implications on business.

Ideal situation: All players in the inputs chain are invested in understanding farmer behaviours and coupling products with excellent advice and follow-up customer service to see what’s working and what’s not.

A step in the right direction? One hypothesis of the project I’m working on is that if private input firms  are doing demonstration farms where they show the proper use of all inputs, let farmers ask questions and get practical experience, then they will sell more and also be forced to develop the information/education aspect of their business. It builds a face-to-face relationship, follows the “seeing is believing” concept and gives the firm immediate field-level feedback.

“Facilitating” demos: In practice, a market facilitation approach means a field staff will sit with an input retailer, make a strong case for the business to invest their own resources in demonstrations. It puts the pressure on the project to supply good ideas, and gives the firm the ultimate decision on if they want to drive an idea forward or not.

Real responses: “That’s not my duty. That’s the responsibility of the importer to finance demonstrations. Why would I invest my own resources in promoting somebody else’s products? I’m a DISTRIBUTOR, so I can facilitate the process, but I don’t want to pay for it.”

“I shouldn’t bear the marketing costs. It should be paid for by the importer.”

Inputs Supply Chain

It’s crazy how once you hit the field and get real feedback on an idea, the complexity can just blossom in front of your nose. It brings a couple of different questions and examples to mind that I’ll end with:

(1)    There ARE retailers who finance their own demonstrations, but these tend to people who already acknowledge that the education/information they are offering is helping them differentiate their business from competitors. How do we change the mindsets of those who want to see importers finance demos?

(2)    We’re also working with importers to help them do demonstrations, but the challenge is often making clear the link between a farmer in a rural village and the nearest retailer (whose shop is “Mike’s inputs shop”) to make the next purchase of that product that was demonstrated. If the importer does the demo themselves directly, they actually cut the retailer out of the chain.

(3)    There’s another whole ball game I haven’t touch – which is project-funded demonstration farms, pushed in the name of “demand creation”. I think the ownership distinction makes a big difference.