I am working with input retailers in Yendi district to understand their challenges and facilitate change that is beneficial to their business and beneficial to farmers. Input retailers sell agriculture chemicals, seeds and/or fertilizers to farmers. Farmers have witnessed that the chemicals can have adverse affects on crops and the user’s health.
One way to address this challenge through the private sector is to encourage input retailers to develop a better relationship with existing farmers that make extra money by spraying crops for a fee. Input retailers have the knowledge that sprayers require, more business for sprayers means more business for retailers and farmers benefit from proper chemical use. The service would be tied closely to the business so that farmers know who to turn to when they need proper spraying service.
The problem in implementing this service is that the retailers do not see the market this way. The business I’m working with said that sprayers will fear he is trying to monopolize the market and will no longer purchase his chemicals. The reason he thinks this way is that he and other input retailers believe that they each have their own set of customers. Anyone that is a customer of their business only patronizes their business and does not move to others. The accuracy of this statement may be suspect, but it seems to be the belief amongst dealers. Therefore, the only competition is for new acquisitions rather than competing with each other for customers already buying chemicals.
This spraying service or other attempts to differentiate a business from its competition have the potential to seriously benefit farmers. The farmer is the direct customer of the retailer so it is in the retailer’s best interest to differentiate itself by providing some benefit to farmers. If the retailer is not motivated by competition and expanding his market share through improved services for farmers, then the motivation to serve farmers has to come from an altruistic sense of duty. With competition, there is an increased incentive for retailers to provide a service that is beneficial for farmers without any requirement of altruism.
A market ripe with competition in Yendi requires a shift in mindsets. Either the input retailers are correct and farmers need to see the benefits of competition or retailers need to see that farmers want a much more competitive market. A way to show players in the market that this really is a win/win situation is to implement competition on a small scale. Ideally the pilot would encompass enough to test how the market reacts but will be small enough to mitigate risk in the case of failure.
One way to test the waters is to select one sprayer and one village as testing grounds. If the pilot is representative of the scale, success demonstrates not only that farmers are receptive to the spraying service, but likely would be receptive to competition between retailers as well. Failure of the pilot demonstrates that farmers are not receptive to the spraying service but it would take further analysis to determine whether or not it was due to the service itself or if they really do not trust a competitive input retailer.
3 comments
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Good to see such thoughtful exchange happening here at this EWB blog.
I think you need to reconsider your assumptions here, Evan.
First of all, I question that input retailers do in fact have the knowledge that “sprayers” and farmers require. How many retailers have actually farmed, or have significant training in actual pest management and the practices of safe and well-planned spraying operations in a variety of crops?
The service needs to be more nuanced around pest management and it requires a broader skill set and experience; it requires scouting (monitoring) for damage and discerning the need for, and cause of damage, that may be observed. Non-chemical means of crop health management are important values, e.g., spacing and fertility management. “Spraying” is a “silver bullet” mind set, but plant protection and integrated pest management are knowledge-driven skill sets that do not depend on a regular spraying schedule. Pest management services are what should be developed and promoted.
If the retailer is indeed broadly experienced and truly knowledgeable (beyond standard pesticide management training offered for maintaining certification — an important step in the right direction, to be sure), then he will train agents to operate on his behalf, and if they’re good, the word will spread.
I find it curious that when most documents discuss “agri-inputs” — fertilizers and seeds are implied, and pesticides are not mentioned or are under-emphasized, yet pesticides are in a different class all together and require special skill and knowledge.
Second, consider that there may indeed be a cultural differentiation of clientele with particular retailers by reason of ethnicity, familial linkages and geographic origin, or friendship. When you see a market place with many stands of identical wares, the model depends upon that sort clientele differentiation: each vendor has her own clientele base. Yes, it may indeed be that each “customer of their business only patronizes their business and does not move to others.”
Of course, a service provider/retailer may well distinguish him/herself by quality service and customer outreach, advertising, etc.
Just my 2-cents’ worth, from an interloper who wishes you all well, and success in your support to an emerging, and let us trust, sustainable commercial (entering market economy, has nothing to do with scale) agriculture.
Walter Knausenberger (I won’t be able to monitor this blog very much after July 26th, 2011)
I just to add another point, that provision of planting services cold indeed be a good business proposition–properly conceived and based on bona fide skills and experience, including about proper soil preparation and fertility, plant spacing requirements, use of planters like dibblers, pest management, etc.
Also much needed are harvesting and threshing services, and related quality-assurance measures.