The Top Five Challenges You Need to Know and Which Frustrate Agricultural Input Retailers in Emerging Markets
Globally, agricultural input retailers supply farmers with products and services needed to grow their crops and business. The products can include seeds, feed, nutrients, pesticides, equipment, and technology. Often, they provide farmers with consultative services such as crop input information, spraying, and range in size from small, family-managed business to cooperatives, and larger companies. They can also be an important credit source for farmers.
Because of their central role in the agricultural value chain, it is crucial that development practitioners focus on input suppliers as part of their programmatic intervention to help farmers in emerging economies.
This article lists the top five issues constraining input retailers and is part one of a two-part series about input retailers.
Long distances for input retailers to source their goods on roads with poor infrastructure (which worsen in the rainy season) is one of the greatest setbacks to reaching farmers. The increase in distance and transport costs affect the price at which they can sell their goods or services and creates business constraints for the input retailer to be competitive and accessible for the smallholder.
Lack of market information
As climate change and pest/insect resistance increasingly affect smallholder farmers, input retailers are also being required to adapt. Input retailers find they require further training for agricultural extension research, updated agricultural information and products. However, input retailers themselves find it difficult to access the latest market information.
Demand for inputs by most smallholder farmers is often for very small quantities, due to farmer’s lack of financial resources, poor organization, and seasonal changes. The variety of sizes in fertilizer packaging is also a barrier for some farmers who can only purchase a few kilos at time. This makes it increasingly difficult for input retailers to provide farmers at the right time, in the right place with required quality inputs.
Lack of finance
Inadequate funding for business operations is a major challenge faced by input retailers. Often this leads to their inability to stock their shelves and shops adequately and miss providing farmers with appropriate inputs.
Limited business knowledge
In developing communities input retailers often work informally, without the business support and training required to grow. Business skills to support accounting, marketing, overall management and employees were very immature which can lead to inefficiencies in operations.
Knowing how to appropriately market or offer new promotions is challenging for retailers who are not very skilled. This results in smaller market reach on the upstream and on the downstream, this affects the retailers purchasing power to get inputs from their suppliers.
UPCOMING! In part 2 of this series, we will be discussing the solutions BUT we’d like to hear what YOU have to say. Join our online event below to contribute to the discussion.
SCOPEinsight and Cultivating New Frontiers in Agriculture (CNFA) will be hosting a live Twitter chat with industry leaders this Friday, June 7, on the role of agriculture inputs in improving productivity. The chat will begin at 9:30am Washington DC time (3:30pm Amsterdam, and 4:30pm Nairobi time). This #AgChat chat will be led by CNFA Program Director, Margaret Anderson and Mascha Middelbeek SCOPEinsight’s Farmer Organization and Agribusiness Expert. Together, we will discuss why improving access to high-quality agricultural inputs and services is key to increasing agricultural productivity and addressing food security challenges.
Tweet us your questions @CNFA @SCOPEinsight using #AgChat.