Enterprises designed to serve the smallholder farmer

By Waktola Wakgari 17 July 2014

A farmer sorts tomatoes in Ethiopia. Here and elsewhere around the world, smallholders often lack farm inputs and information to increase productivity. Photo by: ­­Stephan Bachenheimer/ World Bank / CC BY-NC-ND

For 70 percent of the developing world, agriculture is the main source of income and employment. In Ethiopia, agriculture accounts for almost half of the country’s gross domestic product and 90 percent of its exports. It’s the main source of income for more than 85 percent of the population, which these days is nearing 100 million people.

Despite its mass importance, agriculture in Ethiopia is characterized by low productivity, with most smallholder farmers having limited access to inputs, information and services. Smallholders also suffer from a lack of training on the productive benefits of quality inputs and improved cultivation practices. Unfortunately, this makes for an uphill plight if one wants to rise out of poverty.

Imagine you are one of these smallholder farmers. Imagine you know that an improvement in the quality of your life — your ability to better feed your family, to send your children to school, to access proper health care — depends on what you are able to harvest and sell at the market.

But what if you could access the inputs you need at a store that guarantees high quality and fair prices? What if you could talk to an expert agronomist or veterinarian when you have a question or concern? What if there was a place to learn about how to change the way you manage your farm and livestock so that the land you cultivate and animals you raise yield a higher quantity and quality range of products?

Well, if you are a smallholder farmer in the Oromia Region of Ethiopia, things may be looking up. As part of a two-year pilot program funded by the U.S. Agency for International Development, the Commercial Farm Service Program is establishing what agriculture and livestock producers need most: an Ethiopian-owned one-stop shop where smallholder farmers can access the inputs, consultation and trainings they need to increase their yields and eventually improve their livelihoods.  

 Building a farm service center network in Ethiopia

The program is part of U.S. President Barack Obama's Feed the Future initiative, which aims to help vulnerable households participate in economic activities and bring jobs and income opportunities for rural households. The program is implemented by CNFA, a U.S.-based international development organization that focuses on stimulating economic growth through enterprise-based agricultural initiatives. CNFA has developed a series of input supply models, all of which are driven by and adapted to local production, markets, entrepreneurs and context.

Having had great success setting up businesses with this enterprise model in Georgia, Moldova and Afghanistan, CNFA and USAID are adapting this model to Africa for the first time.

The enterprises, known as farm service centers, are currently operational in six towns throughout Oromia: Ambo, Bishoftu, Dodola, Fiche, Nekemte and Shashamane. The enterprises were selected following a competitive application and business plan development process. Each FSC has uniform branding and logo usage and maintains a similar floor plan that includes a crop showroom, veterinary showroom, community training room, environmentally sound storage facilities and office space.

To build business and technical capacities, farm service center staff — which includes an agronomist and veterinarian — have received trainings on topics that range from business management and integrated pest management to environmental mitigation, marketing and communications. The program is also working to establish a wholesale buying PLC, or private limited company, that will be owned by and dedicated to serving the inventory needs of FSCs by linking them to national and international suppliers.

For each farm service center, USAID has dedicated $40,000. To promote buy-in and sustainability, the program also asked that, at the minimum, each selected grantee “match” USAID’s investment to the dollar. This means that by leveraging private sector investment, each FSC will have a minimum initial value of $80,000, a first for an Ethiopian business dedicated solely to serving the needs of smallholder farmers. How’s that for investment in a start-up?

But let’s get back to the customer here, the one I was asking you to imagine yourself as: the smallholder farmer.

So far, the positive reaction from customers has been astounding. Chaltu Senbetu, a customer of the Nekemte farm service center, said she had “never seen any other place in town that is as appealing to shop in, that is very clean and safe for medicines and that provides quality products on a timely basis.”  

When describing the immense value of accessible expert advice, Atsede Abate, a customer of the Ambo FSC, said: “I bought a calf and it became so sick and very close to death. I lost all my hope before I came to this center and got treatment for my animal. Now my calf is more than well and is even running around. I believe this center brings hope to many of us in the town as it is accessible, knowledgeable and welcoming.”

These two testimonies, and others like it, suggest that these farm service centers have quickly become a place where farmers access a diverse product line and the expert consultations and training they need to improve their crop and livestock yields. FSCs are enterprises designed to serve the smallholder.

Now, imagine yourself as that same farmer. Would you agree with Atsede that a farm service center can bring you hope of not just a better harvest, but of a better future?

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Feeding Development is an online conversation hosted by Devex in partnership with ACDI/VOCA, Chemonics, Fintrac, GAIN, Nestlé and Tetra Tech to reimagine solutions for a food-secure future from seed and soil to a healthy meal.

About the author

Waktola devex
Waktola Wakgari

Waktola Wakgari is an Ethiopian agricultural professional with more than 20 years work experience in both the public and private sectors. Wakgari worked with Golden Rose Agrofarms as the inputs marketing manager and researcher, and with the international firm BASF as the manager of ornamental and horticultural crops. Prior to his private sector agribusiness work, he also worked as a senior researcher and head of the entomology department for the Ethiopian Institute of Agricultural Research.

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