Kenya Agrodealer Strengthening Program

Kenya Agrodealer Strengthening Program

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Overview:

The three-year Kenya Agro-dealer Strengthening Program (KASP) project, made possible by a grant from the Alliance for Green Revolution in Africa (AGRA), strengthened Kenyan agro-dealers by providing training in business management and productive farming methods and increased access to agro-dealers in remote areas, ultimately raising rural incomes and growing household productivity.

CNFA worked to improve the input supply and output marketing distribution channels available to smallholder farmers in rural Kenya by expanding a commercially viable network of rural retail enterprises. KASP built on the foundation of existing agro-dealers in Kenya and expanded the network to cover 85 districts located in targeted agricultural areas across the country. Expansion of this network benefited smallholder farmers by greatly reducing the distance traveled to obtain needed equipment and farm inputs.

Program Approach:

  • Strengthened the business and technical skills of agro-dealers to better serve the needs of smallholder farmers;
  • Improved rural access to finance to jumpstart agro-dealer enterprises in areas where none existed;
  • Increased smallholder farmer access to larger markets to distribute their products by working with agro-dealers to develop and deliver basic output marketing training;
  • Increased farmer awareness of market opportunities, helping to link them to existing market channels;
  • Advanced agricultural policy advocacy by creating a mechanism for sustaining a public-private policy dialogue.
  • Agro-dealer Surveys:CNFA carried out agro-dealer surveys in all 85 districts of KASP operation and developed a comprehensive database of 5,156 agro-dealers, representing 52% of the estimated 10,000 agro-dealers in Kenya at the time. The team also developed GIS-based maps showing agro-dealer density and distribution. AGMARK boasts the most comprehensive database of agro-dealers in Kenya and is now used by leading stakeholders in the agricultural inputs industry;
  • Business Management and Technical Training:CNFA certified 1,976 agro-dealers through a six-module business management training program that included sessions on managing working capital, managing stocks, costing and pricing, selling and marketing, record keeping, and managing business relationships. CNFA/AGMARK also worked with input suppliers to develop and deliver technical training to agro-dealers in product knowledge, handling and safe use of pesticides, herbicides and fertilizers, and use of improved seed, using demonstration plots and farmer field days to increase awareness and demand for improved inputs. AGMARK-led training is now recognized by leading stakeholders in the inputs industry, including the Ministry of Agriculture, who has required individuals to be trained by AGMARK in order to participate in certain government subsidy programs;
  • National Accelerated Agricultural Input Access Program:NAAIAP is a government-sponsored program targeting resource-poor farmers to facilitate access to improved farm inputs with the aim of improving agricultural production of staple foods and promoting the use of quality farm inputs for increased productivity. Since its inception in 2008, KASP was involved in the program by preparing agro-dealers with business and technical skills and financial support to enable the agro-dealers to provide farmers with the correct information and inputs. The subsidy program worked with more than 60 districts (over 95,000 farmers) in the country. Those who benefited from the program received seeds and fertilizers valued at $7.8 million;
  • Credit and Financial Services:Credit guarantees are an important instrument in enabling small rural-based and start-up agro-dealers to access the credit necessary to stock their stores. CNFA/AGMARK deliberately chose to partner with wholesalers and microfinance institutions because the more established financial institutions do not target them. A matching investment facility targeted two areas: agro-dealer start-up and grain bulking and aggregation;
  • Technical Training:CNFA/AGMARK facilitated agro-dealer training on technical knowledge of inputs by input supply companies, in addition to project training on seeds, agrochemicals, veterinary and fertilizer companies, product knowledge, and safe use, to help teach farmers at the point of sale. Other stakeholders, including the Ministry of Agriculture (MOA), Agrochemical Association of Kenya (AAK), Pest Control and Produce Board (PCPB), Kenya Health Inspectorate Services (KEPHIS), Kenya Bureau of Standards (KBS), National Environmental Management Authority (NEMA), Kenya National Agro-dealers Association, and various financial institutions, were also involved in the trainings to ensure that the various components of agricultural input handling are exhausted. These interactions provided vital linkages for continued business and education relationships;
  • Output Marketing:CNFA strengthened the linkage between input and output distribution channels, and used the rural retailer as a link back to cash markets for their farmer customers. KASP provided agro-dealers with small matching grants to improve storage, install small processing facilities, and invest in transportation, packaging, and handling equipment for farmer outputs;
  • Demand Creation:Through demand creation activities, farmers were exposed to different methods of growing crops, the use of hybrid seeds, the use of veterinary products, and the proper handling of fertilizer and other farm products. The seed and fertilizer companies were able to penetrate the market after establishing demonstration plots and holding field days to show farmers, first-hand, the quality that could be produced with improved seed and fertilizer. Over 142,000 smallholder farmers attended KASP-sponsored farm input exhibitions and were exposed to a broad range of productivity-enhancing farm inputs and services;
  • Output Marketing:In all of its agro-dealer programs, CNFA strengthens linkages between input and output distribution channels and uses rural retailers as a link back to cash markets for their farmer customers. The agro-dealer serves as a point of market information, trades in outputs as well as inputs, and often engages in primary processing, storage, or handling. To strengthen these initiatives, KASP provided agro-dealers with small matching grants to improve their storage facilities, add small-scale processing capacity, and invest in transportation, packaging, and handling equipment for farmer outputs;
  • Association Development:KASP created a sustainable forum for advocacy on behalf of small businesses and agro-dealers throughout target districts and nationwide. CNFA has previously helped launch agro-dealer associations in Kenya and Tanzania and built their capabilities through trainings on organizational management, member services, networking and advocacy, and capacity building. CNFA/AGMARK activities led to the formation of 25 agro-dealer associations, including one national-level association, KENADA.

Agricultural Market Development Trust

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Overview:

The Improving the Productivity and Incomes of Smallholder Farmers in Western Kenya initiative aimed to expand the agricultural input distribution system across four key districts of Bungoma, Bondo, Siaya, and Vihiga. This pilot project focused on the development of rural agricultural input stockists, accessible to smallholder farmers and local communities. Through its locally registered Kenyan affiliate AGMARK, CNFA addressed the constraints in the input distribution system to stimulate the flow of productivity enhancing inputs and provide increased production, food security, and incomes to smallholders.

Program Approach:

  • Built the capacity for stockists via training in both agricultural inputs, product knowledge and safe use, and business management. CNFA leveraged both “embedded” services provided by companies on products and independent trainers for teaching business management skills;
  • Drafted six new training modules comprised of Working Capital Management, Stock Management, Selling and Marketing, Costing and Pricing, Record Keeping, and Managing Relations and Networks (Supply Companies, Banks, and GOA Agencies) information;
  • Used a Financial Innovation Fund to provide partial guarantees to reduce initial risk for companies and wholesalers interested in selling to project-supported stockists.

Business Connections Program

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Overview:

The two-year Business Connections Program, funded by the United States Agency for International Development (USAID) and the Government of Kazakhstan (GOKZ), built the capacity and competitiveness of Kazakhstani small-and medium-sized enterprises (SMEs) through modernization and expansion initiatives. The program was aligned with the GOKZ’s broader national development plan to diversify the economy through the development of Kazakhstani SMEs. The Business Connections Program also supported the objectives of the Ministry of Economic Development and Trade and the JSC Entrepreneurship Development Fund (DAMU). CNFA helped to identify expert agriculture trainers, plans, and volunteer experts, and helped create agriculture-related training materials to meet the program’s objectives.

Program Approach:

  • Identified qualified U.S. agricultural business experts to develop training curriculums and deliver business management courses to Kazakhstani participants;
  • Led selection process of participants, chosen to represent Kazakhstani companies in targeted industry sectors through study tours;
  • Facilitated three-week long study tours, which included industry-specific training, business meetings with U.S. companies, roundtable seminars, and trade shows;
  • Redesigned the DAMU business portal to encourage information sharing and distance learning among participants.

Private Sector Development Initiative

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Overview:

The four-year, $12 million Private Sector Development Initiative (PSDI), was implemented by the Volunteers for Economic Growth Alliance (VEGA) with CNFA, International Executive Service Corps (IESC), and Citizens Development Corps (CDC) as subcontractors. The goal of the project was to help expand a competitive private sector in Iraq by offering business training and other business support services to Iraqi entrepreneurs. As the leader of the Value Chain and Marketing Development, CNFA identified, assessed, and analyzed market opportunities throughout the entire agricultural value chain to ensure that interventions were appropriately targeted. Our team developed a comprehensive agribusiness strategy that addressed agribusiness development needs, priority sectors, and specific interventions to strengthen weaknesses within specific value chains.

Program Approach:

  • Training: The training component of PSDI was geared toward improving business skills and knowledge among the SME sector of the Iraqi private sector as well as among local SME supporting institutions (banks, Chambers of Commerce, business associations, and training institutions, among others);
  • Technical Assistance: We provided technical assistance through the use of paid American and Iraqi consultants. The technical assistance component was designed to reinforce the skills developed in training programs and to complement the provision of grants when possible;
  • Grants: CNFA was responsible for the selection of grantees and disbursement of 347 separate grants packages.

Commercial Strengthening of Smallholder Cocoa Production

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Overview:

Launched in 2009, the three-year Commercial Strengthening of Smallholder Cocoa Production (CSSCPP), funded by the Bill & Melinda Gates Foundation, aimed to stimulate capital investment and enhance the lives of farmers in the Ghanaian cocoa business. CSSCPP promoted improved production techniques, increased access to inputs and finance, and crop diversification. Through the use of strategically designed matching grants, this project leveraged $5.8 million in private investment.

CNFA, in collaboration with the National Cocoa Producer Association, Kuapa Kokoo Farmers Union, and Chemico Limited, provided support to cocoa farmers through training, certification programs, land tenure, and association development.

Program Approach:

  • Collaborated with agro-input suppliers and farmers to build 20 Business Development Centers for cocoa buying, as well as training and association meetings;
  • Provided training in best practices and crop diversification to enhance production of cocoa and other crops;
  • Worked with financial institutions to institute new credit programs to mitigate risk for farmers.

Association Development: In order to promote more convenient access to inputs, training, finance, and collective marketing, CNFA supported farmers to organize into groups, clusters, and associations, allowing for better service of the maximum number of farmers through project activities to give farmers easy access (within six kilometers) to products and services.

Development of Integrated Warehouses: CNFA collaborated with agro-input suppliers and farmer associations to build model pilot mini-warehouses to serve cocoa producers. Each mini-warehouse has two separate areas: a cocoa buying and certification area operated by local buying companies and a room for the producer groups to use for association meetings, trainings, and other events. A small, independent agro-dealer shop selling agro-inputs (seeds, fertilizers, and crop protection chemicals) is typically located nearby. By offering inputs for many crops rather than just cocoa, these agro-dealers encourage crop diversification.

Technical Improvement and Certification: Farmers and agro-dealers received technical training on cocoa production. In addition, demonstration plots and farmer field days, organized with input suppliers, encouraged crop diversification and improved cocoa production practices. After determining the cost-benefit tradeoffs of various certification schemes, the program provided information and training, should the farmers choose to secure internationally recognized certifications like Fair Trade, UTZ, and Rainforest Alliance. As a result of project training and certification services, beneficiary farmers’ yields increased by 189% and incomes increased by 309%.

Stimulating Capital Investment: CNFA conducted an extensive study of land tenure issues as they impact the cocoa industry, focusing on the impact on very small-scale producers, women, and sharecroppers. In addition, CNFA piloted land-titling training for landowners and worked with financial institutions to pilot new credit and crop insurance to mitigate farmer risk.

Economic Prosperity Initiative

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Overview:

The four-year Economic Prosperity Initiative (EPI), funded by USAID, improved enterprise and competitiveness at the industry and country level in Georgia. Working under contract with Deloitte, CNFA implemented activities with a specific emphasis on mandarins, hazelnuts, and greenhouse and open-field vegetables. EPI provided technical assistance to enterprises, facilitating trade by creating market linkages between producers and buyers, and assisting in strengthening agricultural policy.

EPI selected hazelnuts, mandarins, and several greenhouse vegetables as the focus value chains of this program. These value chains were targeted for technical assistance, training, and study tours, as well as grants. CNFA focused specifically on improving the competitiveness of targeted agricultural sectors, working at all points along targeted value chains with agriculture traders, distributors, and buyers, creating access to market information and joining with financial institutions and export buyers.

EPI built upon CNFA’s existing network of 60 farm and machinery service centers in Georgia, which served as delivery points for extension, outreach, and advocacy. EPI also built on CNFA’s work with Georgian processors to improve operations and quality standards (GlobalGAP, ISO, HACCP), enabling them to better respond to international market demand.

Program Approach:

  • Improved the competitiveness of mandarin, hazelnut, and greenhouse and open-field vegetable value chains;
  • Leveraged existing farm and machinery service centers, which served as delivery points for extension, outreach, and advocacy;
  • Improved operations and quality standards (GlobalGAP, ISO, HACCP), responding to international market demand;
  • Created Knowledge Plots (KP) and Knowledge Centers (KC) to provide “on-the-field” farmer training.

Georgia Agricultural Risk Reduction Program

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Overview:

The USAID-funded Georgia Agricultural Risk Reduction Program (GARRP) impacted the needs of roughly 40,000 farm families in their recovery from the economic impact of the conflict. The project addressed crucial food security and income generation issues in the affected communities of the Gori, Kareli, and Kaspi districts.

Through GARRP, CNFA provided livelihood assistance to local farmers, as well as resettled internally displaced persons (IDPs) who had been issued agricultural land, to ensure successful spring crop planting and orchard assistance. In addition, CNFA operated a three-track voucher system for corn, orchards, and winter wheat.

Program Approach:

  • Higher Yields: Vouchers for seed, fertilizer, and machinery were distributed to more than 10,000 farm families (including 2,300 IDP families). CNFA mobilized local machinery service providers and organized the provision of plowing, cultivation, planting, and fertilizer application services;
  • Electronic Voucher Cards Modernized Orchard Production: More than 17,900 farm families received electronic voucher cards for orchard inputs to be used in eight retail locations;
  • Support Allowed Farmers to Harvest Winter Wheat: The third prong of the voucher program targeted families either late in receiving land or whose land had been recently decontaminated from unexploded ordinances, which distributed vouchers for seed and machinery services for 700 IDP families and 2,670 farm families.

At the end of fall 2009, the wheat planted at the beginning of the GARRP program was fully harvested, adding up to more than 41,000 metric tons and worth $10.1 million for program beneficiaries. Not only did this represent a vital return to self-sufficiency for the 7,862 wheat beneficiaries, but due to the failure of the wheat harvest in the east of the country, the total yield amounted to 2/3 of the total Georgian wheat harvest for the year, making it critical for the food security of the country as a whole.

In the last phase of the program, 32,000 farm families received vouchers to plant 2,750 hectares of winter wheat and 12,650 hectares of wheat fertilizer. Over 95,000 individuals benefited from the final phase, representing the completion of delivery of critical livelihood support to every farm and IDP family affected by the conflict.

Access to Mechanization Project

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Overview:

Through the three-year, USAID-funded Access to Mechanization Project (AMP), CNFA used a commercially sustainable and market-oriented methodology to develop machinery service providers across Georgia. Building on its existing nationwide presence, AMP combined matching investments, commercial finance, and technical training to establish Machinery Service Centers (MSCs) and provide custom machinery services to small farmers.

Program Approach:

  • Provided technical assistance to MSCs using local consultants and Farmer-to-Farmer (F2F) volunteers to ensure sustainable operation and long-term availability of services for farmers;
  • Improved the competitive environment for machinery services by reducing the cost to farmers as a result of increased supply of machinery and service businesses;
  • Leveraged grant funds with local partner matching investment, including large-scale involvement of commercial finance to maximize impact and investment in the rural economy.

Ongoing support from CNFA Farmer-to-Farmer (F2F) volunteers was an integral part of our approach to implementing AMP. A total of 25 volunteer assignments, focused primarily on conducting various types of trainings, were completed during the program:

  • Business Management Training Sessions: F2F volunteers conducted a wide array of trainings on business management. With the assistance of the AMP Training Coordinator, volunteers selected local trainers, finalized business and extension training topics, and developed standardized training materials for dissemination;
  • Financial and Credit Trainings: F2F volunteers led basic financial trainings for AMP’s farmers on credit lending, record-keeping, and risk assessment, which were especially useful for farmer clients looking to better understand their budgets and recognize when they could rent equipment from MSCs;
  • Environment Trainings: AMP organized volunteer-led trainings focused on environmentally friendly agricultural practices for MSC owners and trainers of a local extension training provider consortium. Training was conducted on irrigation and drainage systems, pest and disease control, technologies of land cultivation, and agricultural mechanization;
  • Marketing and Communications Support: AMP fielded volunteers to help develop communications and marketing strategies for MSC owners, demonstrating the services they could offer. Additionally, volunteers worked with the Georgian Public Broadcaster in designing the format of the Agricultural TV show “Farmer’s Day” and created a full-scale business plan to facilitate the funding of the show.

Agribusiness Development Activity

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Overview:

CNFA implemented the four-year, $20 million Agribusiness Development Activity (ADA), funded under the Millennium Challenge Georgia Fund (MCG) as part of the Compact between the Georgian government and the Millennium Challenge Corporation (MCC), to catalyze local matching investments from Georgian partner enterprises and farmers. Through matching grants, farmers received access to innovative agricultural production technology, inputs, quality control practices, and output marketing as well as stronger market linkages and reliable sources of inputs and methods to market higher-value products.

Program Approach:

  • Enterprise Initiative: ADA awarded resources to groups of farmers and enterprises applying innovative business solutions and technology to boost household incomes and net revenues. Applications submitted included a business plan built for domestic market demand;
  • Value Chain Initiative: Value chain improvements were accomplished through technical assistance (via long- and short-term consultants/volunteers), formal and informal training, and access to grants and capital mobilization proposed by bidders responding to ADA’s request. The Value Chain Initiative built strategic commercial linkages between producers, processors, and markets in promising Georgian agricultural sectors, including dairy, meat and poultry products, fruits, citrus, nuts, vegetables, and potatoes;
  • Rural Outreach Initiative: ADA launched a mass media campaign to empower Georgians to make better choices about their business environment and families through access to information.