Feed the Future Partnering for Innovation Rural Distribution
Enabling Environment
Thin profit margins: Rural agro input shops are expected to generate narrow profit margins, suggesting that large volumes of sales are necessary.
Agro input shop entrepreneurs are given training in basic business skills, inventory management, and pricing so that they may manage their margins appropriately. Additionally, shops are placed in key production areas with large numbers of farmers, and will boost offseason sales by selling consumer products such as soap, cooking oil, etc. Entrepreneurs want salaries: After selecting Company C partnered with a local NGO to identify entrepreneurs to run the agro input shops, many women entrepreneurs that they could train and requested a salary from Company C. It was support as they established these input shops. evident that they did not fully understand the entrepreneurship-driven model, or it was not effectively communicated. Perception of free seed: Farmers are accustomed to either re-using seed or receiving free seed from the government and NGOs. Buying seeds is often perceived as an unnecessary expense by farmers.
Agro input shops diversify their offerings to generate sales in non-seed inputs.
Commercial Outlook Company C is not competing in the seed market, and has not expressed interest in expanding its investment in the seed market in Mozambique. Company C sees the demand for seed as very small, due mainly to the practice of reusing seed and the proliferation of seed handouts by government and NGOs. Nonetheless, its experience provides valuable insights into the opportunities and challenges to stimulate smallholder uptake of improved input technologies in Mozambique. The Company C partnership ultimately illustrates that offtake demand is a prerequisite for farmer input investments. Company C has observed significant (albeit latent) potential in the agro input market where output demand is high, but more can be done by the public sector to create incentives for new buyers (particularly value addition enterprises) to emerge.
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