Chapters 8.57

8.57-Use of Snack food, Cigarette, and Alcohol Dealers to Sell Inputs to Farmers

Daniela Bernal Kotlier, University of Guelph, Canada

Suggested citation for this chapter.

Kotlier Bernal,D. (2022) Use of Snack food, Cigarette, and Alcohol Dealers to Sell Inputs to Farmers,In Farmpedia, The Encyclopedia for Small Scale Farmers. Editor, M.N. Raizada, University of Guelph, Canada. http://www.farmpedia.org

Background

Low productivity typically associated with subsistence farms in remote and rural areas of developing countries is exacerbated by lack of accessibility: inaccessibility of a market to sell crops, inaccessibility of agricultural extension programs and specialized knowledge, and also the inaccessibility of agricultural inputs such as improved seeds to bolster yields (Byerlee et al., 2007; Edmonds, 1998). The majority of farm input suppliers are concentrated either in urban areas or rural areas densely populated with commercial farms, leaving remote farmers with few opportunities to purchase affordable farm inputs (Farrow et al., 2011). While a subsistence farmer may have to travel far to purchase inputs that will improve the profitability of his farm (likely representing significant losses in time and labour), there are items such as snack food, cigarettes, and alcohol that are consistently available in even the most remote agricultural regions of the world (Chapagain & Raizada, 2017). Given the lack of established distribution channels for agricultural inputs in remote areas, and the immense disadvantage this poses to subsistence farmers, it is advisable that the very distribution networks that make snack food, cigarettes, and alcohol readily available should be dually used to distribute and sell inputs to farmers in remote locales (Chapagain & Raizada, 2017). This has the potential to effectively mitigate the geographical barrier to purchasing inputs that is widely experienced by subsistence farmers.

Description of Practice

The first problem that arises when attempting to use already established distribution networks is the question of how to incentivize private companies to become involved in the distribution of agricultural inputs. Partnerships between development NGOs and multi-national corporations are common; a good example of which is the collaboration between Doctors without Borders and pharmaceutical companies to distribute needed medicines in underdeveloped countries (Dahan et al., 2010). Partnerships of this kind to facilitate distribution can be presented by NGOs as a mutually beneficial business opportunity. Corporations will provide their expansive distribution networks, while development organizations will provide their knowledge of community networks to optimize the financial success of the corporation’s venture and their acquisition of a completely new consumer base (Dahan et al., 2010). NGOs, who have already secured the trust of local stakeholders and established their knowledge of agricultural interventions, will lend legitimacy to the corporation’s sale of agricultural inputs, and will also be able to inform local stakeholders of the project.

Once committed to adding agricultural inputs such as improved seeds and commercial fertilizers to the products they sell, corporations will acquire these with the help of the national department of agriculture. The government and development agencies’ funding will subsidize the corporation’s added cost of purchasing and distributing inputs, so that the inputs can be sold at low cost to consumers. The government will be responsible for setting a reasonable price ceiling or a price per unit for each product, which the corporation will agree to uphold so that product’s prices remain stable and affordable for farmers. The agricultural products will be sold alongside the snack food, alcohol or cigarettes that the corporation already sells, providing access to smallholder farmers in remote areas.

Possible Benefits

1. Low labor requirement:

This practice would employ a supply network already in place, and does not likely require any additional labor on the part of the farmer. Farmers who once expended time and energy travelling to purchase agricultural inputs will no longer have to do so.

2. Low cost:

Due to local demand and added transport costs the vendor may wish to mark up the price of agricultural commodities, however buying inputs from a vendor locally will certainly still be the least expensive option for farmers, in comparison to the costs incurred by individual travel. Most importantly however, the practice should be subsidized through funding by international aid agencies and the government, which will create stable and affordable prices (Chapagain & Raizada, 2017).

3. Increased productivity:

Given the economic reliance that many underdeveloped and developing countries have on their agricultural sector, and the fact that agricultural production in less developed countries constitutes the majority of the population’s livelihoods, it is necessary for the agricultural productivity of farms to be increased (Feder et al., 1985). The adoption of previously-unused agricultural technologies presents an optimistic solution for the need to increase productivity and farmer incomes. The United States has a well-documented history of increasing agricultural productivity through the adoption of new technologies, such as improved seeds and commercial fertilizers (Edgerton, 2009). Other agricultural countries have followed suit, though adoption rates are often inadequate and yields still sit far below world averages (Edgerton, 2009).

An important factor for low adoption rates of new agricultural technologies in developing countries may be the absence of markets where smallholder farmers live. In fact, it has been shown that the adoption of commercial fertilizer use and improved seed varieties as a way of increasing productivity on smallholder farms in Malawi is negatively associated with the distance from input markets (Chirwa, 2011). Further, the adoption of chemical fertilizers by smallholder farmers in the peanut basin of Senegal has been shown to be affected by geographic location (Thuo et al., 2011). Increasing the scope of distribution networks within developing countries so that they reach remote areas where smallholder farmers live, may play an important role in increasing the use of commercial fertilizers and improved seed varieties, which in turn can significantly bolster the productivity of subsistence farmers in developing countries.

4. Dissemination of agricultural knowledge:

Vendors can also be used to distribute agricultural leaflets created for subsistence farmers alongside inputs (Raizada, 2017). In the absence of adequate extension officers in many remote areas, leaflets with illustrated instructions on best practices for farmers is a viable method to disseminate agricultural knowledge regarding sustainable, low cost solutions. These leaflets should also provide valuable information on how to use the new inputs that are purchased, as farmers who lack this knowledge may be disinclined to purchase inputs (Belt et al., 2015). Additionally, these picture books will demonstrate best practices for land preparation, ensuring soil health, treating pests and disease, harvesting, and disaster relief.

5. Business opportunity:

The distribution of agricultural inputs in remote areas also presents an added business opportunity for local economies. Inputs must be sold in small amounts to subsistence and small-scale farmers, given the small size of their lands and their low incomes. Thus, a business will be needed to package large quantities of seeds or fertilizers into smaller packages to meet the unique needs of these farmers. This added step in the supply chain can be fulfilled at the local level to provide new jobs in the community.

Critical Analysis

A concern with this practice may be that vendors will not easily accept selling these products in their shops, especially as they differ drastically from what they usually sell. However, given the demand in remote areas for agricultural inputs, these products will undoubtedly produce a strong and previously untapped customer base for the vendor. In other words, the profitability of these products will likely ensure that there are willing vendors in each community where they are sold. Despite the profitability of such a venture, it is still important that snackfood vendors be informed and receive support for their role in supplying agricultural inputs. It is therefore suggested that development non-profits or government programs provide them with training and start-up capital to ensure the viability of their business (Belt et al., 2015).

A second area of concern could be that despite now having access to new inputs, small-scale farmers will likely lack the tools to effectively use these inputs on their farms. Therefore, it is advisable that peri-urban machine shops be used to distribute tools such as fertilizer spreaders and pesticide sprayers that farmers can purchase to optimize the use of new inputs. If the cost of such tools is burdensome, farmer co-operatives can purchase these tools and share the cost among their members so that everyone has access to them but nobody incurs the full expense.

Lastly, accessibility to modern farm inputs through established town vendors may be an effective means to improving the productivity and incomes of subsistence farms, however it has been argued that is not a long-term alternative to the necessary improvement of rural transport infrastructure, which will have a lasting impact on rural incomes, food security, and poverty alleviation (Farrow et al., 2011). In Africa, it has been shown that a constraint to increased input use and input-led agricultural intensification is in fact the lack of provision of public goods such as roads, education, research, and extension (Kelly et al., 2003). It has been suggested that aid agencies and national governments should refocus their resources and investment on these necessities, and away from programs that provide inputs directly to farmers. However, shifting funding to infrastructure projects such as building roads instead of focusing on providing support to small-scale farmers is a problematic response for several reasons. For one, supply roads are often built at the expense of the communities who live near them, whose livelihoods are negatively affected by the ensuing environmental degradation. Secondly, developing countries are unlikely to have the revenue to adequately address infrastructure needs in a way that will improve the livelihoods of farmers within the near future. Thus, alternative solutions are needed that specifically target remote small-scale farmers, and empower them to reach their full production potential. The use of snackfood vendors to sell agricultural inputs in remote areas has the potential to do this.

Further Reading

1. Expanding Access to Agricultural Inputs in Africa: http://www.sciencedirect.com/science/article/pii/S0306919203000629

2. ILO report, Wasted Time: The Price of Poor Access: http://www.oit.org/wcmsp5/groups/public/---ed_emp/---emp_policy/---invest/documents/publication/wcms_142663.pdf

3. CSM Analytical Guide, Connecting Smallholders to Markets: http://www.fao.org/fileadmin/templates/cfs/Docs1516/cfs43/CSM_Connecting_Smallholder_to_Markets_EN.pdf

4. Market-based Solutions for Input Supply: inphttp://www.snv.org/public/cms/sites/default/files/explore/download/snv-kit_wps_5-2015-web.pdf

References

1. Belt, J., Kleijn, W., Chibvuma, P. A., Mudyazvivi, E., Gomo, M., Mfula, C., … Boafo, K. (2015). Market-based solutions for input supply: making inputs accessible for smallholder farmers in Africa. KIT Sustainable Economic Development & Gender. Retrieved from http://www. snv.org/public/cms/sites/default/files/explore/download/snv-kit_wps_5-2015-web.pdf

2. Byerlee, D., Kelly, V., Kopicki, R., & Morris, M. (2007). Fertilizer Use in African Agriculture: Lessons Learned and Good Practice guidelines. Directions in Development, The World Bank. Retrieved from: http://documents.worldbank.org/curated/en/ 498591468204546593/Fertilizer-use-in-African-agriculture-lessons-learned-and-good- practice-guidelines

3. Chapagain, T., & Raizada, M. (2017). Impacts of Natural Disasters on Smallholder Farmers: Gaps and Recommendations. Agriculture and Food Security, 6(39). Retrieved from: https:// www.infona.pl/resource/bwmeta1.element.springer-doi-10_1186-S40066-017-0116-6/ tab/summary

4. Chirwa, E. W. (2011). Adoption of fertiliser and hybrid seeds by smallholder maize farmers in Southern Malawi. Development Southern Africa, 22(1), 1-12. Retrieved from: http://www. tandfonline.com/doi/full /10.1080/03768350500044065?scroll=top&needAccess=true

5. Dahan, N. M., Doh, J. P., Oetzel, J., & Yaziji, M. (2010). Corporate-NGO Collaboration: Co-creating New Business Models for Developing Markets. International Journal of strategic Management, 43(2-3), 326-342. Retrieved from: https://s3.amazonaws.com/academia.edu. documents /39751565/Corporate-NGO_Collaboration_Co-creating_20151106-20993-1slzlwq.pdf?AWSAccessKeyId=AKIAIWOWYYGZ2Y53UL3A&Expires=1511406067&Signature=GxB8IsD5E5Y2nSQk3f0lldrRbHc%3D&response-content-disposition=inline%3B%20filename%3DCorporate-NGO_collaboration_Co-creating.pdf

6. Edgerton, M. D. (2009). Increasing Crop Productivity to Meet Global Needs for Feed, Food, and Fuel. Plant Physiology, 149(1), 7–13. Retrieved from: https://www.ncbi.nlm.nih.gov/pmc/ articles/PMC2613695/

7. Edmonds, G. (1998). Wasted Time: The Price of Poor Access. International Labour Office. Retrieved from: http://www.oit.org/wcmsp5/groups/public/---ed_emp/--- emp_policy/---invest/documents/publication/wcms_142663.pdf

8. Farrow, A., Risinamhodzi, K., Zingore S., & Delve, R. (2011). Spatially Targeting the Distribution of Agricultural Input Stockists in Malawi. Agricultural Systems, 104(9), 694-702. Retrieved from: https://journals-scholarsportal-info.subzero. lib.uoguelph.ca/pdf/ 0308521x/v104i0009/694_sttdoaisim.xml

9. Feder, G., Just, R. E., & Zilberman, D. (1985). Adoption of Agricultural Innovations in Developing Countries: A Survey. Economic Development and Cultural Change, 33(2), 255-298. Retrieved from: http://www. jstor.org/stable/1153228

10. Kelly, V., Adesina, A. A., & Gordon, A. (2003). Expanding access to agricultural inputs in Africa: a review of recent market development experience. Food Policy, 28(4), 379-404.

11. Raizada, M.N. (2017). AGR2150 Course Notes - Agronomic and Associated Challenges and Solutions for Subsistence Farmers.

12. Thuo, M., Bravo-Ureta, B. E., Hathie, I., & Obeng-Asiedu, P. (2011). Adoption of chemical fertilizer by smallholder farmers in the peanut basin of Senegal. African Journal of Agricultural and Resource Economics, 6(1), unpaginated. Retrieved from: http:// ageconsearch.umn.edu/bitstream/ 156960/2/Thuo_06_01.pdf