Cropserve Zambia Limited: Distributing agricultural inputs to small scale farmers
Cropserve’s inclusive business project aims to develop an effective and sustainable distribution model to supply the small scale farmer segment with affordable and high quality agro Inputs.
The inclusive business initiative
Cropserve is a Zambian agricultural inputs company selling herbicides and pesticides as part of the United Phosphorus Limited (UPL) group. Cropserve currently serves the small scale farmer segment through two main distribution channels. The first is a network of Cropserve-owned retail stores called Unimarts that sell a range of agricultural inputs to farmers using sales agents to aggregate demand.
The second is a network of independent agricultural input dealers (village level entrepreneurs) that sell directly to the farmers. Cropserve would like to expand its presence in the small scale farmer market and is assessing different distribution options, including a franchise model.
The small scale segment represents a significant opportunity for Cropserve to increase revenues.
This segment already accounts for over 50% of revenues, and Cropserve only reaches 5% of the market.
The development benefits are significant. At present, farmers have little to no access to good quality agricultural inputs; many of them being located in rural areas 60 to 300 km away from where inputs can be bought. Lack of access to inputs has a severe impact on yields. For example, average yields of small scale maize farmers are 2 MT/ha compared to 10 MT/ha for large scale commercial farmers. This project improves farmer yields and incomes, while at the same time creating employment for village level entrepreneurs selling these inputs.
Cropserve is working with Nutri-Aid Trust, a Zambian non-profit which has been pioneering work in developing and supporting a village level agro dealer network across the country.
Objectives of Facility engagement (May 2012)
In the initial phase of support from the Business Innovation Facility, key principles were developed for the design of a distribution model to target smallholder farmers. In the second phase, the Facility team worked closely with Cropserve to study the financial information related to small scale sector sales and to evaluate options for increasing revenues.
Facility support was completed in August 2012 and the recommendations made are now being taken forward by Cropserve Management.