AFAP in Partnership with AGRA proves agrodealer success is possible
“All these linkages and training from AFAP has increased the company’s asset base and thereby making the balance sheets of the company very credible and creditworthy, especially in the face of most financial institutions and banks â€“ CEO, Dansman Business Consult”.
Improved agrodealer linkages with agro-input supplying companies
UUnder the Leadership of Mr Dansman Subiniman the Dansman Business Consultancy (DBC) Limited is a company in the Northern Region of Ghana. The company provides a high-quality goods and services, including the conventional agro dealership complemented with a business consultancy that improves farm yields.
The biggest challenge faced when it comes to agricultural inputs is delivering high-quality inputs to the last mile of the farmer. Over the years, DBC Ltd has carved itself into a supplier of quality input to the farmers. The firm has served over 500 farmers in various districts, namely Bunkurugu/Nankpanduri District, Yunyoo/Naasuan, Garu, Tempane, East Mamprusi District, Tamale, and Sagnerigu. In addition to providing high-grade agricultural inputs, the company offers support to out-growers by supplying fertilizer on a credit basis through its retailers and agents at the community level in return for farm produce, cash or in-kind based on the agreed mode of payment. DBC Ltd also provides fertilizer and good agronomic practices training, market information to out-growers, facilitates linkage programs with financial institutions for credit facilities and trains out-growers on group dynamics and formation.
To meet the growing demands of the services provided by DBC Ltd, with the assistance of the AFAP and other organizations, a 700 and 5000 metric ton warehouse was constructed in the Northern part of Ghana. The warehouses allowed the company to store enough qualities of fertilizer to meet the growing needs of the farmers.
However, despite the growth in the business ability to stock up the warehouse to total capacity and obtain fertilizer on credit from agro-input supplying companies continued to be a challenge from DBC Ltd.
The expectation from the majority of agro-input supplying companies demands collateral before the supply of inputs to agrodealers. The terms and conditions outlined by the agro-input suppliers resulted from payments not being as per the agreed time frame. These terms and conditions negatively impacted hub-agro dealers’ inability to access agro-inputs to meet farmers’ demands and revenues.
To counter the impending challenges, DBC Ltd was selected as an agro dealer that could benefit under the Smallholder Inclusive, Productivity and Market Access Project (SIPMA) implemented by AFAP and financed by Alliance for a Green Revolution in Africa. The objective of the programme was to assist the agribusiness aspect of the agrodealer and train the agro dealer to identify structural business challenges.
To promote market and business to business linkages, AFAP connected DBC Ltd to several supplying companies, therefore securing fertilizer on favorable terms. The company obtained 4000 of 25kg bags of NPK fertilizer from Omnifert on credit to adequately fill the capacity of its warehouse and meet farmers’ demand. The relationship developed with Omnifert Limited reduced its credit terms and conditions, making it possible for DBC Ltd to purchase fertilizer on credit. The company paid an initial 50% of the total cost, subsequently paying the balance two weeks after receiving the fertilizer.
Additionally, DBC Ltd and Omnifert have sustained a good working relationship resulting in it leasing its warehouse in Tamale to Omnifert Ltd as part of credit terms.
The Smallholder Inclusivity and Productivity for Market Access (SIPMA): is a three-year project funded by AGRA and implemented by four (4) organizations, namely AFAP, Agribusiness in Sustainable Natural African Plant Products (ASSNAP), YEDENT and Savannah Agriculture Research Institute (SARI). The consortium focused on unlocking the maize and soya bean value chains to create market access for smallholder farmers. The SIPMA project reached about 125 smallholder farmers, including Community Based Advisors (CBAs), agro-dealers, and other relevant stakeholders across the country. Through interactions and monitoring visits, it is quite apparent that the SIPMA project has, without doubt, impacted the revenue generation, efficiency and productivity of beneficiaries such as Community Based Advisors (CBAs), retail and hub agro-input dealers.
African Fertilizer and Agribusiness Partnership (AFAP): The African Fertilizer and Agribusiness Partnership (AFAP) is an independent non-profit organization founded in 2012 by a partnership of African development organizations. It was built on the Comprehensive African Agriculture Development Program (CAADP), a framework for achieving ambitious agriculture development goals set in place by African nations and leaders. AFAP has since evolved into a social enterprise and service provider to the public and private sectors on sustainable development projects and policies. AFAP focused on market-driven business solutions in the agriculture inputs and agribusiness value chain. AFAP combines technical expertise with entrepreneurial innovation.