Building stronger agri-inputs value chains

28 Feb 2023
Mrs. Elizabeth Dwamena, CEO of Northgate Enterprise, an AFAP hub agro-dealer from Ghana

Agriculture is a major source of income and livelihood for many rural and smallholder farmers in Africa. Increasingly, it is also becoming a business focus for smallholder farmers who get linked to out-grower programs and more formal value chains. These farmers rely on the supply of quality agricultural inputs such as seeds, fertilizers, pesticides, and herbicides to enhance their crop yield and productivity. However, the accessibility and affordability of these inputs are major challenges in many African countries, especially in remote rural areas. This is where hub agro-dealers and their small retail agro-dealer networks, through a hub and spoke Supporting hub agro-dealers in Africa model of marketing, logistics and distribution, come in to play a vital role.

Hub agro-dealers are typically medium-sized agri-SMES that operate in peri-urban, rural and remote areas, supplying agricultural inputs to farmers in their locality through a network of smaller agro-dealers/ stockists. These hub agro-dealers act as a bridge between the farmers and the manufacturers or distributors of agricultural inputs. They provide a one-stop shop for farmers to access quality inputs, information on best practices, and support services. Hub agro-dealers also create local employment opportunities and contribute to the economic growth of rural areas. Despite the importance of hub agro-dealers, there is a need for greater access to finance and more investment toward supporting these businesses. This finance and investment could come in the form of increased credit facilities, equity investment, and risk-reducing trade credit guarantees. In most instances, hub agro-dealers also need business training and technical assistance. With better access to financial resources, hub agro-dealers can improve their stock levels, expand their businesses, and reach more farmers. They can also diversify their product offerings and provide additional services such as aggregation, mechanization services and postharvest management.

The African Fertilizer and Agribusiness Partnership (AFAP) is an organization that recognizes the importance of supporting hub agro-dealers in Africa. AFAP works with various stakeholders, including governments, domestic and international private sector companies, and farmers’ organizations, to promote the development of agro-input markets in Africa. AFAP provides training and technical assistance to hub agro-dealers to improve their business skills, increase their access to finance, and expand their networks. AFAP also works with governments to develop policies and regulatory frameworks that support the growth of the agro-inputs sector and the harmonization of policies within regional economic communities to expand the markets within regions for agro-inputs.

Supporting farmers, particularly rural smallholder farmers, through the development of hub agro-dealer networks also has significant implications for food security in Africa. Smallholder farmers who have access to quality inputs can improve their crop yields, increase their incomes, and improve their food security. Improved food security has a ripple effect on the wider economy, leading to reduced poverty, increased rural development, and improved livelihoods.

In conclusion, the role of hub agro-dealers in the supply of agricultural inputs to rural and smallholder farmers in Africa cannot be overemphasized. These businesses play a critical role in enhancing food security, creating local employment opportunities, and contributing to the economic growth of rural areas. More investment in supporting hub agro-dealers, especially in the form of credit facilities and guarantees, is essential to improve access to quality inputs for farmers. The work of organizations such as AFAP in supporting hub agro-dealers is valuable, and there is a need for more stakeholders to support this important sector for the benefit of Africa’s farmers and it’s wider economy