Ghana : Influence of the Smallholder Inclusive Productivity and Market Access (SIPMA) Project on MyBarnes Company limited
28 Apr 2021
Agrodealer: Kenneth Barnes
Name of company: Mybarnes Company Limited
Location: Northern, North-East and Bono, Bono East and Ahafo regions
Mybarnes Limited, an agrobusiness company has been operating as an agrodealer distributor in the Bono, Bono East, Ahafo, Northern and North-East regions of Ghana. Their strategic plan is to be an input provider for smallholder farmers and off-takers/aggregators in the agriculture sector over the next few years. As an agrobusiness company, one of its goals is to boost agriculture by taking part in the agricultural value chain thereby fulfilling farmersâ€™ hopes and interests. Mybarnes began its business operations as an input provider for smallholder farmers and later scaled to include fertilizer distribution, retailing, off-taking/aggregation and insurance and thus providing these solutions to farmers and the agricultural sector in totality. Mybarnes focuses exclusively on the high-quality and cost-effective development of channels, technology and implementation in the delivery of services.
Results of business needs and capacity assessment under the SIPMA program
The following summarizes how the SIPMA program identified changes to be made and the results of the assessment of Mybarnes Limited after the project was complete.
Poor access to market and key inputs-supplying companies: as a new agricultural business focusing on smallholder farmers in the Northern region, access to a large market to boost the company was a major challenge. Entering such markets, especially for new companies, sometimes requires not only recommendations but also a certain amount of handholding. In addition, another challenge was gaining access to major inputs-supplying companies, which would be willing to supply and equip the input dealer (Mybarnes) on credit â€’rather than demanding the typical down payments or references from distinguished companies or persons. All these challenges faced by Mybarnes greatly restricted its development and expansion.
Poor access to financing to expand their business: one of the major challenges faced by Mybarnes was access to the capital or credit needed to expand. Similar to the challenges faced by most small- and medium-scale agricultural companies in the country, lack of access to credit was a major obstacle to growth. Given that Mybarnes was a new company with less visibility, its business model was not properly understood by financial institutions. As a result, when approached, these financial institutions were reluctant to invest in Mybarnes and this, therefore, posed a major challenge to the company whose main aim is to expand through increased access to capital.
Poor visibility and therefore poor access to markets for their produce and challenges in expanding to other regions in the country: Mybarnes experienced key challenges from poor visibility and branding, which therefore hindered its ability to expand to other areas in the country. Creative marketing and branding of their products to attract customers, as well as other retail products, were lacking. The company was therefore less competitive in the market.
Impact of the SIPMA project
Under the SIPMA program, AFAP worked with Mybarnes to address the highlighted challenges.
In 2018, through the AGRA Smallholder Inclusive, Productivity and Market Access (SIPMA) project, Mybarnes was assisted to expand its business and overcome some of its major concerns in the sector. Thanks to the project, AFAP has worked collectively with other key stakeholders and partners to ensure the development and growth of smallholder farmers in different regions and, in fact, the entire country.
â€œI will say, the project has been great because our revenue in 2018 prior to our involvement in the project was GHS 1.2 million and in 2019, after introductions and training under the SIPMA Project, we made a revenue of GHS 1.5 million. Although the year has not ended yet, in 2020, we have already made a total revenue of GHS 7 million. I largely credit this success to AFAP and the SIPMA project through its assistance and connections.â€ Kenneth Barnes
Access to market: through the SIPMA project and the community-based advisor (CBA) model under the same project, Mybarnes was linked to 35 CBAs in the projectâ€™s implementing regions. It currently operates in areas it previously did not such as Atebubu, Berekum, Amantin and Sunyani, just to name a few communities located within the middle belt of Ghana; Mybarnes currently serves about 60 retail networks. â€œCurrently, Mybarnes works with 60 retail networks and out of these, 35 were the direct a result of the AFAP under the AGRA SIPMA project,â€ explained Kenneth Barnes. In addition to the listed connections, Mybarnes Limited has also been linked to key input-supplying companies in the country such as Yara and AMG.
Access to financing: as a result of recommendations from AFAP through the AGRA SIPMA agri-inputs fair and stakeholder sensitization event, Mybarnes Limited was able to strengthen its previous discussions with notable financial institutions within the sector. One of these was Injaro Investments â€’ an investment adviser primarily focused on opportunities in West Africa â€’ which agreed to help raise funds towards the companyâ€™s expansion and importation in the year 2021. Additionally, at the same fair, Mybarnes was able to approach and initiate loan-financing discussions with Absa bank. This discussion is currently ongoing and is being taken to the next level of the loan acquisition process.
Improved visibility and branding: heeding the advice given during lectures at the various sensitizations and training sessions on entrepreneurship and business branding held under the SIPMA Project, Mybarnes Limited invested in the branding and labelling of its products. This was to differentiate it from similar products from other companies in the market and to create a competitive market for itself as well. According to Mybarnes Limited, this step has been very helpful in attracting customers and creating visibility, especially amongst smallholder farmers. This step has also made Mybarnes more noticeable to farmers, potential investors and other financial institutions. Furthermore, it has been able to create and maintain a cordial and healthy relationship with key government organizations such as the Ministry of Food and Agriculture (MoFA) and other vital donor organizations. This was made possible through various workshops that brought together these important stakeholders along the value chain.
Establishment of commercial connections: in its effort to establish commercial links under the project, AFAP not only linked Mybarnes Limited to key input-supplying companies such as Yara and AMG but was also able to assist Mybarnes to secure a GHS 5 million government contract for vegetables (cabbage, pepper and tomatoes), fertilizer and inputs. According to Mybarnes, this contract was necessary for the companyâ€™s expansion and development.
Similarly, through the AGRA SIPMA agri-inputs fair and stakeholder sensitization event, Mybarnes linked up with HJA Africa, an upcoming input-producing company. Plans are in place for a possible collaboration beyond the country with respect to the supply of organic and inorganic fertilizer and other agro-inputs.
African Fertilizer and Agribusiness Partnership (AFAP) in Partnership withÂ Alliance for a Green Revolution in Africa (AGRA)