Agro Dealers Profiles Report

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Contents

Introduction and background ....................................................................................................................... 3

The Survey ..................................................................................................................................................... 4

Objectives ................................................................................................................................................. 4

Methodology ............................................................................................................................................. 4

Findings ......................................................................................................................................................... 4

Demographic Data .................................................................................................................................... 4

Business Environment ............................................................................................................................... 6

Accounting Systems .................................................................................................................................. 7

Participation In Grain Marketing (Output Marketing) .............................................................................. 8

Agrodelars Participation In Input Marketing ........................................................................................... 9

Previous Experience With Consignment Stock ................................................................................... 10Current Stock ...................................................................................................................................... 11

Conclusions and Recommendations ........................................................................................................... 13


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Introduction and backgroundThe Netherlands Development Organization (SNV) is implementing a Rural Agriculture RevitalizationProgram (RARP III) in Zimbabwe with the intention of ensuring the recovery of agriculture after decadeof decline in production and attendant situations. Key to this recovery is marketing of smallholderfarmers produce. SNV beli eves that Agro-dealers can play a pivotal role in marketing of rural produce.They can do this through mobilizing and bulking quantities to satisfy markets. 1The RARP III intends,among other objectives, to strengthen agro-dealers and agro-dealers associations for:

1. Access to input and output markets to serve the smallholder farming communities2. Collective bargaining with wholesaler, manufacturers, processors, commodity brokers and

transporters for services rendered along the value chain.

Specifically the output marketing component seeks:

1. To facilitate the establishment of sustainable output market channels between farmers, agro-dealers, commodity brokers in the programme areas.

2. To facilitate increased access by smallholder farmers to competitive commodity market prices3. To improve capacities of actors in the agriculture and food value chains to relate for mutual

benefit and rural economic development

To this end SNV is facilitating the development and strengthening of a national Agro-dealers Associationand provincial associations. These, in-turn, organize themselves to participate fully in the revival ofagriculture in their respective constituencies through the capacity they receive from SNV in marketlinkages and input distribution.

On the 26 th of July 2012, provincial agro-dealer association for Mashonaland West and Central provinces

signed a memorandum of agreement (MOA) with Rollex a commodity broking international company forthe supply of 60 000 tonnes of maize. The agro-dealer associations selected agro-dealers to facilitate theprocurement of maize from smallholder farmers. The Agro-dealers in turn mobilized farmer who wantto sell their produce. Rollex purchased the produce at an agreed price and transported them to theirfinal market.

In this context, this survey was conducted to get a profile of agro-dealers participating in outputmarketing

1 MOU between Rolex and The Agro-dealer Association-Mashonaland West 26 July 2012


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The Survey

ObjectivesThe objective of the survey was to profile Agro-dealers in Zimbabwe. This is in terms of their location,capacity to participate in output marketing (maize), scale of business, and bankability and their potentialfor participating in input marketing.

The results of the study can be used as a baseline for monitoring the output marketing component ofthe RARP III, planning purposes and evaluating the impacts of the program on the Agro-dealer level.

MethodologyA structured questionnaire was developed to elicit information on demographic and programmaticinformation on the selected agro-dealers. The questionnaire was self-administered at separateorientation workshops for the agro-dealers. The Mashonaland West agro-dealers were surveyed on the3rd of August 2012 at the Chinhoyi University Hotel while the Mashonaland Central agro-dealers weresurveyed on the 4 th of August 2012 at the Mazowe Hotel. Two agro-dealers from Mashonaland East alsoparticipated in the survey due to the fact that they have business operation in both the selectedprovinces and also Mashonaland East. The sample included all participating agro-dealers under theRollex maize buying scheme. The filled in questionnaires were coded and entered into a computerstatistical package; SPSS for analysis.

Findings

Demographic DataA total of 92 agro-dealers participated in the survey (69 Males and 23 Females). 57 from MashonalandWest, 33 from Mashonaland Central and 2 from Mashonaland West. The agro-dealers were derivedfrom the 15 Districts of the three provinces. The following figures summarizes the information

Summary of agro dealers who participated in the survey.

Province Ward Number of Agro-dealers

Male Female Total

Mashonaland

Central

Bindura 5 0 5

Mazowe 1 3 4Shamva 5 2 7

Mt Darwin 2 2 4

Muzarabani 5 1 6

Guruve 5 2 7

Mashonaland Kariba 11 2 13


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West Zvimba 6 3 9

Sanyati 6 5 11

Hurungwe 9 2 11

Makonde 2 0 2

Chegutu 6 0 6Mhondoro 4 1 5

MashonalandEast

Wedza 1 0 1

Marondera 1 0 1

The highest number of agro-dealers is operating in the Mashonaland West province with Kariba districtproviding the highest number of agro-dealers (14.1%).

The Agro-dealerships were established at varying times. The earliest was established in 1957 while some

were established as late as 2012. However, the majority (47.1%) were established after 2000 and 14.1%of the agro-dealerships were established in the last four years.

65.8% of the agro-dealerships are registered as private companies while 34.2% are not registered.Female Agro-dealers are more likely than their male counterparts to register their agro-dealership. 78%of female agro-dealers are registered compared to 62.3% of male agro-dealers. It is important to notethat of all the districts surveyed only in Muzarabani are all the agro-dealers unregistered. There is needto educate agro-dealers on the need for registration with the Register of Companies or with the Ministryof Small and Medium Enterprises and Cooperatives.

The agro-dealerships have an average of 2 directors or owners (minimum of 1 and maximum of 6 with a

standard deviation of 0.94). They employ on average 4 permanent employees with a minimum of oneand the agro-dealer with the largest number had 27 permanent employees in 7 shops. On average agro-dealers have 2 outlets/shops (min 1 and max 7). The average gross monthly income for each agro-dealeris US$2768.75 with a minimum of US$200 and maximum of US$15000 (from 4 outlets)

Only 1.2% of the agro-dealers interviewed indicated that they were not members of the Agro-dealerassociation. Their inclusion in the current program is therefore not clear. Of those who indicated thatthat they are members of the Agro-dealer association 87% are paid-up members while 13% haveoutstanding subscriptions. Some Agro-dealers have been Association members for about 15 years whileothers are relatively new having recently joined as of 2012. Membership grew rapidly in the last 5 years.The following line graph plots the Associations membership over the last 15 years.


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Agro-dealers hold various assets for personal and business use. The following table list the bankableassets the agro-dealers have.

Assert Min Max Mean

Plough 0 4 1Tractor 0 4 1Bicycle 0 4 2Wheelbarrow 1 4 1Radio 1 6 2TV 0 10 2Cattle 0 87 13Goats/Sheep 0 700 28Fowls 0 2000 118Premises 0 5 2

Motor Vehicle 0 8 2Cell phone 0 2 2Computer/TillMachines

0 6 1

Generator 1 2 1

The study also asked agro-dealers about the value of stock currently in their shops. The average valuewas US$8682.28 (min US$140 and max US$43200)

Accounting Systems

A few (10.1%) agro-dealers do not have a bank account. There is therefore need to encourage them toown a bank account. However, it was noted that female agro-dealers are more likely not to have a bankaccount than males. 18.2% of females do not have bank accounts while only 6% of males do not have anaccount with the bank.92.8% of agro-dealers stated that they kept books of accounts while 7.2% do not. More females do notkeep books of accounts than males. 10% of female agro-dealers do not have books of account comparedto 6.3% of males. Varying books of accounts are kept including a cash register, profit and loss/cash flow,stock register and breakages register. Most of the Agro-dealers keep manual books. Only 8% havecomputerized their books of accounts. The following graph shows how many agro-dealers keep books ofaccounts.


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Participation in Grain Marketing (Output Marketing)The study found that 55.8% of agro-dealers have experience in grain marketing. The majority 80%participated as buyers/bulkers. Some (11.1%) used their facilities for storage purposes while othersparticipated as transporters (8.9%). There is no significant difference between men and women inparticipation in grain marketing as 56.3% of male agro-dealers are involved in grain marketing comparedto 54.5% of females 2

Those who stated that they bought or bulked grain from farmers dealt with an average of 311smallholder farmers (minimum 3 and maximum 3000 with a standard deviation of 641). On average

each agro-dealer handled 104 tonnes of grain during the last season. The average grain price in 2011was US$231 (ranging between US$180 and US$295)

84.3% agro-dealers have grain storage facilities. The facilities hold on average 159 tonnes of maize grain(min 3t and max 5000t).

Half (50%) of the Agro-dealers have received training in grain marketing, including grain handling,grading, storage and pricing. Some were trained as recent as 2012 while others were last trained morethan 27 years ago. Therefore there is need for continuous training. However, 70.1% were trained in thelast 4 years. The following time line shows when agro-dealers were last trained in grain marketing.

2 This however, may have been affected by internal Association selection criteria, since the surveyed agro-dealershad been selected for participation in the Rollex grain marketing contract.


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Various companies worked with agro-dealers in the procurement of grain in the various districts. The

following table summarizes the company engaging agro-dealers in grain marketing in the respectivedistricts.

District CompaniesBindura Olam, National Foods, IvirnesMazowe GMB, Trust BankShamva Grafax, Agriseeds, Seedco, Pioneer, Ivirnes, Victoria, National FoodsWedza GMB, Trust BankMt Darwin No Company ReportedMuzarabani Greatwin, National Foods

Guruve National FoodsKariba GMB, Lake HarvestZvimba GMB,Sanyati GMB, Delta, ParogateStewartHurungwe Goal, GMB, National Foods, ZFC, Seedco, AgricuraMakonde Steelbase, Topfellas, GMBChegutu GMB, Sable FoodsMhondoro/Ngezi No Company ReportedMarondera Feedmix,

It is important to note that all the 4 agro-dealers from Mhondoro/Ngezi have never participated in grainmarketing and they also do not have any formal training in grain marketing.

Agrodelars Participation In Input Marketing It is apparent that agro-dealers are important in smallholder farmers access to agricultural inputs.Agro-dealers act as local stockist of various inputs.


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Previous Experience with Consignment StockThe study found that 66.3% of agro-dealers have participated in some input schemes (consignmentstock) whether driven by NGOs, wholesalers or manufactures. The value of agricultural input sold lastseason 2011/2012 ranged from US$900 to USD$75000 per agro-dealer with an average of US$14457.Most agro-dealers (94.1%) have been able to remit/repay the supplier of the consignment. The

following graph shows the repayment rates.

A number of suppliers were engaged on input marketing. The following table shows companies thatprovided consignment stock in the various districts.

District CompaniesBindura Feya Feya, AgriseedsMazowe Feya Feya, Seedco, Pioneer, Windmill, Harvest RamaShamva Africare, Feya Feya, Nico Orgo, Pioneer, SeedcoWedza --------Mt Darwin Feya FeyaMuzarabani Agriseeds, TIMBGuruve Feya Feya, Seedco, Nico Orgo, Mashco, National Foods, ZFCKariba Seedco, PioneerZvimba Feya Feya, Mashco

Sanyati Mahaka EnterprisesHurungwe Goal, Agricura, Bayer, ZFC, Coopers, Pannar, Seedco, Red Star, Windmill, CAPS,

National Foods, Wiruma, Ominia, AgriseedsMakonde ----------Chegutu Agriseeds, FSGMhondoro/Ngezi SATMarondera Chemplex, Coopers, Granite Chemicals


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The survey noted that agro-dealers in two districts (Makonde and Wedza) have never participated inagriculture input consignment stock. While no reasons for this were proffered it might be important toengage suppliers so that the two districts are coved by some agriculture input scheme.

Current StockAt the time of study, 20.8% of agro-dealers had consignment stock. The low figure could be attributed tothe fact that the study was carried out at the beginning of August when suppliers were just beginning todeliver inputs for the 2012/2013 season. However, it is indicative in the sense that stocking of inputs isslow as the season is almost arriving. . However, Mr Mapiki (the Mashonaland CentralAgrodealersAssociation Charperson) indicated that about seven suppliers of agricultural inputs hadindicated that they ould start supplying inputs in the following two weeks. At the time of survey, only sixof the 15 districts had consignment stockThe districts that had some consignment stocks incudeBindura, Mazowe, Muzarabani, Guruve, Hurungwe and Marondera.

Of the agricultural inputs already in stock, the most stocked inputs are fertilizers and maize seed at57.1% and 57.4% respectively. The following bar chart illustrates the number percentage of agro-dealersstocking each of the agro-input.


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Conclusions and Recommendations

It is apparent that agro-dealers have an important part to play in input and output marketing. Agro-dealers are not novices in input and output marketing. However, agro-dealers are not a homogeneousgroup. They do have varying interest and capacities. Some are more inclined towards grocery marketing

while others are general dealers; some are interested in transporting grain produce than purchasing andbulking. These capacities have to be developed and spread throughout the districts so as to maximisethe potential of the value chains.

The Mashonaland West Agro-dealers Association is more developed than its Central counterpart. Thereis therefore need for sharing between associations. This can be through exchange visits betweenassociation members or even Local Capacity Builders.

Agro-dealers should be encouraged to register their companies with the registrar of companies and orthe Ministry of Small and Medium Enterprises Development and Cooperatives. This will be important tocomply with regulations as well as benefit from government programs. Agro-dealers should also beencouraged to subscribe to their local Agro-dealers associations ad tangible benefits should flowthrough these associations.

While it has been noted that Agro-dealers are engaged in appropriate business management practiceslike banking and accounting systems. It will be necessary to inculcate better practices in the agro-dealers.

The study has also affirmed the fact that agro-dealers are ethical business persons. This has beendemonstrated by the fact that a large percentage of agro-dealers being able to repay input loans. This isdespite the general sentiments that agro-dealers are not trust worthy.

Thus it is recommended to engage agro-dealers in input and output marketing as they providecompetitive services within their local confines.

Documents

Agro Dealers Profiles Report