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#AgEvents
Developing Private Sector
Input Supply Systems
Speakers
Patrick Norrell, CNFA
Dinnah Kapiza, Tisaiwale Trading
Douglas T. Nelson, CropLife America
Moderator
Zachary Baquet, USAID Bureau for Food Security
January 30, 2013
Agrilinks 2.0 promo
The Final Frontier: Bringing the Green Revolution to Sub-Saharan Africa
Douglas T. Nelson, Ph.D, J.D.
Executive Vice-President and General
Counsel CropLife America
Washington, D.C., U.S.A.
U.S. Agriculture Track Record
4
Number of People Fed Per U.S. Farmer
American Farm Bureau Federation
In 1930, the
average U.S.
farmer fed
10 people.
Today, that
number is
155.
• Corn yields ─ 1930 – 20 bushels/acre ─ 1960 – 55 bushels/acre ─ Today – 162 bushels/acre (est.)
• Wheat yields ─ 1930 – 14 bushels/acre ─ 1960 – 26 bushels/acre ─ Today – 45 bushels/acre
• Per-cow milk production ─ 1930 – 4,500 lbs./cow ─ 1960 – 7,030 lbs./cow ─ Today – 20,450 lbs./cow
5
U.S. Agriculture Track Record
Without Insecticides, U.S. Crop Production Would be Much Lower
6
U.S. Corn Grain Yield
7
Hybrids
introduced
Fertilizers
Introduced
2,4-D
Introduced
Atrazine
Introduced
Alachlor/Metolachlor
Introduced
Post-Emergence Grass
Herbicides Introduced
Roundup Ready
Varieties Introduced
8
• This miracle of modern agriculture that has happened
in the developed world can occur anywhere:
Provided the national government promotes and
protects innovation.
Only if their invention is protected, will innovators
develop new tools to help farmers grow more and
better food.
The Miracle of Modern Agriculture
How do we foster innovation?
• Patent
Incentive for discovery and development
Social contract – government provides exclusive
marketing time in exchange for disclosure of
invention
20 years from date of filing
• But – National jurisdictions also require registration
9
slide 10
1
Registered
Ingredient
Chemistry Field
Trials
Toxicology Environ.
Chemistry
1.3
Ingredients
170 Tests
Chemistry Biology Toxicology
140,000
Ingredients
Research Development
Research to Register 9.8 Years
2005-2008
Source: Phillips McDougall 2010 Report
10
Active Ingredient R&D Process
slide 11 11
Discovery & Development Costs of One New Active Ingredient
Research 72
Develop 67
Research 94
Development 79
Development 146
Research 85
Source: Phillips McDougall 2010 Report
slide 12
For industry, R&D expenditures expected to increase by 2.8% per year
Total $2,328 m.
Total $2,943 m.
Source: Phillips McDougall 2010 Report
International Standards
• Global Harmonization of Laws
CODEX Alimentarius food standards
Persistent Organic Pollutant Treaty
Prior Informed Consent Treaty
Sanitary & Phytosanitary Agreement
WTO TRIPS Agreement
Patent law
13
Counterfeit Products
• Destroyed crops, farmer loss, environmental loss
• Loss of export crops for national economy
• Solutions:
Training – police, regulators, farmers
Holospots on containers (security holograms)
Aid donations contingent on use of legal pesticides
Extension training
Vicarious liability - know your supplier
14
Driven by 8 Core companies
Crop Protection Global Network
Plant Biotechnology Global Network
Global Area of Biotech crops
18
Sub-Saharan Africa
• 43 Countries
• 700 Million People
• 180 Million Farms
• 170 Million Crop Hectares
Typical Smallholder Farm 1 hectare: 2.5 Acres (1 U.S. city block)
Cow
pea
Home
Garden
Sorghum Cassava
Maize Maize
Yams
Gro
un
d-
nu
ts
Cotton
Maize
Crop Yields (Tons/hectare)
Maize
Rice
Sorghum
Groundnuts
Africa
1.6
1.9
.9
.7
Global
4.5
3.8
1.3
1.4
FAO
African Yields (Tons/hectare)
Experimental Plots
Average Farmer
Maize
8
1-2
Rice
4
1
DeVries and Toenniessen, 2001; Tittonel, et al, 2007
Handweeding is the Predominant Weed Control Practice in Sub-Saharan Africa
• 50-70% of the labor in crop production is spent weeding.
Chikoye, et al, 2007
Cotton Experiment: 4 Weeks After Herbicide Spray H
erbic
ide
Tre
ated
U
ntr
eate
d
-254 hours/hectare Hand weeding
+1.5 kg/hectare of Chemical
Lagoke, et al, 1992
Herbicide Experiment: Kenya
Weedy Herbicide Treated
Maize Yields +53%
Bean Yields +94% Kibata, et al, 2002
Cameroon: Herbicide Use Impact in Cotton
• Reduced labor by 12 days/hectare
• Reduced cost of weeding by 50%
• Increased yield by 400 kg/hectare
Mathews & Clayton, 1999
Maize Experiment: Kenya
“Chemical weeding was one-third
of the cost of two hand-weedings”
Maina, et al, 2003
Herbicide Experiments: Kenya & Uganda
“Herbicides can increase the net economic benefits to
farmers cultivating maize by up to 80%. When this
is combined with their ability to alleviate seasonal
and gender-based labor constraints, their potential
contribution to a more successful and economically
sustainable farming system is substantial”
Overfield, et al, 2001
CARE Zambia, 2011
• Maize yield increased from 1.5-2.0 tons per hectare
to as much as 4.5 tons per hectare.
• The increased use of herbicides also triggered the
adoption of fertilizers, use of hybrid seeds and an
increased practice of other restorative practices such
as conservation farming.
CARE Zambia, 2011
Adoption of herbicide technology among female farmers has also brought behavioral change as most of them have vowed never again to weed their crops using hand hoes.
Intro Slide (Patrick Norrell)
www.cnfa.org
Building Commercial Input Distribution & Output Marketing Networks
Farm Service Centers
Machinery Service Center
Agrodealers
CNFA’s Approach
Africa
• Kenya
• Tanzania
• Mali
• Malawi
• Sierra Leone
• Zimbabwe
• Ethiopia
Eastern Europe
• Moldova
• Georgia
• Romania
Central Asia
• Afghanistan
All based on the business of serving smallholders
3 Related Input Supply/Farm Service Models
=
FARM STORE
NETWORK
AGRODEALERS
FARM SERVICE
CENTERS
Rural Economic Infrastructure
Platform to expand value added/
processing capacities and
enterprises
Up/down stream
linkages for
distributors of other
goods and services Services
Credit
Output
Marketing
Distribution Network
Training
Inputs
www.cnfa.org
Complete Farm Service Infrastructure
Key Components:
• Business Training
• Matching Grants (up to $50,000)
Designed to serve the needs of Moldova’s family farms
• Input supply
• Machinery services
• Output marketing
• Access to credit
• Training and information
A network of 85 stores established between 2000-2004. More than 60 still operational in 2012.
• Annual sales in excess of $9 million network wide
• 900,000+ farmers served
• Single largest source for agricultural goods and services in Moldova
Output marketing, cold storage and other services generate > $3.5 MM in sales increasing incomes of 12,000 farmers
Developing a National Private Enterprise-Based Input Distribution System
Moldova Farm Store Model
Village-level retail outlets
• 80 Stores Total: 30 town stores; 50 village stores
• Average of 3,900 clients per store
• New jobs created: 761 (407 women and 354 men)
www.cnfa.org
Moldova Farm Store KPIs
Western-style service Co-op
Designed to serve the farm stores to:
• Bring down input prices
• Expand supplier credit options
• Expand access to small-packaged
chemicals/fertilizer
• Enhance the viability of the farm store network
Currently:
• 100 members and growing
• 2011 annual sales in excess of $17 million
(up from $0.8 million in 2003)
• 800,000 farmers served
• Output marketing/export activities
• Refrigerated warehouse
• Fresh grapes
• Grain storage facilities
• Wheat
• Soy
• Maize
AGROSTOC Input Supply Cooperative Importer/wholesaler: supporting the network
Farm Service Centers - $5,000 to $50,000 grants (plus $100-$150,000
machinery service add-ons for 10), 0.75 to 1 matching requirement.
Creation of a privately-owned retail network providing a complete range of
agricultural goods and services for Georgian farmers.
“One-stop shop” for farmers
– everything a farmer needs,
under one roof.
• Input Supply
• Veterinary supplies and services
• Machinery Services
• Training and information
• Market information and output marketing services
• 33 locations operational
www.cnfa.org
Georgia Farm Service Centers (FSCs)
FSCs
As a result of this combined investment, ADA-funded FSCs generated the
following key impacts:
• More than 350 new rural jobs
• $2.7 million in increased net revenue to assisted firms
• $11.2 million in sales of inputs and services to more than 100,000 clients
through the Farm Service Center (FSC) network
Georgia Farm Service Center KPIs
•Matching grants program to establish 21 Machinery Service Centers (MSCs)
around the country
•MSCs are equipped with 3-5 tractors and range of agricultural implements (or, in
some cases, combine harvesters), to provide fee-based services to smallholder
farmers
•Program leverages an estimated $20 million in corporate support from John
Deere, Case/New Holland, Claas and local lending institutions
•Program projected to benefit at least 15,000 farmers through improved access to
custom machinery services
www.cnfa.org
Georgia Machinery Service Centers (MSCs)
At the end of the Access to Mechanization project:
• 21 Grants worth $2.7MM, leveraging more than $3.1MM in private sector
matching investment
• 82 agricultural machinery vehicles and 235 implements were procured
• 209 new jobs were created within agricultural sector
• 12,819 small and medium scale farmers served
• 31,190 ha of agricultural land served
• $1,783,092 in sales generated
• 119 extension trainings and 35 business trainings delivered, 25 volunteer
assignments fielded
•$6,113,420 increase in annual income of small-scale farmers
•$1 million of agriculture credit facilitated
Georgia Machinery Service Center KPIs
Private-sector expertise connecting farmers to
critical extension services
www.cnfa.org
Afghanistan Farm Service Centers
Objective: increasing rural family incomes by catalyzing the growth
of rural Farm Service Centers
• Establishing 17 Farm Service Centers (FSCs), regional one-stop
shops that provide input supply and output marketing services
and linkages
• FSCs provide services to more than 45,000 households
• FSCs have formed a national association, enabling:
• Bulk Purchasing
• Quality Standards
• Private Labeling
• Output Marketing/Exports
Afghanistan Farm Service Alliance
(AFSA): $10 million
Kunar
Laghman
Kabul
Ghazni
Zabul
Kandahar
Helmand
Nangarhar
Logar
Wardag
Parwan
Kapisa
Takhar
Kunduz
Balkh
Urozgan
Nimroz
www.cnfa.org
FSC Network Coverage: 17 FSCs
Afghanistan FSC Showroom
• Total increase in sales for all 17 shops was $49.3MM over 4 years
• Average total increase in sales across 17 farm stores was nearly $3MM
• Figures suggest that the longer a center was operational, the greater its
average sales increase suggesting continued sales growth in each year of
business
• Centers open for 4 years saw average annual sales increase of
$1.53MM versus $416k for those open 2 years
• 369 additional full-time positions created
• All of this illustrates strong profit and employment potential, even in an
extremely challenging operating environment
www.cnfa.org
Afghanistan KPIs
Population Growth
Limited Land for
Production
Low Agricultural
Productivity
Limited Access to
Agricultural Inputs
Improved Diets
Factors Facing Africa
3.
4.
5.
2.
1.
UN, IFPRI, FAO, FAOSTAT
2010 Africa: 1.2 billion
2050 Population: 2.2 billion
Africa 6% Irrigated land
Asia 37%
Latin America14%
Africa 1.3 t/ha
~Global 5.12 t/ha
Africa fertilizer 9.6kg/ha
~Global fertilizer 77kg/ha
~Africa
182.71kcal/capita/day
~Global
481.29kcal/capita/day
Among Urgent Needs: Increase Ag
Input Use
Improvement of
Ag productivity
and farmer
revenues
www.cnfa.org
CNFA’s Agrodealer Model
1. Mapping and Surveying
2. Training of Commercial Trainers
3. Certification of Agrodealers
4. Matching grants
5. Credit Guarantee
6. Demand Creation Activities
7. Policy
8. Output Marketing
What is the Agrodealer Model?
www.cnfa.org
1. Mapping and Surveying
Help to
understand the
situation before
our work and
guide priorities
2. Training of Commercial Trainers (CTs)
• Individual with Ag diplomas
• Become fee-based service providers
• Project match 50% for CT fees
www.cnfa.org
3. Certification and Training of ADs led by CTs
• Business Management
• Production Practices
• Safe use of inputs
• Output Marketing
4. Matching Grants
Certified Agrodealers get access to grants for:
• Creation of new shop
• Improvement of shop
• Diversification
• Output marketing activities
5. Credit Guarantee
Certified Agrodealers may use credit guarantee:
• Back up to 50% of input supplier credit sale to Agrodealers
6. Demonstration Activities
• Field days
• Demo plots
• Exhibitions
• Radio Programming
• Access to Farmer Mentors
7. Policy
• Creation and/or development of AD associations
• Support to government policy development
• Strengthen dialogue between Agrodealer associations and
governments
www.cnfa.org
www.cnfa.org
8. Output Marketing
AD offer access to market
• Aggregation
• Small scale processing/value addition
• Connection with larger buyers
Farmers Learn from a Maize Field Day in Kenya
A Group of Farmers Being Taught Maize Varieties at a
Field Day in Kenya
Rads Agrovet in Bondo; Inset is the proprietor Anthony
Rading in his green house. He used the equity loan to
construct the green house for crop demonstrations.
Kenya Agrodealers in Action
Cost per beneficiary $0.98
Progress in 5 Countries since 2007
• Launched in October 2012, CFSP is a two-year project which will
establish 6 Farm Service Centers in Ethiopia, served by a member
owned wholesale buying cooperative
• $500,000: Total value of inputs provided by wholesale buying
cooperative
• $600,000: Total sales of 6 Farm Service Centers
• 30,000: Number of customers served by Farm Service Centers
• $354,600: Private sector matching investment
www.cnfa.org
Ethiopia Commercial Farm Service Program
(CFSP)
Last slide
www.cnfa.org
Intro Slide
www.cnfa.org
Mrs. Dinnah Kapiza Managing Director, Tisawale Variety Shop Malawi
Mrs. Dinnah Kapiza
Mrs. Dinnah Kapiza is a CNFA-Certified agrodealer from Malawi. Mrs. Kapiza, a
mother of 10, owns four successful rural input supply shops that form a critical linkage between Malawian smallholder farmers and output markets. Mrs. Kapiza enrolled with CNFA in July 2002 to receive training in business management through the Malawi Agrodealer Support Program. After completing her training, Mrs. Kapiza gained access to the CNFA credit guarantee enabling her to access secure credit and build a relationship with international seed and input suppliers to supply a full range of quality inputs to local farmers at affordable prices. In less than 10 years Mrs. Kapiza built a chain of agrodealer shops that today boasts $190,000 in annual sales and provides roughly 3,000 small-scale farmers with farm tools, seeds, crop protection products and fertilizer. Her agrodealer business, Tisaiwale Trading, provides credit for farmers, critical technical advice and extension services through demonstration plots and field days.
Mrs. Dinnah’s Photo
www.cnfa.org
Photo of store 1
Photo of store 2
www.cnfa.org
Photo of family
More photos
www.cnfa.org
Photo of farmer
Photo of group
www.cnfa.org
Photo of children
www.cnfa.org
CNFA Logo
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