Scalable Models for “Last Mile” Input Delivery

Ben Fowler, MarketShare Associates

Dan White, ACDI/VOCA

The Research Questions and Cases

1. What are the primary constraints to increasing the poor’s access to agricultural inputs on a sustainable basis?

2. What programming models have proven more and less effective in solving these constraints at scale?

3. What results have been achieved?

4. What are the implications for future project design?

DFID11%

USAID56%Private Sector

11%

B&MG11%

Various11%

Financing

Active 56%

Closed44%

Status

1. OUTREACH

2. OUTCOMES

4. EQUITY

Scale Framework & Case Criteria

Evidence of systemic changeEvidence of the model’s resilience

Benefits for other value chain actors

Depth of impact on farmers

3. SUSTAINABILITY

Number of farmers that benefited

Why Farmers Can’t Access Inputs

Smallholders

Cashflow/Credit limitations

Weak agronomic skills

Far from sources of inputs

Input Providers

Cashflow/Credit

High transaction costs

Transactional business practices

Rules and Enabling

Environment Weak Public Infrastructure

Weak trust between actors

Government distortions

Smallholders

Cashflow/Credit limitations

Weak agronomic skills

Far from sources of inputs

Input Providers

Cashflow/Credit

High transaction costs

Transactional business practices

Rules and Enabling

Environment Weak Public Infrastructure

Weak trust between actors

Government distortions

LOW USAGE RATES OF QUALITY INPUTS

LOW YIELDSLOW INCOMES AND EMPLOYMENTFOOD

INSECURITY

Impacts

Typology of Models

Input supplier-driven (Agrodealers/Agents)

Microentrepreneur-driven

Lender-driven

Producer collective-driven

Buyer-driven

Input Supplier-Driven

Agro Dealers

• Inputs• Extension• (Finance)

• Inputs • Extension

Farmers

Input Suppliers

Local Agents

PrOpCom

PROFIT

• Inputs • Extension

Market

Bayer Greenworld

MSME

Sunhara

Pathways to Scale

Context Demonstrated Potential

- Demand Pull (from farmer and offtake market)

- For Agents, ICT Infrastructure

- Multiple growing seasons better to smooth demand

Outreach: Can hit ‘capacity ceiling’ quickly

Outcome: Difficult to measure, but RoI can be huge (Sunhara)

Sustainability: for Agents:- Diversity of income streams- Proactive mgmt

Equity: Agents tied more closely to BoP

Microentrepreneur-driven

ADVANCE

NAFAKA

Market

Producer Collectives

InputsAdviceFinance

Services (spraying, land preparation etc.)InputsExtension

Farmers

Input Suppliers

Microentrepreneur

Pathways to Scale

Context Demonstrated Potential

- End-market pull Outreach: Strong potential, and easy to track

Outcomes: Side-selling for NFs big problem; BUT can lead to greater customer orientation

Sustainability: ‘Stepping Stone’ to other role in VC. Diversity of income streams

Equity: high—geographic proximity

Lender-driven

One Acre Fund

InputsExtensionFinance

Farmers

Lender

Service and Product

Suppliers

Market

Pathways to Scale

Context Demonstrated Potential

- Requires appropriate financial provider

Outreach: significant potential

Outcomes: strong results

Sustainability varies based on financial service provider and target population

Equity: Can function serving poor farmers growing staple crops

Producer collective-driven

PCE

Market

Producer Collectives

Inputs

Inputs ExtensionStorage Market Information

Farmers

Input Suppliers

Producer Collectives

ProductPayment

Pathways to Scale

Context Demonstrated Potential

- Requires existing collectives with reasonable management

Outreach: Can be significant, but obtaining large outreach is slow if existing networks not already in place

Appear to support positive outcomes

Strong potential for equity

Sustainability varies

Market

Buyer-driven

InputsExtensionFinance

Farmers

Buyer

Service and Product

SuppliersProduct

Findings I

• Leveraging private sector-led business models has tremendous potential for scale

0

100,000

200,000

300,000

400,000KMDP Outreach to Smallholders

Number of farmers using improved seed

Number of farmers using improved fertilizer

Findings II

Tradeoffs between Sustainability and Equity from working higher or lower in the chain

Input SupplierEnd-BuyerFinancier Agrodealer Micro-entrepreneur

Producer Organizations

Management Capacity

BoP

Market Opportunities

Findings III

• Select and apply a consistent definition of “scale” • Context is key • Technology needs extension for sustained scale• Apply robust M&E throughout the market system to

achieve scale and expand the evidence base

microlinks.org/activities/leveraging-economic-opportunities-leo

acdivoca.org/LEO