Existing and Potential Business Models on Last Mile Delivery of Seeds
Loading...
Date
2021
Journal Title
Journal ISSN
Volume Title
Publisher
Abstract
The first part of this report builds on insights developed from the review of existing models of seed delivery systems available in sub-Saharan Africa (SSA) that serve most smallholder farmers. The first chapter begins with a summary of what the various models seek to address in the smallholder farmer operating landscape. A description of the various operating models identified in the formal1 and informal2 seed sectors is reviewed. The greatest responsibility for the model to function is borne by the principle or anchor entity that brings together other supportive partnerships to make the model function in seed delivery to farmers. The review recognizes that no one entity can satisfy all farmers’ needs identified in delivering quality seed at the last mile, but a series of formal and informal working relationships between various players in the seed value chain is necessary, each with different roles and responsibilities in the entire process. The report further identifies the dominant models as those operating at the informal seed system level, driven by commodity traders and community-based seed producers. Models operating in the formal seed system are responsible for the distribution of certified seed and are also captured in their various forms; they are described as government-backed models that include seed parastatal-based models and relief-based models that encompass seed aid, seed vouchers, and trade fair approach. Models based on aggregation are also described, and these include formal and informal farmer groupings, such as cooperatives that deal with input and output aggregation models that take the form of off-takers, contract farming, or out-grower schemes. The report further recognizes the agro-dealer model as being at the core of the certified seed delivery system, driven by a network of rural-based brick-and-mortar agro-dealer enterprises with varying capacities and operating structures. The Village-Based Advisor (VBA) model is also captured as one that helps to combine seed delivery together with on-the-ground extension service support.With access to finance being identified as a major factor affecting farmers’ productivity, various organizations have developed innovative models that offer agricultural inputs and other bundles of services on credit. These models are described in detail and include the One Acre Fund (OAF) social enterprise model, with other new and upcoming organizations taking an almost similar basic approach of input credit but with a distinctly different marketing route involving digital financing, intermediaries, and local networks. These include models by Apollo Agriculture, Tulaa, and Agri-wallet that recruit small-scale farmers every season with similar input supplies (seed and fertilizer), crop insurance, and extension services. Models that involve vegetatively propagated crops, namely Irish potato, sweet potato, and cassava, have been described separately so as not to diminish their importance and the special characteristic of this group. The seed systems in this category are farmer and trader-dominated, highly dependent on public research and development, and less formally regulated, with most of the delivery models taking a decentralized multiplication process approach to increase localized availability of disease-free planting material to farmers. The fodder seed systems have been described as underdeveloped due to limited progress in the livestock sector in which animals are kept on subsistence. There is, however, growing interest in this sector with the increase in demand for livestock products and the presence of new market actors for fodder seed in the market. The second part of the report proposes potential models that can be adopted and gives basic guidelines that should be embedded in them. These include scalability, sustainability, quality standards, incorporation of technological advancements, and the creation of a local ecosystem around the solution considering its inclusivity nature, i.e., considering gender, age, and disability of the population involved. Input into these models has also borrowed from the Fast-Moving Consumer Goods (FMCG) industry, which is very efficient in delivering goods from producers to consumers, even in very remote areas. Some solutions have been tailor-made to suit the special conditions and regulatory framework in the seed industry. The review further proposes and describes the Business Model Canvas 3 as a tool that will aid in understanding the proposed models systematically and concisely. The outcome will be insights about last-mile customers, important partnerships required, the value proposition offered, and through what channels the models hope to generate revenues while managing costs for sustainability. Various models have been proposed, which all focus on last-mile delivery solutions. These are labeled as the micro-franchising model; Regional clean seed producers with hub entrepreneur model; Dry legumes production financing model; Seasonal Rural Aggregation and Distribution Kiosks model; and the Motorcycle Distribution Agents model. The rationale for proposing each model is explained in-depth with an accompanying business model canvas. No one model will be able to deliver on all the needs of rural small-scale male and female farmers; what is required is a combination of different ingredients incorporating a market-based systems approach, learning from previous projects, multiple partnerships, borrowing successful models from other industries, taking advantage of technological advancements, and eventually taking calculated risks. Through experimentation with different approaches, we will eventually produce models that can drive more quality seed and related inputs sustainably to most small-scale male and female farmers in rural SSA.
Description
Keywords
Smallholder farmers, Seed systems, Public sector
Citation
Nagarajan, Latha, Thomas Muesembi, Alexander Fernando 2021. Review of Existing Last Mile Seed Delivery Models and Approaches. A Feed the Future Global Supporting Seed Systems for Development activity (S34D) report.