Agriculture in sub-Saharan Africa is dominated by small-scale farmers. But doing business with these farmers – they often live in remote areas with little money to spend – is no easy feat. [hidepost=9][/hidepost]
German agricultural chemical and seed company Bayer CropScience is currently growing its footprint in Africa, and courting small-scale farmers is one of its top priorities.
Eric Bureau, head of business development for Africa, recently shared with How we made it in Africa some of the company’s strategies to boost sales to smallholders.
1. Demonstrate the advantages of modern farming inputs
Modern seeds and chemicals don’t come cheap, and even when farmers are able to afford these inputs there is a lack of knowledge on how to use them. For this reason Bayer is involved with demonstration farms and training centres aimed at proving to small-scale farmers they can achieve better yields with modern technology and the latest farming practices. For example, in Zambia, Bayer is involved in a demonstration farm set up by American tractor-maker AGCO.
These initiatives don’t have immediate pay-offs but are rather a more strategic approach to develop farming in the region and subsequent demand for modern farming technologies and equipment.
Bayer is also involved with similar projects in South Africa, Ghana, Ethiopia and Morocco.
2. Get involved with agricultural development projects
Bureau believes strategic partnerships are essential to influence the buying behaviour of the millions of small-scale farmers across the continent. For example, in the Democratic Republic of Congo – an area more than triple the size of France – Bayer would have to recruit a significant number of staff if it wants to reach even a fraction of the farmers by itself.
It is therefore actively involved with numerous agricultural development projects. Through the Competitive African Rice Initiative (CARI), Bayer supplies its products and expertise to improve the harvests of rice farmers in Burkina Faso, Ghana and Tanzania. And in Kenya and Nigeria it is involved in potato projects sponsored by the GIZ, Germany’s international development agency.
“We will never reach all the small farmers [by ourselves], so we need to partner with these kinds of projects,” says Bureau.
And while these initiatives might seem more like corporate social responsibility (CSR), he says there is a clear business interest for Bayer. “We see it as a way to create new markets for our products… I would not call it CSR, although there is a social component in it.”
3. Innovate with packaging
Bayer is also adapting its packaging to better cater for the needs of small-scale farmers. Similar to companies such as Unilever and Procter & Gamble that are selling toothpaste and washing powder in small pack sizes for low-income customers, Bayer is also offering its agrochemicals in single-use packs.
The company has launched a small 10mℓ pack of insecticide that can be used on cotton. It is just about the right quantity to mix with 15ℓ of water, the capacity of a knapsack sprayer typically used by small-scale farmers. The product costs under US$1, and is currently for sale in Malawi, Zimbabwe and Zambia. A number of other crop protection products that can be launched in smaller pack sizes have already been identified.
4. Supply product to organisations that aggregate small-scale farmers
In many cases in sub-Saharan Africa, large groups of small-scale farmers are managed by state-owned organisations or private companies. They will typically be supported with products such as seeds as well as expertise. For example, in Cameroon the cotton industry is tightly controlled by a government-owned company which distributes inputs and collects the crops at harvest. While in Zambia US-based food and commodity trading company Cargill supplies inputs and training to thousands of small-scale farmers from whom it buys maize, cotton and soya beans.
In some cases Bayer sells products directly to these organisations, which gives it easy access to thousands of smallholders.
5. Find the right distributors
However, the majority of agricultural inputs are brought into sub-Saharan Africa through importers that distribute it to farmers via a network of retailers.
Bureau says it is often a challenge to find the right distribution partner that will both put sufficient effort into distributing its products and has the right network of retailers to reach as many farmers as possible.