Agro-dealer partnerships transform smallholder farmers into profitable ‘business units’
Iringa, Tanzania: Magreth Aidan Sanga is a Hub agro-input dealer based in Iringa, a town in Tanzania’s Southern Highlands where she trades as Iwawa General Supplies. In business for the past 11 years, Magreth’s best-selling inputs are seed and fertilizer.
The majority of her over 10,000 direct customers are smallholder farmers within Iringa and Njombe regions. Indirectly, she also sells to hundreds of others through an agency system. They hold the key to a sustained green revolution.
According to AGRA’s head of policy and advocacy, Boaz Keizire, agro-dealers and their agents play a big role in agricultural development and transformation by giving farmers access to quality inputs and market information. “The winners are the smallholder farmers,” he says, “thanks to the reduction in distances covered to access agricultural inputs and to receive timely market information.”
Magreth is a beneficiary of the Hub Agro-dealers Training event in October 2018, organized by PIATA Tija Project with the support of AGRA, where she met seven other agro-dealers for experience- sharing and collaboration. Armed with new knowledge she embarked on expanding her business and recruiting agents.
Since 2017, PIATA Tija Project has gained traction among smallholder farmers and agribusinesses in Tanzania by promoting a shift to productive and profitable agriculture that creates food security and expanded economic opportunities. The Partnership for Inclusive Agricultural Transformation in Africa (PIATA) is a five-year engagement led by AGRA, the Rockefeller Foundation, the Bill & Melinda Gates Foundation and USAID. Tanzania is one of 11 countries under the Partnership.
Although she has eight agents spread across villages in Iringa, each serving several hamlets, Magreth’s business challenges are two-pronged and closely related. “In order to increase the number of agents, I will need to increase my capital base for input purchases and upgrade my warehouse capacity,” she explains. She also lends inputs to the smaller agents as a way of adding to their capacity and growth.
Zabibu Magava, an inputs distributor based at Italula village in Iringa serves over 700 customers. She receives most of her inputs from Magreth on credit terms. “The idea was to bring the inputs closer to the farmers and Iwawa General Supplies has made this possible,” she observes.
With improved distribution channels, agents like Zabibu are counting increased business opportunities and higher incomes as a result.
Iwawa General Supplies is a distributer for more than seven firms dealing with inputs and post-harvest technologies such as tarpaulins and hermetic Purdue Improved Crop Storage (PICS) bags. They include Yara Tanzania, Meru Agro, Staco, Premium and Kibo Seeds as well as post-harvest technology manufacturers A to Z, PPTL and Panner.
Magreth is tuned in to the agribusiness potential within an expanding customer base, leading her to improve the management of her company by professionalizing it.
“With more farmers assured of markets for their produce, they are always motivated to improve and make more money and I have learned that I cannot reach my goals if I work alone,” she adds. “Partnerships, the AGRA way help businesses like mine to grow and working with agents has opened up new frontiers for my business.”
Such business models play a critical role in ensuring food security targets are met and transform agriculture into profitable ventures. Stella Rwiza, AGRA’s Southern Highland Zone Country Program Officer recognizes Iwawa General Suppliers as one of PIATA Tija’s pivotal partners. “They have participated in all the exhibitions organized within Iringa and were instrumental in supporting farmers with extension services,” she adds.
In the 2018/19 season, the company set up 10 demonstration plots in Iringa and Kilolo Districts, giving farmers a first-hand opportunity to learn how to enhance production.
“My greatest moment is seeing smallholder farmers in the Southern Highlands transform their farms into profitable business units that bring in the profits,” says Magreth.
By Anthony Muchoki