Page 136 - AFAP Success Stories 2020

Challenge also the neighboring communities as well. Under these
groups, they identified the lead farmers who in many
One of the Agrodealership development challenges cases, were also leaders of a group.
in the Lake Zone is the lack of contractual agreements
between Hub Agrodealers and their retailers. Hub Hekima Agrovet and General Supply and Shinyanga Farm
Agrodealers were claiming to have a network of retailers, Supplies were working with these groups using them as
but in-depth analysis indicated that their relationship was their market for their products. When AFAP came with
merely informal. Claiming to have retailers for whom you the analysis that Hub Agrodealers lacked contractual
don’t have contact details or even any formal agreement agreement and discussed the likely impact of this, Hekima
is about as good as having no retailers at all. Hub Agrovet and General Supply and Shinyanga Farm Supplies
Agrodealers need to have some control of the goods and used the established groups to identify members with
services they sell to retailers, as anything that happens to whom they would work as retailers. They came up with a
the final consumer, in this case the farmers, might affect contract in which a selected farmer signs, provides all his
the Hub Agrodealers’ business. details and agrees to be part of their distribution channel.
These farmers were members of farmers groups whose
Lack of contractual arrangement between Hub contact details they did not have. The agreement forms
Agrodealers and retailers created a lot of challenges for were signed under the supervision of local authorities,
them. For example, Hub Agrodealers were not able to which meant that the contract was enforceable by law.
sell on credit as it was difficult for them to recover the This arrangement was of benefit to the Hub Agrodealers,
debts in case of default; they had no assurance that their the retailers and the farming community as it helped
business relationship with retailers would continue as to keep control of the price of the product to the final
they could opt to go elsewhere; and Hub Agrodealers had consumer.
no control over products to the final consumer. Retailers
were incurring additional transaction costs, which could
be covered by Hub Agrodealers, they had limited chance Impact
to buy on credit and had no assurance on the quality of
the product they bought from different Agrovet shops. Since signing this contract with lead farmers, Hekima
Agrovet and General Supply and Shinyanga Farm are
distributing agro-input to their network of retailers
Initiative and lead farmers. The lead farmer normally aggregates
demand of agro-input in their catchment area and sends
Hekima Agrovet and General Supply and Shinyanga Farm an order to the respective Hub Agrodealers. The Hub
Supplies each had groups in four districts of: Mbogwe (six Agrodealers normally distribute according to the order
groups), Maswa (four groups), Shinyanga (four groups) made by a network of the lead farmers.
and Msalala (four groups), each having 20 people. The
groups were established as the focal point to establish Before this contractual agreement was in place, it was
demonstration plots, conduct farmers’ training and deliver difficult for the Hub Agrodealers to know the exact
the awareness campaigns. The training, demo plots and amount of agro-input that was needed by the farmer at
the campaign do not only cover the group member but a time. Hub Agrodealers were not confident to extend

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