Articles, Blog

Agricultural Service Provider Market System – Case Study in Bangladesh

November 5, 2019

Worldwide, smallholder farmers need support
in irrigating their land, and protecting and harvesting crops. Farmers often hire season workers, who are
unskilled, to perform these activities. This affect people’s health, land productivity,
and ultimately, farmers’ incomes. In Bangladesh, USAID’s Agricultural Value
Chain activity (known as AVC) is strengthening the service provider system supporting smallholders. Rather than providing support directly to
farmers, AVC works through private agricultural firms, in this case, NAAFCO. AVC supported NAAFCO to train and brand independent
agri-service providers who help farmers, from irrigating lands, to using pesticides and
harvesting equipment. Within less than a year, there were rapid
results. A growing number of agri-service providers
are working in teams, earning much higher incomes and servicing farmers up to seven
times each year! Thousands of mango farmers are increasingly
accessing specialized services, reducing wastes and overuse of inputs, growing more and better
crops, and reporting income growth. NAAFCO sales have increased, their products
are used more effectively and safely, and they continue to invest their own funds to
expand the strategy to new regions and crops. How were these results achieved? AVC shared ideas with NAAFCO on expanding
input sales to rural, smallholder farmers. Motivated, NAAFCO focused on mango orchards,
investing its OWN funds to bring an international expert to train independent sprayers. Sprayers were taught to use NAAFCO products
correctly, and trained in diverse skills. This moves dangerous products away from unskilled
helpers to specialists who are trained and protected while using them. How is this approach sustainable, with expected
results well beyond AVC? The right incentives were utilized to create
behavior change. Independent sprayers operate as a local sales
force, receiving commission for NAAFCO products sold. They’re branded with NAAFCO protective gear
and equipment. RESULTS ARE EXPONENTIAL with testimonial advertising
between farmers, who are increasingly requesting specialized farm services. AVC mentored NAAFCO in branding rural stores
as preferred NAAFCO retailers, where service providers can now easily access NAAFCO’s products. The retailers receive PERFORMANCE INCENTIVES
from NAAFCO and pass commissions on to the service providers. Rather than on sales volumes alone, performance
is based on service and value provided to smallholders. This is key for system change as it incentivizes
continued investment into a loyal and growing smallholder customer base. Importantly, farmers benefit from healthy
COMPETITION between agri-service providers to provide more value at an affordable cost. NAAFCO has transformed informal mango orchard
sprayers into agri-service providers for multiple crops! This facilitation approach yields far greater,
long-term impacts for this market system than a traditional intervention. As a result, farmers now have access to trusted,
reliable, and professionally trained service providers year-round, who provide much more
than just spray services. Subsequently, there are healthier families,
healthier lands, and healthier food going to market.

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