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Agrodealers are critical to agribusiness development in Zambia

On Wednesday last week, one of the agrodealers from Solwezi complained to government that they were going to demonstrate if they are not paid the money it is owing them from the services and products they supplied in 2018 production season.

This, in my view, is a genuine complaint from people that have been patient for too long. The unfortunate response from the Minister of Agriculture was a warning that government was not going to be held at ransom by the agrodealers. I found that statement misplaced and out of context for the minister who understands how bad our economy is. Agrodealers in Zambia are in business just like any other businesses. Normally, in business there are terms and conditions for supplying that are agreed upon. The agrodealers are indispensable in the agribusiness development in Zambia; they are providing a service which the government failed to provide efficiently for a long time. Firstly, allow me to share with you that the agrodealers have provided job opportunities in Zambia. Just to share some statistics with policy formulators in case they don’t know. On government records, they have about 1500 to 2000 registered agrodealers but the bulk of them are seasonal who just take advantage of the corrupt system to make money. The genuine agrodealers that operate throughout the year are only about six hundred. On average, each one of them has employed three people and this translates into one thousand eight hundred jobs. Secondly, these agrodealers have been providing a service in terms of taking the productivity technologies close to the farmers. In 2009, Technoserve conducted a baseline productivity study in the soybean value chain in Eastern Province; the average productivity for that crop was 900kg per hectare. Today, without changing anything but by just introducing the farmers to using inoculants in soybean production, farmers are averaging 1.2Mt of soybean per hectare. This has come about because of many factors and one of them is by the strides of a USAID funded project called Profit Plus which tried to create community agrodealers (CAD) and improve their capacities in that province.

The minister’s comment is misplaced because as the environment enablers, they have not taken keen interest to study the agrodealer model thorough to try and strengthen it. The bulk of the tenderpreneurs who have gotten into the system through corruption have messed up the genuine agrodealers. In case the government doesn’t know, genuine agrodealers are now disinvesting in this business and trying something else like selling of hardware, groceries and other goods that they feel have sustainable opportunities as businesses. They could be happy as government to report in their board meetings or is its cabinet meetings that agrodealers have grown to two thousand? The commerce ministry should appreciate the effort the 600 agrodealers did because they used their innovativeness and invested in those risky businesses without receiving any support from the banks or the government. It is for this reason that the government should have taken keen interest to support them by paying them on time. What the government might not know is that those agrodealers are getting those products from suppliers on cash basis or 30-day credit lines. The longer it takes for government to pay them means these agrodealers are not able to get more products. The implication is that they will be out of business and just like any business, they will look for alternative businesses to invest into. This might look or sound simple, but it has great ramifications and impact on the productivity and production in agriculture. This FISP thing is a mess and a total failure which must be reviewed today. It is a great opportunity to support the industry but the greediness of those managing it have led to its failure. If the minister was genuine with supporting and growing the agricultural business in this country, they should consider giving this project to a private company to run for at least ten years using the structures in the ministry. Thereafter, they can leave it to the ministry to operate after systems and the capacities have been enhanced or built. The other point that the government seems not to know is that the agrodealers that joined the system because of the opportunities they sniffed increased the product prices with margins of between 80 per cent to 200 per cent. This defeated the purpose of having the FISP because the idea was to provide cheap inputs so that farmers can be competitive when selling to wean them off after three years. The government should not be surprised if they find out that the contribution of the agricultural sector to the GDP in the last four years has been on a decline. They should start by conducting a stakeholder analysis of genuine agrodealers and segmenting them according to their turnover. Once this is done, they can choose to support those in the top two brackets because they know that even with late payments, they can sustain their businesses otherwise, it should only run the eVoucher on a cash basis if it must have any impact. The agrodealers are as important to agribusiness development in this country as it is to development the irrigation infrastructure as well as the marketing systems. We can do it only if we identify people that are not greedy to manage this project. Thank me for sharing this bluntly with you otherwise I should have charged you for consultancy. If MPs that are elected to make laws are being paid to sit in the NDF conference whose output is doubtful.  Already some decisions are being questioned such as the re-introduction of deputy ministers, what more this valuable information?

The author is the Agribusiness Development Consultant

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