"It's been a good harvest this year," said George, manager of Phoenix Seeds, a commercial farm in the Manica Province of Mozambique. Surrounded by stalks of maize, George gazed out at the vast plot of land and wondered how to distribute and sell his high-yielding certified seeds to rural farmers up to 500 miles away. George understood many factors were working against him in the difficult context of Mozambique. In addition to vast geographic distances, the country's currency had devalued 50 percent against the dollar, civil strife was rampant, and subsidized inputs made it difficult to convince farmers to pay for quality seeds.

George oversees commercial production of maize and other improved seed varieties for Phoenix Seeds in Manica Province, Mozambique.

Misinterpreting the Market

To help overcome these challenges, George and Phoenix Seeds entered a competitive grant application process with Feed the Future Partnering for Innovation (FTF-P4I) for expanding and investing in effective distribution and sales strategies for certified seeds for the smallholder market. Under the original 2014 application, Phoenix Seeds focused their distribution model on selling seeds from large facilities in urban centers, requiring farmers to travel to the stores to purchase inputs. This assumption, however, failed to take into account that distance is a major determinant in purchases. The result was an inefficient and costly system under which farmers could not purchase seeds at the right time to coincide with planting seasons. As a result, Phoenix Seeds did not meet their sales targets during the first year of their FTF-P4I grant, and had to sell leftover seeds at a discounted price.

From a project perspective, FTF-P4I should have conducted a more in-depth analysis of the target market and projected seed volume during the initial due diligence phase to ensure Phoenix Seeds' goals were achievable. However, after quickly realizing the remote seed-selling strategy was not viable in Mozambique, FTF-P4I hired a local consultant to develop a marketing and distribution strategy for Phoenix Seeds. This analysis helped Phoenix Seeds develop low-cost, innovative models such as creating input hubs closer to farmers, making it easier for them to purchase the seeds in time for prime planting dates. The larger hubs also supply smaller stores in nearby areas, further expanding distribution efforts and allowing for more timely delivery of inputs. As a result of the revised strategy, Phoenix Seeds was able to sell a total of 31 MT of seed to 2,200 farmers and generate an additional $33,180.

Clemente Laddison, a Phoenix Seeds agrodealer from Zambezia Province, shows the advantages of Phoenix Seed (right hand) versus normal seed (left hand).

Lessons Learned

This case reveals that distribution models require more than just pushing out product, and that sales are not dictated by price alone. Effective distribution requires creating incentives for farmers to engage, i.e. understanding both their technical needs and their ability to access and pay for such goods. In the future, commercially driven programs should use a multi-disciplined approach to distribution and sales to capture a larger market share and demonstrate value to farmers. It also reveals that grant-making projects need to do a more effective job of conducting market analysis and research to ensure the proposed objectives of the partnership are realistic within the context of the market systems in a particular country.

Fintrac, implementer of FTF-P4I, has more than 25 years of experience adapting to local contexts such as this one in Mozambique. We make a concerted effort to apply lessons learned across our global portfolio of projects, determining if our efforts are working or not, and ensuring we share these lessons both internally and externally.

Working and Learning Together at #SEEP2016

Learn more at the 2016 SEEP Annual Conference, where Fintrac will be further 'Applying Lessons Learned to Strengthen Seed Systems.' Join speaker Mark Sevier as he shares this incredible story of learning from failure and turning a costly, ineffective venture into a thriving seed distribution business.

Click here for more information on FTF-P4I, and also learn about Fintrac's broader methodology and technical approach.

Mark Sevier has seven years of experience providing management and technical support to agriculture programs in Africa. In his current position with Feed the Future Partnering for Innovation, he manages a $40 million portfolio of public private partnerships in Malawi and Mozambique.