Paired Farmer-to-Farmer Assignment Helps Zambian Agribusiness Expand and Add Value
Richard Banda has operated Rimbecks Agro Hardware and General Dealers, an agricultural enterprise based in Petauke district, Zambia, since 2012. The enterprise, which consists of a retail shop and two outlets, provides inputs to smallholder farmers through contract farming — a method where farmers are provided with inputs by a company that later purchases back their produce. In this case, Banda works with over 2,000 local farmers to purchase maize, groundnuts, soybean and sunflowers. By utilizing contract farming, Rimbecks Agro Hardware and General Dealers provides 250 of these farmers with access to profitable markets and high-quality seeds, fertilizers and other inputs, thereby improving farm productivity and providing a stable source of income.
Looking to expand his business and incorporate more farmers into his contract farming model, Banda and his staff of eight employees partnered with Cultivating New Frontiers in Agriculture (CNFA)’s USAID-funded Farmer-to-Farmer (F2F) Program in June 2021. Virtual volunteer Chris Behr, an international development professional with over 15 years of experience from Virginia, and in-person volunteer Joseph Mwenda, a Zambian business expert from Copperbelt Province with over 10 years of experience in banking and private sector business development, worked together through a paired assignment to train Rimbeck’s personnel in financial and business management. By introducing personnel to key tools such as spreadsheets and mobile money applications, the volunteers were able to enhance the enterprise’s organizational structure and decision-making, improving its business effectiveness, strategy and plan.
During the volunteer assignment, the World Bank-funded Zambia Agribusiness and Trade Project (ZATP) released a call for proposals to fund producer groups and small- and medium-sized enterprises (SMEs), like Rimbecks, who are engaged in commodity aggregation and value addition. The volunteers heeded the opportunity and pivoted their training to help Rimbecks apply for a $100,000 ZATP grant. Drawing from his experience in the Zambian banking sector, Mwenda helped Rimbecks personnel understand the requirements described on the application. The volunteers also recommended that Rimbecks share their new business profile and strategy as part of their application.
The grant application was approved by ZATP on July 1, 2021 and was recently dispersed to Rimbecks. Under the proposed business expansion, Rimbecks will utilize an aggregator model to provide farmers in 20 additional producer groups and cooperatives with forward delivery contracts. Similar to the contract farming method, Rimbecks will oversee the transfer of inputs to the selected cooperatives on credit, while the selected cooperatives will supervise farm production and aggregation at an agreed upon rate. In partnership with the Ministry of Agriculture, Rimbecks will also provide extension services to the farmers through its field officers.
In addition to scaling up its contract farming model, Rimbecks planned to use some of the grant funding to purchase equipment and construct a storage warehouse in the community where its farmers are located. The equipment, such as grain sorting machines, platform scales, packaging equipment and a small truck, will support farmers and aggregators to efficiently package and transport products as well as to store products for sale when prices are the most favorable. The warehouse will also be used by smallholder farmers in the region as a satellite depot for the distribution of farm inputs and as aggregation center for produce.
In total, the expansion project cost $165,000, with Rimbecks contributing 30% ($50,000) as part of the matching grant agreement. In March 2022, $66,000 was disbursed to Rimbecks for the construction of the warehouse, a 15m x 30m structure that can hold 300 MT of produce. The warehouse construction is ongoing and expected to be completed in preparation for the next cropping season.
Reflecting on his business’s growth, Banda highlighted that the knowledge and skills his team gained from the F2F assignment gave them the confidence to apply for the $100,000 grant. He also expressed his enthusiasm for Rimbecks to be able to help farmers access inputs and markets within their community, which will cut down on transportation costs thus reducing the cost of production.