Going the Last Mile! Investing in Rural Markets Results in Commercial and Development Impact
Tecnologia E Consultoria Agro-Pecuaria, LDA (TECAP), a Mozambique-based wholesaler of agriculture inputs and mechanization equipment, received investment support through the Feed the Future Partnering for Innovation program to establish a retail network to reach last mile markets with improved seeds, agriculture inputs, and equipment. Using pay-for-performance funding from Partnering for Innovation, TECAP established a network of 70 independent agro-dealers or franchisees, supplemented by a network of 250 independent, commission-earning farm business advisors to establish sales networks in underserved provinces of Tete, Manica, and Zambezia.
In two years, TECAP established three regional hubs and a sub-distribution network composed of independent and franchised shops and farm advisors, resulting in over $3 million in improved seeds (32 percent of sales), fertilizer (14 percent), pest management products (13 percent), veterinarian services (11 percent), and equipment/machinery/irrigation/tractor services (19 percent) to over 40,000 smallholder farmers in these previously underserved markets. Agrodealers established demonstration plots on nearby farms where they conduct training and marketing events to educate local farmers on the advantages of using improved inputs and incorporate mechanization into their production practices. Twenty percent of the agro-dealers are women, and 15 percent are youth.
Equally exciting are TECAP’s growth plans, which indicate the pilot is proving there is strong commercial potential within the smallholder segment. As its business in these provinces grows, TECAP is developing partnerships with logistics and other value-added companies to improve services and lower costs. In addition to the expansion of the retail business model, it is also investing in:
- Poultry processing
- Commodity buying for value-added processing
- Real estate development
Investment in these additional activities will help TECAP improve its commercial viability through vertical integration. As farmers become more productive and TECAP’s business grows, we at Partnering for Innovation expect to see other competitors enter these markets to offer more choice to the smallholder farmer.
Feed the Future Partnering for Innovation is a USAID-funded program that has promoted the commercialization of improved agricultural technologies and services by investing in 50 commercial agribusinesses in 17 countries, reaching 1.3 million farmers.
- Market Facilitation