Farm Shop: Scaling access to agricultural inputs in Kenya

January 22, 2019
Peter Muturi stands inside his Naaro Farm Shop franchise.
IDRC / BARTAY

Rural smallholder farmers are the backbone of many sub-Saharan African countries, including Kenya, where 80% of farms are run by women. However, fragmented, informal, and unreliable retail networks make it difficult to access the high-quality agricultural inputs and trusted advice farmers need. At the same time, agro-dealers fear losing money if they set up village shops to serve low-income farmers.

The agro-distribution network needed be modernized and transformed into a self-sustaining supply chain that provides rural farmers with affordable and reliable access to products, education, women-friendly services, and trustworthy service providers. The model needed to bring together three key ingredients for smallholder success: products, information, and financing.

Farm Shop assistant William Muchai, who was trained to provide clinical services, tends to a customer's goats by applying tick and anti-infestation powder.
IDRC / BARTAY

Using this formula, Farm Shop, a replicable social franchise model, provides rural smallholder farmers with local access to affordable, high quality inputs (e.g., seeds, fertilizer, animal feed, medicines), services (e.g., soil testing, animal healthcare), educational opportunities, and trusted advice that improves livelihoods, productivity, and food security. Farm Shops also act as the village hub for farmer clinics, serve as product promotion and demonstration sites, and they are a source of employment, especially for women and youth.

Building a modern and profitable supply chain

A new generation of entrepreneurs, particularly women and youth, are adopting the innovative and field-tested Farm Shop business model, which routinely boosts retail revenues by at least 500% in the first six months — with top performers seeing profits rise more than 2000%. “Farm Shop has been solely responsible for all of the extra profit I am now making,” said Paul Mbugua, a Farm Shop agent and farmer in Kiambu County. “I buy all the seeds from Farm Shop, as well as the pesticides and other necessary inputs… I earn about KES22,000 (CA$275) a month from the sale of the greens and fertilizer from the cattle. This has allowed me to send my two boys to school without any issues.”

Farm Shop sources directly from leading agricultural suppliers to provide farmers with access to the highest quality and most innovative products. Nearly 35,000 smallholder farmers, 54% of them women, were served by Farm Shop through a network of 75 franchises. The shops provided one-stop local access to more than 850 high quality and affordable products from 30 different suppliers. Farm Shop also developed improved systems and processes for inventory management, financial management, quality control, performance measurement, and supply management.

Franchisees and their shop assistants gained access to technology (e.g., mobile tablets and an online interactive app) to operate more efficiently while better serving their customers. Shop owners and staff were also trained in customer service, shop management, bookkeeping, and financial management. A network of village-level demonstration centres also provided training opportunities for 26,578 customers (52% women), who learned about various aspects of agronomy and animal husbandry.

Expanding economic opportunities for women

Farm Shop developed human resources and employment policy that prohibits gender or any other type of discrimination. Women farmers were also top of mind in the design of the Farm Shop business model. Special considerations were made for the needs of women in terms of employment opportunities, products, shop locations, the timing of training sessions, and access to credit.

Smallholder farmer Elizabeth Waithira sells her produce at the Kandara Market.
IDRC / BARTAY

Half of all franchisees (51%) and shop assistants (54%) are women, while youth made up 52% of franchisees and 100% of shop assistants. “I have a bachelor’s degree in animal health, and this was the perfect job for me. In today’s times it is difficult for youth to find jobs that match their degrees, but I have been lucky,” said Salome Wanjiku, a Farm Shop assistant in Karuru. “I am getting really good experience with the supply of animal medication and I am making good connections with the farmers.”

What's next?

Farm Shop is moving forward with a five-year sustainability plan that includes increasing revenues, reducing costs, and focusing resources on high-performing shops with the greatest chance of profitability. An innovative finance product called Cascade Agricultural Finance is being piloted to improve farmer access to credit so they can buy in larger quantities and reduce the number of shop visits. Farm Shop is also experimenting with selling household goods (e.g., soap) to reduce the need for women farmers to make multiple visits to different shops. The social enterprise’s long-term strategy also includes working with governments and local development organizations to provide farmer training. The mechanics of the model could also be potentially transferrable to other sectors such as health, education, sanitation, and water.

The Canadian International Food Security Research Fund is jointly funded by IDRC and Global Affairs Canada.

Learn more about this project and its outcomes.

Watch a video about Farm Shop’s story.

Watch a video profile about Farm Shop.

Watch Scaling a social entreprise: Lessons from Farm Shop.