Analysis of distribution systems for supply of synthetic grain protectants to maize smallholder farmers in Zimbabwe: Implications for hermetic grain storage bag distribution. (December 2019) - Govereh, Jones
Abstract: Grain storage in pesticide-free hermetic bags is a promising alternative to synthetic pesticide treatment and storage in polypropylene bags for smallholder farmers but the hermetic bags are not conveniently available to rural customers. Developing a commercial hermetic storage bag distribution chain that supplies bags to smallholder farmers is a challenge for manufacturers. We therefore examined the factors affecting the design of grain synthetic insecticide distribution channels to draw lessons for hermetic bag manufacturers to consider. Key informant interviews with insecticide manufacturers and/or distributors and agricultural merchants along the supply chain from national to grassroots level were complemented with farmer focus group discussions. The insecticide distribution channels were analyzed in terms of channel length and breath. Some of the factors that influenced the length of the insecticide distribution channel included the manufacturer's financial, human and technological resources; the value-to-volume ratio of insecticide products; and the sparse geographic concentration of smallholder farmers. The number of intermediaries in each channel depended on farmer purchase habits, product features and market factors. Given the small operational scale of local insecticide formulators, distribution was mainly through intermediaries. The shorter one-tier supermarket distribution channel primarily served urban consumers while the traditional two-tier wholesaler-retailer channel served rural customers. To penetrate the rural smallholder market segment, the longer channel that placed inventory closer to farmers will continue to be the main route for hermetic bag manufacturers. With a low value-to-volume ratio product feature, collaboration between manufacturers of hermetic bags and rural retailers will be essential. In addition, a large-package delivery approach that aggregates retail orders for a particular farming radius should be considered. Highlights: Manufacturers of hermetic grain bags can learn from existing synthetic pesticide distribution systems. Partnering of hermetic bag manufacturers and intermediaries is necessary to serve customers effectively. A two-tier wholesale-retailer distribution channel is the route to penetrate rural consumers. A large-package delivery approach aggregating demand is proposed for hermetic bag distribution.