September 24, 2021

A risk-sharing solution to the issue of access to agricultural inputs in Mali

Staple Crops

Mali

Improving the availability of white and parboiled rice for local consumption is the primary ambition of the Siguida Yeelen union in Konodimini. In Mali, the national need for rice is around 1,868,000 tons per year (National Statistics Institute). The partnership between Siguida Yelen and 2SCALE aims to improve the income and living conditions of the 3,126 farmers, parboilers, and other actors in the value chain by increasing the value and production of paddy rice in the localities of Konodimini and Tamani.

Access to inputs, especially quality inputs, remains a headache for the Siguida Yelen farmers. According to Tahirou Dembélé, President of the Siguida Yelen union, the challenges are threefold:

Prior to our partnership with 2SCALE, we never had fertilizer on time. We had 3 main problems. First, access to inputs at the right time. Second, how to get enough fertilizer? And third, having quality fertilizer. Previously, in a hurry, we accepted everything that was offered to us. So with the partnership, we had meetings with all the actors in the value chain, including input sellers and financial services.

Addressing access to inputs

Since the beginning of the partnership's activities a little over a year ago, the actors have been working together to set up a system with local suppliers that can facilitate access to fertilizers, seeds, and pesticides for all the union's farmers. According to Mr. Dembélé, these meetings were instrumental in resolving the difficulties:

During these meetings, farmers were able to estimate their fertilizer needs to input suppliers, specifying the quantity, the time to provide them as well as the development of a detailed delivery schedule.

A first test of the system was carried out during the year 2020. Against all odds, 95 tons of fertilizer were mobilized for 495 producers for a total amount of more than 36 000 000 FCFA ($64.312) with a supplier credit of 70%.

How does the system work?

The system consists of creating a collaborative framework between farmers and input suppliers. After signing an agreement between the two parties, farmers mobilize 30% of the total amount of the purchase in cash, and the input supplier gives the equivalent of 70% in fertilizer on credit without any other form of guarantee. After the harvest, farmers build up their stock of paddy rice in the storage of the Siguida Yelen union, which in turn seeks out buyers (economic operators) in order to reimburse the remaining 70% of the total amount to the input supplier. With the first test carried out during the September 2020 crop year, all reimbursements were effective by the end of April 2021. This collaboration, according to Mamadou Nantoumé, CEO of Guina Agricole (input supplier), is built on trust between the two parties. He said:

The farmers in the partnership have quick hands, because they have fulfilled their pledge by repaying all the credit on time. Thanks to this loyalty, the input needs of the farmers of the Siguida Yeelen union for the 2021/2022 agricultural season have been a priority for my company this year.

Towards a second trial with the involvement of several stakeholders

This year in Mali, as in some countries in the sub-region, the supply of fertilizer has been subject to numerous disruptions. The cost of fertilizer was too high. Many of the union farmers were initially reluctant to get committed, believing that the price would eventually drop. But the opposite happened, as prices continued to rise. Despite these difficulties, Guina Agricole was able to deliver about 32 tons of fertilizer to the union's farmers through the system. The particularity of this year was the involvement of other actors, namely the microfinance fund CVECA-ON (Caisse Villageoise d'Épargne et de Crédit Autogéré de l'Office du Niger), which granted 50% of the total amount of 32 tons, which amounts to 12,732,5000 FCFA ($227.505). The amount mobilized by the union’ farmers is 3,819,750 FCFA ($6.825), about 30%, and the input supplier granted the equivalent of 20% of the total amount in fertilizer on credit. A total of 240 farmers, including women and youth, have benefited from this year's fertilizer disbursement. Repayment is scheduled for early 2022 after the marketing year.

For the producers of the Siguida Yelen union, this approach promises to promote sustainable access to inputs based on mutual trust between the various stakeholders. In Mali, the 2SCALE team plans to replicate this risk-sharing system in other partnerships in order to facilitate access to basic services for all stakeholders.

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