December 01, 2023

Agribusiness Clusters: Cultivating Business Connections to Improve Coordination and Collaboration for Improved Food Availability in Western Equatoria State, South Sudan

Staple Crops

As in all 2SCALE partnerships, the syndicate partnership between 2SCALE and Nzara and Eden Multipurpose Cooperatives leverages the concept of Agribusiness clusters (ABCs) to accelerate the development of the maize value chain in Western Equatoria state, South Sudan.

An ABC is a network of all actors engaged in a particular value chain at the grassroots level. These actors come together to find solutions to the challenges they face and explore opportunities to enhance their competitiveness and overall performance. Within ABCs, actors develop their bargaining power around a shared business goal—increasing food availability at the local level. This collaborative platform empowers grassroots actors to voice concerns and establish connections with nearby stakeholders such as sellers of agricultural inputs, farmers, local banks, traders, extension officers, and local government officials.

In the syndicate partnership in South Sudan, existing clusters have been strengthened, and actors have been linked to each other, enhancing the coordination of their activities for mutual benefit. To strengthen their collaboration, 2SCALE continually provides technical assistance and capacity building and facilitates access to markets and finance. These clusters address the specific challenges and opportunities within each cluster, identifying ways to improve productivity, quality, and market access.

Enhancing coordination between input providers, agro-dealers and maize farmers

Through the activities in the ABCs in the syndicated maize partnership, there has been improved coordination between seed companies, agro-dealers, and maize farmers in the region. By bringing input providers, such as seed and fertilizer companies, together with agro-dealers and maize farmers, the clusters have fostered an environment for shared knowledge and resources. Input providers can understand the specific needs and preferences of maize farmers, enabling them to tailor their products and services accordingly. This has in turn improved the availability and accessibility of high-quality inputs for maize farmers.

Agro-dealers, acting as intermediaries, play a vital role in connecting input providers with farmers. Through the Agribusiness Clusters, agro-dealers have received training and support to enhance their technical knowledge and business skills. This additional skill set has enabled them to provide accurate and relevant advice to farmers who buy inputs from agro-dealership shops.

38-year-old Alice Naumba is an agro-dealer in Yambio town of the Western Equatoria region. She has seen great benefits and business growth being a member of Yambio ABC. She narrates:

I attribute the growth of my business, among other factors, to active engagement within the cluster. Regular meetings provide me with opportunities to showcase my products and advise farmers on the benefits of certified seeds. Farmers, upon understanding the importance of quality seeds, are more willing to invest. Challenges arise, particularly with farmers requiring credit for inputs. Despite agreed repayment terms, many default, resulting in business losses. To address this, I now provide inputs on credit to reliable organizations like Eden Multipurpose Cooperative. They not only buy in bulk but also consistently make payments ahead of our agreed-upon date, contributing to the success of my business.

For Alice, her membership and active engagement in the ABC has made her one of the major input distributors in the region. Nzara Cooperative also buys inputs from her, for distribution to farmers. Through the ABC, she has also been linked to the Rural Finance Initiative (RUFI), which has become a financial partner in her business.

I was able to get a loan of 700,000 SGD ($ 1,158) from RUFI, which I used to expand my shop,

Alice adds.

Moses John, a 41-year-old farmer who bought certified maize seed from Bakiki Agro-shop, operated by Alice, expressed his satisfaction with the quality of the seed and its performance.

For the past few years, I struggled to obtain quality seeds for planting, relying on relief seeds. These seeds were consistently distributed late, had poor germination rates, and yielded very little. This season, I opted for certified seeds, resulting in a much better harvest compared to last year. I am grateful to have enough food for my family, and by selling the surplus I am able to meet household needs and cover my children's school fees.

Shares Moses.

Access to certified improved seeds and inputs has been made easy with the establishment of the Agribusiness Clusters in Yambio, in which the agro-dealers are members.

Linking farmers to Micro-Finance Institutions (MFIs)

In addition to facilitating timely access to quality inputs, the Agribusiness Clusters in this partnership also create linkages with Financial Institutions. Rural Finance Initiative (RUFI) is among the institutions that are actively engaged in the ABC within Eden Multipurpose Cooperative and is also a financial service provider for various actors in the maize value chain. Through their participation in the stakeholder meetings, they engage in community outreach sessions to create awareness of how farmers, input providers and other stakeholders in the maize value chain can access finance.

38-year-old Anibie Mena Kufuta, the Branch Manager of RUFI, shares that despite having been in operation for only four years, they have achieved significant milestones, some of which are attributed to their participation in the ABC meetings. She narrates,

Thanks to our engagement with ABCs, we've established partnerships with agricultural cooperatives, input dealers, farmers, and other micro-entrepreneurs seeking affordable finance. To ensure our financial products resonate with stakeholders in the agricultural sector, we apply a minimal interest rate of 2% for agricultural cooperatives, accompanied by a grace period of 3 months where they only pay interest. This clause has seen cooperatives expressing interest in partnering with us, leading to the growth of our institution. The intervention by 2SCALE has also provided a platform where we market our product and get to sensitize various actors on our products.

In future, RUFI intends to expand beyond Yambio and Nzara which are their current catchment areas.

In addition to linking farmers with financial institutions and input dealers, the ABCs facilitate connections with off-takers, processors, and other market players, enabling farmers to secure better prices and market opportunities for their maize products. This enhanced coordination streamlines the overall maize production process, minimizing disruptions and addressing gaps along the value chain to maximize productivity and income.

For the 2SCALE program, Agribusiness Clusters serve as catalysts for improved coordination and collaboration between various stakeholders in specific value chains. By fostering these connections in the syndicate partnership, the clusters contribute to the development of a more efficient and sustainable maize value chain, benefiting all stakeholders involved.

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