Insights Explorer

Service Delivery Cost per Farmer

What we mean by service delivery cost per farmer

The amount a company invests in service delivery to smallholder farmers is crucial to understanding their business model and identifying potential risks and opportunities. Knowing this helps companies identify opportunities to more efficiently offer goods and services to farmers or to increase their investment levels, while optimizing for other outcomes such as direct cost recovery and farmer value creation.

Service delivery cost per farmer refers to the average, annual cost of service delivery to farmers as visualized below. 

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The FarmFit data, covering over 100 business models, shows a huge spread in the service delivery cost per farmer per year. Figures range from a minimum of $2.5 to a maximum of $4,382, with mean and median values of $276 and $77, respectively.

Why is it so important to understand service delivery cost?

Among the many benefits of studying this indicator, there are two we want to highlight:

Firstly, as highlighted in the New Paradigm  section, there is a massive need for increasing private sector investment in smallholder farmers. Understanding how much companies are investing today on a per-farmer basis allows us to identify patterns across different contexts and types of models. Better data allows us to identify how smallholder-inclusive business models can reach optimal levels of investment and efficiency in different contexts.

Secondly, due to a lack of credible and comparable data, there is currently very little visibility and comparability on the efficiency of service delivery. We see that there is often a large difference in average per-farmer investment between similar models and in comparable contexts. This suggests that there is potential for offering the same services with the same outcomes, but at a reduced cost. This would allow the same finite resources to be spent on more farmers and create more impact. 

There exists a range of more specific benefits to studying and understanding service delivery cost that differ for different types of organizations, including:

Our insights on service delivery cost per farmer

There is a large spread in service delivery cost per farmer per year for the 100+ models that we have analyzed, ranging from less than $5 per year to over $5,000. Till date, the Insights Hub has found the most interesting relationship between service delivery cost per farmer and the following other outcomes, contextual drivers and design drivers:

Other outcomes

Direct Cost Recovery

Farmer Value Created

Contextual Drivers

Crop Type and Value Chain Organization

Type of Provider

Design drivers


Last Mile Delivery

Target Group