Unlocking success

Key messages

What if we told you that:

  • Regional agribusinesses invest 2x more in service delivery per farmer than global agribusinesses. This is driven by a combination of contextual factors as well as, crucially, conscious design decisions.
  • Business models that charge farmers for service delivery (even if not fully recovering their costs) invest up to 7x more per farmer than business models that provide services to farmers for free. The implication is crucial: We know that investments in smallholder farmers need to increase and FarmFit data suggests that businesses require more direct cost recovery for increased investment to be feasible.
  • Scale is no silver bullet solution but comes with important trade-offs: while working with more farmers is associated with more efficiency and higher direct cost recovery for companies, it often comes at the expense of the quality of service delivery to farmers.

Keep reading to discover more insights and understand the potential implications of these insights for you.

The case for change

Smallholder agricultural markets have enormous funding needs: farmers’ incomes are low, reducing their capacity to  properly invest in their farms, and business models serving these farmers struggle to justify increasing their investments. Meanwhile, agricultural development funding is unlikely to increase significantly in the near future, and is often deprioritized due to competing environmental, social, geopolitical and economic challenges. 

We are convinced, however, that under the right conditions, business models working with smallholder farmers can be inclusive, cost-effective and commercially viable – at scale.  And that credible, comparable and accessible data to accelerate learning and identify best practices will help to make this a reality. The real and perceived risk of investing in the smallholder agricultural sector is high, but more rigorous, data-informed insights can and will help drive better allocation of investments – for the benefit of both businesses and farmers.

More and smarter investments into smallholder agricultural markets are needed, and are possible. The private sector – both companies and investors – play a large role as they can drive the development and scaling of business models. In turn, the emergence and scaling of more smallholder-inclusive business models develop and strengthen markets in which smallholder farmers have equitable access both as consumers of goods and services and producers of agricultural products. The public and philanthropic sectors also play a crucial role in providing targeted support, including funding and service provision, and to catalyze more efficient private sector investments through a conducive enabling environment. 
 Read more on the paradigm shift we see happening.

Defining success

The FarmFit Insights Hub explores where, why and how stronger smallholder-inclusive business models can be designed, implemented, scaled, and replicated for success. In the current iteration of the Insights Hub we focus on three core outcomes that provide insight into a business model’s strength and potential:

  • Service Delivery Cost per Farmer
  • Direct Cost Recovery from Services
  • Farmer Value Creation

We recognize there are other ways of defining successful business models. As our analyses and our insights develop, these will also be reflected in the Hub’s content.

Smallholder service provision: Key insights

Trade-offs and tipping points: What have we learned?

Implications – What does this mean for you?

So what do these insights mean for you? And how to put these insights to the test? 

The answer to these questions depends on what type of organization you represent.

Get in touch

Are our data, analytics, and insights shaping your decision-making? Are there specific topics, studies, or formats you're eager to explore? Don't hesitate to get in touch and share your thoughts with us! Your input matters.