In Dodoma Region sunflower oil processors struggle to secure enough sunflower seeds to satisfy their markets. At the same time, farmers hesitate to invest in quality seeds because they worry that no one will show to pay them a fair price at harvest time. This represents an odd market failure where supply and demand do not line up. In October 2017, TechnoServe took the first steps to unlocking this by training processors on basic contractual arrangements.
Paulo Mwanga is one of these processors facing a sunflower seed shortfall. He owns and runs a growing processing business in Nyerere village, Hongoro ward in Kongwa district called Agape Praise. Paulo started processing sunflower in 2007 and he had never been part of any sunflower development program.
For two days in October 2017, Paulo attended a training event co-hosted by the Central Zone Sunflower Oil Processors Association (CEZOSOPA) and TechnoServe, a market facilitator under the Agricultural Markets Development Trust (AMDT). The trainers explained the value in establishing a stronger relationship with farmers, and helping link them to supplies of improved seeds and other sunflower actors such a financial institution and EFTA Limited, an equipment finance company specialized in serving small and medium enterprises and farmers. More notably, Paulo heard from some of his fellow processors on how these basic contractual arrangements had helped their business. Mariam Majengo from Three Sisters Sunflower Oil Mills explained how she had gained loyal suppliers who were unlikely to “side sell” by appealing to women on sunflower farming households.
Later in the event, many input suppliers and financial institutions presented their products and services. Paulo listened intently as a sales representative from Kibo Seeds explained the increased yields farmers could receive by investing in the improved Kenya Fedha seed. He figured that many farmers would be willing to pay the extra money for Kenya Fedha.
After the event, Paulo decided that he might try out these techniques. After receiving some coaching in the field from TechnoServe and CEZOSOPA, Paulo set off on his own. In the following weeks, he traveled from village to village on his motorcycle, and worked with local agricultural extension officers to gather crowds of sunflower farmers to hear his message. Paulo explained the better yields that farmers could get from Kenya Fedha.
When farmers complained that agents had sold them fake seeds, Paulo agreed that he could arrange to “cut out the middle man” and help them buy directly from the Kibo Seeds. He also pledged to buy the farmers’ production at the end of the season, and if he was unable to buy from them at the end of the season, he promised to link them to other processors he knew, so that they would buy the farmer’s production.
Many farmers responded favorably, and Paulo helped them to secure supplies of improved Kenya Fedha seeds. Also, many farmers were pleased when Paulo organized them to get free seed packets with ByTrade’s high-yielding hybrid seed, HySun-33. This seed is higher yielding and more expensive than Kenya Fedha, and if farmers adopt it, both farmers and Paulo could make more money.
Paulo continues to follow up with these farmers to ensure that they have planted their seed and are tending their crop. In time, he plans to return to buy their production, and is hopeful about how these improved relationships with farmers will help him satisfy his sunflower oil markets.